More disclosure approved for campaign matters

By Marianne Goodland

Legislators who fear an influx of millions of dollars in undisclosed political communications made by corporations or labor unions are celebrating the passage of Senate Bill 203, which is now headed to Gov. Bill Ritter for signing.

Under SB 203, corporations or labor unions that make independent expenditures exceeding $1,000 must register as an independent expenditure committee and make certain disclosures. Those expenditures, and the communications they pay for, by definition target the election of a candidate, or support or defeat of a ballot issue or ballot question.

SB 203 also requires that any electioneering communications broadcast, printed, mailed or delivered and that are coming from an independent expenditure committee must clearly identify who paid for the communication and the individual who is the registered agent. Under Amendment 27, which was approved by voters in 2002, an independent expenditure is an expenditure that is not controlled by or coordinated with any candidate or candidate’s agent.

The bill is intended to address changes required in the wake of a U.S. Supreme Court decision made in January in Citizens United v. FEC. In that 5-4 decision, the court said corporations and labor unions could not be prohibited from making independent expenditures, which had previously been established in the McCain-Feingold Act.

The Supreme Court decision had impacts for Colorado’s constitution, specifically Amendment 27. Following the Supreme Court decision, Ritter sent interrogatories to the Colorado Supreme Court, asking what affect the Citizens United decision would have on Colorado campaign finance laws. The state court said in March that the Supreme Court decision rendered Amendment 27’s ban on independent expenditures by corporations or labor unions unconstitutional. However, the state constitution prohibition on direct contributions to candidates or political action committees was unaffected, as was a statutory ban on corporate or labor union donations to so-called 527 committees.

SB 203 was introduced on April 26 and by May 7 was out of the Senate and ready for House action. It was amended by the House State, Veterans and Military Affairs Committee Monday morning; the House Appropriations Committee passed it along later in the day and the full House amended it further during second reading debate Monday afternoon. On Tuesday, the Senate voted to approve the House amendments and re-passed the bill 21-13, with one Republican senator excused.

In the Senate, SB 203 passed without any Republican support, and that was also the case for its passage in its two House committees. But SB 203 got a much warmer reception on the floor of the House, where it picked up votes from seven Republicans and passed 45-20.

In the House State Affairs Committee Monday, Secretary of State Bernie Buescher said he believed some of the money that currently goes into 527 committees will likely now flow to the independent expenditure committees. Buescher said he also believes the issue will eventually wind up in the Colorado courts.

Rep. Carole Murray, R-Castle Rock, questioned why the bill was needed. “Most of this bill is a repetition of what is already required in the law,” she said. House Majority Leader Paul Weissmann, D-Louisville, and sponsor of SB 203, said the Citizens United case created a different kind of committee and one that needs disclosure. “We’re not allowed to put limitations” on independent expenditures but that the Supreme Court ruling opened the door to requiring disclosure when those expenditures are made, he said.

To address the question of why the bill was needed Phil Hayes of the Colorado AFL-CIO noted that an independent expenditure is a different kind of expenditure. Current law requires only that an organization notify the Secretary of State of the expenditure 48 hours prior to obligating the funds, he explained. The organization making the electioneering communication does not have to disclose where the money comes from, he explained. “Independent expenditures [committees] have virtually no reporting of contributions. Unscrupulous donors will gravitate to the path of least resistance,” Hayes said.

Elena Nunez of Colorado Common Cause noted that SB 203 is “a reasonable way to make sure these new expenditures that are allowed are captured so the public has good disclosure of what is going on,” she said. While Colorado Common Cause did not like the Supreme Court ruling, Nunez said they did support the court’s strong upholding of the importance of disclosure, and that the public had a right to know where the money is coming from.

Attorney Mark Grueskin, who works on election issues, addressed committee questions on whether the bill is duplicative, and was the only witness who voiced support for the Supreme Court’s decision. “It was a logical extension of the First Amendment,” he said.

According to Grueskin, in the wake of that decision SB 203 will mandate total disclosure where before none was required. He explained that prior to Citizens United and Amendment 27, the only type of independent expenditures that were made in Colorado and nationwide were done by wealthy individuals; corporations and labor unions were not allowed to do so. “You only had to disclose what was spent,” not where the contributions came from, he said. After Citizens United, “a chasm opened up and everyone can do independent expenditures.”

The issue, Grueskin said, is that labor unions or corporations have other purposes, not just political ones. Political campaigns and issue committees come together only for political purposes, he said; corporations or labor unions may decide they want to be involved in electioneering but that isn’t their primary task. “We don’t want [corporations or labor unions] to disclose everything on where their money comes from or where they spend all of it. We want them just to disclose the kind of money used on independent expenditures,” he said.

SB 203 was amended to clarify that the $1,000 trigger to file an independent expenditure could be an aggregate amount, not only a single expenditure.

There was no debate on SB 203 on the House floor Monday afternoon, and the only action was to adopt another amendment to clarify that the $1,000 trigger is an expenditure made in a calendar year.

If signed by Ritter, the bill goes into effect immediately. Sen. Morgan Carroll, D-Aurora, its Senate sponsor, said that would be necessary in order to apply to the 2010 elections. However, the state’s TRACER system, the Web-based database that records campaign finance reports, will take time to be modified; the bill allows for manual filing of independent expenditure documents until the computer system modifications are completed.



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