Faegre Baker Daniels
Kroger Gardis & Regas
The fate of Fort Wayne's newly-adopted ordinance limiting corporate campaign contributions hangs in the balance following a letter Thursday from Mayor Tom Henry to the City Council urging reconsideration and threatening a veto if the ordinance is not revised.
"However, since I do agree something needs to be done to make the campaign donation process more transparent, I would prefer to return the ordinance to you, unsigned, for further discussion, debate and modification," Henry said.
The ordinance adopted on Nov. 28 bars companies from bidding on city contracts if the company or an owner who controls more than 7.5 percent of the company, as well as an owner's spouse or live-in children, gives more than $2,000 total to an elected local official's campaign in a single year. The state limits corporate campaign contributions to $2,000 per calendar year.
In an interview Thursday, Councilman John Crawford, R-at large, who sponsored the ordinance with Councilman Jason Arp, R-4th, said there are no plans for the ordinance to return to the council table for review prior to a veto override vote expected next week.
"What council will do, one never knows," Crawford said.
The Fort Wayne city code requires a two-thirds vote of all city council members -- six votes -- to override a mayoral veto.
Henry's letter states that he believes the ordinance approved in a 6-2 vote violates Indiana's Home Rule Act, as well as the state and federal constitutions.
Home Rule allows municipalities over a certain population limit to govern themselves on matters that aren't superseded by state law.
Additionally, Henry states the ordinance is "not permissible under state law because local governments cannot regulate conduct that has been assigned by the Indiana General Assembly to other units and agencies of government (here the Indiana Election Division and county election boards)."
Specifically, Henry said the ordinance's flaws include:
- Campaign finance limits as a condition for contracting eligibility that state law does not limit.
- Restrictions on campaign finance activities in ways state law does not limit.
- Campaign finance limits for contract eligibility on business entities that state law does not limit.
- Violations of the free speech and association rights of candidates and donors, especially for spouses and children of business owners who are not themselves seeking office.
Henry's letter contained legal opinions from several Indiana law firms, including Kroger Gardis & Regas, Ice Miller, Faegre Baker Daniels and Taft Tettinus & Hollister LLP, to back up his claim that the ordinance violates state and federal law.
"One of my biggest concerns is at a minimum the ordinance could be challenged in court for a determination that the city exceeded its authority under both the state Home Rule Act and the U.S. Constitution," Henry said. "In either case, the city would not only have to pay for its own defense, but if unsuccessful on the federal claims, would have to pay damages to the plaintiff as well as pay the plaintiff's attorneys fees. This is worrisome, to say the least."
City Council Attorney Joe Bonahoom is confident the ordinance is legal, Crawford said.
"I wouldn't have considered putting it forward in the first place if I wasn't sure Joe had done his legal and this stood a chance of facing a (legal) challenge," Crawford said.
Crawford also raised the specter of campaign contributions when referring to the opinions gathered by Henry's administration.
"Some of the firms that have given opinions are ones that have given large contributions and have gotten a large amount of work from the administration," Crawford said. "It raises questions about bias."
According to a pre-primary campaign finance report filed with the Allen County Election Board, five Ice Miller attorneys from Carmel, Indianapolis and Zionsville donated $1,000 each to Henry's mayoral campaign in 2015. According to that same report, Faegre Baker Daniels donated $7,500 to Henry's campaign before the 2015 primary.
A campaign finance report filed shortly before the 2015 general election shows 16 Ice Miller attorneys, including four of the five who contributed prior to the primary, made donations to Henry's campaign totaling $8,850.