The state Intermediate Court of Appeals yesterday upheld a Maui court ruling which found that corporations can donate the same amount of money as individuals to state political candidates and do not have to pass the donations through corporate political action committees.

The state Campaign Spending Commission appealed the 2007 ruling from Maui Circuit Court, arguing corporations could only give $1,000 per election — $2,000 per election cycle — to corporate PACS, which could then contribute the money to candidates.

The appeals court agreed with the Maui court that corporations and individuals can give the same maximum amount directly to candidates, which is $2,000, $4,000 or $6,000 per election cycle, depending on the office.

The commission has not enforced its interpretation of the law pending the appeal, so corporations have been free to donate directly to candidates and will likely continue as fundraising has already started for the 2010 elections.

Barbara Wong, the commission's executive director, said the commission would have to review the appeals court ruling before determining whether to ask the state Supreme Court to take the case. She said she hopes the state Legislature will address the issue.

Corporate donors to Maui Mayor Charmaine Tavares' 2006 campaign filed the legal challenge after being warned by the commission that they had given excess contributions.

"The law is clear," said William Crockett, a Wailuku attorney who represented the donors. "I can't understand why Wong has interpreted the law as she did."

The Legislature changed state campaign-finance law in 2005 to restrict the amount of money corporations can give to corporate PACs. Before the change, corporations had since 1997 been able to give unlimited amounts of corporate money to corporate PACs.

Wong said that moving the money through corporate PACs provides more public transparency, since corporate PACs have to file campaign-finance reports that detail contributions. Corporate donations made directly to candidates show up on candidate campaign-finance reports but are difficult for the public to monitor unless every report is scrutinized.

"The court's decision is a blow to transparency," Wong said.

But some lawmakers, and the state attorney general's office, believe the Legislature never intended to cap corporate contributions to candidates at $1,000 per election, only to place to limits on corporate donations to corporate PACs.

Several attempts to amend the law have failed. Last session, lawmakers suggested a $25,000 or $50,000 cap as a compromise, but the proposals were defeated after activists complained lawmakers were opening the floodgates to corporate cash.

State House Majority Leader Blake Oshiro, D-33rd ('Aiea, Halawa Valley, 'Aiea Heights), said the court ruling would likely strengthen the position of lawmakers who do not want further caps. "It makes it difficult for us to go back to them and say, 'why don't we try again?' " he said.

State Sen. Les Ihara, Jr., D-9th (Kapahulu, Kaimuki, Palolo), said activists are standing behind the principle that corporations are not like individuals and should not be able to donate directly to candidates. The federal government and more than 20 states ban direct corporate contributions to candidates.

"He tried to bait us into a gamble, and we didn't gamble. We wouldn't play," he said of Oshiro and others who backed the compromise. "Basically, the position has always been clear: no corporate donations to candidates."