HB 7 in Detail: Independent Expenditures

Cross-posted from ICPR's blog, The Race is On:

Today we resume our series on the problems with HB 7, beyond the astronomical dollar limits. Recent posts have dealt with the effective date, calendar year limits, and the penalties for violating the law, among others.

Independent expenditures are so common in federal elections that they are routinely referred to by the initials "IE." These IE campaigns spring up in part because federal law limits how much anybody can give to a candidate, so that groups that want to spend more in support or opposition to a candidate have to work outside of that candidate's campaign. And there are explicit disclosure and contribution limit rules for IE efforts in federal law.

It makes sense for Illinois to adopt rules for IE campaigns at the same time that we adopt limits on campaign contributions generally. But while HB 7 has a section on "independent expenditures," it uses the term in very different ways than federal law does. These differences threaten the effectiveness and legality of the bill.

While federal law applies to any organization, the provision in HB 7 dealing with independent expenditures applies only to those "made by a natural person," meaning single individuals acting alone. The immediate consequence of this is to suggest that no other entity can engage in "independent expenditures," and the consequences of that would be vast. It would turn the contribution limits into spending limits, for one, which would certainly draw a skeptical judicial eye in the inevitable challenge (note that the bill exempts parties and some other committees from this limit).

There are also apparent drafting problems in this section. The section ensures a modicum of disclosure from natural persons acting independently of any political committee. Individuals are required to report when they have spent $3,000 and again at $20,000. It is not clear that the bill would require any continuing obligation to report -- say, at increments of $20,000. Nor is it clear that the person would have any obligation to disclose at the time that they commit to making an expenditure. If they have to disclose only when they actually pay the bills, that disclosure may well come well after the ads have run, and long after Election Day.

To the extent that HB 7 tried to ensure that individuals making large expenditures in relation to candidates are covered by disclosure requirements, the bill is on a useful errand. But the section is drafted in ways that fall short of that goal and threaten the abilities of others to make their voices heard in the course of campaigns. It needs to be re-written.

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HB 7 in Detail: Constituent Services

Cross posted from ICPR's blog, The Race is On:


Today, ICPR continues its series on the problems with HB 7, beyond the astronomical dollar limits. Previous posts are here and here.

HB 7 creates a wholly new type of committee, one dedicated to "constituent services" -- a new type that's ripe for abuse. It's true that for many years, public officials have used personal funds or campaign contributions to supplement the public funding allocated to their district offices. While the proper solution to underfunded district offices is to increase the public allocation, the use of a small portion of campaign funds has become a normal practice in Illinois.

HB 7 institutionalizes this practice by creating new committees dedicated to supplementing the district office allocation. But it raises very troubling questions. Will incumbents be able to use their constituent services committees to produce and distribute mailers and hold public events? It will be difficult if not impossible to determine when such activities are political (aimed at voters in the district), as compared to expenditures that are (as HB 7 states) “related to constituent services and the maintenance of the official’s public office” as these are aimed at the exact same people, and may occur at the exact same time. Note that there are none of the restrictions on Constituent Services Committees that apply to mailings on behalf of legislators by the Legislative Printing Unit, for instance.

Furthermore, would donors be able to contribute money to an official’s constituent service committee at the same time that they lobby them? Session day fundraisers have been banned for over a decade. The law now bars legislators from holding "fundraising functions" on session days. But a separate bill, SB 54, makes a change to the section of the 2003 Ethics Act regarding session day fundraisers, inserting the word "political" before the phrase "fundraising functions" (this change is on page 18 of SB 54):

1 (5 ILCS 430/5-40)
2 Sec. 5-40. Fundraising in Sangamon County. Except as
3 provided in this Section, any executive branch constitutional
4 officer, any candidate for an executive branch constitutional
5 office, any member of the General Assembly, any candidate for
6 the General Assembly, any political caucus of the General
7 Assembly, or any political committee on behalf of any of the
8 foregoing may not hold a political fundraising function in
9 Sangamon County on any day the legislature is in session (i)
10 during the period beginning February 1 and ending on the later
11 of the actual adjournment dates of either house of the spring
12 session and (ii) during fall veto session. For purposes of this
13 Section, the legislature is not considered to be in session on
14 a day that is solely a perfunctory session day or on a day when
15 only a committee is meeting.

On its face, this change would seem to allow non-political fundraising. Perhaps the intent is merely to let legislators sponsor events for groups like United Way or the Cancer Society. But coupled with the creation of Constituent Services Committees, which are by intention for non-political purposes, this provision is very disturbing. Could a Constituent Services Committee hold a session day funder? The law doesn't say, and where the law is silent, loopholes are formed.

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HB 7 in Detail: Defining when a committee "receives" a contribution

Cross-posted from ICPR's blog, The Race is On:

Today, ICPR continues its series on the problems with HB 7, beyond the astronomical dollar limits. Previous posts are here.

In revisions to the Election Code, HB 7 changes the definition of when a committee "receives" a contribution. The date of receipt determines when a committee must report a contribution, and is especially important during the A-1 reporting period: the final 30 days before an election, when committees are required to report contributions over $500 within two working days of receipt. The date of receipt also becomes a factor around the end of the regular reporting period, in determining when the public is told of a contribution.

Current law uses the word "receipt" but does not define it in statute, relying instead on the common sense of the word. The State Board of Elections has defined the word in regulation, relying again on the common sense meaning of the term.

HB 7 changes the definition to when the "candidate or campaign treasurer" has "actual personal physical possession of the contribution." This greatly narrows the definition in ways that are deeply problematic. When, for instance, would the candidate or treasurer have "actual personal physical possession" of an electronic funds transfer? An on-line contribution? An inter-bank exchange?

But there are deeper problems, and an example will illustrate: In 2006, Todd Stroger, then a candidate for Cook County Board President, missed statutory deadlines to make public reports of more than $250,000 in contributions received in the final weeks before the election. He later claimed that the contributions had been “received” by the committee but were being vetted, and so were not “received” by the officers of the committee. After much haggling, the State Board of Elections disagreed with Stroger's interpretation. Under current law, he was found to have violated the Election Code and was fined just over $25,000. This provision in HB 7 would validate his failure to disclose.

With this change, a committee could receive a contribution without triggering reporting requirements. Until the candidate or treasurer of the committee directed a staff person to hand the contribution to the treasurer or candidate, creating the necessary “actual personal physical possession,” there might be no obligation to report a contribution. There is nothing to require a committee to disclose once a staff person has told the candidate or treasurer of the receipt, so long as the staffer does not deliver "actual personal physical possession" of the contribution. The chair of the committee or other staff could have "actual personal physical possession" of a contribution indefinitely without ever triggering disclosure. Contributions received by the committee before Election Day could, under this proposal, be held until after the voting is over, then delivered to the treasurer, deposited, and used to pay debts incurred before Election Day. This could postpone disclosure for months, completely defeating the purpose of A1 reports.

This is a huge step backward, and one of several reasons why ICPR believes that HB 7 is worse than nothing.

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HB 7 in Detail: Ballot Questions

Cross-posted from ICPR's blog, The Race is On:

HB 7, the campaign finance measure, has garnered a lot of media attention, none of it positive. (see, for instance, today's editorial in the Daily Herald). The bill was sent to Gov. Quinn on June 30, and he has until later this month to decide whether to sign it, veto it, recommend changes with an amendatory veto, or allow it to become law without his signature.

Our opposition to HB 7 is well known. Yes, we object to the provisions that would allow for astronomically high contributions. Where federal law allows contributions of $2,400 for people and $5,000 from political committees each election, HB 7 allows contributions of up to $10,000 from people and $90,000 from committees each calendar year. But that is far from the only flawed section of the bill. Over the next few days, we intend to outline our concerns with the non-limit parts of the bill. Some of these reflect ambiguous drafting. Some reflect intentional changes to the statute that will have adverse consequences. In the next few days, we'll focus on different parts of HB 7, other than the astronomical dollar amounts, in order to explain our concerns.

Start with how HB 7 treats ballot questions. HB 7 defines “single candidate committee” (on page 39 of the bill) as:

4 "Single-candidate committee" means a political
5 committee organized to support or oppose the election of a
6 single, specific candidate or public official or to support
7 or oppose one or more questions of public policy. (emphasis added)

The term "single candidate committee" is a misnomer, as the definition also encompasses committees formed to support or oppose ballot questions. It has been long established that governments can require financial disclosure as it relates to these questions of public policy, but cannot impose limits. At least since Buckley v Valeo, the US Supreme Court's landmark ruling on campaign finance, courts have held that there is no public interest in limiting giving to ballot question committees.

That's because the purpose of contribution limits is to address the fact or appearance of corruption and ballot questions are not "corruptible," or even sentient. Ballot questions do not exercise judgment or discretion. They pass or fail, and then it is up to other officials to implement them. Including ballot questions in the definition of a "single candidate committee" may be sloppy drafting or careless thinking but it is also certainly an invitation to a legal challenge.

In the next few days, we'll post concerns with other portions of the bill.

To comment, please visit ICPR's blog.

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