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PACs Can Solicit Corporate Donations: 5th Cir.

By Brett Snider, Esq. on October 22, 2013 | Last updated on March 21, 2019

The Fifth Circuit upheld an injunction blocking a Texas election law which prevented political action committees (PACs) from garnering corporate donations, reinforcing a post-Citizens United look at campaign finances.

Courthouse News Service reported that the Fifth Circuit is now the fourth federal appellate court to uphold "indirect political contributions" since Citizens United, giving the win to Texans for Free Enterprise (TFE), a PAC which uses funds primarily to run campaign ads.

Does the court just love Rick Perry attack ads?

Texas Election Law More Or Less Neutered

The case in TFE v. Texas Ethics Commission revolves around whether TFE's acceptance of funds from corporations is a protected First Amendment activity which is violated by Texas Election Code. In 2012, the TFE obtained a preliminary injunction from the enforcement of Texas Election Code Sections 253.094 and 253.003, and the Texas Ethics Commission appealed to the Fifth Circuit.

As the first line of argument on considering the injunction's success on the merits, the TFE Court cites Citizens United. And not for nothing, Citizens United created a binding distinction between contributions and expenditures, on exactly the kind of political ads that TFE makes its bread and butter.

The TFE Court calls this case "one step removed" from Citizens United, as Texas law would prohibit third party corporations from giving money to a political ad-creator like TFE or Citizens United. And since there's no principled difference between a fundraising ban for advocate groups and barring the actual political advocacy, the Fifth Circuit believes that the cases are "indistinguishable."

Circuits Rally Around Citizens United

With McCutcheon v. FEC hitting SCOTUS' docket this term, the interpretation of the First Amendment with regard to campaign contributions and expenditures has reached a bit of a boiling point. As the TFE Court noted, its sister Circuits in the Ninth, Seventh, and D.C. have made similar rulings with respect to applying Citizens United in favor of corporate monies funneling into politics, despite fears of corrupting the democratic process.

Things may look bleak in the land of political expenditures, but contribution limits to actual campaigns are still being upheld post-Citizens United -- thanks to the Sixth Circuit.

Perhaps the worries about the corrupting influence of political ads have been overstated. Take this Texas ad calling for Texans to vote for Rick Perry despite their dislike for him.

Bottom Line

It appears that without further guidance from SCOTUS, this new line of Citizens United cases striking down laws which limit corporate contributions to PACs is the new normal.

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