Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Federal Judge Upholds Alabama Ban on PAC-to-PAC Campaign Donations

A federal appeals court on Tuesday upheld Alabama's ban on transfers between political action committees, saying it didn't affect a political group's ability to make independent expenditures.

By Brian Lyman

A federal appeals court on Tuesday upheld Alabama's ban on transfers between political action committees, saying it didn't affect a political group's ability to make independent expenditures.

The three-judge panel ruled that the law didn't prevent the Alabama Democratic Conference (ADC), which sued to overturn it, from raising the funds to support its activities.

"The ban does not limit the amount of money the ADC can raise; it only limits the ADC's ability to raise money through a specific type of donation -- PAC-to-PAC transfers," said the opinion, written by U.S. Circuit Judge Beverly Martin. "Moreover, the ban does not directly affect the ADC's campaign contributions or independent expenditures. The ADC can continue to make unlimited contributions and independent expenditures."

The Alabama Legislature in 2010 approved a law that banned PACs from moving money to other PACs. Known as a PAC-to-PAC transfer, the practice was often used to hide the source of money given to individual candidates or groups. The ADC challenged the ban on freedom of speech and due process grounds.

In a statement, Alabama Attorney General Luther Strange praised the ruling.

"The PAC-to-PAC transfer ban has been instrumental in limiting campaign corruption while adding greater transparency to the elections process," the statement reads. "I am pleased the federal appeals court upheld the constitutionality of this important law."

Joe Reed, executive director of the ADC and a longtime leader of the Alabama Education Association (AEA), said Tuesday the decision would make it harder for his organization to raise money.

"Not only ADC, it's going to be harder for everybody," he said.

After the law passed, the ADC created two separate bank accounts, one dealing with independent expenditures and the other aimed at political contributions. The ADC challenged the ban in 2011, arguing that in light of the U.S. Supreme Court's 2010 ruling in Citizens United, which struck down campaign spending limits by independent groups, the state of Alabama couldn't regulate those contributions.

"It was an effort to curb the amount of money that we could transfer," Reed said Tuesday. "It was aimed at organizations like the AEA, the ADC, organizations that really were out trying to influence legislation for the good of the common people."

A lower court initially ruled in favor of the ADC, but an appeals court reversed the decision, saying the ruling in Citizens United applied only to groups making independent expenditures and not organizations like the ADC, which engage in independent spending and direct contributions to candidates.

The district court upheld the ban, arguing among other items the ban didn't promote a state interest or that the state had a strong interest in banning the practice. Attorneys for the state argued Alabama's interests were promoting transparency and preventing corruption. The ADC also argued that because it kept its expenditures in separate bank accounts -- and because Citizens United said independent expenditures don't create the appearance of corruption -- the state had no compelling interest in its accounts tied to campaign expenditures.

The appeals court disagreed with that, upholding the lower court's ruling that because the ADC controlled the accounts without any clear organizational separation between the two, the state had an interest in regulating them.

"The District Court properly recognized that the PAC-to-PAC transfer ban served the State's anti-corruption interest as applied to the ADC's account for independent expenditures," Martin wrote.

Ed Still, an attorney for the ADC, said Tuesday the organization hadn't decided whether to pursue an appeal.

(c)2016 the Montgomery Advertiser (Montgomery, Ala.)

Caroline Cournoyer is GOVERNING's senior web editor.
Special Projects