Signed Into Law

The Hawaii bill which would strip corporations of the power to make corporate donations is now law.

I do expect that the Supreme Court will overrule this, probably in a shadow docket decision, before the ink on the Governor's signature is dry, but it is a good thing. 

On Thursday, Gov. Josh Green formally enacted Senate Bill 2471, now Act 11, which establishes new restrictions on political spending by corporations and other “artificial persons” established under Hawaii law.

The measure has received widespread national attention as the first major state-level challenge to the unchecked spending by Super PACs ushered in by the U.S. Supreme Court’s controversial 2010 Citizens United v. FEC decision, which established corporate spending on political advertisements as protected free speech.

“The foundation of our democracy is that political power belongs to the people,” said state Sen. Jarrett Keohokalole, who co-introduced the measure. “Corporations and other artificial entities exist because the state grants them legal privileges, including limited liability and lucrative tax benefits that individuals cannot claim. Act 011 clarifies that those privileges do not include the power to spend corporate money to influence our elections.”

The new law will almost certainly be challenged in court as a direct violation of the Supreme Court ruling but supporters contend it will withstand judicial scrutiny because its scope is limited to the terms set forth by the Hawaii State Constitution regarding the powers granted by the state to the entities it creates and their limitations.

In essence, Act 011 clarifies that artificial entities created under state law possess only those powers necessary or convenient to carry out their lawful business or organizational purposes. The law specifies that those powers do not include spending money or contributing anything of value to influence elections or ballot measures.

Act 011 applies to a range of entities organized or authorized to do business under Hawaii law, including corporations, nonprofit corporations, limited liability companies, limited partnerships, limited liability partnerships, and certain associations. It also authorizes the attorney general and the director of Commerce and Consumer Affairs to impose penalties or bring enforcement actions for violations.

Hopefully, this scares the hell out of the Snollygoster Six on the Supreme Court.

More is coming.