Political “dark money” and the founder of an organization tied to President Donald Trump’s accusations of voter fraud will be at the center of a Texas Supreme Court case Tuesday that could reshape campaign finance laws in the country's second-largest state.
Chief questions facing the nine Republican justices on Texas’ highest civil court include the legality of the state’s ban on corporate contributions and disclosure requirements for political action committees. Some believe the case ultimately could wind up before the U.S. Supreme Court and potentially reshape campaign finance regulations nationwide.
Houston tea party group King Street Patriots, started by Catherine Engelbrecht, has been the focus of a longstanding lawsuit by the Texas Democratic Party accusing the organization of violating state campaign finance laws by engaging in political behavior when it dispatched poll watchers on behalf of the Texas Republican Party during the 2010 election. Democrats have used the case to press for disclosure of the group’s donors.
But the nonprofit, represented by conservative Terre Haute attorney James Bopp Jr., architect of the landmark Citizens United case that opened the door for corporations and unions to make unlimited independent expenditures in U.S. elections, has fired back with a counterclaim challenging numerous provisions of Texas campaign finance law. The case has played out for years in Texas courts on whether key components of the state’s campaign finance and disclosure system are constitutional.
Twenty-two states currently prohibit corporations from contributing money to campaigns and candidates, according to the National Conference of State Legislatures.
Texas has no limit on what individuals or political committees can donate to candidates, requiring all political spending to be disclosed. But corporations statewide are barred from giving money directly to a campaign, though they are allowed to contribute to a political committee set up for a ballot measure or to a state-level Super PAC, which is only allowed to make expenditures independent of candidates.
With his win in the Citizens United case and lawsuits lodged nationwide, Bopp has become “the most prolific anti-campaign finance litigator in U.S. history,” and the Texas lawsuit could be a proxy for a future challenge at the U.S. Supreme Court, said Tara Malloy, deputy executive director of the Campaign Legal Center, a Washington-based group that has filed briefs in the case supporting Texas’ campaign finance laws.
Malloy said a federal ban on corporate contributions to candidates remains in place.
“This Texas case could be a sleeper test for a much larger context,” Malloy said.
Bopp said current Texas laws infringe on the Houston group’s free speech. He said an appeal to the U.S. Supreme Court to eliminate the corporate contribution ban and PAC disclosure requirements would be expected if they were to lose in state courts.
“I’ve won a whole bunch of cases around the United States on several of these issues,” Bopp said.
Engelbrecht’s King Street Patriots drew national attention in 2010 for sending hundreds of observers to assist the state Republican Party with poll watching efforts and sparking allegations of voter intimidation. She said the group exists only on paper now and an offshoot started about the same time called True the Vote has taken the lead on looking into voter rolls in numerous states.
Trump has made widely debunked claims that the presidential election was marred by 3 million illegal voters while encouraging the work of True the Vote, which claims to be conducting a state-by-state voter roll analysis that Engelbrecht says could substantiate Trump’s accusations.
Tuesday’s hearing comes amid debate in Texas and elsewhere over so-called “dark money” and when a politically active nonprofit should have to disclose its donors like a traditional political committee.
Democrats have alleged in their lawsuit that the King Street Patriots, a nonprofit that is not required to disclose donors under federal and state campaign finance laws, made unlawful political contributions to the Texas GOP by training poll watchers in cooperation with the party and by holding candidate forums only for Republicans. Democrats have argued the nonprofit is a “sham corporation” that has acted more like an outside political group.
Two state courts so far have upheld the Texas campaign finance laws at issue in the case. A lawyer for Texas Democrats said he’d be shocked if even the state’s all-Republican Supreme Court didn’t continue that trend.
“It would be among the most radical campaign finance rulings of any court in the nation,” said Houston lawyer Chad Dunn. “If you get rid of the disclosure rules in Texas you have no rules at all.”