Political Dark Money Limits Clear Hurdles in Hawaii, Montana

A drive to end the era of political dark money using a novel theory of corporate law is gaining momentum, with proposals in two states overcoming key hurdles.

Hawaii’s version is headed to the governor’s desk after becoming the first to clear a state legislature May 8, when lawmakers signed off on a compromise bill following weeks of negotiations. In Montana, twin voter initiatives—one statutory, one amending the state constitution—survived court challenges in the past few weeks that would have kept them off the midterm ballot.

Success in either state would likely force the US Supreme Court to decide if the move represents a legally viable counter to Citizens United—the landmark 2010 decision that effectively ended efforts to limit corporate campaign spending—or just a doomed end run around settled law.

The movement’s backers hope an eventual ruling in their favor will transform it politically into a “speeding freight train that nobody wants to step in front of,” according to Tom Moore of the Center for American Progress, the plan’s architect.

Read More: Dark Money Critics Wield Corporate Law Against Citizens United

Organizers in roughly two dozen more states are working on parallel measures, although about half are in the earliest stages and the others failed to advance ahead of the midterms. Supporters say the strategy is crafted to avoid the concerns behind the Citizens United ruling, which held that corporate spending on elections is constitutionally protected.

Rather than directly restricting political activity, the Hawaii legislation, Montana initiatives, and related proposals would remove the power to spend on elections from the statutes that authorize businesses, trade associations, and other “artificial persons” to operate in the first place.

Business groups, GOP politicians, and other opponents—among them many free speech advocates and labor unions—insist the strategy will crash headlong into the high court’s recent precedents.

Critics including Hawaii Attorney General Anne Lopez (D) have cited the First Amendment argument, concerns that applying the law to out-of-state companies could violate the Commerce Clause, and the “unconstitutional conditions” doctrine, which prevents states from hinging the exercise of one right on the surrender of another.

Legislative Minefield

The Montana initiative was initially seen as the theory’s most promising test thanks to its status as a referendum with the chance to steer clear of a legislative process that often spells death by inertia or special interest bartering.

The push has drawn endorsements from state political heavyweights like former US Sen. Jon Tester (D) and national figures including former US Transportation Secretary Pete Buttigieg, a potential 2028 presidential candidate. Buttigieg will visit the state to rally support ahead of a June 19 signature deadline.

The lack of a legislative minefield meant opponents looked to the courts to halt the initiatives. Those challenges came up short in April, when the state’s top tribunal said it would be premature to weigh the broader arguments against the law before voters have their say.

The decision rejected the idea that by affecting both the “powers” and “rights” of corporations, the proposal violated a state constitutional doctrine requiring ballot measures to embrace only a single subject.

Moore characterized the ruling—the first by any court to explicitly agree that altering corporate powers differs from curtailing corporate rights—as a major victory, although he acknowledged that the case’s posture was unusual. If Montana’s justices continue to honor the distinction between rights and powers when the constitutional issues are fully presented, “that’s the whole ballgame,” he said.

Concerns about the legislative process, meanwhile, proved prescient when the plan failed to advance this year in 13 of the 14 states that introduced bills, including California and New York. Those fears also foreshadowed complications that threatened to derail Hawaii’s Senate Bill 2471 before its surprise emergence intact.

There are about a dozen states where supporters have taken more preliminary steps, unveiling draft bills or starting to organize ballot drives.

‘Pretty Gross’

Hawaii Gov. Josh Green—a Democrat up for re-election who has until late June to decide on a potential veto—recently expressed tentative support for the legislation, which would take effect July 1, 2027. Green called the flood of corporate political spending “pretty gross” in remarks to a local TV reporter.

State Sen. Karl Rhoads (D), a sponsor of the legislation, said in an email that he expects the governor ultimately to sign it.

“Limiting the flow of dark money is a very popular proposition,” Rhoads said, “especially among Democrats.”

Aviam Soifer, the longtime former dean of the University of Hawaii’s law school, said a constitutional workaround is only necessary because the Supreme Court’s jurisprudence has veered off course. He said Justice Anthony Kennedy had shown himself to be at best “amazingly naive” by stating in Citizens United that corporate mega-donations don’t create even the appearance of corruption.

But last month’s ruling gutting the Voting Rights Act—in which Justice Samuel Alito Jr. suggested changing circumstances justify revisiting settled precedents—may have cracked open the door to attack corporate political spending, according to Soifer, who penned a May 5 op-ed in favor of S.B. 2471 with a former state attorney general and retired chief justice.

“The current court has shown that it’s not bound by precedent,” he said.