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February 5, 2019

Draft rule would cut union contributions to candidates

State campaign finance regulators are proposing to close what critics have derided as a "union loophole" by reducing the amount of money a union can contribute to a candidate for public office from $15,000 to $1,000.

The Office of Campaign and Political Finance proposed the change in a draft regulation released Monday that will now become the subject of public hearings.

"We're definitely pleased that the agency adopted our recommendations with just a few minor tweaks," said Pam Wilmot, executive director of Common Cause Massachusetts. "We look forward to looking more thoroughly at the details, and the process will continue, but we think it's the right decision based on the statute, the law and good public policy."

Campaign finance regulators began revisiting the current rules at the request of Common Cause after the Supreme Judicial Court last year questioned the legal strength of the so-called "union loophole" in a ruling against the Massachusetts Fiscal Alliance upholding the state's ban on corporate political donations.

Under the current rules, unions are allowed to contribute up to $15,000 to individual candidates in a single cycle.

That practice stemmed from a 1988 bulletin exempting unions from contribution limits that apply to individuals and political action committees. Opponents argued that this rule gave organized labor unfair influence over the electoral process.

The draft rule would hold unions to the same contribution limits of individuals, including $1,000 to a candidate, $500 to a political action committee (PAC) and $5,000 to a political party. Unions would also be forced to register as a PAC if they exceeded $15,000 in donations in a year. 

The fiscal alliance said the reduction in the limit is welcomed, but the organization continues to believe that unions, like corporations, should be forced to set up PACs in order to participate in politics.

"We are pleased to see the union loophole get dramatically smaller. OCPF and MassFiscal came to complete agreement on one issue today: the $15,000 threshold should be eliminated. This will result is more competitive elections and more equality in campaign finance law," said Paul Diego Craney, a spokesman for MassFiscal. 

Craney, however, said he "can't be satisfied" because he does not believe that OCPF has the authority to set any limits for unions.

"The state legislature was very clear in their legislation on this issue. Unions can donate to candidates by forming a political action committee. That’s what’s written in the law, and that’s the position we will push OCPF to adopt at their next hearing. Any other position is lawlessness," Craney said. 

Political action committees are currently limited to giving $500 to a candidate's committee. Forcing unions to register as PACs would also trigger reporting requirements and prevent them from making donations from their general treasury.

Jacob Ventura, an Attleboro Republican, told OCPF Director Michael Sullivan in December that had he known in 2017 about the union loophole he never would have run in a special election against Sen. Paul Feeney, who Ventura said raised over $70,000 in union loophole donations, putting Ventura at a significant disadvantage.

A public hearing on the draft regulations has been scheduled for March 5, and all comments are due to OCPF by March 15. Final regulations are expected by May 1.

The union loophole is also being challenged in the U.S. Supreme Court by businesses owned by MassFiscal founder Rick Green and board member Mike Kane.

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