In The News

The New Campaign Finance Landscape: Super PACs Spending Big in 2012 Election

The New Campaign Finance Landscape: Super PACs Spending Big in 2012 Election

Super PACs are a new kind of political action committee created in July 2010 following the outcome of the federal court case SpeechNow.org v. Federal Election Commission (SpeechNow.org v. Fed. Election Comm’n, 599 F.3d 686 (D.C. Cir. 2010) cert. denied, 131 S. Ct. 553, 178 L. Ed. 2d 371 (U.S. 2010)).

Securities and Exchange Commission Plays Campaign Finance Watchdog

While the courts are de-regulating campaign finance, other branches of government are searching for ways to clamp down. At the national level, the Securities and Exchange Commission has targeted individuals and entities that provide investment advisory services to government pension systems.

Litigation We’re Watching by Terry Martin

Lasted Updated 5/14/2018

United States v. Singh (9th Circuit, parties currently filing opening briefs): Ravneet Singh, a political consultant, was convicted under the “anti-shredding” provision of the Sarbanes-Oxley Act for his role in a campaign money laundering scheme which funneled campaign contributions from a wealthy Mexican businessman into San Diego local races. Recognizing that the particular theory of the Sarbanes-Oxley Act accepted by the trial court may impose additional, unenumerated reporting obligations on vendors of in-kind services to campaigns beyond the comprehensive reporting obligations of the Political Reform Act, Bell, McAndrews & Hiltachk attorneys filed an amicus brief in the U.S. Court of Appeals for the 9th Circuit urging the court to adopt an interpretation of the “anti-shredding” provision of the Sarbanes-Oxley Act that provides clear guidance to such vendors.

Thompson v. Hebdon (9th Circuit, oral argument set for June 11, 2018): First Amendment law forbids discriminating against speakers based on identity, with rare exceptions such as certain forms of foreign national participation in the political process. Alaska enforces a statutory provision that limits the aggregate contributions a candidate may accept from out-of-state residents. The law was challenged under the free speech clause for unconstitutionally discriminating against people who do not live in Alaska, but are still U.S. citizens. If Alaska’s law is upheld, the decision could undermine protections for national groups and donors engaged in political action.

Lair v. Motl (9th Circuit opinion issued, awaiting appeal): Montana’s campaign contribution limits for campaigns in state were challenged under the First Amendment as being too low and unsupported by evidence. The district court struck down the limits and the U.S. Court of Appeals for the 9th Circuit reversed. It is expected that the challengers will petition the U.S. Supreme Court for review. If review is granted, the case is expected to resolve whether limits on the amount a donor can contribute to candidates, committees, and political parties imposed by governments must be supported by evidence of the corruption they were enacted to combat. Another case, Zimmerman v. City of Austin, presents a similar issue in the context of the municipal campaign finance limits in Austin, Texas. As with Lair, a federal appellate court decision against the challenger was recently issued (5th Circuit) and is expected to be appealed to the U.S. Supreme Court.

Gil v. Whitford (U.S. Supreme Court, decision forthcoming): Although the Voting Rights Act and Equal Protection Clause have been held to disallow legislatures from drawing district lines that disfavor individuals on account of race, this concept has never successfully been extended to protecting voters on account of political party preference. Wisconsin’s statewide redistricting plan was challenged by Democrats as unfairly reducing their voting strength in state legislative elections. The lower court invalidated the map, relying on an “efficiency gap” concept that compares votes that are “wasted,” by either being for a losing candidate or for a winning candidate but not needed to secure that candidate’s victory, to the overall votes cast in the election. The case could either provide a standard by which future legislative maps must be restricted nationwide or determine that such questions are best left to the political process and inappropriate for the judiciary to hear.

Minnesota Voters Alliance v. Mansky (U.S. Supreme Court, decision forthcoming): U.S. Supreme Court precedent has permitted states to pass laws prohibiting campaigning inside a polling place. Minnesota currently has a law that bans the wearing of political apparel at the polling place. The law was challenged on First Amendment grounds when a voter was temporarily prevented from voting for wearing two items of political apparel: A t-shirt that stated “Don’t Tread on Me,” with a picture of the Gadsden Flag and a small Tea Party logo, and a button that stated “Please I.D. Me.” The challenger argues that the prior caselaw only permits states to enforce laws barring active campaigning, not passive political speech such as T-shirts. The case could potentially expand First Amendment protections for voters whose participation in the political process extends beyond voting into shows of support for favored candidates and issues.

Janus v. AFSCME (U.S. Supreme Court, decision forthcoming): Public sector unions may not, under current First Amendment law, compel membership in their organizations as a condition of employment. They may, however, charge an “agency fee” to non-members to help cover the cost of bargaining. Unions argue that this agency fee is necessary to prevent economic free riding. The challenger urges the U.S. Supreme Court to reconsider its prior holding permitting such fees, arguing that it infringes upon his right to free speech by compelling him to support a lobbyist for pro-labor policies.

New Legislation and News from Ethics Agencies by Sarah Lang

Last updated 5/14/2018

Fair Political Practices Commission News

Proposed Updates to Enforcement Policies

At the request of the Commission, Fair Political Practices Commission staff currently is gathering information in order to eventually review and update the priorities and procedures of the Enforcement Division, including the current structure of the Commission’s streamline enforcement program. Link to Interested Persons Memorandum and Additional Materials.

Federal Election Commission News

FEC Rules that Candidates May Use Campaign Funds for Child Care Expenses

In May 2018, the Federal Election Commission unanimously ruled that a federal candidate may use campaign funds to pay for child care expenses arising from the candidate’s time spent running for federal office.

Campaign finance law says that candidates cannot use campaign funds for “personal use.” The Federal Election Campaign Act and Commission regulations define “personal use” as the use of campaign funds “to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign” or duties as a federal officeholder. (52 U.S.C. § 30114(b)(2); 11 C.F.R. § 113.1(g).)

New York Congressional candidate Liubia Grechen Shirley, who worked from home as a consultant while caring for her two young children full time before running for Congress, argued that she should be allowed to use campaign funds, as she would not have needed child care had she not been a candidate. The Federal Election Commission agreed with Shirley’s argument, and concluded that the childcare expenses described in her request, to the extent such expenses were incurred as a direct result of campaign activity, would not exist irrespective of her election campaign, and thus may be permissibly paid with campaign funds. Link to FEC Draft Opinion

California Assemblywoman Lorena Gonzalez stated that she will introduce similar legislation in California so that the California Fair Political Practices Commission will follow suit.

San Francisco Ethics Commission News

Individual Expenditure Ceiling Adjusted for One San Francisco Mayoral Candidate in June 2018 Election

In May, the San Francisco Ethics Commission announced that it raised the Individual Expenditure Ceiling of publicly financed candidate London Breed in the June 2018 Mayoral race. The Individual Expenditure Ceiling for Breed was raised from $1,475,000 to $1,775,000 because the Total Supportive Funds for candidate Mark Leno totaled $1,780,366 on May 10, 2018.

Under San Francisco’s voter-approved public financing program, candidates must agree to abide by campaign spending limits in order to receive public funding. The spending limit for a candidate for mayor starts at $1,475,000. Pursuant to City law, the San Francisco Ethics Commission is required to raise the spending limit of a publicly financed candidate when the Total Supportive Funds of one of the candidate’s opponents and the Total Opposition Spending against the candidate exceed the candidate’s own spending limit. The spending limit is raised in increments of $100,000 at a time. Link to SF Ethics Press Release

San Diego Ethics Commission News

In May, the San Diego City Council is expected to approve new campaign advertisement disclosure rules for the November 2018 election. Link to memorandum from Executive Director