If you want to form a general purpose political action committee in Texas that promotes a particular point of view, you first need to: (1) Appoint a treasurer and register with the Texas Election Commission, (2) collect contributions from 10 contributors, (3) wait 60 days before exceeding $500 in contributions and expenditures, and (4) never accept contributions from corporations unless your PAC engages only in independent expenditures.

On appeal, the Fifth Circuit upheld the treasurer requirement and (surprisingly) the ban on corporate contributions. However, it found the 60-day, $500 limit and the 10-contributor requirement unconstitutional.

At issue were three different general-purpose PACs that couldn’t engage in election advocacy because of the rules above.

The 60-Day, $500 Limit: No!

Was this an “expenditure or contribution limit,” meaning it’s subject to “exacting scrutiny”? Or was it a “disclosure incentive” subject to much less scrutiny? The court found that even a temporary limit on election speech was still a limit subject to Citizens United. Because the expenditures were “independent” – meaning not made in coordination with a particular politician’s campaign – the limit on those expenditures could not possibly be designed to combat “quid pro quo” corruption, which can only occur if the expenditures aren’t independent. (If this logic seems circular, you can blame Justice Kennedy.)

The Ban on Corporate Contributions: Yes!

Notably, the Fifth Circuit upheld the ban on corporate contributions, but the contribution here was an email list as an in-kind donation.

All in all, a pretty good day for election regulation, as the Fifth Circuit recognized that at least “hybrid” organizations engaging in both direct and indirect expenditures present enough of a question of quid pro quo corruption that the state can regulate their contributions.

Related Resources:

  • What Corruption? McCutcheon Reveals Absurdity of Citizens United (The Center for Media and Democracy)
  • Dollars and Sense: How Undisclosed Money and Post-McCutcheon Campaign Finance Will Affect the 2014 Election and Beyond (Demos)
  • Citizens United Is Now Affecting Your Grandma’s Bingo Game (FindLaw’s U.S. Fifth Circuit Blog)
  • PAC Can Make Unlimited Donations in NY Mayoral Election (FindLaw’s U.S. Second Circuit Blog)

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