Political & Election Law: New York court shuts down PAC for campaign finance violations

Monday, November 7, 2016

In an unprecedented move, a New York court ruled over the weekend to prohibit a political committee from making further expenditures in connection with the November 8 election because of a campaign finance violation. This move, possibly the first of its kind, implicates serious First Amendment constitutional issues.

As a preliminary matter the case, McGrath vs. New Yorkers Together, centers on a new law in New York that prohibits one independent expenditure committee from contributing to another. The constitutionality of this law is ripe for challenge. Campaign finance laws can be boiled down to two essential types: contribution limits and disclosure. The Supreme Court has said that independent expenditures do not implicate quid pro quo corruption and so the state cannot limit contributions to committees that only make independent expenditures. Thus, there is no basis for the New York law grounded in the perceived need for limits on political speech.

The second core regulation is disclosure. The familiar refrain is that disclosure regulations are about the right of the people to know who is contributing to a political effort to elect or defeat a candidate. Such disclosure, the argument goes, prevents the appearance of corruption of the political process and quid pro quo corruption. But because all of the contributions to an independent expenditure committee are by law publicly disclosed, disclosure is not inhibited when one independent expenditure committee contributes to another. Both committees – the giving and receiving committee – must disclose all their donors.

Political speech implicates core First Amendment rights and should be protected by the courts. The judge here took the unprecedented step of enjoining the political committee from raising and spending any money in connection with this upcoming election and canceling the organization’s registration with the State Board of Elections. This is a decision worthy of a third-world dictator and not the American Constitution.

Our Constitution recognizes that in a healthy democracy, people will disagree. The remedy chosen by our forefathers was to promote dialogue, not to squelch opposing viewpoints. The judge in the New Yorkers Together case ignored all First Amendment precedent and common sense when he banned the group from election-related expenditures, regardless of the source of those funds.

Courts should only prohibit speech in the most narrow of circumstances. This is not one of them.

This blog post was written by Karen Blackistone Oaks, a partner with The Gober Group. She specializes in advising clients that are engaged in multi-faceted, multi-million dollar policy campaigns that incorporate a wide range of advocacy strategies.