On January 4, the Fiscal Alliance Foundation filed an Amicus Brief with the United States Supreme Court in support of a request for appeal by the plaintiff’s in the case 1A Auto v. Sullivan. 

The brief was written by Tad Heuer, partner at Foley Hoag in Boston, and is the most comprehensive study ever done on the union loophole.

Initially filed by two family-owned businesses in 2015, the 1A Auto case seeks to close the “Union Loophole.” In September, the Massachusetts Supreme Judicial Court ruled against the plaintiffs and allowed the loophole to remain open.

Since 1988, unions and non-profit associations have been allowed by the Office of Campaign and Political Finance (“OCPF”) to use general treasury funds to make donations directly to Massachusetts candidates, in the aggregate of up to $15,000 annually. This is commonly referred to as the “Union Loophole.” Under Massachusetts state law, donations by individuals are limited to $1,000 per candidate, donations by PACs are limited to $500 per candidate, and businesses are prohibited from making candidate donations at all.

A full copy of the Amicus is available here.

“We filed this Amicus because we believe it is important for the US Supreme Court to have a solid understanding of the scale and scope of the union loophole, and because we believe the publicly available OCPF campaign finance data make this case empirically,” commented Danielle Webb, chairman of the Fiscal Alliance Foundation.

As part of their Amicus, the Foundation analyzed over 38,000 entries in the OCPF database dating back to 2002, the last year data is available on the web. The results demonstrated the extreme bias of the loophole. Some highlights include:

• 99% of all union loophole donations went to Democratic candidates, while 1% went to Republicans.
• 607 union loophole donations totaling $1,865,043 funded Democratic candidates, while seven donations totaling $21,750 funded Republicans.
• 124 union loophole donations, totaling $333,470, were made to 53 unique candidates in Democratic primaries.
• There has never been a union loophole donation in a Republican primary.
• There have been twenty-three $15,000 union loophole donations, while sixty-two were for $10,000 or more, and seventy-seven were between $5,000 and $9,999.
• 18% of union loophole donations—amounting to $549,786—came from out-of-state unions located in 24 different states and the District of Columbia, as far away as California and Hawaii.
• The union loophole allows unions to give up to thirty times more to a single candidate than they could using a PAC—and the OCPF data indicate that unions are taking advantage of this unfairness in the law.
• The union loophole allows candidates to receive donations well beyond what they could receive from PACs—but without triggering the statutory limits on total PAC receipts.

A copy of the raw data used in the analysis is available here.

“In the 2018 election cycle, House candidates expended a median of about $15,000 through October 19, while Senate candidates expended a median of about $37,000,” noted Paul D. Craney, an advisor to the Fiscal Alliance Foundation. “It’s not controversial to think that in such races, even a single loophole donation of $1,000 or more can make a potentially significant difference. And in recent years we’ve seen that happen in some very close races in our state.”

“With the benefit of this empirical analysis of nearly two decades’ worth of Massachusetts campaign finance data on the scope and scale of unions contributions, we believe the Supreme Court will be in a stronger position to evaluate the legal merits of whether the 1A Auto plaintiffs deserve one final day in court,” concluded Craney

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The Fiscal Alliance Foundation is a registered 501(c)3 non-partisan, non-profit organization. It seeks to educate the public on benefits to be derived from greater fiscal responsibility, transparency, and accountability in government and engages in legal assistance on issues involving the civil rights of the public at large.