Dan Proft | Youtube screenshot
CHICAGO — A federal appeals panel has rejected a challenge to Illinois campaign finance laws from conservative pundit and activist Dan Proft, saying the state can limit contributions to and spending by certain campaign funding organizations, while not limiting others.
In 2018 Proft, founder of the political advocacy group Liberty Principles PAC, sued the state seeking to strike down campaign donation limits on so-called independent expenditure committees, arguing it’s unfair to not have similar restrictions on other campaign finance vehicles. He asserted the law establishes an "unlevel playing field" for political funding.
In October 2018, U.S. District Judge Virginia Kendall dismissed the case, finding limits on the independent committees are constitutional and a “closely drawn means of preventing corruption or its appearance.”
A three-judge panel of the U.S. Seventh Circuit Court of Appeals backed Kendall's ruling. Seventh Circuit Judge Michael Brennan wrote the opinion on Proft’s appeal, issued Dec. 16. Judges Michael Kanne and Frank Easterbrook concurred.
Brennan said Proft’s appeal was narrow, seeking “to overturn the ban only when unlimited contributions and unlimited coordinated expenditures are allowed for others.”
Under state law, campaign spending limits disappear when a candidate’s self-funding efforts exceed $250,000 for a statewide office or $100,000 for any other race. But even in those circumstances, independent expenditure committees remain barred from contributing to or coordinating with a candidate.
“In effect, the Illinois Election Code grants independent expenditure committees a tradeoff,” Brennan wrote. “They can raise unlimited funds for independent expenditures, but they risk heavy fines if those funds are contributed to candidates, parties or PACs.”
The panel said lifting the contribution and coordination ban would introduce “a substantial risk of actual or apparent corruption.” Because an independent expenditure committee can take in unlimited money from any source, the ban erects a wall keeping such committees from becoming a channel connecting unlimited donations and unlimited expenses, which the panel said “would create manifest opportunities for corruption.”
Groups that are allowed to donate when the cap is lifted, such as conventional political action committees, still remain subject to restrictions on contributions from individuals and group entities.
“Because the Illinois Election Code limits contributions to PACs, donors are less likely to use PACs as conduits for contributing money to candidates in corrupt dealings,” Brennan said.
Donations of more than $150 to independent expenditure committees must be reported on state disclosure forms, the panel said. But because the committees would be listed on disclosure forms when they give money to candidates, the individual donor’s identity could be obscured.
“Passing contributions in this manner may be a particularly effective way of hiding quid pro quo transactions,” Brennan wrote. “Funds may commingle within an independent expenditure committee, and these committees may even transfer funds back and forth to one another without penalty.”
The panel agreed with Kendall that striking down the law would essentially create a road map for eschewing disclosure obligations and public oversight.
“The ban serves a sufficiently important interest — the prevention of actual or apparent corruption — by ensuring independent expenditure committees cannot circumvent key Illinois Election Code provisions that prevent corruption,” Brennan wrote. “Illinois’ statutory scheme leaves ample room for independent expenditure committees to participate in Illinois politics. The ban regulates only contributions and coordinated spending by these committees - the activities most likely to give rise to the prospect of corruption.”
The panel also rejected the argument Kendall erred in denying a motion for preliminary injunction, noting she did so after determining the complaint was likely to fail on its merits and that granting the injunction wouldn’t outweigh “maintaining the integrity of the electoral process.”
Proft has been represented in the action by attorneys from the Liberty Justice Center, of Chicago.