The Missouri Ethics Commission (MEC) recently issued several advisory opinions regarding the state’s newly adopted campaign finance regulations. These opinions provide clarification for businesses and individuals wishing to participate in campaign-related activities. The MEC opinions do not account for all potential scenarios. Therefore, we encourage you to consult Lewis Rice as questions arise.
On November 8, 2016, Missouri voters approved Amendment 2 to the state constitution, reinstituting state political contribution limits, which were repealed in 2008. Amendment 2 adds Section 23 to Article VIII. The new contribution limits took effect on December 8, 2016. The purpose of the amendment was to eliminate unlimited contributions to state candidates and party committees and to prohibit direct corporate and labor organization donations. Section 23.3(3)(a).
There are currently legal challenges to certain provisions of the measure, specifically, concerning what types of business entities may contribute under the new structure. See Missouri Electric Cooperatives v. State of Missouri, No. 17-CV-04006 and Free and Fair Election Fund v. Missouri Ethics Commission, No. 2:16-CV-04332. Even though litigation is pending, contribution limits do apply to the statewide offices of governor, lieutenant governor, attorney general, secretary of state, state auditor, and state treasurer. The limits also apply to state house and state senate candidates. Section 23.3(1)(a).
Individuals may contribute a maximum of $5,200.00 per candidate in a single election cycle. In addition, a state-registered political action committee (PAC) is permitted to donate a maximum of $5,200.00 per candidate in an election cycle. Section 23.3(1)(a).
Corporations and labor unions wanting to remain politically active at the state level must register a state PAC with the MEC. A corporation or labor organization may not contribute its own funds to its connected PAC. Such PACs may only accept donations from members, officers, directors, employees, or security holders. Section 23.3(3)(a) and MEC Opinion No. 2017.03.CF.010. Under the new guidelines, a donation from a limited liability company (LLC) to a state candidate or state party committee is prohibited because it is considered a corporate contribution. MEC Opinion No. 2017.02.CF.005. Consequently, such entities should consider establishing a PAC for purposes of state political activity.
Local and county-level candidates are exempt from the donation limits of Amendment 2. Section 23.3(12) and MEC Opinion No. 2017.02.CF.001. Individuals and labor organizations may contribute unlimited amounts to local candidates. Also, an LLC that files as a partnership is permitted to donate any amount to local candidates.
These current MEC guidelines and interpretations might be affected when the pending litigation is resolved. Until that time, please contact Lewis Rice if you have any questions or need additional information.