The great union loophole

Labor can donate to pols, but not businesses

NEWLY SEATED SUPREME COURT JUSTICE Neil Gorsuch once wrote, “There is something distinct, different, and more problematic afoot when the government selectively infringes on a fundamental right.”

The Massachusetts union loophole, upheld last week in Superior Court, does just that.

The union loophole allows unions to contribute up to $15,000 to state candidates, while limiting individuals to $1,000 and preventing employers from contributing anything at all. The loophole exists as a result of an interpretation by a state bureaucrat in 1988 and has been exploited again and again, with some candidates raking in hundreds of thousands of dollars from unions.

For example, in 2015, Boston Mayor Martin Walsh collected over $500,000 from over 100 unions through the union loophole. Many of those unions were outside of Massachusetts.

The law has been challenged by businesses owned by Rick Green and Mike Kane, both officers on Massachusetts Fiscal Alliance’s board of directors. Their suit charges that by enforcing different rules on businesses and unions, the law violates both constitutionally protected free speech and equal protection.

Massachusetts is just one of six states that prohibit employers from donating to candidates while allowing unions to donate. It’s the only state that also bans employers from creating a political action committee and allowing the business to administer the committee. Even the federal government allows employers a voice through a political action committee.

Campaign finance laws exist to limit the corrupting influence of money in politics. In Massachusetts, the laws are interpreted and administered by the Office of Campaign and Political Finance.

In defending the unfair union loophole, the Office of Campaign and Political Finance argued that it was in the interest of the state to protect campaigns against potential corruption from employers. And even though LLCs were free to contribute until the ban was expanded to include them in 2010, the court wasn’t provided with a single example of a case in which a business contribution led to corruption.

The corrupting influence of unions, however, has been a troubling issue at Boston City Hall as recently as last year. Unions and mischievous elected officials have long gamed the system to benefit each other. City officials have, in fact, been indicted by federal law enforcement for extortion in connection with union hiring.

The argument that employers are more likely to corrupt than unions doesn’t hold up.

Meet the Author

Paul D. Craney

Board Member & Spokesman, Massachusetts Fiscal Alliance
Meet the Author

James M Manley

Senior attorney, Goldwater Institute
In other parts of the country, courts are moving toward increasing personal freedoms and extending greater equal protection. Massachusetts should move that way, too.

The next step in the union loophole lawsuit is an appeal to the state Supreme Judicial Court. Because equal protection is a fundamental freedom, we are optimistic that justice will finally be served.

Paul D. Craney is the executive director of Massachusetts Fiscal Alliance. James M. Manley is a senior attorney with the Goldwater Institute and is representing the plaintiffs with assistance from McCarter & English partner Gregory D. Cote.