A federal judge has upheld Hawaii’s ban on political donations by state and county contractors, ruling that the state has an interest in preventing both actual corruption and the perception of "pay to play" in awarding contracts.

A-1 A-Lectrician Inc., a local electrical construction firm, had challenged the ban as a violation of the First Amendment because it prohibits contractors from making campaign donations to lawmakers who do not directly award or oversee contracts.

U.S. District Judge Michael Seabright ruled that corporate contribution limits are justified to deter corruption. The state Legislature approved the ban on political donations by state and county contractors in 2005 after a rash of campaign-finance scandals involving engineers, architects and other contractors.

Seabright said the Legislature has oversight of state projects and that lawmakers may have power over or close friendships with government officials who award contracts. The judge found that "even more than deterring legislators from actual corruption in awarding contracts, the government has an interest in alleviating a public perception that legislators or others in public office have power to influence who is awarded government contracts.

"The appearance of ‘quid pro quo’ is more than appearance of straight ‘dollars for contracts.’ It is also the appearance of ‘dollars for political favors.’"

The challenge to the "pay to play" ban was part of a federal lawsuit by A-1 A-Lectrician against several provisions of the state’s campaign-finance law in the aftermath of Citizens United v. Federal Election Commission, the U.S. Supreme Court ruling in January 2010 which held that corporations — like individuals — have a constitutional right to political speech.

The Hawaii lawsuit was filed in August 2010 by James Bopp Jr., a conservative mainland attorney who has fought campaign-finance restrictions on corporations.

Seabright, in a ruling issued Wednesday, affirmed that Hawaii cannot limit donations to political action committees that make independent expenditures. The judge had previously issued a preliminary injunction in October 2010 so two contractors involved in the lawsuit could make $2,500 contributions to the Aloha Family Alliance Political Action Committee before the November 2010 elections. State law had limited such donations to $1,000.

Seabright, however, upheld a requirement that corporations such as A-1 A-Lectrician register as political action committees and file disclosure reports if the purpose of their political spending is to influence elections. The judge also held that political advertisements by political action committees must include disclaimers that the ads are not approved or authorized by candidates.

James Hochberg, one of the attorneys for A-1 A-Lectrician, said he was pleased the judge lifted the donation limit to political action committees that make independent expenditures. He said attorneys are reviewing the rest of the ruling and would decide later whether to appeal.

"The ability to use money to get a message out is free speech," he said. "Political speech is the most valuable speech that we have."

The judge’s ruling could bolster efforts by some at the Legislature to expand reporting and disclosure requirements for political action committees, since independent expenditures are expected to increase now that there are no limits.

Others hope that Hawaii will follow the federal government and several other states and ban all corporations — not just state and county contractors — from making direct political donations to candidates.

"We should have that policy discussion about whether or not we ban all corporate contributions," said state Rep. Della Au Belatti (D, Tantalus-Makiki).