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State News

May 20, 2013

Lawmakers: Corporate contribution limits may end

MONTGOMERY, Ala. —

Leading lawmakers have agreed to a litany of changes to Alabama election law, including eliminating the cap on corporate political contributions and making it easier for regulated utilities to influence campaigns.

A compromise committee of representatives and senators fashioned a revised version of Senate Bill 445 on Monday. It still faces a final vote in each chamber, and lawmakers must finish their annual session by midnight. The House and Senate must approve the same version of a proposal before it can be sent to the governor.

Sen. Bryan Taylor, a Prattville Republican, said he began the push to rewrite campaign finance law to make it easier to enforce and to tighten the rules on how political action committees can transfer money. House Republicans added provisions to relax rules corporations and utilities, but Taylor said he's comfortable with the change.

On paper, the current limit is $500, though in practice corporations can find ways to give considerably more to particular candidates or PACs. Individuals already have no cap on what they can give a candidate or political action committee.

The measure also would tighten limits on transfers among political action committees. Republicans first banned PAC-to-PAC transfers after they won legislative majorities in 2010, but they left open a allowing PACs to accept money from out-of-state entities.

Business Council of Alabama President William Canary said he supports lifting the corporate limits. Canary cited U.S. Supreme Court precedent that holds, essentially, that corporations are people and that spending money in politics is a form of speech.

"I think the key to campaign finance has always been transparency and reporting," Canary said. "Those are the issues that should dominate the discussion."

The Alabama bill comes as several federal courts consider various challenges to campaign contribution limits in federal election law. Original plaintiffs in those cases argue that the First Amendment should allow unlimited contributions from individuals, corporations or any other entity eligible to give money.

Republican Mike Ball of Madison, the House sponsor, argues current Alabama law already allows wealthy interests to infuse significant sums of money into the process. He said the changes will allow the public to see who is giving the money and who is taking it.

Taylor also said current law doesn't treat all businesses the same. How a business is constituted — a limited liability corporation versus a limited liability partnership or sole proprietorship — determines whether it was subject to the regulations or whether it could already give unlimited sums.

"This at least gives everyone a level playing field," he said.

Corporations have been able to get around the existing limit because of a longstanding attorney general's opinion that interpreted the limit to apply to a single donation for a single election. The number of elections per cycle, under the opinion, includes everything from the statewide general election to local referenda and any special legislative election. So in a year with 15 elections, the corporate limit $7,500, and that is the amount that a corporation can give to each candidate and political action committee.

It was common for lobbyists and associations to run multiple PACs, and corporations would give that year's limit to multiple PACs they aligned with. The proliferation of PACs also gave rise to transfers among the committees, maneuvers that made it difficult to tell where a candidate was actually getting their money.

The GOP adopted changes in 2010 and 2011 that party leaders said at the time would curb that practice, though the lack of an out-of-state ban opened a new path for an Alabama donor to simply route the money out-of-state to obscure the original source. The compromise on Taylor's bill is intended to block any out-of-state transfers.

House Republicans had proposed allowing PACs of the same political party to give to each other. The compromise committee struck that provision amid outcry that it would simply allow another loophole.

As for utilities, it has generally been the practice that those entities — such as Alabama Power Co., AT&T and cable companies — had PACs that got their money from executives and employees. The proposal would allow those entities to give directly from company accounts, though they still would not be able to contribute to candidates of the Public Service Commission, which regulates utilities.

Ball said those companies should be treated like any other.

Taylor, meanwhile, emphasized the bulk of the bill that deals with rules for filing campaign finance reports and penalties for violating the campaign finance rules. The most serious violation — minor breaches would be misdemeanors — would still be using campaign accounts for personal use.

 

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