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December 18, 2015

A Campaign Finance Reform Win in Hawaii

By Katherine Duncan and Stuart McPhail

Marking another win for campaign finance reform and transparency, the U.S. Supreme Court last month declined to review a challenge to Hawaii’s political committee requirements.

Hawaii’s election law is fairly far-reaching, especially concerning what triggers disclosure requirements for political organizations. In contrast, federal law mandates that a group register as a political committee—and disclose its spending and contributors—if its “major purpose” is nominating or electing federal candidates. The Federal Election Commission (“FEC”) will only find that standard met if a group spends more than half of a its budget on political activities, which is not a difficult standard to dodge for organizations looking to avoid being considered a political committee so that they can keep donors hidden.

As a whole, the major purpose standard is murky because of uncertainty about what “political activities” encompasses. “Express advocacy,” meaning ads specifically urging that viewers “vote for” or “vote against” a candidate (or uses campaign slogans or words that in context have no other reasonable meaning than to urge the election or defeat of a candidate), is included in this category, but some—including three FEC commissioners—dispute that it covers other communications and issue ads, even if they are overtly political.

Under Hawaii law, in contrast, a “noncandidate committee”—comparable to a political committee not associated with a candidate under federal law—is defined as any group that spends more than $1,000 on or accepts $1,000 in contributions for influencing elections over a two-year period. This standard is much broader than the standard in federal law, which has a similar $1,000 threshold (measured over a single calendar year) but also includes the aforementioned “major purpose” designation.

The Ninth Circuit Court of Appeals upheld the Hawaii law’s application to a private for-profit corporation in Honolulu, A-1 A-Lectrician, Inc., rejecting the company’s arguments that the regulations are too strict.

In its petition to the Supreme Court, A-1 argued, in part, that the Ninth Circuit had erred and that Hawaii’s disclosure laws were too stringent, making the case for restricting disclosure to one-time “event-driven” reports, rather than the continual reports required of political committees. In addition, A-1 argued that “major purpose” status is a constitutional requirement for all political committee laws and not merely a feature of federal law—a line of reasoning the Ninth Circuit rejected along with the challengers’ argument that the court narrow what triggers campaign regulations to express advocacy.

In a section of the circuit court decision that A-1 did not challenge in its petition to the Supreme Court, the Ninth Circuit upheld Hawaii’s ban on government contractor contributions to legislators. This reform measure goes even further than the similarly focused reform—calling on contractors to disclose their campaign activity—that CREW Executive Director Noah Bookbinder has called for at the national level.

Though the denial of cert is not binding on other cases, and only has the effect of leaving the laws of a single state standing, this decision is another important step toward more accountability in elections, showing that the Supreme Court—despite the deregulation ushered in by decisions like Citizens United—may allow stronger disclosure laws to stand.

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