Missouri's Ban on Banks Contributing to Ballot Measures, PACs Found Unconstitutional

By Chuck Hatfield and Erin Naeger

The U.S. District Court for the Western District of Missouri struck down as unconstitutional and permanently enjoined enforcement of a new Missouri campaign finance law. Under the provisions of the law, banks were prohibited from contributing to Missouri state candidates or ballot measures. They were also prohibited from contributing to Missouri PACs, essentially shutting Missouri banks out of the political process.

In a consolidated lawsuit, Legends Bank, et al. v. Missouri Ethics Commission, et al., Case No. 16-04332-CV-C-ODS, Legends Bank challenged, among other provisions, the amendment's ban on corporate contributions to campaign committees whose sole purpose is to support or oppose ballot measures and on contributions to political action committees from corporations organized outside Chapters 347 to 360, RSMo, including state-chartered banks.

The court agreed with Legends, finding Missouri's ban on banks contributing to ballot measure committees and the ban on bank contributions to PACs to be unconstitutional. Therefore, under the court's order, banks may contribute to campaign committees whose sole purpose is to support or oppose ballot measures and to political action committees. The court's order also allows PACs to accept contributions from foreign corporations that are registered to do business in Missouri and from other PACs.

As a result, the current status of Missouri's campaign finance law is that state-chartered banks may not contribute directly to state candidates, but they may contribute unlimited amounts to non-federal political action committees or to ballot measures.

The court stayed enforcement of its order for 45 days to allow the Missouri Ethics Commission time to appeal. Therefore, the court's order does not give protection from enforcement of the unconstitutional provisions until the end of the 45-day stay, which expires on June 19, 2017. Note this decision applies only to Missouri law and does not change federal restrictions on bank contributions to federal candidates.

For more information on Missouri's campaign finance laws, please contact Chuck Hatfield, Erin Naeger, or the Stinson Leonard Street contact with whom you regularly work.

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