Type: Law Bulletins
Date: 08/29/2012

Post-Postscript: Can Government Contractors Make Campaign Contributions? The Sixth Circuit Weighs In

This is our third installment in a series of updates, examining whether the old law prohibiting campaign contributions will be upheld post-Citizens United.1  First, we told you about the decision of Wagner v. FEC, in which the District Court for the District of Columbia denied a motion for a preliminary injunction and upheld the constitutionality of the ban on campaign contributions from Federal government contractors.2  Then, we told you about the Supreme Court’s June 25, 2012 ruling in American Tradition Partnership, Inc. et al. v. Bullock,3  which overturned a ruling by the Montana Supreme Court upholding a law prohibiting contractor campaign contributions. The Montana Supreme Court had found that the ban was justified by the long history of corruption related to contractor expenditures in Montana, but the Supreme Court overturned that decision, with little discussion, finding that Citizens United applied.

Now, a Sixth Circuit decision has weighed in on another contractor campaign contribution ban.   On August 3, 2012, the Sixth Circuit filed a decision in Lavin v. Husted,5  in which plaintiffs challenged as unconstitutional Ohio Rev. Code § 3599.45, which made it a crime for the State’s Attorney General or county prosecutor candidates to accept campaign contributions from any Medicaid provider or any person with an ownership in a Medicaid provider.  The plaintiffs were Medicaid providers who had tried to contribute to the reelection campaign for Richard Cordray to Ohio Attorney General in 2010 but had been rejected by the campaign committees.  The District Court for the Northern District of Ohio at Cleveland had, after discovery, granted summary judgment in favor of the defendants.

But, the Sixth Circuit overturned the lower court decision, finding that although the prevention of corruption is an important interest, the state was required to demonstrate a general interest, not merely recite one.  In other words, the Secretary of State, defending the Ohio statute, merely theorized that the ban would prevent corruption; he had not shown that corruption had occurred and that the law was closely tied to preventing that corruption.  According to the appellate court, this was not enough.

Although this opinion does not address Citizens United, Wagner, or American Tradition Partnership directly, it is yet another in a series of cases deciding whether bans on campaign contributions by contractors can ever survive the intermediate form of scrutiny applicable to such restrictions in the face of a First Amendment challenge. And, although the Sixth Circuit decision comes out on the side of striking down such a law it notes that the standard has been satisfied in at least one occasion.  Citing to a Second Circuit decision, the Sixth Circuit approvingly notes that in Green Party of Connecticut v. Garfield, the state law prohibiting campaign contributions from state contractors to candidates for state office was upheld, because it had been enacted “in response to a series of scandals in which contractors illegally offered bribes, ‘kick-backs,’ and campaign contributions to state officials in exchange for contracts with the state.” 

According to the Sixth Circuit, Ohio had not presented similar facts.   The court even considered affidavits from three past Ohio Attorneys General stating that receipt of campaign contributions from such individuals would not have influenced their decision-making with regards to Medicaid fraud.  Although understanding and accepting that Medicaid fraud was a serious problem, the court found that this did not justify the First Amendment restrictions as applied to all 93,000 Medicaid providers in the State of Ohio.

So, the Sixth Circuit decision seems to have two sides to it.  On one hand, it strikes down another restriction prohibiting campaign contributions by contractors.  On the other hand, it seems to indicate that there are some sets of facts that would support such a ban.  This balancing act seems at odds with the Supreme Court’s recent decision in American Tradition Partnership where the Supreme Court rejected Montana’s restrictions on contractor campaign contributions notwithstanding the state’s history of corruption that led to the restriction.  The focus of American Tradition Partnership was to follow the Citizens Federal’s holding.  But, let’s not forget the Wagner v. FEC decision; there the D.C. District Court upheld a ban on contractor campaign contributions because the law was enacted in response to a history of corruption.

It seems that the waters of campaign contributions by contractors are getting murkier, not clearer.  At present, it is uncertain whether these decisions can be reconciled to provide a reliable road map or whether clarity will come only after another Supreme Court decision is rendered.

1 Section 441c of the Federal Election Campaign Act.
2 Wagner v. FEC, No. 11-1841(JEB), Apr. 16, 2012, D.D.C.  The case may be accessed at 2012 WL 1255145 (D.D.C.). 
3 American Tradition Partnership, Inc., v. Bullock, No. 11-1179 (U.S. June 25, 2012).  This case may be accessed at 2012 WL 2368660. 
4 Mont. Code Ann. § 13-35-227(1) (2011). 
5 Lavin v. Husted, No. 11-3908 (6th Cir. Aug. 3, 2012).

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