Judge suspends campaign cash limits

A federal court judge has ordered that a campaign finance law that limits how much money candidates can accept from wealthy donors be suspended.

The order marks the local legal impact of a recent U.S. Supreme Court decision that removed overall caps from how much money donors could give to federal candidates.

The Minnesota branch of the Institute for Justice and four plaintiffs, including two current and former Minnesota lawmakers, used the Supreme Court’s ruling in the McCutcheon case to argue that the state’s limits on “special source” donations prevent free speech.

“It’s a great victory because the current law rations First Amendment rights on a first come, first serve basis,” said Lee McGrath, who is the executive director of the Institute for Justice’s Minnesota chapter.

Typically, legislative and statewide candidates can only accept 20 percent of their donations money from lobbyists, wealthy donors and political funds.

For instance, Minnesota House candidates can take up to $1,000 from contributors. But once they hit $12,500 in donations from those “special sources” who give between $500 and $1,000, everyone who contributes to the campaign after that can give only $500.

The restraining order only applies to individuals giving large amounts to candidates.

While the suspension will free candidates to take more money overall, Minneapolis campaign finance lawyer John Knapp doesn’t expect to see most candidates collect significantly more money this election cycle.

“Some candidates may get more than 20 percent, some candidates have never come close to getting that 20 percent,” said Knapp, who is an attorney with Winthrop & Weinstein. “It’s going to vary from candidate to candidate.”

The biggest impact will likely be the gubernatorial and legislative leadership candidates, Knapp said.

In part, the McCutcheon ruling said that donation limits can’t be used just to reduce the amount of money in politics.

And that’s why Knapp said he wasn’t surprised that the plaintiffs prevailed in this case. In his order, U.S. District Judge Donovan Frank wrote that history shows that the special source law was put on the books to do precisely that.

“While the Court may not agree with the Supreme Court’s interpretation of the First Amendment in this regard, and echoes the concerns of other courts that have addressed similar issues in light of McCutcheon, the Court is nonetheless bound by the decisions of the Supreme Court,” Frank wrote.

Until the Institute for Justice’s case has made its way through court and a final ruling is made, the state’s Campaign Finance and Public Disclosure Board can’t enforce the special source limit.

“We knew pretty clearly that the ruling could go either way. We were hoping that it would go in favor of the statute,” said board executive director Gary Goldsmith. “The board and the staff and the attorneys knew that the McCutcheon case on which the decision is based provided a strong incentive for the court to issue the injunction.”