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“Ignoring Well-Established Law”: Gov. Scott Walker, Allies Knew Prevailing Interpretation Of State Law

Supporters of Gov. Scott Walker have been working hard in recent weeks to conjure up excuses to dismiss the John Doe campaign finance probe.

First, they attacked it as a partisan witch hunt, ignoring the fact that the investigation is led by a Republican who voted for Walker and that it has the participation of both Republican and Democratic district attorneys from across the state.

Then, they tried to dismiss it as a “legally baseless” investigation, and argued that Wisconsin law does not prohibit the Walker campaign and Wisconsin Club for Growth from coordinating on electoral “issue ads” that omit the phrase “vote for” Scott Walker.

Now, Walker’s allies are acknowledging that the probe is grounded in Wisconsin law, but are claiming that prosecutors are enforcing a “zombie law” — allegedly rendered unenforceable by the U.S. Supreme Court — that the Walker campaign was purportedly free to ignore.

This is not the case.

The governor is endowed with many powers, but he cannot single-handedly rewrite the law or reverse legal precedent.

For decades, Wisconsin law has capped campaign donations to limit the influence of money in elections, and required candidates to disclose major contributions so the public can see who is bankrolling our politicians. Courts have interpreted the law to mean that “issue ads” coordinated with a candidate for state office can be regarded as in-kind contributions to the campaign, because they are of great value to the campaign. Any coordinated issue ad “contributions” that exceed donation limits and are omitted from campaign filings can be illegal. The same is true in federal elections, under federal law.

Even if the Walker camp believed that coordinated issue ads shouldn’t be regulated, or that at some point in the future a court might overrule existing Wisconsin precedent, this belief shouldn’t have given them license to ignore well-established law during the 2012 elections, as the prosecutors’ theory in the case alleges.

The U.S. Supreme Court has never held that counting electoral issue ads as contributions is unconstitutional. In fact, in 2003 the court explicitly upheld a provision of the McCain-Feingold Bipartisan Campaign Reform Act that treats issue ads that air near federal elections (called “electioneering communications”) as in-kind contributions if coordinated with a candidate. That holding has never been overturned.

And, even as a slim majority of the U.S. Supreme Court has chipped away at campaign finance limits for PACs and non-profits, it has done so with the express proviso that these groups are “independent” and their activities not coordinated with candidates.

Conservative Supreme Court Justice Anthony Kennedy explained in Citizens United vs. FEC that “the absence of prearrangement and coordination…undermines the value of the expenditure to the candidate.” In other words, if a candidate is coordinating with a third-party group, that group’s expenditures are of value to the campaign — and the contribution limits and disclosure requirements that apply to candidates would be rendered meaningless if politicians can work closely with a group that takes secret, million-dollar donations.

Wisconsin courts have had a similar take, and the John Doe prosecutors are relying on an interpretation of state law established by the Wisconsin Court of Appeals in 1999, in a precedent-setting case called Wisconsin Coalition for Voter Participation.

In that case, the court rejected arguments identical to those now being made by Walker and the Club for Growth, and held that, under Wisconsin law, electoral issue ads coordinated with a campaign count as contributions to the campaign.

Despite the claims of op-ed writers published by the Journal Sentinel, it is not the case that the courts had overturned the Wisconsin Coalition for Voter Participation precedent or rendered its holding unenforceable in advance of the recall elections. Just ask Wisconsin’s Republican Attorney General, J.B. Van Hollen. As thousands of people were occupying the Wisconsin capitol in 2011 — sparking a movement that would lead to the recall elections — Van Hollen was citing Wisconsin Coalition for Voter Participation in court briefs as controlling precedent.

Just months later, with recall elections heating up, prosecutors believe the Walker campaign and Club for Growth began working together, an alleged violation of the Wisconsin Court of Appeals’ interpretation of state law that Van Hollen had recently endorsed.

The Wisconsin Coalition for Voter Participation precedent was no secret. It is explicitly cited in the end notes to the Wisconsin statutes, which provide guidance on the prevailing interpretations of Wisconsin law for candidates such as Walker and the raft of lawyers who advise him.

Plus, the Wisconsin Elections Board — the precursor to the Government Accountability Board — issued a 2002 opinion citing both state and federal cases to advise that coordinated electoral issue ads are contributions under Wisconsin law. That opinion was affirmed by the GAB in 2008 and is clearly posted on the GAB website.

If the Walker campaign or Wisconsin Club for Growth believed courts were “moving” toward a different interpretation of Wisconsin statutes, they could have sought an advisory opinion from the GAB, or requested advice from Van Hollen. If they believed that U.S. Supreme Court rulings had made the Wisconsin Coalition for Voter Participation decision unenforceable, they could have sought a declaratory judgment from a state court.

The Walker campaign and Wisconsin Club for Growth cannot claim they were unaware of the prevailing interpretation of Wisconsin law, and Wisconsinites should know better than to buy their after-the-fact rationales.

 

By: Brendan Fischer, General Counsel, The Center for Media and Democracy in Madison: Milwaukee Journal Sentinel, July 17, 2014

July 20, 2014 Posted by | Campaign Financing, Scott Walker, Wisconsin | , , , , , , | Leave a comment

“Who’s Paying For What?”: The Flood Of Secret Campaign Cash Is Not All Citizens United

The emergence of nonprofits [1] as the leading conduit for anonymous spending in this year’s presidential campaign is often attributed to the Supreme Court’s 2010 Citizens United [2] ruling, which opened the money spigot, allowing corporations and unions to buy ads urging people to vote for or against specific candidates.

But a closer look [3] shows that there are several reasons that tens of millions of dollars of secret money are flooding this year’s campaign. Actions — and inaction — by both the Federal Election Commission and the Internal Revenue Service have contributed just as much to the flood of tens of millions of dollars of secret money into the 2012 campaign. Congress did not act on a bill that would have required disclosure after Citizens United and other court rulings opened the door to secret political spending.

To understand how all this happened, it’s worth returning to Justice Anthony Kennedy’s opinion [4] in Citizens United, and the political system the court envisioned. In the decision’s key finding, Kennedy and four other justices said the First Amendment entitled corporations and unions to the same unlimited rights of political speech and spending as any citizen.

But in a less-noticed portion of the ruling, Kennedy and seven of his colleagues upheld disclosure rules and emphasized the role of transparency. Undue corporate or union influence on elections, he wrote, could be addressed by informed voters and shareholders who would instantly access campaign finance facts from their laptops or smart phones.

“With the advent of the Internet,” Kennedy wrote, “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.”

If a company wasted money on politics, the justices agreed, its shareholders could use the publicly available information to “determine whether their corporation’s political speech advances the corporation’s interest in making profits.” Separately, the sunshine of public disclosure will let “citizens see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

“The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way,” Kennedy concluded. “This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

A very different system has taken shape. As our reporting this week showed, money for political ads is pouring into non-profits ostensibly dedicated to promoting social welfare. These groups are paying for many of the negative ads clogging the airwaves, but are not disclosing their donors.

As a result, it’s entirely unclear whether these ads are being paid for by unions and corporations empowered by Citizens United or by wealthy individuals.

Separately, corporations have resisted calls [5] to list their donations to political social welfare nonprofits or other political spending. So far, the Securities and Exchange Commission has not responded to a rulemaking petition [6] asking for it to develop rules to require public companies to disclose that spending.

The Supreme Court’s opening of the door to hefty flows of secret money began years before Citizens United. In a 2007 case (PDF) [7] involving a nonprofit called Wisconsin Right to Life [8], the justices ruled that unions and corporations could buy ads that mentioned a candidate in the weeks before an election as long as the commercials stopped short of directly advocating the candidate’s election or defeat. Even if these ads, known as “electioneering communications,” clearly attacked the positions of one candidate, they were permissible unless they were “susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.”

The flood began and the identities of hardly any of the donors were disclosed. The reason? A decision by the FEC, the oversight panel with three Republicans and three Democrats who frequently deadlock.

After Wisconsin Right to Life, the FEC told social welfare nonprofits that they had to disclose only if the donors specifically earmarked the money for political ads. “It proved to be the exception that swallowed the rule,” said Paul S. Ryan, general counsel of the Campaign Legal Center, a nonprofit, non-partisan group that tracks campaign finance. The day the FEC adopted this rule, Ryan wrote on his blog that it would allow massive amounts of secret money into politics. He proved correct.

In 2006, ads bought by groups that didn’t disclose their donors amounted to less than 2 percent of outside spending, excluding party committees, research by the Center for Responsive Politics [9] shows. By 2008, that number hit 25 percent; by 2010, more than 40 percent.

All of this raises an intriguing question: Was Kennedy aware when he drafted the January 2010 Citizens United opinion that nonprofits were being widely used to avoid public disclosure of political spending?

At the least, critics say, Kennedy was poorly informed.

“Justice Kennedy was living in a fantasy land,” said Ciara Torres-Spelliscy, a professor at Stetson University College of Law who tracks campaign finance issues. “I wish the world he envisaged exists. It doesn’t.”

Instead, this is the disclosure world that exists: Someone who gives up to $2,500 to the campaign of President Barack Obama or challenger Mitt Romney will have his or her name, address and profession listed on the FEC website for all to see. But that same person can give $1 million or more to a social welfare group that buys ads supporting or attacking those same candidates and stay anonymous.

This year, a federal judge struck down the FEC rule stemming from Wisconsin Right to Life. The FEC announced in July that major donors to electioneering communications — ads that focus on issues without directly advocating for candidates — would have to be named.

Already, groups are looking for work-arounds. They’re running different kinds of ads. Some will name other social welfare nonprofits as their donors.

The loose oversight by the FEC helped bring so much anonymous money into campaign finance. But no one expects the commission to take a more assertive role anytime soon. Dan Backer, a lawyer who represents several conservative nonprofits, likened the deadlocked agency to a “cute bunny” while referring to the IRS as a “500-pound gorilla.”

The IRS or Congress are more plausible avenues for change, experts say. Ryan said he was hopeful that Congress and the IRS might some day limit ads from groups that don’t disclose their donors. The 2012 campaign, though, appears to be a lost cause. “I think this election will be mired and perhaps overwhelmed by secret money,” Ryan said.

 

By: Stephen Engelberg and Kim Barker, ProPublica, August 23, 2012

August 24, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

   

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