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Bench & Bar of Minnesota is the official publication of the Minnesota State Bar Association.

Campaign Finance Disclosure in a Citizens United World

0316-Campaign-FinanceThough U.S. Supreme Court decisions such as Citizens United and Wisconsin Right to Life have dramatically refigured the campaign money equation, those decisions still afford room for further disclosure requirements. Minnesota is among the states whose legislatures have bills pending on the subject.

Since Citizens United v. F.E.C,1 there have been many discussions about campaign finance law both at the federal and state levels, and undoubtedly money in politics will remain a perennial issue. The Minnesota Legislature has recently considered several proposals to address spending in Minnesota campaigns.2 The most significant proposal in recent years has called for disclosure of electioneering communications and expanded disclosure for independent expenditures. During the 2013 legislative session, the Campaign Finance and Public Disclosure Board proposed a bill doing just that.3 According to Gary Goldsmith, the executive director of the board, the disclosure provisions “were one of—if not the board’s highest—priority.”4 The disclosure provisions passed the Senate but not the House in 2013, and were ultimately left out of the final campaign finance bill that year.5 Again in 2015, the Senate held a hearing on the disclosure bill in the Subcommittee on Elections, but no further action was taken on the bill. This year the disclosure bill has again been pre-filed by several house members for introduction on the first day of the 2016 session.6 In addition, members of the House DFL recently announced they will propose an amendment to the state constitution requiring more campaign disclosures.7

“Electioneering communications” is a legal term that goes back to the 2002 federal McCain-Feingold law.8 Electioneering communications are commonly known as “issue ads.” Federal law defines electioneering communications as any broadcast, cable, or satellite communication (i.e., television or radio ads) that refers to a clearly identified candidate, is made within 60 days before a general election or 30 days before a primary election, and is targeted to the relevant electorate. McCain-Feingold prohibited incorporated entities and labor unions from using their treasury funds to pay for electioneering communications aired on radio or shown on television during the pre-election period. Minnesota law does not regulate electioneering communications.

Both federal and Minnesota law provide for the disclosure of certain independent expenditures. The definition of “independent expenditure” at the federal level and in Minnesota is nearly identical. An independent expenditure means an expenditure that expressly advocates the election or defeat of a clearly identified candidate and is made without any coordination with the candidate.9 “Expressly advocates” means that a communication uses words or phrases of express advocacy, such as “vote for,” “vote against,” “support,” or “defeat.” In Minnesota, associations making certain independent expenditures must register with the Campaign Finance and Public Disclosure Board and make disclosures to the Board.

The federal prohibitions on certain electioneering communications and independent expenditures have been subject to several high-profile U.S. Supreme Court cases, most notably the Citizens United case from 2010. The Court’s opinions have had consequences for how states are able to regulate electioneering communications and independent expenditures. So what may be regulated with respect to electioneering communications and independent expenditures after several important campaign finance opinions from the U.S. Supreme Court? And how does the Minnesota disclosure proposal fit into those opinions?

Electioneering Communications Upheld as Constitutional

Upon enactment of the McCain-Feingold law, its constitutionality was challenged in McConnell v. FEC.10 In McConnell, the U.S. Supreme Court upheld the constitutionality of the electioneering communication restrictions and disclosure requirements. The Court also incorporated, as applied to McCain-Feingold, the holding of Massachusetts Citizens for Life (MCFL) v. FEC.11  In MCFL, the Court held that a non-profit corporation could make independent expenditures as long as the non-profit corporation did not accept funds from labor unions or for-profit corporations. McConnell was a victory for campaign finance reformers insofar as the electioneering communications provisions were upheld. But the Court also began to carve out exceptions to McCain-Feingold’s prohibitions on certain electioneering communications.

Issue Ads and Functional Equivalency

The next U.S. Supreme Court case that analyzed electioneering communications and independent expenditures was Wisconsin Right to Life v. FEC.12  In Wisconsin Right to Life (WRTL), the court reviewed ads that WRTL planned to run during the Wisconsin election season. WRTL accepted corporate funds, so it did not fall under the MCFL exception.  The Court held that the McCain-Feingold electioneering communications restrictions could not be applied to WRTL’s ads because the ads were issue ads, not express advocacy or the functional equivalent of express advocacy. In order to be the functional equivalent of express advocacy, the Court held that an ad must be “susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.”13 As long as an ad can be reasonably interpreted as something other than a campaign ad, WRTL held, then the ad would fall outside the scope of the electioneering communications restrictions.

Citizens United: Corporate Funds for Campaign Expenditures

The next major campaign finance opinion issued by the U.S. Supreme Court was Citizens United. In Citizens United, the court analyzed the constitutionality of McCain-Feingold’s ban on using corporate treasury funds to make independent expenditures for electioneering communications. The Court also reviewed the constitutionality of a law existing prior to McCain-Feingold that banned corporations from using corporate treasury funds for independent expenditures that expressly advocate the election or defeat of a candidate. The Court held that these prohibitions are unconstitutional.14 In doing so, the Court overruled the portion of McConnell that upheld the restrictions on corporate independent expenditures.15 As a result of Citizens United, any corporate entity can use its corporate treasury funds for electioneering communications or for independent expenditures.

So then, what’s left of the federal provisions related to electioneering communications and independent expenditures?

Disclosure

All the cases cited thus far held some portion of the prohibition on electioneering communications or independent expenditures unconstitutional. But, in none of the cases were McCain-Feingold’s disclosure requirements held unconstitutional. Citizens United (the appellant) argued that McCain-Feingold’s disclosure requirements were unconstitutional as applied to issue ads. Justice Kennedy rejected this argument and stated that “disclosure is a less restrictive alternative to more comprehensive regulations of speech.”16 Justice Kennedy went on to say that “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.”17

And that is where the Minnesota disclosure bill steps in: It is about the disclosure of certain electioneering communications and independent expenditures.

There are three main forms of communication that the U.S. Supreme Court analyzed in the previously cited cases: (1) express advocacy (independent expenditure) (2) the functional equivalent of express advocacy (independent expenditure); and (3) electioneering communications (independent expenditure issue ads). Minnesota law currently requires disclosure for certain types of express advocacy, but not electioneering communications or communications that are the functional equivalent of express advocacy.

So what does the Minnesota disclosure bill do?

The Minnesota disclosure bill has two main components.18 The first component is to modify the Minnesota definition of expressly advocating to include the functional equivalent of express advocacy. Minnesota law currently defines expressly advocating as “a communication that clearly identifies a candidate and uses words or phrases of express advocacy”19 such as “vote for,” “vote against,” “support,” “defeat,” etc.
The bill adds the functional equivalent standard as created by Chief Justice John Roberts in WRTL. In WRTL, Roberts held that “a court should find that an ad is the functional equivalent of express advocacy only if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.”20 By adding the functional equivalency language to the definition of expressly advocating, the law would bring under the Minnesota campaign finance disclosure scheme independent expenditures that urge the election or defeat of a candidate but do not use words of express advocacy.

The second component of the disclosure bill is to add disclosure requirements for electioneering communications. The bill adopts the federal definition of electioneering communications, except that it also includes non-broadcast communications, such as printed materials, signs, or billboards, and communications distributed through telephone, e-mail, or text messaging.  The definition provides several exceptions, including exceptions for news items, editorial comments, nonpartisan voter guides, ads that refer to a piece of legislation before the Legislature, and others. In the Senate Subcommittee on Elections in March 2015, Gary Goldsmith explained the difference between express advocacy and electioneering communications. “Electioneering communications is different than express advocacy…. It typically takes the form of the publication that says to call a member and tell that member to do or to stop doing something. That’s typically an electioneering communication, if it falls within the time-frame.”21 If disclosure requirements for electioneering communications were added, issue ads would then fall under the scope of Minnesota campaign finance disclosure requirements.

The last time the Minnesota House considered the disclosure bill (HF43) was on January 12, 2015. On that day, former Representative Ryan Winkler (DFL) offered a motion to bring HF 43 up for immediate consideration by the Minnesota House.22 The session had begun only 6 days earlier and Winkler’s bill had not yet been considered by committee. Representative Kurt Daudt (R-Crown) had just been elected speaker of the House and the members were set to begin their work on the state’s biennial budget. The urgency of taking up the disclosure bill on that day, according to Winkler, was that all campaign reports were due to the Campaign Finance Board by January 31. Minnesota had just gone through an election year in which nearly $34 million in campaign expenditures were reported to the Campaign Finance and Public Disclosure Board.23 The motion did not pass and the bill was not subsequently considered by the House that session.

The last time the Minnesota Senate considered the disclosure bill (SF 215) was on March 12, 2015, in the Subcommittee on Elections. Senator Jim Carlson (DFL-Eagan), the author of the bill in the Senate, testified that in his interpretation the bill “does not prevent any kind of communication…. It does not restrict any free speech whatsoever.”24 In addition, Christian Sande, a board member of the Campaign Finance and Public Disclosure Board, testified on behalf of the bill and stated that as a result of recent campaign finance law jurisprudence, campaign finance law “has changed its focus to disclosure.”25 Regarding the bill’s language, Sande said that the Board believed the approach “is a reasonable and a non-invasive expansion of Minnesota’s disclosure laws to sweep in these undocumented expenditures.”26 The bill was moved out of the Subcommittee on Elections but did not receive any further hearings.

It’s unclear whether the disclosure bill will be heard during the 2016 legislative session. In 2013, when the DFL controlled both houses of the Minnesota Legislature and the governor’s office, the disclosure bill did not make it into the final campaign finance bill for that year. Campaign finance law deals with some very fundamental and sensitive issues relating to our democracy—elections and free speech. No matter which party holds the gavel, addressing these issues can be a complicated task—balancing transparency in elections with first amendment rights. What seems clear is that the disclosure bill will be a perennial issue for years to come.


John R. McCullough is an attorney with the Office of the Revisor of Statutes at the Minnesota Legislature. Prior to joining the Revisor’s Office, John was an Equal Justice Works fellow with the Council on Crime and Justice in Minneapolis. He is a 2005 graduate of the University of St. Thomas School of Law. The views expressed in this article are entirely those of the author and do not reflect the views of the Office of the Revisor of Statutes. 


Notes

558 U.S. 310 (2010).

2 See HF 0276 (2013), HF 2662 (2014), HF 2463 (2014).

3 See HF 863, section 34, as introduced (2013). The Senate companion bill is SF 661 (2013). See also SF 214 (2015), HF 2398 (2016), and HF 2548 (2016).

4 Richert, Catherine. “Tougher disclosure rules dropped from campaign finance bill.” Minnesota Public Radio, May 20, 2013

5 See Laws 2013, chapter 138 – https://www.revisor.mn.gov/laws/?year=2013&type=0&doctype=Chapter&id=138

6 See HF 2398 (2016) and HF 2548 (2016).

7 Collins, Jon. “House DFLers seek disclosure of all election-related spending.” Minnesota Public Radio, February 4, 2016.

8 Bipartisan Campaign Reform Act of 2002 (BCRA) (52 U.S.C. 30104 (f)(3)).

9 See Minnesota Statutes, section 10A.01, subdivision 18.

10 540 U.S. 93 (2003).

11 479 US 238 (1986).

12 551 US 449 (2007).

13 551 US 449, 469-470 (2007).

14 558 US 310, 365 (2010).

15 Id.

16 558 US at 369.

17 558 US at 370.

18 See HF 43 (2015) or SF 214 (2015).

19 See Minnesota Statutes, section 10A.01, subdivision 16a for current definition of expressly advocating.

20 551 U.S. 449, 469-470 (2007).

21 Minnesota Legislature, Senate. Subcommittee on Elections. Hearing on SF 214 (2015). March 12, 2015. 89th Legislature. (Testimony of Gary Goldsmith, Executive Director, Campaign Finance Public Disclosure Board) available at http://www.senate.leg.state.mn.us/committees/committee_media_list.php?ls=&cmte_id=3021.

22 Journal of the House, 89th Legislative Session. 3rd Day (Monday 1/12/2015). http://www.house.leg.state.mn.us/cco/journals/2015-16/J0112003.htm

23 “Overview of Expenditures and Sources of Funding for the 2014 Election.” Campaign Finance and Public Disclosure Board, 4/9/2015.

24 Minnesota Legislature, Senate. Subcommittee on Elections. Hearing on SF 214 (2015). 3/12/2015. 89th Legislature. (Testimony of Senator Jim Carlson).

25 Minnesota Legislature, Senate. Subcommittee on Elections. Hearing on SF 214 (2015). 3/12/2015. 89th Legislature. (Testimony of Christian Sande, Board Member, Campaign Finance Public Disclosure Board).

26 Id.

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