Texans for Free Enterprise v. Texas Ethics Commission, No.13-50014 (5th Cir. October 16, 2013).
This is an injunction case of interest to any governmental entity which has its own election code or enforces state law election codes through an ethics ordinance. In this case, the U.S. Court of Appeals for the Fifth Circuit enjoined the enforcement of certain sections of the Texas Election Code as being contrary to the First Amendment.
Texans for Free Enterprise (“TFE”) is a political committee formed and incorporated to advocate for candidates in Texas elections. They advocate for candidates they believe proper for a position, but do not provide funding to any specific candidate. The Texas Election Code prohibits corporations from “mak[ing] a[n unauthorized] political contribution” which includes providing indirectly anything of value to a candidate. The ban on contributions applies regardless of whether the corporation uses that money to make contributions to candidates or makes only direct campaign expenditures supporting a candidate (such as paying for a supporting commercial). TFE sued to TEC seeking to enjoy the enforcement of this provision against it for its support of candidates. The trial court granted the injunction and the TEC appealed.
In affirming the injunction, the 5th Circuit held the challenged law is incompatible with the First Amendment and adopted the holdings of various other circuits. Preventing anyone, including corporations, from paying for advocacy of candidates is not supported under the U.S. Constitution. Additionally, although not explicit in the opinion, is this holdings implication on a candidates “acceptance” of such indirect value which would, more than likely, not hold up to a constitutional challenge either.
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