The just-because or, a bit more flippantly, “no duh” school of campaign finance regulation suffered another welcome correction in September, providing a lesson to regulators and would-be reformers.
Last year, Pasquale Deon and Maggie Magerko filed a federal suit against the members and certain employees of the Pennsylvania Gaming Control Board as well as state attorney general John Shapiro, all in their official capacities. Deon and Magerko challenged a provision of the Pennsylvania Gaming Act that broadly prohibits political contributions from the following individuals:
(1) An applicant for a slot machine license, manufacturer license, supplier license, principal license, key employee license, interactive gaming license or horse or harness racing license.
(2) A slot machine licensee, licensed manufacturer, licensed supplier, interactive gaming operator or licensed racing entity.
(3) A licensed principal or licensed key employee of a slot machine licensee, licensed manufacturer, licensed supplier, interactive gaming operator or licensed racing entity.
4 Pa. C.S. § 1513. As principals of different gaming companies under the Act, the plaintiffs were entirely foreclosed from giving money to state candidates or political committees. On September 19, Judge Sylvia Rambo enjoined this provision as unconstitutional under the First Amendment.
The history of both the case and the law at issue show some of the problems with campaign finance law and the lackadaisical way that constitutional concerns are addressed by the government. The Supreme Court of Pennsylvania previously struck down Section 1513 in DePaul v. Commonwealth of Pennsylvania, 969 A.2d 536 (Pa. 2009). In response, rather than amending the law itself, the state legislature simply added the following legislative purpose to the Gaming Act:
The General Assembly has a compelling interest in protecting the integrity of both the electoral process and the legislative process by preventing corruption and the appearance of corruption which may arise through permitting any type of political campaign contributions by certain persons involved in the gaming industry and regulated under this part.
Banning all types of political campaign contributions by certain persons subject to this part is necessary to prevent corruption and the appearance of corruption that may arise when political campaign contributions and gaming regulated under this part are intermingled.
To free speech proponents, this is laughable. It should be self-evident that the government may not simply say that an industry (particularly one that is legal and otherwise highly regulated) is corrupt and then enact a wholesale ban on campaign contributions from those associated with it. Yet, such bans are not wholly without precedent. In the few decades of comprehensive money-in-politics regulation, courts have upheld contribution bans on the gaming industry as well as government contractors and lobbyists. As Judge Rambo discusses, however, these cases were all distinguishable because of the narrowness of the laws and the specificity of the legislature’s findings.
Specificity is a welcome requirement. Although the nebulous “exacting scrutiny” standard has allowed too much rubber-stamping of some campaign finance regulations (particularly those relating to disclosure), Judge Rambo ruled that a sufficient governmental interest in regulation must be more substantive than a conclusory statement from lawmakers. Moreover, it is not appropriate for a state to simply rely on findings in other states; for example, the corruption of riverboat casino operators in 1970s Louisiana does not speak to the Pennsylvania gaming industry in 2018. To allow such justification is, at best, a double-edged sword, because numerous states don’t have such corruption or bans in regards to related industries.
This is not to say Deon raises the bar of a sufficient governmental interest very high. The ruling discusses an Illinois case in which I was co-counsel, Ball v. Madigan. That case struck down a wholesale ban on campaign contributions from medical marijuana dispensaries and grow operations, which was nothing more than a throwaway line in the law that authorized the state’s cannabis pilot program. Like in the Ball case, rather than present evidence, in Deon the state largely sat on its laurels. If either the legislature or state attorneys general make some effort beyond citing cases that have upheld industry-focused bans, their arguments may pass muster. Moreover, the breadth of the Pennsylvania law was, even by campaign finance standards, unusually broad.
However low the bar may be, it is important to affirm that it exists. Allowing the government to prohibit campaign contributions—which are both fundamental expressions of support for candidates and fundamental tools for political participation—with nothing more than righteous indignation invites abuse and discrimination. Moreover, requiring a factual basis for labeling an industry “corrupt” opens the door to citizens who are affected by such bans to challenge the veracity of those findings. Finally, given that campaign finance “reform” is an industry fueled by little more than platitudes, requiring any substance whatsoever will likely cause the so-called watchdogs a to bark up a different tree in an ever-shrinking forest.