The DGA Should Not Be Allowed to Bypass SEEC Procedures for Obtaining a Declaratory Ruling.
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- Hugo Henry
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1 April 28, 2014 The Honorable George Jepsen Office of the Attorney General 55 Elm Street Hartford, CT Dear Attorney General Jepsen: Last week the Democratic Governors Association (DGA) filed a civil action in federal district court challenging the constitutionality of Connecticut s statutory restrictions on political expenditures by organizations such as DGA that are coordinated with state candidates and officeholders. See DGA v. Brandi, Complaint, 3:14-cv (D. Ct. Apr. 23, 2014). The DGA s standing to bring this lawsuit is questionable and Connecticut s coordination laws are clearly constitutional. Connecticut Common Cause, the Connecticut Citizen Action Group and the League of Women Voters of Connecticut strongly urge you and your colleagues in the Office of the Attorney General to vigorously defend the challenged statutes. The integrity of Connecticut s elections generally, and publicly-financed elections in particular, depend on the successful defense of the challenged coordination restrictions. The DGA Should Not Be Allowed to Bypass SEEC Procedures for Obtaining a Declaratory Ruling. This lawsuit is an attempt by the DGA to bypass the State Elections Enforcement Commission (SEEC) process for obtaining a public declaratory ruling, which require the DGA to first provide the facts and present its arguments surrounding the activity it is asking to be sanctioned to the Commission. Rather than follow the established administrative procedures, the DGA apparently hopes to obtain custom tailored answers to its fact based questions from the court or possibly through negotiations with the staff of the agency or AG while the lawsuit is pending.. Not only does the DGA not have standing to seek judicial intervention at this point, but to entertain discussions with the DGA about how to resolve this matter short of them officially seeking an opinion from the SEEC is contrary to the interests of the SEEC in the state of Connecticut. Simply put, DGA s purported injury is entirely conjectural and hypothetical. Indeed, DGA s entire complaint is based on speculation regarding how the SEEC might apply the state s campaign finance statutes to DGA s planned activities. DGA s chief complaint is that the challenged statutes, combined with SEEC Declaratory Rulings, create uncertainty about whether DGA s planned activities will fall within the scope of state laws regulating coordination between DGA and state candidates such as Governor Malloy. See DGA Complaint at 3. 1
2 A mechanism exists under Connecticut law for DGA to obtain the certainty it seeks a mechanism counsel to DGA are very familiar with: the declaratory ruling process. Counsel to DGA recently requested and received declaratory rulings from the SEEC on a variety of campaign finance law matters, including with respect to hypothetical scenarios about coordination. However, DGA s counsel has not yet presented to the SEEC for a declaratory ruling the scenarios described in DGA s federal court complaint. For example, the declaratory ruling request regarding coordination submitted by DGA s counsel to the SEEC made no mention of the use of a firewall of the sort described in DGA s complaint. Under the plain language of the state s coordination statute, the SEEC is required to consider, as an effective rebuttal to the presumptions of coordination the DGA complains about in its lawsuit, establishment of a firewall policy. See C.G.S.A c(d). It is quite possible that, upon receiving an appropriately-detailed declaratory ruling request from DGA, the SEEC would issue a ruling that DGA s use of a firewall would lead the SEEC to find no coordination between DGA and Connecticut candidates it chooses to support with respect to many or all of DGA s planned activities. Unless and until DGA seeks such a declaratory ruling from the SEEC, DGA has no basis for its lawsuit and the Attorney General should challenge DGA s standing to litigate DGA v. Brandi. Challenged Statutes Are Clearly Constitutional A. The Supreme Court has made explicit that only expenditures that are totally, wholly, or truly independent from candidates are non-corruptive. In Citizens United v. FEC, 558 U.S. 310 (2010), the Supreme Court endorsed the principle that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption. Id. at 357. While the Court did not elaborate on what it meant by an independent expenditure in Citizens United, it has spoken in more detail about the standards governing an expenditure s independence in other campaign finance decisions. And it is worth noting that, unlike the facts in DGA v. Brandi, neither the independent expenditures at issue in Citizens United, nor the independent electioneering communications in FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) (WRTL) the Supreme Court decision that DGA principally relies upon nor the independent expenditures at issue in other cases in which the Supreme Court concluded that the expenditures posed no threat of corruption, involved fundraising by candidates and/or officeholders to pay for such expenditures. Beginning in Buckley v. Valeo, 424 U.S. 1 (1976), the Court distinguished for constitutional purposes between limitations on contributions to a candidate s campaign, and limitations on expenditures by an independent spender to influence an election. Buckley also recognized that, to be effective, any limitations on campaign contributions must apply to expenditures made in coordination with a candidate, so as 2
3 to prevent attempts to circumvent the Act through prearranged or coordinated expenditures amounting to disguised contributions. 424 U.S. at 47. Drawing the line between independent and coordinated expenditures was thus crucial to averting circumvention of the contribution limits. Buckley further explained that there was a difference between expenditures made totally independently of the candidate and his campaign[,] id. at 47 (emphasis added), and coordinated expenditures, and construed the contribution limits to include not only contributions made directly to a candidate, but also all expenditures placed in cooperation with or with the consent of a candidate, his agents or [his] authorized committee. Id. at n.53; see also id. at 78. The Court echoed Buckley s broad language regarding coordination in later decisions on the same topic. In Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) ( Colorado I ), the Court held that an ad aired by the Republican Party attacking the Democratic Party s presumptive nominee to the U.S. Senate, before the Republican Party had even nominated its candidate, would not be treated as coordinated because the ad was developed independently and not pursuant to any general or particular understanding with a candidate. Id. at 614 (emphasis added). Then, in FEC v. Colorado Republican Federal Campaign Committee, 533 U.S. 431 (2001) ( Colorado II ), the Court again in the context of party spending noted that independent expenditures are only those without any candidate s approval (or wink or nod). Id. at 442, 447. Shortly thereafter, the Court again noted that the relevant dividing line was between expenditures that are coordinated and therefore may be regulated as indirect contributions and expenditures that truly are independent. McConnell v. FEC, 540 U.S. 93, 221 (2003) (emphasis added). The Court explained in McConnell: Independent expenditures are poor sources of leverage for a spender because they might be duplicative or counterproductive from a candidate s point of view. By contrast, expenditures made after a wink or nod often will be as useful to the candidate as cash. Id. at (emphasis added) (internal citations and quotation marks omitted). Throughout its campaign finance precedents, the Supreme Court has thus maintained a broad wink or nod view of what constitutes coordination between a candidate and an outside spender, a position it articulated in both Colorado I ( general or particular understanding ) and Colorado II ( wink or nod ). It has spoken in expansive terms about the degree of independence that is necessary to prevent outside spending from undermin[ing] contribution limits. Only totally independent, wholly independent, and truly independent expenditures qualify. Importantly, the Supreme Court has never held that the expenditure of funds raised by a candidate to directly benefit that candidate cannot be regulated as coordinated expenditures. Nor has the Court ever held that funds spent in coordination 3
4 with a candidate can only be regulated as coordinated expenditures if the expenditures entail express advocacy or its functional equivalent. For this reason, even if DGA were to appropriately seek a declaratory ruling from the SEEC regarding its planned expenditures to support Governor Malloy using funds raised by Governor Malloy, and the SEEC were to conclude that such expenditures would be coordinated, the SEEC s interpretation and application of the coordination statute would be on solid constitutional footing. B. The Supreme Court Decision in WRTL Has No Relevance to DGA and Its Planned Activities DGA misconstrues and then principally relies upon the Supreme Court decision in WRTL for the proposition that Connecticut s statutory definition of expenditure, together with the state s coordination statutes, cannot constitutionally be applied to DGA s planned activities. DGA incorrectly states in its complaint: The Supreme Court has held that the government has no compelling interest in regulating speech that does not qualify as express advocacy or its functional equivalent. DGA, Complaint at 4. DGA cites the Supreme Court decision in WRTL for this inaccurate proposition. Going back to Buckley, for the purposes of constitutional analysis, the Supreme Court has distinguished between groups that have the major purpose of influencing elections and those that do not. The Buckley Court explained: To fulfill the purposes of the Act [political committees] need only encompass organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate. Expenditures of candidates and of political committees so construed can be assumed to fall within the core area sought to be addressed by Congress. They are, by definition, campaign related. Buckley, 424 U.S. at 79. With respect to such major purpose groups, the Court upheld the federal law statutory definition of expenditure, which included funds spent for the purpose of influencing an election. However, with respect to non- major purpose groups, the Court narrowed the statutory definition of expenditure to include only express candidate advocacy. The Supreme Court in WRTL held that only advertising by the plaintiff organization that contained express advocacy or its functional equivalent could constitutionally be subject to the federal law ban on corporations paying for 4
5 electioneering communication with treasury funds. DGA analogizes its planned expenditures to those at issue in WRTL and argues that only the funds it spends on express advocacy can be regulated by the State of Connecticut. The Supreme Court s decision in WRTL is inapplicable to DGA for two critical reasons. First, the activities in WRTL entailed no involvement with candidates or officeholders. In fact, the WRTL was spending money on ads critical of then-senator Russ Feingold, who was running unopposed in the primary election that was weeks away. See WRTL, 551 U.S. at 464. The WRTL had no opponent of Sen. Feingold to coordinate with, even if it had wanted to. Second, WRTL is not a major purpose organization. WRTL is a so-called 501(c)(4) social welfare organization, which is prohibited by federal tax law from having as its primary activity candidate election intervention. Unlike WRTL, DGA has had very close involvement with Governor Malloy. Indeed, the entire motivation for its lawsuit is the fact that Governor Malloy has raised enormous sums of money for DGA, which DGA now hopes to spend in support of the Governor s reelection campaign. Also unlike WRTL, DGA is a major purpose organization. DGA has voluntarily registered with the Internal Revenue Service as a 527 political organization and, consequently, must have as its primary purpose the election or nomination of candidates to public office. Whereas WRTL is entitled to an express advocacy limitation on regulation of its independent spending, DGA is entitled to no such narrowing construction of the state law definition of expenditure. For these reasons, as the DGA litigation proceeds, your office should make clear to the court that DGA has misconstrued the principal Supreme Court authority upon which it relies and further make clear that the Court s analysis and decision in WRTL a case dealing with a non- major purpose group having no interaction with candidates is wholly inapplicable to DGA, which is a major purpose group that has engaged in extensive fundraising and other activities with Governor Malloy among others. Consequences of Invalidation of the Challenged Statutes The stakes are very high in this case. If the DGA succeeds in its effort to prevent the State Elections Enforcement Commission from enforcing Connecticut s laws that prevent coordination between outside groups and candidates, then the reforms enacted after the Rowland scandal are meaningless. Millionaire candidates could run under the public financing system and contribute millions to a SuperPAC who will run so-called independent expenditures on their behalf. Candidates who run clean under the public financing system can raise millions of dollars for SuperPACs, 501 (c) (4) s and other political committees from special interests, state contractors and lobbyists which completely undermines the important reforms that helped distance the state from the moniker Corrupticut. We strongly urge you to fulfill your responsibility in this case and defend Connecticut s laws and the State Elections Enforcement Commission s declaratory 5
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