As the U.S. Supreme Court handed down a major campaign finance ruling Wednesday, a New Hampshire House committee heard testimony on a bill that would no longer allow some political groups to spend money on state elections without disclosing it to voters.
The proposal, which cleared the Senate by a 19-4 vote February 6, would require any organization that spends more than $5,000 on so-called electioneering to filed detailed reports with the Secretary of State's office.
At the same time, the bill broadens significantly the definition of independent expenditures - spending that is not coordinated with a political candidate yet is clearly intended to influence the outcome of an election.
“I think this is a good step in the direction of transparency and something that, as we look at the changing landscape of campaign finance, would be an enhancement to New Hampshire,” said Senate Majority Leader Jeb Bradley, (R-Wolfeboro), the main sponsor of the bill.
The committee was still listening to testimony on Senate Bill 120 when that landscape changed again.
The Supreme Court's decision in McCutcheon v. FEC strikes down limits on how much an individual donor can contribute to federal candidates and political parties. Coming four years after the Citizen's United ruling, which erased restrictions on spending by corporations, unions and special-interest groups, the McCutcheon ruling will likely only add to the estimated $7 billion that was spent on federal elections in 2012.
In New Hampshire, candidates, party groups and political committees – defined as two or more persons organized to influence an election - are all required to register with the Secretary of State and file reports detailing their receipts and expenditures.
But when it comes to independent political groups, the law has been difficult to enforce.
During the 2010 gubernatorial contest, the Attorney General's office investigated complaints from Democrats that two groups, Americans for Job Security and the National Organization for Marriage, had funded ads attacking Gov. John Lynch without first registering as political committees.
Republicans waged an identical complaint, alleging that Citizens for Strength and Security, which had run ads attacking GOP nominee John Stephen, had failed to report its activities as required by state law.
The attorney general declined to take action. In the case brought by Democrats, the AG ruled that because neither group's “major purpose” involved telling people which candidate to vote for, they could not be designated as political committees.
Under the proposed bill, what constitutes a political committee would change.
Organizations that raise or spend at least $2,500 in a calendar year for the “major purpose” of electioneering for or against a candidate or measure would be required to register and file reports. Groups that do not have as its major purpose the success or defeat of a candidate or measure would have to register if they spent $5,000.
The bill would not require tax-exempt groups, such as 501(c) 4s, to report their donors — a concession that was necessary to gain broader support, said Sen. David Pierce, (D-Hanover), who helped craft the latest version of the bill.
“There were groups who did not want to identify their donors for fear of, one, their funding running dry, which really is not my concern, and, two, their not-unreasonable fear that their donors could be identified as supporting a particularly volatile issue,” Pierce said. “I think it’s a reasonable compromise."
About a half-dozen people spoke in favor of the bill, including two representatives of the Coalition for Open Democracy, a Concord group that supports public funding of elections in New Hampshire.
Olivia Zink, the coalition’s program director, told committee members that independent political groups, including some that never registered with the Secretary of State, spent $19 million on the 2012 governor’s race – nearly five times as much as the candidates themselves.
“Much of this money is from out of state,” Zink said. “As a lifelong resident it disturbs me to realize my local elected officials are beholden to out-of-state associations and organizations. We have a right to know and need to know who is influencing our elections.”
Representatives of three groups - New Hampshire Right to Life, New Hampshire Firearms Coalition and Cornerstone Policy Research – testified against the bill, arguing that it could be interpreted to require organizations engaged in non-political activity to register as political committees.
New Hampshire Right to Life President Kurt Wuelpe asked whether the NHRTL Committee, which lobbies for pro-life laws, would have to adhere to the same reporting requirements as the organizations political action committee. “When we send out communications, which we do on a very regular basis, are we now going to be subject to reporting under this statute’s new definitions that we are not subject to currently?” he said.
Shannon McGinley had the same concerns. McGinley is chair of Cornerstone Policy Research, a conservative 501(c)3 organization that is prohibited by law from political activity, and Cornerstone Action, a 501(c)4 that is allowed to participate in some electioneering, and which has a political action committee registered with the Secretary of State.
“When you start getting into C4 activity, it starts to get very, very muddy,” McGinley said. “I respect the need for transparency with outside money coming in to New Hampshire, absolutely, but I’m very concerned with how this bill is written and how it is going to impact grassroots organizations like ours that have been here in New Hampshire for 12 years and are not just about a campaign cycle.”
Pierce said the changes in the law would only apply to groups that advocate on behalf of candidates and ballot measures.
“I think the bill is carefully crafted to make sure we’re not reaching into issue advocacy,” he said. “But when a group spends money in our elections in order to sway the success or defeat of a candidate or measure or trying to dictate public policy at an election I think the reporting should kick in.”