Connecticut may not bar lobbyists from making or soliciting campaign contributions, a federal appeals court has ruled - thus sustaining part of an ACLU challenge of the 2005 Campaign Finance Reform Act and overturning a lower court ruling.

The appeals court also found that the so-called "trigger provision," giving a publicly funded candidate more public funds when a privately funded opponent spends above a certain threshold, imposes an impermissible penalty on candidates who choose not to receive public funding, and violates the First Amendment by restricting the right of candidates to spend their own funds on campaign speech.

The Second Circuit U.S. Court of Appeals rejected the arguments of the ACLU and other plaintiffs in ruling that state contractors may be barred from making campaign contributions, although it struck down a provision barring them from soliciting such contributions.

The court also rejected the arguments of the ACLU and the Green Party of Connecticut that the law unduly burdens third-party candidates who seek public financing.

"Today's decision makes clear that the government cannot ban speech and association by silencing certain voices such as those of lobbyists," said Andrew Schneider, executive director of the ACLU of Connecticut. "The Connecticut financing law, which was meant to increase the ability of more people to participate in the democratic process, actually made it harder for some people to do so.

"We hope," Schneider added, referring to the third-party hurdles, "that the legislature will take a fresh look at the campaign finance law and make it fair for all candidates."

Noting that the reform act was a reaction to the corruption conviction of Gov. John Rowland, the appellate court said barring state contractors from political giving was a reasonable response. But it said the law over-reached in barring contractors from soliciting others to give to candidates.

The ACLU and the Green Party had challenged provisions of the law making it more difficult for third-party candidates than for Democrats or Republicans to win public financing. The lower court had rejected that challenge. The appellate court, drawing heavily from a 1976 U.S. Supreme Court decision in Buckley vs. Valeo, agreed with the lower court.

The lower court had also rejected the ACLU's challenge to the law's barring lobbyists from contributing to candidates or urging their constituencies to contribute. Those provisions, the appellate court ruled, violated the constitutional freedom of speech.

The case has been remanded to U.S. District Court Judge Stefan Underhill for urgent review of whether the "trigger provision" of the 2005 law is "separable" so that overturning it did not invalidate the entire law.