Federal Appeals Court Rejects Challenge to NYC Campaign Finance Laws

The U.S. Court of Appeals for the 2^nd Circuit has upheld New York City’s campaign finance rules – which prohibit corporate contributions to political campaigns and require candidates to disclose contributions from people and groups that do business with the city – finding that they do not violate constitutional free speech rights and appropriately address “a heightened risk of actual and apparent corruption.”

Under Local Law 34, which was enacted in 2007, entities doing business with the city can contribute no more than $400 for citywide offices, $320 for borough offices and $250 for city council candidates, and their contributions are ineligible for public matching. Other contributors can donate up to $4,950 for city-wide offices, $3,850 for borough wide positions, and $2,750 to council candidates, and such donations are eligible to be matched with public dollars.

The plaintiffs argued in the case that the U.S. Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission means that New York City’s contribution limits are unconstitutional.

The Court rejected that argument, finding that Citizens United applies only to independent corporate expenditures, and not to contributions limits such as those enacted in New York.  It held that the city’s campaign finance laws “are closely drawn to address the significant governmental interest in reducing corruption or the appearance thereof.”

Since this issue has never been directly addressed by the U.S. Supreme Court, it is possible that the case could end up going before the high court before it is finally resolved.