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The news that state campaign finance officials had released a long-awaited statement on donor disclosure rules barely made a ripple in the political news cycle, but the opinion figures to make Minnesota a critical battleground in the national, post-Citizens United legal war over transparency, privacy and campaign money.

Marriage amendment brings campaign disclosure battle to Minnesota

Attorney James Bopp spoke to the news media outside the Supreme Court in Washington on April 28, 2010, after arguing a case about whether the names on a petition asking for the repeal of Washington state's domestic partnership rights should be kept secret. (AP file photo/Evan Vucci)

Question concerns disclosure of donors to ballot initiatives

The news that state campaign finance officials had released a long-awaited statement on donor disclosure rules barely made a ripple in the political news cycle, but the opinion figures to make Minnesota a critical battleground in the national, post-Citizens United legal war over transparency, privacy and campaign money.

The showdown that’s shaping up here has been prompted by the gay marriage ban ballot initiative that the Republican-controlled Minnesota Legislature passed last spring. The Minnesota Campaign Finance and Public Disclosure Board (CFPD) has been on the hot seat in recent months as it has tried to create rules governing the extent to which nonprofit groups that raise money and contribute to ballot campaigns need to reveal who writes them the checks.

CFPD officials took the first step in the contentious process in June, when board members voted 5-1 to repeal a long-standing administrative rule that ballot campaigns do not have to reveal the underlying sources of the contributions they receive. Conservative groups who support the gay marriage amendment dissented from the board’s decision. But no one, so far, has taken the state to court.

That might change now that the CFPD board has concluded months of deliberation with a written document, known as a “guidance,” that spells out what sorts of contributions must be disclosed.

The guidance was released on Wednesday, and the initial response from advocates on both sides of the issue suggests the controversy won’t die anytime soon. Groups like Common Cause Minnesota say the draft guidance leaves them fearing that large amounts of money contributed to ballot campaigns like the 2012 gay marriage amendment will be untraceable.

“This new rule potentially creates a loophole that groups can basically use to funnel money that is undisclosed,” said Mike Dean, Common Cause Minnesota’s executive director.

Nationally prominent conservative attorney James Bopp Jr. has the opposite reaction. Bopp, whose firm is based in Terre Haute, Ind., and represents the pro-amendment umbrella group Minnesota for Marriage, said the board’s rules will reveal too many people’s political activity and expose them to potential harassment.

He said one of the draft guidance’s interpretations — that money given as a result of a solicitation that expressly supports the ballot campaign must be disclosed — has already been struck down by a federal appeals court.
“They seem to want to go on to already established forbidden territory,” Bopp said.

The issue presses the CFPD board up against the dueling concerns of privacy and transparency. Gary Goldsmith, the CFPD’s executive director, issued a memo that accompanies the guidance. In a note that disappoints campaign finance watchdogs, Goldsmith notes that some contributions will not need to be disclosed.
“The draft guidance proposes a conservative approach to the definition of ‘contribution,’” Goldsmith wrote. “To be sure, if it is adopted, there may be donations of money that were, in fact, for the purpose of promoting or defeating a ballot question yet are not subject to disclosure. This proposed narrow definition favors free speech at the expense of not obtaining the maximum possible disclosure that might be constitutionally permitted.”

In some cases, donors give to nonprofit corporations like 501(c)(3) entities with missions that are broader than advocating for the passage or defeat of a particular ballot measure. Rep. Ryan Winkler, DFL-Golden Valley, who has worked on campaign finance disclosure policy at the state Capitol, calls the guidance “reasonable” and uses the example of Planned Parenthood in making the point.

“What the law tries to do,” Winkler said, “is distinguish between an activity that your organization engages in its normal course of business versus an activity that it engages in to influence an election, recognizing that the public doesn’t have an interest in understanding who donates to Planned Parenthood’s clinics, but does have an interest in knowing who donates to their political action fund.”

In writing disclosure rules that interpret Minnesota law, the CFPD takes pains to define “general donations” and “non-major-purpose associations.” The latter refers to associations that might make contributions to ballot initiatives but whose underlying donors might not have intended for the money to be spent to influence the outcome of a particular ballot campaign.

There are certain types of contributions that appear easy to define, such as when the contributor makes known that the money should go toward the campaign. There appears to be no argument that those donations should be disclosed. More complicated are instances where the donor was solicited by an organization that didn’t expressly call for support or defeat of the ballot initiative but implied the purpose for making the contribution. The CFPD’s guidance cites U.S. Supreme Court precedent in stating there are types of solicitations that “can have no reasonable interpretation other than that money received as a result of the solicitation will be used to promote or defeat the ballot question.”

While the guidance states there isn’t a specific case that can be applied to the “outer bounds” that the CFPD might apply to the definition of a contribution to a ballot campaign, the guidance claims to be “relatively conservative” and supported by current case law.

Bopp said he finds the guidance anything but conservative: There is no way for officials at an association to know what campaign finance regulators are going to construe as an implied solicitation, he said.

“I would call it the opposite of a conservative approach,” Bopp added. “I think they’ve gone as broad as a campaign reformer’s most beautiful dream.”

The CFPD is trying to set rules at a time when the issue of disclosure in Minnesota and around the country is in a state of legal flux.

Politicians have been debating and lawyers have been arguing about disclosure of campaign donors since the 2010 Citizens United case, in which the U.S. Supreme Court ruled that laws prohibiting corporations from making campaign contributions are a violation of the First Amendment.

In the wake of Citizens United, Minnesota legislators passed legislation that was signed by Gov. Tim Pawlenty that enhanced disclosure requirements.

After the legislation passed, two conservative groups, the Taxpayers League of Minnesota and Minnesota Citizens Concerned for Life, challenged the disclosure requirements in federal court as unconstitutional. The plaintiff’s case was rejected by a three-judge panel of the U.S. Court of Appeals for the 8th Circuit. Oral arguments were heard in front of the en banc 8th Circuit on Sept. 21.

Even though the CFPD’s guidance document concerns ballot questions rather than elections for public office, Winkler, who authored the 2010 disclosure legislation, said that the roots of the board’s guidance are found in the post-Citizens United disclosure legislation.

“The language is different, but the intent is the same as in independent expenditures for candidates,” Winkler said. Spending for candidates and spending for ballot initiatives, he added, are both efforts to steer votes.

Bopp, who is representing the Minnesota plaintiffs in the pending case in the 8th Circuit, said the case against the 2010 disclosure law has no bearing on the issue of disclosure on ballot initiatives. Opponents of disclosure contend that ballot questions are different because the concerns of pay-for-play types of corruption aren’t a factor as they potentially are in races for public office.

The CFPD will meet on Tuesday to approve the guidelines, but even if they are modified further, it’s unlikely to put an end to the legal wrangling.

Anthony Sanders, an attorney at the Minnesota chapter of the libertarian law organization Institute for Justice, said he’s concerned that the guidance is an example of a byzantine system that poses a problem for small nonprofit organizations that lack the money to hire campaign finance attorneys.

“This is another example of the board, in its own eyes, trying to strike a balance between free speech and disclosure — when actually what it’s doing is making it harder for everyone to speak,” Sanders said.

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