IE Disclosure Divergence: Something's Gotta Give

February 23, 2012

The NYC Campaign Finance Board (CFB) has now issued revised proposed rules on Independent Expenditure (IE) disclosure.  The revisions make changes that appear to address many of the concerns previously raised in this forum.   Comments on the new rules are due March 2, 2012.

We therefore return to our tale of divergence.

Once upon a time, in 1976, New York election law was amended to codify the U.S. Supreme Court holding in Buckley v. Valeo that liberated independent expenditures from contribution and spending limits.  The Election Law described independent expenditures as: payments “made in connection with” the nomination or election of a candidate that the candidate (or his campaign committee or their agents) “did not authorize, request, suggest, foster or cooperate in”.

In 1988, this description of independent expenditure was replicated in the New York City Campaign Finance Act.  The 1988 local law declared: “[t]he council finds that this local law will supplement and be consistent with state law.”  The State and City law provisions are identical and remain so to this day.  But “consistent”?  Maybe not so much.

In 2010, voters adopted into law a Charter Revision Commission proposal requiring public disclosure of independent expenditures.  The new Charter definition slightly altered the phrasing from the pre-existing state and city laws to encompass expenditures “in support of or in opposition to” a candidate.  The NYC Campaign Finance Board was authorized to promulgate rules to implement the new disclosure requirement.

The CFB’s revised proposed rules require disclosure of two types of expenditures “express advocacy” and “electioneering communications.”  Express advocacy has two subsets: (i) contains express words such as vote for, etc, and (ii) lacks express words but it can have no other reasonable meaning other than advocating the election, etc.  Electioneering communications are meant to capture phony issue ads that run close to an election (“call Mr. X [a candidate] and tell him he should not keep raising our taxes”).

In 2011, a new state law directed the NY State Board of Elections (SBOE) to issue regulations to require disclosure of independent expenditures for advertisements or advocacy that “expressly identifies a political candidate or ballot proposal … to the fullest extent of the law.”  The SBOE has therefore also issued proposed regulations, which would apply in both state and local elections (including New York City elections).

Like the NYC Charter provision, the proposed SBOE rules cover expenditures made “in support or opposition of a candidate”.  (For some reason, unlike the CFB proposal and despite the state legislation, the SBOE proposed rules make no mention of ballot proposal advocacy.)  In stark contrast to the CFB proposal, however, the SBOE’s proposed rules limit disclosure to express advocacy communications, which are more narrowly defined as only those containing express words such as vote, oppose, elect, defeat, etc., and omit electioneering communications altogether.  Groups have criticized the SBOE proposed rules’ omission of electioneering communications as a “loophole.”

The CFB’s revised proposed rules are now accompanied by an extensive report, which makes no mention of the proposed SBOE rules.  While redundant disclosure regimes are certainly a problem, the two agencies’ failure to justify definitional divergence may suggest an even greater problem.  How can both sets of proposed rules possibly be accurate understandings of existing law?

Isn’t it time for these two governmental agencies to acknowledge their divergence and to address whether or not it is a problem?  Perhaps they can get together to try to harmonize their approaches to independent expenditure disclosure – or to jointly explain why these two sets of rules should not be harmonized.  At a minimum, doesn’t each owe the public a duty to explain why their particular understanding of the law is correct (in contrast to what the other agency is doing) and to justify why independent speakers in New York City elections will be subjected to two different disclosure regimes?  After all, even with different definitions, it may still be possible to design software that enables spenders to file both sets of required reports.

And if the agencies don’t act, perhaps this subject should instead be addressed in the new campaign finance reform legislation.


Tags: New York CityNew York State