#NMLEG Progressive Bill of the Day | 02-05-15

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Earlier this week we wrote about a new Common Cause NM poll that showed overwhelming public support in New Mexico for campaign finance reforms. The poll found that 92% of New Mexico voters support requiring all large political contributions from individuals, corporations, political action committees (PACs), non-profit organizations and unions be made public. Additionally, the poll found that 88% of New Mexico voters support requiring independent political groups to report who their donors are and how their money is being spent on campaigns. Support doesn’t get much more overwhelming than that.

Luckily, Senator Peter Wirth (D-Santa Fe) is co-sponsoring a bill with Representative Jim Smith (R-Bern., Sand., SF) that would enact sweeping campaign finance reforms. Their bill, SB 384, would make a number of changes to reporting requirements and the definitions of certain terms within the Campaign Reporting Act. According to an analysis by Common Cause NM, SB 384 would serve two main purposes:

  1. To restore the enforceability of the Campaign Reporting Act (CRA). Since the CRA was enacted, the courts have developed an extensive body of restrictions on the authority of governments to regulate campaign speech. Under these rules, several key provisions of the CRA have recently been invalidated by the courts, including most of the Act’s reporting requirement for PAC’s and other independent groups. The bill would rewrite the CRA to conform to current constitutional rules.
  1. To adapt the CRA to modern methods of campaigning. When the CRA was enacted, candidates and political parties were virtually the only campaign participants. There are now numerous national and local independent groups participating in state elections in a variety of ways, ranging from campaign ads coordinated with candidates to an occasional ad mentioning a public official who is running for reelection. The bill would expand the CRA to cover all these kinds of campaign activities in a constitutionally permissible way.

New Mexico is notoriously bad when it comes to campaign disclosure requirements and ethics laws. Last year, New Mexico received an “F” rating from the National Institute on Money in State Politics on disclosure requirements on independent political spending.

Senator Wirth has shepherded a campaign disclosure bill through the Senate three times (twice with unanimous approval), only to see it die in the House beneath a swarm of special interest lobbyists.

The need for better campaign disclosure requirements (and more overall electoral and governmental transparency) came to the fore again this week as Governor Susana Martinez’s political machine essential bought a school board seat in Albuquerque, dumping tens of thousands of dollars into the Kathy Korte/Peggy Muller-Aragon race.

SB 384 is a 37-page bill, so if you’re short on time here’s the rest of Common Cause NM’s in-depth analysis of SB 278:

Defines or redefines several key terms which are essential to understanding the bill’s provisions

  1. Advertisement: any communication referring to a candidate or ballot measure that is disseminated to more than 500 people except: (1) legitimate news stories or editorials; (2) internal communications sent only to the members or shareholders of a group or corporation; and (3) voter guides published by 501(c)(3) groups and similar kinds of neutral voter information.
  1. Coordinated expenditure: an expenditure made (1) by a person other than a candidate or candidate‘s campaign committee, (2) in cooperation or consultation with a candidate, campaign committee or political party, (3) to pay for an advertisement that supports or opposes a candidate or refers to a candidate and is disseminated to the electorate within 30 days before a primary or 60 days before a general election at which the candidate is on the ballot.


  1. Covered transfer: a payment or transfer of funds where (1) the transferor requests or is told that the recipient will use the funds to make campaign contributions, coordinated expenditures or independent expenditures or will transfer the funds to another person who will use them for such purposes, or (2) the transferor knows that the recipient is an entity that is primarily engaged in making or facilitating transfers of funds to one or more candidates, campaign committees or political committees. By requiring “covered transfers” to be reported, the bill would forestall the common tactic of avoiding disclosure by laundering a donor’s funds through various layers of organizations with vague names that reveal nothing about where the money is really coming from.


  1. Independent expenditure: an expenditure, other than a coordinated expenditure, made by a non-candidate to pay for an advertisement which either (1) expressly advocates the election or defeat of a candidate or passage or defeat of a ballot measure, or (2) refers to a candidate or ballot measure and is disseminated to the electorate within 30 days before a primary or 60 days before a general election at which the candidate or ballot measure is on the ballot.


  1. Political committee: a qualified political party, a group that has the primary purpose of contributing to candidates or making coordinated expenditures, or a group that has the primary purpose of making independent expenditures and has expended over $3000 for that purpose in the preceding year. This represents a considerable narrowing of the definition of “political committee” in the current law, which purports to cover any person who spends over $500 for “influencing or attempting to influence an election.” This overbroad definition was the main feature of the law that motivated the courts to invalidate the CRA’s registration and reporting requirements for non-candidate groups.

Substantive Provisions

  1. Coordinated expenditures as contributions. The bill treats coordinated expenditures as contributions to the candidate or committee with whom they are coordinated. This means that the expenditure would have to be reported by the candidate or committee as a contribution, and the amount of the expenditure could not exceed the candidate’s or committee’s contribution limit.


  1. Reporting by candidates and political committees. Except for the obligation to report coordinated expenditures, the bill leaves substantially unchanged the CRA’s current requirements for reporting and disclosure by candidates and political committees – although, as noted, the definition of “political committee” would be considerably narrowed by the bill.


  1. Reporting of independent expenditures and covered transfers. Under Section 1 of the bill, any person who makes an independent expenditure or covered transfer of $1,000 or more that is not otherwise required to be reported must report to the Secretary of State (1) the name of the person making the expenditure or transfer and its amount and purpose; and (2) the names of the donors of all contributions over $200 to the person making the expenditure or transfer that were solicited or earmarked to make independent expenditures. In addition, for expenditures or transfers of over $3,000, the person making the expenditure or transfer must either (1) report the names of all its contributors of over $5,000; or (2) finance the expenditure from a segregated bank account that contains only individual donations earmarked for independent expenditures or covered transfers, and report the names of all contributors of over $200 to the account. Reports would have to be filed within 24 hours of making an expenditure of more than $3,000 within 14 days before an election, and within three days for all other expenditures.


  1. Disclaimers. Section 2 of the bill requires every person who makes a campaign expenditure, a coordinated expenditure or an independent expenditure of over $3,000 for an advertisement to include in the ad a statement of the names and contact information for the sponsors and principal funders. This provision would replace the unconstitutionally overbroad disclaimer requirements of the current law, which would be repealed by the bill.


  1. Changes in contribution limits. The current law imposes limits on the contributions that may be received by a candidate or political committee from any single contributor during a primary election or general election for the office being sought. The bill would apply these limits to every primary or general election instead of merely the elections in which the candidate is running. The effect of this change would be to apply the same total contribution limits over a four-year cycle to candidates for four-year offices as are currently applied to candidates for two-year offices. Contribution limits for political committees would also apply to each primary and each general election.


  1. Exemption from contribution limits. In accordance with recent court decisions, contributions to political committees that can only be used for independent expenditures – either because the committee makes only independent expenditures or because the contributions are deposited in a separate account that can only be used for that purpose – would be exempt from contribution limits.


  1. Increased civil penalties. The bill would increase, to $1,000 per violation and $20,000 total, the civil fines that may be imposed for violations of the CRA. The criminal penalties authorized by current law would remain unchanged.