This article originally provided by The Charleston Gazette

September 14, 2005

Campaign law breaks new ground

Bill limiting 527 spending faces constitutional test

By Scott Finn
Staff writer

West Virginia has taken the lead in regulating shadowy 527 groups that increasingly influence elections, one reform advocate says — but questions remain about whether the state’s law is constitutional.

On Tuesday, the Legislature passed a bill that limits contributions to such groups to $2,000 per election cycle — the first state to do so, said Cecilia Martinez, executive director of the nonpartisan Reform Institute.

“West Virginia is a model for the country,” she said. “After the 2006 elections, you’ll see more states doing what [West Virginia is] doing.”

Last year, West Virginians were inundated with negative political advertisements paid for by 527 groups, which spent $5.6 million on the state Supreme Court race alone.

Almost half of that, $2.5 million, came from one person, Massey Energy CEO Don Blankenship, through the group And for the Sake of the Kids. Another $1.4 million came from Consumer Attorneys of West Virginia.

The groups sponsored more than 4,000 negative advertisements last year, about 43 percent of all negative court advertising nationwide, according to one study.

The bill passed the Senate 33-0, and the House of Delegates approved it 91-4. Delegates Bob Ashley, R-Roane; Mike Hall, R-Putnam; Thomas Porter, R-Mercer; and Patti Eagloski Schoen, R-Putnam voted against it.

“What struck me so much about this vote is that it is a bipartisan victory for reform,” Martinez said.

The bill also requires 527 groups and others to tell the secretary of state who gave them money and how they spent it.

State Republican Chairman Rob Capehart said he approved of the disclosure requirements. But he questioned whether the contribution limits are constitutional, or if they violate a person’s First Amendment right to free speech.

In McConnell v. Federal Elections Commission, the Supreme Court upheld contribution limits to political parties, so called “soft money” donations.

No one has ruled if those same restrictions can be applied to 527 groups, which are organizations independent of any candidate or party, Martinez said.

Martinez believes the limits were constitutional, but a challenge is certainly possible. “We’re kind of in a legal unknown here,” she said.

It can be impossible to figure out who’s giving money to 527 groups. Much of their spending isn’t reported until after the election is over. And the IRS, not the Secretary of State, keeps the reports.

Those IRS reports often do not reveal individual donors. For example, the 527 group West Virginia Consumers for Justice lists dozens of contributions from the Consumer Attorneys of West Virginia, but doesn’t say who gave to the lawyers’ organization.

The same thing for And for the Sake of the Kids, which lists on its IRS report $745,000 from a group called Doctors for Justice, but no information about who gave money to the doctors’ organization.

The bill makes several changes to campaign law. It defines “electioneering communications” as any attempt to influence a candidate’s election.

The electioneering communication must include a candidate’s name and has to take place within 60 days of the general election or 30 days of the primary.

Before, someone had to say “vote for this candidate” or “vote against this candidate” to be regulated under state law.

Such 527 groups have to register with the Secretary of State before accepting contributions. An individual cannot establish more than one 527 group with the purpose of evading campaign finance laws.

The bill does not stop individuals such as Blankenship from spending their own money in a race. The First Amendment forbids such restrictions.

But they will have to report their spending to their Secretary of State every time they spend $5,000 on “electioneering communications,” as will 527 groups.

Also, individuals and 527 groups will have to identify themselves in a verbal disclaimer in future television or radio advertisements.

The bill does not affect spending on ballot issues, such as the recent pension bond vote. And it does not apply to voter’s guides put out by special interest groups.

Originally, the bill required only 527 groups to keep their records after the election so they can be audited. Due in part to an amendment by Delegate Tim Armstead, R-Kanawha, candidates also must keep their records for six months after an election. Secretary of State Betty Ireland has hired an employee solely to track and audit campaign reports.

On the Web: www.reforminstitute.org

To contact staff writer Scott Finn, use e-mail or call 357-4323.