Recent State Campaign Finance Developments Impact Business By Mike Wittenwyler
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new law and two recent court decisions affect how campaigns will be financed in Wisconsin in 2014 and beyond. 2013 Wisconsin Act 153
2013 Wisconsin Act 153 revises portions of Wisconsin’s campaign finance and lobbying laws. Highlights of the new law include:
• In soliciting funds for its PAC or conduit, a corporation may now spend significantly more money – up to $20,000 or 20 percent of annual PAC or conduit contributions.
• A process was created for the redirection of conduit funds contributed by a member who no longer can be located. • Lobbyist campaign contributions can now be made earlier in an election year – April 15 of an even year for a fall election. • Lobbyists may now deliver and discuss PAC, conduit and nonlobbyist campaign contributions at any time.
• An individual’s volunteer Internet activities are now free from regulation including sending or forwarding emails, linking to another person’s Internet site or blogging.
McCutcheon v. Federal Election Commission (U.S. Supreme Court)
On April 2, 2014, in McCutcheon v. FEC, the U.S. Supreme Court struck down federal limits on aggregate individual contributions to federal candidate campaigns, political party committees and PACs. The court held that the First Amendment rights of donors are violated by the federal campaign finance law. As a result, aggregate contribution limits in eight states – including Wisconsin – are also considered unconstitutional and unenforceable.
Under McCutcheon, the Court held that federal limits on aggregate individual contributions to federal candidate campaigns, political party committees and PACs violate the First Amendment rights 10
of donors. Any restrictions on campaign contributions can only be justified when the limits prevent a direct quid pro quo corruption. Because aggregate contribution limits do not relate to a threat that any single candidate will be corrupted, the Court held these limits cannot be upheld.
McCutcheon does not address base campaign contribution limits to candidates, political parties and PACs. Those contribution limits remain in place. Similarly, corporations are strictly prohibited from making campaign contributions under federal and Wisconsin law. These source restrictions also remain in place after McCutcheon. The Government Accountability Board (“G.A.B.”) subsequently announced that it is no longer enforcing Wisconsin’s $10,000 annual aggregate individual contribution limit. As a result, individuals may make an unlimited overall amount of campaign contributions provided that each contribution is within the respective base limit amount. Moreover, an individual is also now able to contribute an unlimited amount to a PAC or state political party committee. Wisconsin Right to Life v. Barland (7th Circuit)
In 2010, the G.A.B. adopted an administrative rule that greatly expanded the scope of communications subject to regulation as independent expenditures. As a result, issue advocacy communications in the 30/60 days before an election that identified a candidate would have been presumed to be independent expenditures and subject to full PAC regulation under state campaign finance law, including donor disclosure.
In response to the G.A.B.’s adoption of this highly controversial rule, three lawsuits were filed almost immediately after the rule took effect. On May 14, 2014, the Seventh Circuit U.S. Court of Appeals issues a decision in the last of those lawsuits: Wisconsin Right to Life v. Barland. The plaintiff prevailed in virtually all of its arguments, including:
Watch a video explaining the Wisconsin Right to Life v. Barland 7th Circuit Court decision on WMC's YouTube channel WMC501.
- Wisconsin’s ban on corporate political spending is unconstitutional under Citizens United; - The administrative rule that treats issue advocacy during the 30/60 day preelection period as fully regulable express advocacy/independent expenditures is unconstitutional; and,
- An administrative rule that imposes PAC-like registration and reporting requirements on all organizations that sponsor independent expenditures is unconstitutional as applied to sponsors who are not superPACs (such as 501(c) (4) organizations and other noncommittee sponsors). The WRTL decision also is an excellent summary of the history of campaign finance regulation and litigation in Wisconsin during the last 20 years. It covers in detail successful legal challenges brought against the Elections Board / G.A.B by our law firm on behalf of Wisconsin Manufacturers & Commerce. And, it discusses how despite losing in each of these instances, the G.A.B. continued to push for greater regulation – not less – of political speech. In short, the WRTL decision makes clear that the government’s authority to regulate political speech extends only to money raised and spent for speech that is express advocacy and that “ordinary political speech about issues, policy, and public officials must remain unencumbered.” BV
Mike Wittenwyler is an administrative and regulatory attorney with Godfrey & Kahn. He can be reached at (608) 284-2616.