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An Alabaman Speaks To New Yorkers

Shaun McCutcheon, an electrical engineer and CEO from Alabama, is now free to tell New Yorker City voters exactly what he thinks of their mayoral candidates - thanks to a federal appeals court.

Three judges on the Second U.S. Circuit Court of Appeals ruled yesterday that a New York law limiting contributions to “independent expenditure” groups is probably unconstitutional, and that McCutcheon is free to disregard the $150,000 contribution cap. The decision came just 12 days before New Yorkers go to the polls to choose between Bill de Blasio, a Democrat, and Joseph Lhota, a Republican.

McCutcheon is not an admirer of de Blasio, or at least of de Blasio’s politics. He has pledged to donate at least $200,000 to the New York Progress and Protection PAC, which supports Lhota’s campaign but is not part of the Republican’s campaign organization.

The PAC wants to help fund a last-minute advertising blitz in favor of Lhota, who is far behind in the polls. But New York’s law limiting individual contributions to such groups to $150,000 per year is in the way.

The Second Circuit panel did not address the merits of that claim, but it found that under the Supreme Court’s Citizens United ruling, there is a substantial likelihood that the law will fail. Citing irreparable harm to McCutcheon’s free speech rights, it reversed U.S. District Judge Paul Crotty’s refusal to issue a preliminary injunction to block enforcement of the law against the Alabaman.

McCutcheon is the founder and CEO of Coalmont Electrical Development Corp. of McCalla, Ala. He is also the central figure in another high-profile lawsuit, one that was argued before the Supreme Court earlier this month. In McCutcheon v. Federal Election Commission, McCutcheon seeks to overturn a federal limit of $123,200 on the amount an individual can give collectively to individual candidates,  political parties and some political committees. The ceiling further limits total contributions to individual candidates at $48,600. McCutcheon is not challenging the rule that says an individual may give any particular candidate no more than $2,600; he simply argues that the aggregate limits prevent him from contributing to as many candidates as he would otherwise choose to support.

McCutcheon says the state and federal rules he is challenging infringe on his free speech rights. As a legal point, this is beyond question in the New York case, since McCutcheon wants to contribute not directly to the candidate he supports, but merely to a group that wants to advertise in favor of that candidate. This is exactly the point that Citizens United decided.

The case against the FEC potentially breaks new ground. The Supreme Court has not yet held that a contribution directly to a candidate’s campaign, to be spent as the candidate decides, is tantamount to speech. Even though I support the Citizens United decision, I don’t see how such a ruling would be the correct answer. It seems more likely that such rules run afoul of constitutional protections for freedom of association, but that too is something the Supreme Court has not declared - yet.

Critics of Citizens United who also are critics of McCutcheon’s current suits say the CEO and his supporters want to “buy” elections. This is a nonsensical argument, which presupposes that elections are always won by the candidates who can afford the most advertising. There is ample evidence to the contrary, a lot of which also points to the conclusion that Citizens United’s opponents merely want to ensure that any financial advantage accrues to them.

Take President Obama, for example. He has lost almost no opportunity to criticize Citizens United for inviting wealthy business interests to buy the presidency. Mitt Romney certainly benefited from such support last year, but it did not do him much good. Not only did Obama win the election while his fellow Democrats held control of the Senate, but the voting happened after the most thorough debate of the issues that I think anyone could imagine. I may not agree with the conclusion that most of my fellow voters reached, but I certainly can’t argue that their votes were purchased. I find it insulting, as well as false, for them to imply that mine was.

So congratulations to McCutcheon, who has emerged as an important defender of individual rights, as well as living proof that a single private citizen can still make a difference in our public lives. And congratulations to the Second Circuit judges as well, for sticking up for a Southerner’s right to give New Yorkers a piece of his mind.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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