7th Circuit strikes down transparency and public disclosure in campaign finance


The repercussions from the U.S. Supreme Court decision in McCutcheon v. FEC earlier this year continues to unravel any remaining transparency and public disclosure in campaign finance.

The latest decision is from the Seventh Circuit Court of Appeals in the “Koch Industries’ midwest subsidiary formerly known as the state of Wisconsin,” as Charles Piece calls it. The Wisconsin State Journal reports, Court: Wisconsin campaign finance laws went too far:

A federal appeals court on Wednesday declared major portions of Wisconsin’s campaign finance law unconstitutional in a decision that experts said would have little immediate effect but would make it clear that the rules must be rewritten.

Screenshot from 2014-04-02 14:06:21The decision came in a lawsuit filed by Wisconsin Right to Life, an anti-abortion group that objected to rules governing so-called issue advocacy, in which groups express political opinions but don’t advocate for or against specific candidates. The lawsuit, however, also challenged a host of other rules governing how outside groups spend during elections.

[Read the decision in Wisconsin Right to Life v. Barland Here.]

The strongly worded decision from the 7th Circuit U.S. Court of Appeals said Wisconsin regulators had overstepped their bounds in banning spending by corporations, setting limits on how much they could raise for affiliated political committees and establishing burdensome rules for groups that merely mentioned candidates’ names in ads.

Part of the problem, Judge Diane Sykes wrote, was that state law had not kept up with recent U.S. Supreme Court decisions limiting the government’s power to regulate political speech. She went on to detail its flaws.

James Bopp, an Indiana attorney representing Wisconsin Right to Life, compared the law after Wednesday’s decision to “the Titanic after hitting the iceberg.”

“There have been so many holes blown into this campaign finance law that I don’t know what you could do other than have the Legislature rewrite the whole thing,” Bopp said.

Reid Magney, spokesman for the Government Accountability Board, which oversees Wisconsin elections, declined to comment. A spokeswoman for Attorney General J.B. Van Hollen said only that Justice Department lawyers were reviewing the decision.

Wisconsin election law attorney Mike Wittenwyler said the practical effect of the decision was muted by the GAB’s earlier agreements to stop enforcing some aspects of the law, including the ban on corporate spending. But he said that it sent a strong message that the GAB had overstepped its bounds in regulating spending by outside groups and that Wisconsin legislators need to update state law.

A key issue in the case was the state’s definition of issue advocacy. A GAB rule that said ads aired close to elections crossed the line from issue advocacy into so-called express advocacy, which brings additional regulation, if they mentioned a candidate. The appeals court said that wasn’t enough.

The ruling noted that ads must use “magic words,” such as “vote for,” “elect” or “reject” to merit additional regulation.

Wittenwyler said the court also made it clear that the rules governing groups advocating for or against candidates couldn’t put too much of a burden on them.

For instance, if a person wanted to put up a campaign sign for a candidate, “what I should be able to do is go out and paint that sign — and then I shouldn’t have to file a report,” Wittenwyler said.

Ken Mayer, a political scientist at UW-Madison, said the appeals court decision could eventually allow some smaller groups to participate in elections by reducing legal and accounting costs involved in reporting their spending.

Republican lawmakers vow to update Wisconsin’s campaign finance laws in the wake of a federal court ruling. Campaign finance ruling fuels GOP call to revamp state laws:

A federal appeals court ruling on key elements of Wisconsin’s campaign finance laws is spurring calls for an overhaul of the state’s regulations.

The ruling also has prompted questions about whether it would have an impact on a separate investigation into alleged illegal campaign coordination.

Republicans and some advocacy groups say Wednesday’s decision in the 7th Circuit Court of Appeals was a victory for free speech, and makes it clear that the state’s campaign finance laws are overly restrictive and urgently need to be updated.

Assembly Speaker Robin Vos, R-Rochester, and Sen. Mary Lazich, R-New Berlin, promised Thursday to revamp the laws.

But Democrats and groups that support aggressive regulation of campaign spending say the ruling struck a blow against transparency and will fuel more secret money flowing into Wisconsin’s elections.

“Today freedom and democracy took a harsh blow in Wisconsin,” said Senate Minority Leader Chris Larson, D-Milwaukee. “Common sense campaign finance laws were in place to protect our state from corruption and undue influence from money and special interests.”

A spokeswoman for Gov. Scott Walker, “the goggle-eyed homunculus hired by Koch Industries to manage their midwest subsidiary formerly known as the state of Wisconsin,” said the “issue is not on our agenda.” I’ll bet it’s not.

Here is the Campaign Legal Center press release:

May 15, 2014 – Three-Judge Panel Disregards Precedent to Gut Wisconsin Political Disclosure Laws

On May 14, 2014, a three-judge panel of the Seventh Circuit Court of Appeals invalidated or narrowed multiple provisions of Wisconsin’s political disclosure law in Wisconsin Right to Life v. Barland.

More specifically, the three-judge panel held that Wisconsin’s disclosure requirements could only extend to express advocacy and the functional equivalent of express advocacy, disregarding that the Supreme Court in Citizens United stated unequivocally that it “rejected the contention” that disclosure “must be limited to speech that is the functional equivalent of express advocacy.”  The three-judge panel also struck down Wisconsin’s “PAC-like” disclosure requirements as applied to groups making independent expenditures that did not have express election advocacy as their major purpose.  Both holdings run contrary to a 2012 decision by a different panel of the Seventh Circuit in Center for Individual Freedom v. Madigan, which upheld comparable provisions of Illinois’ campaign finance law.

“The result of this decision is to leave virtually no reporting requirements for independent spending on the books for certain organizations.  A group can pour millions of dollars into advertising in Wisconsin elections without having to make full disclosure to the public, provided that it claims its ‘major purpose’ does not relate to candidate elections,” Legal Center Senior Counsel Tara Malloy stated.  “The reasoning of the decision is also slipshod, selectively distorting parts of controlling Supreme Court precedent, as well as contradicting the recent precedent of its own Circuit.  This panel has apparently forgotten that the High Court has repeatedly found that there is a vital public interest in ensuring that voters receive information about the independent advertising campaigns that bombard them in the election season so that they can make meaningful decisions at the polls.”

To read the amicus brief the Legal Center filed on November 9, 2012, defending the challenged provisions of Wisconsin law, click here.