New 2016 Campaign Finance Law For Filing and Enforcement Officers in Cities and Towns Arizona Municipal Clerks Association November 2016
Overview Purpose Review 2016 Changes What is gone What is new Not covering everything for Clerks (July) The Law and Resources New Organization of CF Chapter Overview of Clerk Responsibilities Fewer Documents and Duties Increased Enforcement Responsibility
Overview Political Committees Simpler with fewer types Registration of Political Committees Significantly fewer entities will qualify Contribution Limitations Limits unchanged, but more exceptions Disclosure in Literature & Advertisements Simpler mostly same for everyone
Overview Reporting for Organizations Making Independent Expenditures - Repealed! Reporting Contributions & Expenditures More reports required (for PACS, not candidates) Reporting schedule change - simpler Reports more complex (Committee questions) Termination of Committees Simpler from streamlined committees Simpler for old committees to terminate Challenge - All existing must terminate by June
Overview Enforcement of Report Filing Simpler, stricter filing deadline Need Guidelines from SOS Enforcement of Campaign Finance Violations Significantly more Responsibility for Clerks Role of Clerks presents several Challenges SOS Guidelines will be Critical (Need!)
PURPOSE / CONTENT Content of Outline Duties and issues for local filing officers NOT details on contribution & expenditures Offered in SOS Workshops for candidates Reference Summary Reference Guide to apply law Only a Summary does not cover all details Always refer to statutes references provided
LAW Legal Counsel Important to consult with attorney Campaign Finance regulation increasingly complex Law and duties unclear in many cases conflicts exist Legal opinions differ. Know your attorney s position. Responding to Questions Law is unclear interpreting is legal advice Filing Officer role provide information, not advice An opponent or public could challenge your advice Appropriate response - "You need to discuss that with your attorney or campaign advisor."
THE LAW Arizona Constitution, Art VII, Sec 16 The legislature, at its first session, shall enact a law providing for a general publicity, before and after election, of all campaign contributions to, and expenditures of campaign committees and candidates for public office.
THE LAW Arizona Revised Statutes - Title 16, Chapter 6 Campaign Finance (Article I) 16-901 through 938 New Organization Clean Elections (Article II) 16-940 through 961 (Not applicable to cities and towns)
THE LAW - ORGANIZATION Arizona Revised Statutes - Title 16, Chapter 6 Campaign Finance (Article I) Article 1 Definitions, 16-901 Art. 1.1 Establishment of Committee, 16-905 - 908 Art. 1.2 Contributions, 16-911 - 917 Art. 1.3 Expenditures, 16-921 - 922 Art. 1.4 Reporting and Disclosure, 16-925 928 Art. 1.5 Biennial Financial Adjustments, 16-931 Art. 1.6 Committee Termination, 16-933 934 Art. 1.7 Enforcement, 16-937 938
THE LAW - RESOURCES Arizona Election Law Pamphlet Constitution, Titles 16, 19, 38 (Blue Book - Aug 2014) (2015 Supplement) Need 2016 Supp Attorney General Opinions (not law) Secretary of State (materials online) Campaign Finance Handbook (online system) Election Procedures Manual (2014) (No 2016) League of Cities and Towns Municipal Election Manual (MEM) Campaign Finance Reports Handbook League General Counsel Opinions
LAW Purpose & Limits Purpose of Regulation Public disclosure of contributions & expenditures Protect public contributions from misuse Limit contributions in candidate races (declining) Limitation on Regulation First Amendment (political speech) Supreme Court decisions Striking restrictions, upholding disclosure Exploring when anonymity is necessary (no disclosure) State Response to Decisions also reducing disclosure
LAW - Enforcement Through Public Disclosure of Information Public, candidates & media identify issues Voters enforce by casting ballots Filing Officers Enforce Report Filing Ensure that public disclosure occurs Enforce Other CF Violations Determine reasonable cause Complaints being used as campaign tactic Increased Clerk Role Sole authority to initiate!
Overview of Clerk Responsibilities 1. Filing Officer for campaign finance documents for your city or town Keep old documents for retention period! ($500 TES) 2. Assign Committee ID numbers & keep Log 3. Must provide Notice of CF laws and Statement of Org to applicants for Initiative, Referendum & Recall petitions (also Title 19 Pamphlet)
Overview of Clerk Responsibilities 4. Receive Campaign Finance Documents Campaign Financing & Reporting Statement Statement they have read campaign finance law Candidates with nomination paper (part of form) Committee officers with registration (in SO form) Committee Registration Documents Statement of Org only $500 Exemption Repealed Periodic Reports Contribution & Expenditure Reports No Activity Statement Repealed Candidate Annual No Activity Statement Repealed
Overview of Clerk Responsibilities 4. Receive Campaign Finance Documents (Cont) Candidate Notice of Large Contributions Repealed Notices of receipt of $1000 or more from a single source within 20 days before election 10K Notices Repealed Large contributions / expenditures by Prop & Recall Termination Statements Now only SO Form for existing $500 TE to Terminate by June? (Old?) Registrations & Notices of Independent Expenditures By Corporations, LLCs & Labor Organizations Repealed!
Overview of Clerk Responsibilities 5. Provide Electronic Filing & Posting on Internet Filing officers must provide electronic filing option Online database not required (yet) Comply using fillable pdf forms filed by email or upload May comply by opting into State System (2017-18) Who Must Post Documents on Internet? All filing officers (Previously only if Pop over 2500)
Overview of Clerk Responsibilities 5. Provide Electronic Filing & Posting on Internet What Documents to Post ALL campaign finance statements and reports Statement of Org, Terminations, Reports A List of committees that filed $500 ES - Repealed Posting NOT Required for other documents Financial Disclosure Statements (Yet) (Some Post) Where to Post On city / town site if maintain a site If no site, probably till may post on League site
Overview of Clerk Responsibilities 6. Enforce Campaign Finance Reporting Determine Failure to File (on time) Send Failure to File Notices (By email within 5 days) Refer to attorney if does not file within 30 days 7. Enforcement of other CF Violations Written complaint from 3 rd party now required Filing Officer is Sole officer to initiate investigations If determine reasonable cause to believe someone is violating CF law, must notify attorney City / Town Attorney is Enforcement Officer Issues Notices of Violation
Overview of Clerk Responsibilities 8. Enforce Filing of Registrations & Notices of Independent Expenditures - Repealed Required for Corps, LLCs and Labor Orgs making independent expenditures in candidate elections Must Register for each election cycle Must file Notice of Expenditures Clerk must verify whether entity has registered If Not categorize unverified & contact entity
Responsibility Issues Compliance is ultimately the responsibility of the candidates & committees Law & scope of duties unclear (New law) Interpretation and opinions differ Some actions not required, but are appropriate for the Clerk role and further the purposes of the law E.g. reminders of filing deadlines
Political Committees No general definition applicable to all committees to identify a committee Repealed $250 Threshold before Register Repealed Instead Had definitions for several Types of committees
Political Committees Groups defined as Committees (separately) Candidates and the committees they designate Exploratory committee (Repealed Nov 5, 2016) Separate segregated fund (Corps & Labor Orgs) Political party Political organization Groups that circulate a petition for a ballot measure or recall (but not groups that support or oppose measure) Separate Definition / Test for Other Groups (Subsection F Committees)
Political Committees Separate Definitions Repealed 2016! New Definition Committee means: A Candidate Committee A Political Action Committee (PAC) A Political Party Entity is a committee if meets tests in 16-905 (Similar to old Subsection F committees)
Political Committees Candidate Committee Candidate must register a committee IF: The candidate receives contributions or makes expenditures (in any combination) of at least $1000 in connection with that candidacy Any combination: Receive $500 and spend it! Candidate may have only 1 for same office during an election cycle (must combine any old) $1000 increases $100 in Jan odd years - 2017?
Political Committees Political Action Committee An Entity must register as a PAC IF: Entity is organized for the primary purpose of influencing an election; and Entity knowingly receives contributions or makes expenditures (in any combination) of at least $1000 in connection with any election during a calendar year Primary purpose - excludes many (most) entities Provision / Test in statute for what is Not (501 Charitable orgs) Provision / Test for a rebuttable presumption of when primary purpose is influencing elections
Political Committees Political Action Committee (Cont) Any combination of spend / receive $1000 Receive $500 and spend it required to register During calendar year (not an election cycle) Entity can receive or spend $999 annually ($1998 for election cycle), even if primary purpose is influencing elections and not be required to register or report. Amount low for state, significant in small jurisdictions! $1000 threshold increases $100 in Jan odd years Increase in Jan 2017? SOS will determine.
Political Committees Political Action Committee (Cont) Separate Segregated Fund Corporations / Labor orgs cannot contribute to candidates Establish a Fund to receive voluntary contributions from employees for making contributions to candidates Fund must register as a PAC Permitted contributions by Corporation / Labor Org Contributions / expenditures on ballot measures Independent Expenditures in candidate elections Not required to register or provide notices for IEs Instead, IE activity reported in New type of CF report
Political Committees? Specific Situations... is it a committee? A candidate? Individual (not a candidate) acting alone? Corporation that makes independent expenditures supporting a candidate? An entity who files an argument on ballot measure & pays deposit?
Political Committees? Specific Situations... is it a committee? Business / organization involved in a ballot measure? Business or organization that spends more than $750 to support or oppose a ballot measure? Public utility spending its own money supporting its franchise measure? Religious assembly or institution that spends $2500 influencing an election?
Political Committees - Definition When to raise question... Inquiry about candidacy (always upon 1 st contact) Inquiry about making contributions to candidates Inquiry about initiative, referendum or recall (always on 1 st contact) Upon filing an argument on a ballot measure Note: not a committee solely for filing argument Inquiry about making contributions to influence a ballot measure
Political Committee Registration When to Register? Within 10 days of qualifying as a committee Not required before engaging in "political activity Accepting contributions or making expenditures Distributing campaign literature or ads Circulating petitions (Not required by CF law) But, signatures on Initiative and Referendum petitions invalid
Political Committee Registration How to Register? File Statement of Organization with Filing Officer Stmt Org is now the ONLY registration document $500 Threshold Exemption Statement - Repealed Upon registration, PAC may engage in any lawful activity Not required to establish separate committees for different activities (e.g. circulate petition and support candidates) Not required to identify activities on registration statement Note: A person or entity must track activity and report on first report after qualify as a committee
Candidate Committees Candidate may be chairman and treasurer Committee name must include candidate name (first or last) Candidate may have only one committee for same office during same election cycle (Eff. Nov 5) Will have to combine any existing old committees No longer required to designate a committee for each election (Can only have one!) Exploratory Committees - Repealed
Other Political Committees Chairman & Treasurer must be different people Committee name must identify the "sponsoring" organization, if any Committees registered outside of AZ Unclear if / how register in AZ (Old provision repealed) Probably can register in AZ Unclear if can use money received before register here
Ballot Measure Committees Most special requirements for committees acting to support or oppose a ballot measure Repealed Committee name not required to include: The petition serial number (or Prop number) Whether support or oppose the measure Now must report activity to support or oppose ballot measures in campaign finance reports Report must identify the ballot measure to which each transaction relates
Recall Committees Is a Recall committee a ballot measure committee? AG Opinion: No Recall is not a ballot measure (results in a candidate election, not a Prop on a ballot) A recall committee is a committee to influence a candidate election Contribution limitations would apply to recall committees (and prohibition on corporate $)
Standing Political Committees Eligibility to be Standing Committee Active in more than 1 jurisdiction ( for 1 yr repealed) File a Statement of Organization with the SOS and a copy in each jurisdiction in which the committee is active Registration Statement no longer has to be notarized Only SOS assigns ID number Also needs to file copy of amended Stmt of Org in each jurisdiction Files Reports only with the Secretary of State Committees cannot sponsor candidate or other committee
Penalty for Failure to Register Civil Penalty Presumptive penalty of the amount received or expended while not registered Can be up to 3 times the amount received or expended Petition signatures invalid Initiative & Referendum Sigs invalid if obtained before a Stmt Org filed Recall Sigs NOT invalid if obtained before a Stmt Org filed Provision that Recall signatures invalid was Repealed
Penalty for Failure to Register Nomination petition signatures No statute invalidating nomination signatures (only in Title 19 for Initiative / Referendum, NOT Recall) Filing officers have no authority to invalidate signatures Superior Court decisions Since 2006, Superior Courts have invalidated signatures on nomination petitions if committee not registered No appellate court decision for legal precedent Consult with your attorney count and let Recorder or Court invalidate?
Statement of Organization Contents Type committee, name, address, website, phone Email address (must agree to receive all notices) Candidate: Name (first or last) and office sought PAC: Sponsor name or any common nickname Sponsor contact information, including email Officers names, address, occupation, employer Statement by Chairman and Treasurer that have read all CF laws (part of form) Designation of financial institutions to hold funds
Statement of Organization Clerk issues ID number Notarization not required (even for standing) All filing officers must now post copy on Internet Amendments Required for any change in required information Must file within 10 days after change (was 5) No specific penalty for failure to amend timely
Treasurer Duties Principal officer has virtually all duties Authorize all expenditures, keep records Track details of all contributions and expenditures and File Reports Maintain separate segregated bank accounts Personal money, Recall, Corporate / other contributions Use best efforts to obtain donor info At least 1 documented written or oral attempt Preserve committee records - 2 years At request of filing or enforcement officer, must produce records required to be kept
Contribution Limitations Limits apply to contributions to Candidates ONLY! And possibly Recall committees (AG Opinion) Limit: $6250 per cycle same as for 2016 Limits increase $100 in Jan of odd years 2017? Apply to an election cycle, not term office (now) There are again now 2 cycles for a 4 year term Cycle is 2 yrs General to General (includes Prim) For Recall cycle from issue serial # to the end Contributions for recall can t be used for other elections
Contribution Limitations No Limits Total an individual can give to all candidates Total a candidate can receive from PACs Use of candidate s own money Foreign Contributions prohibited (Fed law)
Contribution Limitations Candidate Committee Limits Candidate committee can t give to other candidates But can contribute surplus to candidates if terminating No limit on amount candidate committee can transfer to other committees for same candidate Except City / town candidates can t transfer to state committee! Transfers are contributions individual donor limits apply Candidate committees can contribute to other committees (other than candidate)
Contribution Limitations Candidate Committee - Reattribution of Excess Contributions Candidates can t knowingly accept more than limit If unknowingly accept Excess Contribution : Must refund excess within 60 days; or Reattribute the excess if both the following apply: The contribution was from an individual, and The contributor authorizes the committee to reattribute the excess to another individual who is a joint account holder on the instrument used for the contribution
Contribution Limitations PAC Contributions Limit for PAC: $6250 Limit for Mega PAC (state qualified): $12,500 (Double) PACs can only contribute to candidates using money received from individuals, partnerships, political committees or political party (not corporations, labor org) Political Party Contributions Political party can t give to non-partisan candidates (only to nominees of a party)
Contribution Limitations Corporations and Labor Organizations Prohibited Contributions directly to candidate committees Permitted Contributions to support or oppose ballot measures Contributions to candidates from a segregated fund Funded by voluntary contributions solicited from employees, shareholders, retirees and families of entity and its affiliates Contributions for Independent Expenditures Independent Expenditures for candidates (using corporate money, not contributions)
Expenditures Expenditure Exemptions New list of items that are not expenditures Use of email, Internet activity, or social media message if not paid for by the individual and does not contain a solicitation Value of volunteer services Payments for committee accounting & legal services Others
Expenditures Independent Expenditures Independent expenditure - means an expenditure by a person or committee (not a candidate committee) that: "Expressly advocates" for or against a candidate Not made in cooperation or consultation with the candidate or the candidate s committee (independent) Evaluating whether expenditure is Independent New section 16-922 identifies things NOT independent Lists factors for determining whether coordination exists Identifies things that are NOT coordination Any person may make independent expenditures
Disclosure for Campaign Lit & Ads Disclosure Requirements A person (not candidate committee) must disclose in an advertisement or fund raising solicitation: Paid for By followed by the name of the person making the expenditure; and Whether the expenditure was authorized by a candidate and the name of the authorizing candidate (if any) PACs also must disclose in advertisements: Names of 3 PACs making the largest contributions to the committee that exceed $20K during election cycle A committee does not have to be registered at time of the expenditure
Disclosure for Campaign Lit & Ads Disclosure Exceptions Items too small to fit disclosure Social media or text messages sent using SMS Ads placed as paid link on website if less than 200 characters and target website has the disclosure Graphic or picture links on websites if too small and the target website has the disclosure Candidate s own signs paid for by own committee No Exception anymore - Repealed The candidate s own signs must have disclosures
Disclosure for Campaign Lit & Ads Size and Legibility Requirements Ad mailed or delivered by hand or electronically Must be clearly readable Signs or Billboards minimum 4% sign height Radio, television and video Specific requirements that combine spoken and print If use acronym or nickname not commonly known Must spell out
Disclosure for Campaign Lit & Ads Advance Copy of IE Ads to Candidate Repealed Previously required to provide advance copy of independent expenditure ad distributed within 60 days before election within 24 hours of submission for mailing, printing or broadcast
Independent Expenditures by Corp, LLC or Labor Orgs Registration & Notices of IEs Repealed! Entity not required to file separate registration if cumulative expenditures in a city or town exceeds $1,000 Not required to file a notice of expenditure each time exceed $1,000 in local races in a city or town Disclosure Entities that make independent expenditures (other than individual or PAC), must file independent expenditure reports (special version of a campaign finance report)
Independent Expenditures by Corp, LLC or Labor Orgs Non-Profit Corporation Issue ( Dark Money ) Has no income from operations to make expenditures Not required to register a committee so do not file Reports! Non-profits being formed to make independent expenditures with no disclosure of source of $$ Primary Purpose Issue Cannot be formed for primary purpose of influencing elections - must register as political committee Difficult to prove primary purpose before election or because election activities only occur every 2 years
Independent Expenditures by Corp, LLC or Labor Orgs Issue Advocacy Expenditures Use of IE rules by Candidates (and others) Candidate forms a non-profit on specific issue(s) Solicits donations or transfers surplus from campaign committees Makes expenditures for Ads to promote issues and accomplishments on that issue (e.g. anti-tax) Does not mention opponent or solicit vote (not express advocacy or influencing election) Not required to register a committee and report Not required to file IE registration or notices No disclosure of source of funds, and contribution limits do not apply
Reporting Political Committee Contributions & Expenditures Who must file? All registered committees must file required reports until terminated Can t use $500 Exemption Stmt to not report - Repealed What to file? Campaign Finance Report for the reporting period Even if no activity Repealed No Activity Statement Annual No Activity Stmt (candidates) - Repealed
Reporting Political Committee Contributions & Expenditures When to file? PACs and Political Party File Quarterly Report (if no election in quarter) Required every quarter every year, not just election yr File not later than 15 th of next month Reports Due: Jan 15, Apr 15, July 15, Oct 15 Reporting Period: Complete thru last day of calendar quarter Jan 1 Mar 31; Apr 1 Jun 30; Jul 1 Sep 30; Oct 1 Dec 31
Reporting Political Committee Contributions & Expenditures When to file? PACs and Political Party If Election in Qtr: File Pre/Post Election Reports PreElection Report File not later than 10 days before election (Sat) Cover 1 st day of calendar Qtr thru 17 days before election PostElection Report File by 15 th day after end of the calendar Qtr Cover 16 th day before election thru end of calendar Qtr
Reporting Political Committee Contributions & Expenditures When to file? Candidate Committees File reports ONLY during 4 calendar quarters of the year preceding the second (General/Runoff) election for the office the candidate seeks (e.g. May-May or Nov-Nov) Do not file Reports for elections if not a candidate in that election File Quarterly Reports (during 12 months before election) Same filing and reporting dates as PACs First report for election must include election cycle to date If Election in Qtr - File Pre and Post Election Reports Same filing and reporting dates as PACs
Reporting Political Committee Contributions & Expenditures Where to file? With filing officer for the jurisdiction File in each jurisdiction committee is registered Unless Standing Political Committee (only SOS) Filing date? Must be filed no later than due date Filing date is date of actual receipt in office Repealed: Cert mail postmark, delivery confirmation date If Due Sat/Sun/Hol no provision for next business day Office closed on Friday? Monday? Be Open? May be different conclusion with stricter filing deadline
Reporting Political Committee Contributions & Expenditures Content of Reports Requirements in 16-926(B) See CF Handbook of Instructions / Forms Report Contributions in 13 Categories Report Expenditures in 15 Categories Items for some categories require additional info Proposition or Petition Serial Number Candidate named in independent expenditure item Not required to itemize expenditures less than $250 Statute omitted aggregate total of expenditures less $250 But SOS is including aggregate total on form
Reporting Political Committee Contributions & Expenditures Alternatives to Report None! Both options repealed. No Activity Statements - Repealed Committee could file if had no contributions or expenditures during reporting period if committee had no activity Now must file report (which will show no activity) Candidate Annual No Activity Stmt - Repealed
Special Notices of Large Contributions Most Special Notices were Repealed: Notice from candidate committee of receipt of Contribution of $1000 or more from a single source within 20 days before election 10 K Notices of large contributions (State $10K) from a single source within 20 days before election or cumulative contributions or expenditures of $10K
Electronic Reporting All filing officers must provide electronic filing option May comply by opting into State System Not available until mid 2017 Fee not yet determined. Will include help desk support Other options for electronic filing Online database not yet required Use fillable pdfs filed by email or upload to website Opt into another system (Phoenix or other) (Tempe) Develop own system
Electronic Reporting New State System for All Jurisdictions SOS implementing new statewide system 2016 SOS describes as minimally compliant for Nov 2016 Committees enter date into online database Submit reports using logins and passwords Committee data posted to web when filed Extensive online sorting & reporting (reports & graphics) SOS goal to have all jurisdictions use state system SOS system available to cities & towns in mid - 2017 Annual maintenance fee begins in Jan 2019 Cost TBD SOS must notify Clerks of fee by Dec 2017
Electronic Reporting State system was not available to cities / towns Phoenix developed a system (Dec 2012) Committees can enter activity in online database Provides electronic filing (now required in Phx) Reports post to web when filed Public can search database contributors, expenditures Intent to make available to League, cities & towns Availability delayed by legislative changes in 2014-15 Tempe acquired for Spring 2016 Elections (Pilot others) Reprogramming for 2016 Legislative changes Potential option to meet e-filing requirements if SOS system maintenance fees too high
Termination of Committees Committees may only terminate by filing Termination Statement with the filing officer Treasurer must file Termination Statement and certify that the Committee satisfies the conditions for termination Filing officer my reject if it appears the requirements are not met After terminates, committee need not report and cannot receive contributions or make expenditures
Termination of Committees Conditions for Termination Committee either: Has no outstanding debt or obligations; or Debts are more than 5 year old and creditors have agreed to discharge debt and termination Any surplus money has been distributed All contributions / expenditures have been reported May need to file final report with Termination Statement
Termination of Committees Committees with Outstanding Debt Cannot terminate (must have zero balance) Candidate Committee Options If Surplus, may transfer funds to subsequent committee and terminate, OR Annual No Activity Statement - Repealed
Termination of Committees Committee with Surplus Money May distribute Surplus and Terminate Candidate transfer to own subsequent campaign Return surplus monies to the contributors Contribute surplus to other committees, including candidate committees, within limits Donate surplus monies to 501(C)(3) charity Cannot convert to personal use (or family)
Termination of Committees Committees Active in Multiple Jurisdictions May terminate activities in one jurisdiction and remain active in other jurisdictions Standing committees can terminate in some Termination Statement must include additional statement that remaining monies will be used in other jurisdictions (part of form)
All Committees Terminate Session Law HB 2297 All committees in existence on Nov 8, 2016 must terminate by June 20, 2017 (new requirements) If do not, filing officer may terminate or convert to new committee type (Candidate, Party, PAC) Committees will transfer funds to new committee If not required to register, will donate surplus For election in Mar 2017, filing officer may adjust CF filing deadlines
Enforcement Enforcement Role for Filing Officers Filing Officers Enforce Report Filing Ensures Public Disclosure of Information Voters use information to decide how to vote Increasing Role Enforcing other violations Determine reasonable cause on violations Filing officer now sole official authorized to initiate investigation of complaints (11/5/16)
Enforcement Failure to File Campaign Finance Reports Committees must file timely and complete reports File in each jurisdiction registered (except Standing) Treasurer must file Candidate also responsible. Unclear for Chairman. Good Cause Defense for failure Repealed Must file on or before due date or penalties accrue No provisions / defenses for filing after due date
Enforcement Failure to File A committee fails to file if it does not file a timely and complete report Timely and complete not defined or explained Treasurer must certify report is true and correct Report must be filed no later than due date (midnight) Filed appears to mean actual receipt by filing officer If due S/S/H, no provision allowing next business day Complete as prescribed by Chapter Substantially complete & Good faith effort repealed! These changes suggest all requirements must be met
Enforcement Failure to File Duty of filing officer to determine complete? Range of interpretations How view role? Filing officer role Review report on its face to verify if appears complete, schedules attached (view of most jurisdictions) Audit / Enforcement role Audit of reports and schedules to find violations Consult your attorney Set policy for reviewing reports and apply consistently for all committees
Enforcement - Failure to File Notices Filing officer must track committees Identify committees required to file and whether filed! Maintain Log or database Database will track and can send notices automatically Filing Officer must provide Notice of failure In writing - Identifying the late report, and describing how fines accrue and the methods for payment Send by email to committee address within 5 days after the due date (changed from 15 days after)
Enforcement - Failure to File Notices Reminder Notices Optional - not required by law Reminder to committees before filing deadline Can send by e-mail (SOS, Phoenix and others) Include link to online forms or attach forms Benefits Avoids receiving 1 st notice after penalties already due Reduces last minute requests for forms and copies Reduces innocent failures from oversight Avoids criticism for not reminding
Enforcement - Failure to File Penalties A committee that fails to file timely shall pay penalty $10 per day during first 15 days after due $25 per day for each subsequent day (after 15) Penalty increases to $25 automatically (day 16) Penalties accrue until report is filed No maximum amounts (Previous $250 / $1000) Penalties accrue, but must accept reports without payment of the late fees due If committee does not pay, attorney may assess
Enforcement - Failure to File Penalties If committee fails to file within 30 days after due Filing officer may notify the enforcement officer Notice must have been sent to committee to be able to refer to enforcement officer Enforcement officer is city / town attorney
Enforcement - Failure to File Penalties Additional Penalties Committee Suspension Applies only to PACS & Political Party committees - Not Cand Filing officers may suspend committees If Committee Fails to File 3 Consecutive Reports Send Notice of Intent to Suspend On receipt of notice, committee is temporarily suspended Notice must inform committee it has 30 days to come into compliance If fails to come into compliance within 30 days Filing officer may permanently suspend committee Send Notice to committee by email. No further notice required Suspension does not relieve committee of its obligations
Enforcement - Failure to File Penalties Additional Penalty for Candidates 5 Year Bar Repealed Previously, a candidate was not eligible to be a candidate for any local or state office for five years after the last failure to file
Enforcement - Failure to File Penalties Additional Penalty for Candidates (New 2012) Prohibition on Accepting Nomination Petitions Filing officer cannot accept nomination petitions if candidate is liable for $1,000 or more in fines, penalties, late fees, judgments related to CF Exception - If liability is being appealed Nomination paper for all candidates must include statement that candidate has satisfied any liability (includes write-ins) - (statement added to form) Scope of duty for filing officers? Not specified Limited to face of candidate s affidavit? Investigate?
Enforcement - Failure to File Penalties Additional Penalty for Standing Committees If committee files late 3 or more times - Loses eligibility as Standing Committee Must file reports in each jurisdiction active Jurisdictions are not notified if lose status! Filing officers do not know committee required to file! Check status of your standing committees on SOS Website or contact SOS Send reminder Notice if committee has to file with you
Enforcement of Violations Filing Officer is sole public officer authorized to initiate an investigation into alleged campaign finance violations. 16-938(A) Initiate investigation upon filing of 3 rd party complaint Limited to investigation in filing officer s jurisdiction Filing officer can declare conflict of interest Then may refer matter to another filing officer who agrees to accept the referral (Many anxiously waiting!) Guidelines for Investigations SOS required to establish for State in Procedure Manual Process, standards, timelines important. Not issued yet.
Enforcement of Violations Filing officer must determine if reasonable cause exists to believe there is a violation of CF law Reasonable cause standard undefined / unclear No Guidelines or standards. Like Motion to Dismiss? (Assume facts true, violation?) Probable cause? Summary judgement? Other? Standard is affected by ability to review evidence Likely to get standards in Guidelines from SOS
Enforcement of Violations Investigation to determine reasonable cause Must give alleged violator reasonable opportunity to respond No audit or subpoena powers to compel production of documents or attendance of witness May request voluntary production or appearance Treasurer is required to provide records to filing officer Documents and testimony often critical to making reasonable cause determination
Enforcement of Violations If find reasonable cause - Filing officer shall notify enforcement officer Referral appears mandatory if find reasonable cause(?) City / Town attorney is enforcement officer Enforcement officer Cannot take action without reasonable cause determination and referral from filing officer After referral, is sole and exclusive authority to initiate administrative or judicial enforcement Cannot refer to attorney general or county attorney City / Town attorney has discretion whether to prosecute
Enforcement of Violations After referral from filing officer, Enforcement officer may (discretion): Conduct an investigation using subpoena powers Serve alleged violator with Notice of Violation State with reasonable particularity the nature of the violation Specify the fine or penalty imposed Require compliance within 20 days after date notice issued May not compel a person to register as committee until proceedings and appeals are final Presumptive Penalty ( shall impose ) Penalty equal to amount received or spent in violation If find special circumstances, may impose 3 times amount
Enforcement Challenges Challenges with Enforcement of Violations Increased complexity in CF Regulation First Amendment cases removing restrictions Statutory provisions unclear or conflicting Committees & candidates more comfortable in gray areas CF complaints becoming a campaign strategy Resulting in more complaints of violations Independent Expenditure organizations / Non-profits Issue Advocacy ads, mailers, Websites, social media, text, robocalls Trial Courts have referred issues back to filing officers
Enforcement Process - Issues for Municipalities State & County Government Filing and enforcement officers independently elected Position and Authority to enforce against others Municipal Government Clerks & attorneys not independently elected, must initiate enforcement actions against superiors Clerks typically lack necessary legal background and resources to review to make reasonable cause finding Limited authority and no power to compel evidence Actions and findings will be used in campaigns and can affect perception of impartiality in elections
Enforcement Process Options Potential Solutions for Issues Process established in Election Procedures Manual State Office of Administrative Hearings Will handle campaign finance issues Can conduct hearings and make recommendations on campaign finance violations Recommendation to filing officer on reasonable cause Recommendation to attorney on violation and penalty OAH contacting cities and towns about services SOS considering as option for State
Enforcement Process Options Benefits of Using State OAH Provides necessary legal expertise to evaluate evidence, conduct hearings and make determinations Authority to compel evidence Promotes consistency in decisions and case precedent to clarify uncertainty in law and reduce complaints Separation of election officers protects public perception of integrity and impartiality in conduct of elections Potential use for all complaints - state, county and local Reduces or eliminates appearance of political conflicts Less cost for government and committees than court litigation
New Campaign Finance Law For Filing and Enforcement Officers in Cities and Towns Questions / Discussion