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August 11, 2012 04:38 AM UTC

BREAKING: Numerous Gessler-Proposed Election Rules Invalidated

  • by: Colorado Pols

Big news breaking late Friday from Denver District Court:

In November, 2011, the Secretary instituted a rulemaking process to promulgate new rules to administer and enforce Colorado’s campaign finance and election laws. The new rules became permanently effective on April 12, 2012.

Plaintiffs consist of numerous public interest groups, watchdog organizations, and individuals, all of whom have an interest in the new rules. Plaintiffs filed two separate complaints, which were consolidated in this action, challenging the following rules implemented by the Secretary pursuant to the rulemaking process: 1.7; 1.10; 1.12; 1.18; 4.1; 4.2; 6.1; 6.2; 7.2; 14; and 18.1.8. The parties agree that in light of subsequent changes implemented by the Secretary, the challenges to Rules 6.1; 6.2 and 14 are moot. Defendant does not challenge Plaintiffs’ standing to bring this action…

To briefly summarize the challenge filed against Colorado Secretary of State Scott Gessler’s revised election and campaign finance rules, 1.7 pertained to electioneering communications, and the test employed to determine “express advocacy.” This particular rule was upheld by the judge as consistent with precedent and Gessler’s rulemaking authority. Two other of Gessler’s proposed rules, which would have increased the reporting limits for issue committees to $5,000, were not ruled on as Gessler has agreed to not enforce them already as a result of other litigation. And that brings us to the remaining five, that is, most of what was challenged:

[In Challenged Rule 1.12.3], The additional 30% requirement adds a restriction not found in the statute and not supported by the record. The revenue requirement works further mischief in that it appears notto be income neutral. In other words, issue committees with very little income, which presumably spend most of that income on election-related matters, will be required to report. But large corporations or wealthy individuals could spend substantial sums of money on issues and yet not have to report because they are spending less than 30% of their revenue on these activities. [Pols emphasis] Certainly this is contrary to the intent of the electorate, which has expressed aninterest in compelling more disclosure, not less.

Regardless of the consequences of the 30 percent requirement, its addition to the major purpose definition inappropriately modifies and contravenes an existing statute, C.R.S. § 1-45-103(12)(b)…Moreover the revenue test clearly is at odds with the express intent of the legislature, [Pols emphasis] which has enacted a definition without use of such a test. For these reasons, Rule1.12.3 is invalid as it exceeds the Secretary’s delegated authority…

Ultimately, it comes down to this: Can the Secretary add a “major purpose” limitation to Section 2(12)(a) to save the provision, or is it a matter for a the legislature or the citizens, through referendum, to fix it? While the Secretary’s pragmatism is to be respected, removing a critical element of 2(12)(a) by rule goes beyond the Secretary’s powers…He assumes a solution without legislative or voter input, and thereby exceeds his delegated authority. [Pols emphasis] C.R.S. § 24-4-103(8)(a). For these reasons, Rule 1.18.2 is invalid.

…the Secretary’s rules improperly narrow the definition of “political organization.”Under the statute, it is an organization that “is engaged in” influencing elections or appointments of individuals to public office. Under Rule 7.2.1, this is narrowed to organizations with a “major  purpose” in influencing elections. Rule 1.10 further narrows the definition to groups which “expressly advocate” for or against candidates. These narrowing rules effectively eliminate distinctions between “political organization” and “political committee.” [Pols emphasis]

…[Rule 18.1.8] substantially denudes the statutory penalty and raises the possibility that thosesubject to the penalty simply will not report knowing that the fine amount will be fixed on Election Day. The Secretary does not address the effect of the cutoff date in his brief. Stopping accrual of the fine on Election Day is contrary to the stated interests of “strong enforcement of campaign finance requirements” [Pols emphasis] as stated in Art. XVIII § 1. Furthermore, the rule removes an enforcement element from C.R.S. § 1-45-111.5(c) by setting an ultimate limit on fines for lack of reporting…

For the reasons set forth above, Rule 1.7 is valid. Rules 1.10; 1.12; 1.18; 7.2; and 18.1.8 are invalid.

Here’s the complete text of today’s ruling, courtesy Colorado Ethics Watch.

Needless to say, Gessler is not happy about this turn of events, from his release:

“Today’s ruling is problematic. On one hand, we prevailed on the most important issue. On the other, it prevents me from following free speech protections handed down by federal courts. The people of Colorado remain mired in uncertainty. Small community groups face heavy fines and ambush lawsuits, while big-money groups can afford attorneys and accountants to navigate the difficult campaign finance laws.”

“This case isn’t about transparency. When these partisan attack groups start revealing who pays for their activities, then I’ll believe that they care about an equal playing field.”

Gessler’s next move remains to be seen and is sure to be the topic of speculation. Until then, Common Cause, Ethics Watch, and other longtime Gessler adversaries are celebrating.


6 thoughts on “BREAKING: Numerous Gessler-Proposed Election Rules Invalidated

  1. Fork tongued serpents is what you are. You all claim to care for your fellow man and hate big money but your actions say the opposite.

    Gessler has been trying to help this entire time. From personal experience I can verify every single thing Gessler says below is spot on.

    “Small donor committees spent about one or two percent of the money if you take away the smaller committees. They paid 12 percent of all the fines. And I think that was almost a third of their total assets were confiscated in fines. And if you look at candidates as well, they’re generally less sophisticated than the 527s and they have far fewer resources, they pay a much higher proportion than a 527 in fines. So what we’re looking at – and this is just the filing side – is smaller organizations getting whacked by the stuff and larger organizations easily navigate it. The rich get richer and the poor get poorer in the campaign finance world.” Scott Gessler

    “There was another organization called United Women of Color. I’m guessing it was women and they supported minority candidates. They raised, I think around $5,000 or $10,000 – they were finally terminated after they racked up $4 million in fines. This is absurd, it is just absurd. It is hurting grass roots political activism, it’s truly a burden on free speech.

    Now before I got into office my predecessor was headed towards criminalization of campaign finance laws – so not only could you pay fines but you can go to jail too. That’s really, in my view, a terrible system. I’m rewriting all the campaign finance laws from… I’m sorry, not the laws, strike that. Not the laws, I don’t make the laws. The regulations that implement the laws, okay?

    So I’m rewriting all the regulations for long overdue reorganization. We’re making them easier to read but we’re also making substantive changes to bring them in line with court law, to make it easier for people to understand what they can and can’t do, so there’s less ambiguity. And I’m being massively attacked by the left because of it. You know, because big money’s going to be in politics or the lack of transparency.

    Senator John Morse, the majority leader, during a hearing I had he came and he said, “You know, these things are complex, we all know that and we all know that you need a lawyer to follow them but that’s the price we pay for transparency.” The price you pay is to hire a lawyer? So before you can exercise your core political speech you have to hire an attorney to be able to do that.

    But let me tell you the change we’re making there. It used to be big money, big money in transparency, stop big money. That was the talking point and that’s all that the press ever reported about. But now the press is reporting about well, these people are arguing transparency – they’ve given up the big money thing – on one hand but they’re talking about the burdens of speech on the other hand. And we had a big campaign finance rule-making hearing and let me tell you, there were a ton of folks who came. People on the ground with their personal experience…

    People talked about the burden of free speech. And so what you had were all these Democrat organizations, none of whom reveal their donors, all of who have attorneys or were attorneys testifying, talking about how this is so important to stifle speech – And on the other hand we have a lot of people saying, “These are my practical experiences on the ground and this is what this does.” And we’re changing the terms of debate there as well.

    It’s slow, it is difficult, but we are going to change the terms of debate there and people are going to realize in popular political circles, not just the insiders, but they’re going to understand that the campaign finance laws have a true cost to fund our First Amendment rights and we are going to make those changes here in the State of Colorado.” Scott Gessler

    1. The one true thing Gessler said was

      I’m rewriting all the campaign finance laws…

      He attempted to cover, of course

      …I’m sorry, not the laws, strike that. Not the laws, I don’t make the laws. The regulations that implement the laws, okay?

      but the Judge called him out. In fact, this is the second judge in a couple of months that told Gessler he was trying to write law and that he had no power to do so.

      The judge also highlighted the absurdity of the “big guy, little guy” argument. Gessler wanted to only require reporting if spending 30% of an organization’s money. So, for example, a $1,000 organization would have to report after spending $300, while a $1 million organization could spend up to $300,000 without reporting. This is supposed to reduce the burden on the little guy? It shows Gessler for what he is–the best friend and protector of big money in politics. That was how he made his living before taking office; it is how he wanted to keep making his living after taking office.

      Racking up huge penalties does not come from a system that is too difficult to understand. Small-budget candidates and small committees navigate the system just fine every day. Small committees rack up big fines by failing to file, failing to comply, failing to respond, or failing to correct. Yes, even small committees have a responsibility to know the law and follow it. The SOS (before Gessler and continuing under Gessler) has an excellent support system to provide assistance to candidates and committees–a detailed Manual, phone assistance, and online assistance–and an online filing system that guides you through the process and correct errors as you go along.

      Gessler’s arguments don’t hold up, and two judges have made that clear.

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