August 11, 2012 04:38 AM UTC

BREAKING: Numerous Gessler-Proposed Election Rules Invalidated

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• 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.