The Honorable Mark Miloscia
The Honorable Hans Zeiger
The Honorable Sam Hunt

Re:  Significant Constitutional and Practical Issues with House Bill 1807

Dear Chair Miloscia, Vice Chair Zeiger, Ranking Minority Member Hunt, and Members of the Senate State Government Committee:

On behalf of the Center for Competitive Politics, I am writing you today to respectfully submit the following comments regarding the constitutional and practical impact of the provisions contained in House Bill 1807, as passed by the House on March 2, 2017, and scheduled to be heard before the Senate State Government Committee on March 22, 2017. Specifically, I write to note several significant legal concerns raised by the bill, which proposes amendments to Washington’s campaign finance laws. Aside from raising serious public policy concerns, these weaknesses could subject the state to costly litigation.

The Center for Competitive Politics is a nonpartisan, § 501(c)(3) nonprofit organization dedicated to protecting and defending the First Amendment political rights of speech, assembly, and petition. The Center was founded in 2005 by Bradley A. Smith, a former Chairman of the Federal Election Commission. In addition to scholarly and educational work, the Center is actively involved in targeted litigation against unconstitutional laws at both the state and federal levels. Just this past year, we secured judgments in federal court that struck down laws in the states of Colorado and Utah for violating the First Amendment. We are also currently involved in litigation in California, Missouri, and against the federal government.

This legislation proposes a new and stunningly broad definition of “incidental committee” – by definition, organizations that only minimally involve themselves in electoral politics – and proposes to treat these organizations similarly to “political committees” – by definition, groups organized specifically to involve themselves in electoral politics. This new definition proposed in H.B. 1807 is of dubious constitutionality under the First Amendment for four primary reasons:  (1) it ignores decades of jurisprudence establishing the necessity of a “major purpose” test; (2) it places a regulatory burden on many moderately-sized organizations in defiance of recent judicial precedent; (3) it dilutes the value of disclosure by perversely creating “junk disclosure”; and (4) it may subject individuals to harassment based on their political beliefs. As currently drafted, this bill even appears to force certain 501(c)(3) charitable organizations to report the names and home addresses of their significant supporters to the government, even though (c)(3)s by their very nature are forbidden from engaging in political activity. Moreover, because the measure references other vague provisions in existing state law, such as the definitions of “contribution,” “election campaign,” “expenditure,” and “political advertising,” and the undefined terms “support” and “opposition,” the measure suffers from additional weaknesses not present on its face.

In particular, the measure is unconstitutionally vague in that it requires incidental committees to report only those expenditures “that were made directly or indirectly in support of or in opposition to any election campaign or to a political or incidental committee.”[1] What qualifies as “indirect” support (or opposition) of a political committee, or an incidental committee or election campaign, for that matter? The measure is silent on this question, and those speakers who are attempting to comply with these reporting requirements will likely opt not to speak, rather than risk running afoul of the law. If they do speak and attempt to comply with the measure’s reporting mandates, they will face the very real possibility of tripping over the unclear wording of the law and incurring costly financial penalties. This is a significant weakness because the Supreme Court has consistently stated that such lengthy and confusing requirements chill speech:  “Prolix laws chill speech for the same reason that vague laws chill speech:  People of common intelligence must necessarily guess at the law’s meaning and differ as to its application.”[2] This danger is especially pronounced in Washington, where private parties may bring campaign finance complaints for minor reporting violations.

Accordingly, if H.B. 1807 becomes law, its newly proposed definition of “incidental committee” and attendant reporting requirements will likely be challenged. Any such challenge has a high likelihood of success and will cost the state a great deal of time and resources defending the statute. Such a challenge will also divert your Attorney General’s office from meritorious legal work. Furthermore, under the federal Civil Rights Act, Article III courts are empowered to order states to pay costs and damages to successful plaintiffs. The Center received two such judgments – both in the six-figure range – from state governments in 2016.

I. H.B. 1807 creates a new definition of “incidental committee” – with no language concerning such an entity’s major purpose – to reach groups that cannot be regulated as political committees under current law. Such a definition is inappropriate and burdensome.

H.B. 1807 proposes a new definition of “incidental committee,” defined as “any nonprofit organization not otherwise defined as a political committee but that may incidentally make a contribution or an expenditure in support of, or opposition to, any candidate or any ballot proposition in Washington, directly or through a political committee.”[3]

As proposed in this bill, if an incidental committee – a group that, as the very name suggests, is not primarily engaged in political campaign activity, but may incidentally exercise its speech rights –  makes vaguely defined “contributions” or “expenditures” of $25,000 or more, it must file a statement of organization with the State and subject itself to functionally similar reporting requirements as a political committee – which, by definition, has “the expectation of receiving contributions or making expenditures in support of, or opposition to, any candidate or any ballot proposition.”[4] Essentially, the bill states that any organization that spends $25,000 on poorly defined activities is a political committee, regardless of the character and scope of its other activities. This blurs the distinction between groups that exist for political purposes, and groups that do not, but happen to incidentally engage in political speech. Such a distinction is a bedrock principle of First Amendment law.

By making no distinction between organizations that do and do not have a major purpose of supporting or opposing the election of candidates or the passage of defeat of ballot measures, H.B. 1807 imposes significant reporting requirements on “incidental committees.” These requirements subject such groups to functionally similar reporting requirements as political committees, simply because they make vaguely defined “contributions” or “expenditures” of $25,000 or greater. This statutory scheme likely would not survive constitutional scrutiny, for the reasons given below.

II. It is constitutionally impermissible to use a monetary trigger, rather than an analysis of an organization’s major purpose, to determine whether an organization qualifies as a political committee.

In 1976, the U.S. Supreme Court decided Buckley v. Valeo, an omnibus challenge to the then-recently enacted Federal Election Campaign Act (“FECA”). Among the cornerstones of First Amendment law, the Court’s decision is notable for its determined policy in favor of shielding issue speech from the force of governmental regulation.[5] The relevant portion of FECA had a “plan[ed] effect…to prohibit all individuals, who are neither candidates nor owners of institutional press facilities, and all groups, except political parties and campaign organizations from voicing their views relative to a clearly identified candidate through means that entail aggregate expenditures of more than $1,000 in a calendar year.”[6] Because of this, the Court found the government could only regulate contributions and expenditures made by “organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate.”[7]

More recently, in Human Life of Washington, Inc. v. Brumsickle, the Ninth Circuit, which has jurisdiction over Washington, examined the major purpose test in the context of an organization opposed to euthanasia.[8] The court noted that the inclusion of a “primary purpose” requirement could shield a statute from constitutional scrutiny:

The Disclosure Law does not extend to all groups with “a purpose” of political advocacy, but instead is tailored to reach only those groups with a “primary” purpose of political activity. This limitation ensures that the electorate has information about groups that make political advocacy a priority, without sweeping into its purview groups that only incidentally engage in such advocacy. Under this statutory scheme, the word “primary” – not the words “a” or “the” – is what is constitutionally significant.[9] While we do not hold that the word “primary” or its equivalent is constitutionally necessary, we do hold that it is sufficient in this case to ensure that the Disclosure Law is appropriately tailored to the government’s informational interest.[10]

Likewise, in New Mexico Youth Organized v. Herrera (“NMYO”),[11] the Tenth Circuit held that New Mexico campaign finance law’s definition of “political committee” must satisfy “the major purpose test.”[12] Significantly, the challenge dealt with political committee registration and disclosure, at issue in H.B. 1807, and not any challenge to electioneering communication disclosure.[13]

The facts of the NMYO case were typical:  one nonprofit organization, NMYO, worked with another nonprofit organization, Southwest Organizing Project, to disseminate mailings, as both nonprofits had a history of education on issues relating to youth, equality, and government transparency.[14] The mailings suggested that certain legislators were beholden to health insurance interests, and highlighted that the legislators’ donors included health insurance companies.[15] Both nonprofit organizations spent a relatively small portion of their budget on the mailings:  $15,000 out of a $225,000 budget for NMYO and $6,000 out of a $1.1 million budget for Southwest Organizing Project.[16] It’s worth noting that these spending amounts are similar in scope to the $25,000 monetary threshold proposed in H.B. 1807.

The Tenth Circuit, using Buckley as a guide, held that a political committee may “only encompass organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate.”[17] The court found that because neither group spent “a preponderance of its expenditures on express advocacy or contributions to candidates,”[18] neither could be regulated as a political committee.

As recently as 2012, in Minnesota Citizens Concerned for Life, Inc. v. Swanson, the en banc Eighth Circuit struck down a law requiring independent expenditure funds to have “virtually identical regulatory burdens” as PACs.[19] This included having to file periodic reports, even if the fund no longer engaged in political activity.[20] Ultimately, the Swanson court required the major purpose test to ensure that only political organizations face that burden – and not organizations that lack such a major purpose.[21] H.B. 1807 would fail that test.

If this bill becomes law, it will raise the very concerns addressed by the above cases.

III. H.B. 1807 would likely be unconstitutional in many of its applications due to the burdens it would impose on many moderately sized organizations.

While the Supreme Court upheld certain disclosure in Citizens United v. Federal Election Commission,[22] it addressed only a narrow and far less burdensome form of disclosure to that contemplated by H.B. 1807. The Court merely upheld the disclosure of an electioneering communication report, which disclosed the entity making the expenditure and the purpose of the expenditure. Such a report only disclosed contributors giving over $1,000 for the purpose of furthering the expenditure.[23]

By contrast, this legislation would mandate disclosure of the names and mailing addresses of the top ten “payments”[24] received by a nonprofit of $10,000 or more and all contributors who have given $100,000 or more in a calendar year to the organization if that entity makes expenditures of $25,000 – regardless of whether or not its major purpose is to influence elections, and regardless of those donors’ relationship to the organization’s contributions or expenditures.

In contrasting the disclosure burdens dealt with by the Supreme Court in the 1986 case of Massachusetts Citizens For Life, Inc. v. Federal Election Commission (“MCFL”),[25] the Citizens United Court specifically held that the limited disclosure of an independent expenditure report is a “less restrictive alternative to more comprehensive regulations of speech.”[26]

In MCFL, both the plurality and the concurrence were troubled by the burdens placed upon nonprofit corporations by certain disclosure requirements. The plurality was concerned with the detailed record keeping, reporting schedules, and limitations on solicitation of funds to only “members” rather than the general public.[27] Likewise, Justice O’Connor was concerned with the “organizational restraints,” including “a more formalized organizational form” and a significant loss of funding availability.[28]

Accordingly, any disclosure requirements imposed on “incidental committees” that compel generalized donor disclosure, as in H.B. 1807, would likely be unconstitutional. Conversely, language that only requires the disclosure of those donations specifically intended for political contributions or expenditures would be constitutional, pursuant to an over forty-year-old unbroken chain of U.S. Supreme Court litigation.[29]

Essentially, the proposed bill would force a nonprofit to either face disclosure to the government of its significant donors as well as other extensive regulatory costs, if it spends just $25,000 on activities that are poorly defined, or instead avoid speaking. MCFL noted that these sorts of “incentives” serve to “necessarily produce a result which the State [cannot] command directly. It only result[s] in a deterrence of speech which the Constitution ma[de] free.”[30]

IV. The proposed reporting thresholds for incidental committees are burdensome and would often uncouple the disclosed “donor” from the actual speech funded, resulting in “junk disclosure” by associating a donor with a communication they have no knowledge of or may not even support.

In addition to the significant regulatory burdens imposed on organizations whose major purpose is not political, the proposed reporting regime for incidental committees in H.B. 1807 will mislead rather than enlighten voters.

When we speak of political committees and political parties, we can be reasonably assured that all donors to such organizations intend for their contributions to be used for political purposes. The same is not true of donors to 501(c) membership and business organizations, some of whom are likely to fall under the snare of incidental committee regulation, according to the provisions of this bill. As a result, if a group decides to engage in the extremely broad types of communications covered in the bill at a $25,000 monetary threshold, many of its significant donors could potentially be made public, regardless of whether their donations were intended to be used for broadly defined “contributions” or “expenditures,” as defined in existing state law.

This is problematic, as many of these donors will have given for very different reasons. Imagine the Yakima businesswoman who owns a small chain of pharmacies and is a proud and continual supporter of the Association of Washington Business (AWB) as her professional association. She gives $12,000 each year for general support of the Association’s efforts. Then, suddenly a bill is introduced for additional regulation on the construction of power plants, and AWB opposes these regulations as well as the local legislators or candidates who support the bill. This businesswoman finds herself listed as contributing to ads that were run by the group opposing regulations that would not affect her, and opposing legislators or candidates she may actually support; it is “junk disclosure.”

People give to trade associations and nonprofits not because they agree with everything an organization does, or particular policy positions a group may take, but because on balance they believe the group provides a valuable service. To publicly identify contributing individuals with expenditures of which they had no advance knowledge and may even oppose is both unfair to members and donors and will often be misleading to the public. Our businesswoman in the above hypothetical does not take issue with this particular bill and those elected officials who support it; again, it is “junk disclosure.”

This problem is further exacerbated by temporal issues with donations to nonprofits. The Yakima businesswoman in the above example may have given her donation in April of 2017, well before the 2018 election, and long before the nonprofit to which she contributed decided to engage in political activity. Thus, she is being reported as an opponent of a candidate who may not have even declared their candidacy when she contributed to the organization and therefore could not have factored into her motivation for contributing. This, once more, amounts to “junk disclosure” – disclosure that is primarily used by other parties to look for potential donors and by prying neighbors to search their fellow citizens’ political activity and affiliations.

In short, ignoring the major purpose test, as H.B. 1807 does, creates “junk disclosure.” Such disclosure regimes fall outside the purview of legitimate state interests and go beyond reporting requirements approved by the Supreme Court. It is difficult to argue that such public reporting advances the legitimate purposes of informing the public and preventing corruption.

V. Disclosure information can result in the harassment of individuals by their political opponents and should be carefully balanced with the public’s “right to know.”

In considering this bill, it’s worth noting that disclosure laws implicate both citizen privacy rights and touch on Supreme Court precedent. Indeed, the desire to preserve privacy stems from a growing awareness by individuals and the Supreme Court that threats and intimidation of individuals because of their political views is a very serious issue. Much of the Supreme Court’s concern over compulsory disclosure lies in its consideration of the potential for harassment. This is seen particularly in the Court’s decision in NAACP v. Alabama, in which the Court recognized that the government may not compel disclosure of a private organization’s general membership or donor list.[31] In recognizing the sanctity of privacy in free speech and association, the Court asserted that “it is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as [other] forms of governmental action.”[32] This is why the privacy of citizens when speaking out about government officials and actions has been protected in certain contexts.[33]

Much as the Supreme Court sought to protect African Americans in the Jim Crow South and those citizens who financially supported the cause of civil rights from retribution, donors and members of groups supporting unpopular causes still need protection today. It is hardly a stretch to imagine a scenario in 2017 in which donors to controversial causes that contribute to nonprofit groups in Washington – for or against same-sex marriage; for or against abortion rights; or even to groups associated with others who have been publicly vilified, such as the Koch family, Sheldon Adelson, Tom Steyer, or George Soros – might be subjected to similar threats.

Indeed, in today’s highly polarized and, unfortunately, sometimes violent political environment, we have seen (from all sides of the political spectrum):

• Death threats made against individuals for their political contributions to candidates[34]
• Death threats made against individuals for their political contributions to ballot measure committees[35]
• Threats and harassment against employees of advocacy groups at their workplaces and homes due to their groups’ positions[36]
• Death threats made against newspapers for their political endorsements[37]
• Death threats made against delegates to both major political parties’ nominating convention[38]

H.B. 1807 would facilitate these types of threats and harassment by requiring certain donors to nonprofit groups to be publicly identified with activities deemed to be “political” on campaign finance reports, even if such activities are only an incidental part of a group’s overall activities, and the donors did not contribute specifically to support those activities. Notwithstanding all this, H.B. 1807 would require donors’ names and home addresses, as well as the names and home addresses of many of the groups’ officers and employees, to be publicly reported and made available to the public on the Washington State Public Disclosure Commission’s website for eternity.

This danger also illustrates the fundamental problem with the approach taken in H.B. 1807. The assumption seems to be that citizens are dangerous to government, and the government must be protected from them. Little thought is given to protecting the citizens from government or other citizens, as is required by the First Amendment. Worse still, little can be done once individual contributor information – a donor’s full name and street address – is made public under government compulsion. It can then immediately be used by non-governmental entities and individuals to harass, threaten, or financially harm a speaker or contributor to an unpopular cause. We believe, therefore, that the problem of harassment is best addressed by limiting the opportunities for harassment, and that this is best done by crafting reporting thresholds that capture just those donors who are truly contributing large sums to political candidates and express advocacy regarding such candidates – and not to organizations engaging in issue advocacy about a particular topic relevant to the voters of Washington.

Ultimately, the Court has made clear that this concern over harassment exists, whether the threats or intimidation come from the government or from private citizens[39] who receive their information because of the forced disclosure. In short, mandatory disclosure of political activity requires a strong justification and must be carefully tailored to address issues of public corruption and provide the provision of only such information as is particularly important to voters. It is questionable that the monetary disclosure threshold mandated by H.B. 1807 for organizations that lack a major purpose of influencing elections, but may opt to speak about a particular issue, is sufficient to meet this standard.

*          *          *

House Bill 1807 inappropriately ignores decades of jurisprudence regarding the need for a “major purpose” test for organizational registration and reporting, places an unreasonable and legally-suspect burden on many organizations, will perversely create “junk disclosure,” and may subject citizens to harassment. As a result, many provisions in this legislation raise serious legal concerns.

Thank you for allowing me to submit comments on House Bill 1807. Should you have any further questions regarding this legislation or any other campaign finance proposals, please do not hesitate to contact me at (703) 894-6835 or by e-mail at mnese@campaignfreedom.org.

Respectfully yours,

Matt Nese
Director of External Relations

https://ifs-site.mysitebuild.com/wp-content/uploads/2017/07/2017-03-20_Senate-State-Government-Committee-Comments_WA_HB-1807_Incidental-Committee-Disclosure.pdf

[1] Sec. 7(6) (emphasis added).

[2] Citizens United, 558 U.S. at 324.

[3] Sec. 3(25)(a).

[4] Sec. 3(38).

[5] Buckley v. Valeo, 424 U.S. 1 at 42-44 (1976) (emphasis added).

[6] Id. at 39-40 (internal quotation marks omitted); this figure has the equivalent buying power today of approximately $4,863.30.

[7] Id. at 79 (emphasis added).

[8] Human Life of Washington, Inc. v. Brumsickle, 624 F.3d 990, 995 (9th Cir. 2010).

[9] See North Carolina Right to Life v. Leake, 525 F.3d at 328 (Michael, J., dissenting) (“The key word providing guidance to both speakers and regulators in ‘the major purpose’ test or ‘a major purpose’ test is the word ‘major,’ not the article before it.”).

[10] Human Life of Washington, Inc. v. Brumsickle, 624 F.3d at 1011.

[11] New Mexico Youth Organized v. Herrera, 611 F.3d 669 (10th Cir. 2010).

[12] Id. at 677.

[13] Id. at 672.

[14] Id. at 671.

[15] Id. at 671-72.

[16] These figures amount to approximately 6.7% of NMYO’s budget and 0.5% of Southwest Organizing Project’s budget.

[17] Id. at 677 (quoting Buckley, 424 U.S. at 79) (emphasis added).

[18] Furthermore, the New Mexico statute in NMYO provided that $500 in expenditures in a year is “sufficient” to establish the organization’s “major purpose” as political. NMYO, 611 F.3d at 678 (citing N.M. Stat. Ann. § 1-19-26(L)) (emphasis added). Notably, the Tenth Circuit also held that a monetary trigger was not constitutionally sufficient as a stand-in for “the major purpose” test. Colorado Right to Life Committee, Inc. v. Coffman, 498 F.3d 1137, 1154 (10th Cir. 2007). The NMYO court applied Colorado Right to Life Committee and held the $500 trigger unconstitutional. Id. at 679. There are now two major Tenth Circuit cases rejecting monetary triggers as stand-ins for an organization’s “major purpose,” which is what H.B. 1807 purports to do.

[19] Minnesota Citizens Concerned for Life, Inc. v. Swanson, 692 F.3d at 872 (8th Cir. 2012).

[20] Id.

[21] Id.

[22] Citizens United v. FEC, 558 U.S. 310 (2010).

[23] 52 U.S.C. § 30104(f); Citizens United, 558 U.S. 366-67.

[24] H.B. 1807 was amended by the House State Government, Elections and Information Technology Committee to swap out the word “contributions” for “payments” in relation to the reporting required of “incidental committees,” as defined and enumerated in this bill. While we note that the term “payments” is undefined in the bill, we interpret this word choice to be equivalent to “contributions” for purposes of this analysis and opt to use the term “contributions” in our analysis for clarity. To the extent the Legislature intends the term “payment” to encompass pro bono legal advice, accounting services, or other functions performed by an “incidental committee,” the reach of the reporting requirements poses serious constitutional problems that would generate legal challenges. See Inst. for Justice v. State of Wash., No. 13-2-10152-7 (Wa. Spr. Ct. 2015). Regardless of the intent of the amendment, we recommend that the Legislature further amend this bill to clearly and narrowly define the word “payments” or revert to the original “contributions” language.

[25] Massachusetts Citizens For Life, Inc. v. Federal Election Commission, 479 U.S. 238 (1986).

[26] Citizens United, 130 S. Ct. at 915 (contrasting independent expenditure reports with the burdens discussed in MCFL).

[27] MCFL, 479 U.S. at 253 (Brennan, J., plurality opinion).

[28] Id. at 266 (O’Connor, J., concurring).

[29] Buckley v. Valeo, 424 U.S. 1, 80 (1976).

[30] MCFL, 479 U.S. at 256 (plurality opinion).

[31] NAACP v. Alabama, 357 U.S. 449 (1958).

[32] NAACP v. Ala. ex rel. Patterson, 357 U.S. at 462.

[33] See, e.g., Talley v. California, 362 U.S. 60 (1960); McIntyre v. Ohio Elections Commission, 514 U.S. 334, 337-338 (1995).

[34] See, e.g., Casey Sullivan, “After Clinton Donation, Legal Recruiter Complains of Death Threat,” Bloomberg Law. Retrieved on March 20, 2017. Available at:  https://bol.bna.com/after-clinton-donation-legal-recruiter-complains-of-death-threat/ (October 11, 2016).

[35] See, e.g., Brad Stone, “Prop 8 Donor Web Site Shows Disclosure Law Is 2-Edged Sword,” The New York Times. Retrieved on March 20, 2017. Available at:  http://www.nytimes.com/2009/02/08/business/08stream.html (February 7, 2009).

[36] See, e.g., Donna Lieberman and Irum Taqi, “Testimony of Donna Lieberman and Irum Taqi on Behalf of the New York Civil Liberties Union Before the New York City Council Committee on Governmental Operations Regarding Int. 502-b, in Relation to the Contents of a Lobbyist’s Statement of Registration,” New York Civil Liberties Union. Retrieved on March 20, 2017. Available at:  http://www.nyclu.org/content/contents-of-lobbyists-statement-of-registration; Tracie Sharp and Darcy Olsen, “Beware of Anti-Speech Ballot Measures,” The Wall Street Journal. Retrieved on March 20, 2017. Available at:  http://www.wsj.com/articles/beware-of-anti-speech-ballot-measures-1474586180 (September 22, 2016).

[37] See, e.g., Kelsey Sutton, “Arizona Republic receives death threats after Clinton endorsement,” Politico. Retrieved on March 20, 2017. Available at:  http://www.politico.com/blogs/on-media/2016/09/arizona-republic-receives-death-threats-for-clinton-endorsement-228889 (September 29, 2016).

[38] See, e.g., Alan Rappeport, “From Bernie Sanders Supporters, Death Threats Over Delegates,” The New York Times. Retrieved on March 20, 2017. Available at:  http://www.nytimes.com/2016/05/17/us/politics/bernie-sanders-supporters-nevada.html?_r=0 (May 16, 2016); Eli Stokols and Kyle Cheney, “Delegates face death threats from Trump supporters,” Politico. Retrieved on March 20, 2017. Available at:  http://www.politico.com/story/2016/04/delegates-face-death-threats-from-trump-supporters-222302 (April 22, 2016).

[39] Brown v. Socialist Workers’ ’74 Campaign Comm, 458 U.S. 87 (1982).