HomeMy WebLinkAboutCOM 0248.006 2008-2010
Apr-13-09 08:59am From-Campaign Spending Commission 6085860288 T-823 P.01 F-562
235 South Beretania Street, Room 300
Honolulu, Hawaii 96813 CAMPAIGN SPENDING
Telephone: (808) 586.0285
Fax: (808) 586-0288 COMMISSION
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To: Chair J Yoshimoto From: Barbara Wong, Executive Director
Fax: 808-961-8912 Pages. 11 including cover page
Phomr. Pate: 4/1312009
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e Comments:
The Hawaii Campaign Spending Commission is submitting testimony in favor of Council Resolution
98-09 postponing implementation of the Hawaii County Council comprehensive public funding
program.
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Apr-13-09 08:59am From-Campaign Spending Commission 8085860288 T-823 P.02 F-562
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9AR WONG r \p PHONE: (BOB) 566 0285
EXECUTIVE TIVE DIFECTDF ya / g FAX: (808) 566-028d
c~ r3 Wwwnawaii.gov/campaign
STATE OF HAWAII
CAMPAIGN SPENDING COMMISSION
235 SOUTH BERETANIA STREET, ROOM 300 0
HONOLULU, HAWAII 96613 co
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April 13, 2009 f
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TO: The Honorable J Yoshimoto, Chair
The Honorable Pete Hoffman, Vice-Chair
Members of the County of Hawaii Council -
Co
FROM: Barbara U, Wong, Executive Director L w6L_
Campaign Spending Commission
SUBJECT: Testimony on Resolution No. 98-09 (Resolution Supporting the
Passage of H.B. No. 345, Relating to the Postponement of a
Comprehensive Public Funding Program for the County of Hawaii
Council Elections)
Chair Yoshimoto, Vice-Chair Hoffman, and Members of the Hawaii County Council,
thank you for the opportunity to submit written testimony on this resolution supporting
the passage of H_B. No. 345,
We are not opposed to either the resolution or H.B. No. 345, However, we have several
concerns with H.B. No. 345 including additional duties, the cost of the program that will
run parallel to the partial public funding program from which we distributed $144,000 in
the 2008 elections, and the constitutionality of the equalizing funds provision, among
other issues with the Bill.
Act 244, SLH 2008 (Act 244) established a pilot project for comprehensive public
funding program for the county of Hawaii council elections. The pilot project is for a
period of three election cycles, and scheduled to begin with the 2010 elections.
H.B. No. 345 proposes to defer the pilot project for three election cycles until the 2014
elections.
• The Campaign Spending Commission (Commission) is not opposed to this bill,
which was not introduced at the Commission's request.
• The Committee may also want to consider removing the equalizing fund
provisions in Act 244,
The deferral proposed in H.B. No. 345 would provide additional time for the staff to
identify issues and address those issues relating to this new program and focus on other
priorities (2010 is a gubernatorial election year).
Apr-13-09 08:59am From-Campaign Spending Commission 8085860288 T-823 P.03 F-562
The Honorable J Yoshimoto
Testimony on Resolution 98-09
April 13, 2009
Page 2 of 7
1. Additional duties resulting from Act 244
The additional duties and responsibilities resulting from the comprehensive public
funding program will most likely result in the hiring of new staff to augment the existing
staff members who will be responsible for administering the program. Generally, this
program will require the development of manuals, forms and procedures; modifying the
electronic candidate filing system; training the exiting staff and new staff (if any); and
educating candidates.
More specifically, we have identified the following requirements:
1. All qualifying contributions shall be deposited in the Hawaii Election campaign
fund. This may result in the preparation and mailing of thousands of receipts.
2. The application for certification must have 200 signatures and addresses which
must be reviewed and verified by the County Clerk of Hawaii.
3. The Commission must make a decision to certify within five business days of
receiving an application.
4. Seed money is limited to $3,000. These amounts will have to be tracked.
5. Surplus campaign funds may be used for seed money and limited in-office
communications. Other uses are prohibited and separate reports will have to be
filed if a candidate has surplus funds. Surplus funds will have to be tracked.
6. The Commission must post on its website, beginning on January 1 in the election
year, monthly reports stating, by district the number of declarations of intent to
seek public financing received, the number of applications received, the number
of candidates certified for public funds, the base amount certified for each
candidate, and the amount available for additional certified candidates.
7. Equalizing funds must be disbursed when a nonparticipating candidate's
expenditures and independent expenditures supporting the nonparticipating
candidate or opposing the certified candidate exceed the base amounts allotted to
the participating candidate. The Commission, therefore, would track and
investigate all independent expenditures of all committees and individuals that
support the nonparticipating candidates.
8. Equalizing funds must be disbursed within 24 hours; the processing must be done
immediately without sufficient time to verify information that is provided. This
also impacts on the Department of Accounting and General Services, who must
disburse the funds.
9. To implement the initial excess report, the Commission will have to develop a
new report form and business requirements for modifications to the electronic
filing system. When filed, the Commission must review these new reports, send
appropriate letters where required, track responses, and investigate for violations.
10. To implement the supplemental excess reports, the Commission will have to
develop a new report form for the electronic filing system, review these new
reports, send appropriate letters where required, track responses, and investigate
for violations.
Apr-13-09 08:59am From-Campaign Spending Commission 8085860288 T-823 P.04/17 F-562
The Honorable J Yoshimoto
Testimony on Resolution 98-09
April 13, 2009
Page 3 of 7
11. To implement the independent expenditure report, the Commission will have to
develop a new report form for the electronic filing system, review these new
reports, send appropriate letters where required, track responses, and investigate
for violations.
12. To implement the supplemental independent expenditure report, the Commission
will have to develop a new report form for the electronic filing system, review
these new reports, send appropriate letters where required, track responses, and
investigate for violations.
13. Within 24 hours of verifying the failure to file a report, or falsity of report, the
Commission shall automatically disburse equalizing funds.
14. The Commission must conduct investigations of failure to file a report and false
reports.
15. The Commission should adopt rules to compute the equalizing funds and then
compute all funds.
16. The Commission must hire, train and supervise an auditor and systems analyst;
create new reports and integrate the reports into the online filing system; and
purchase equipment for the new staff members; and locate additional office space.
17. The Commission must hire, train and supervise an employee to administer the
public funding program; create an online filing system; and purchase equipment
for the administrator.
18. The Commission must create all forms and receipts, create a candidate's guide,
and provide training classes.
19. The Commission must establish an independent, nonpartisan review committee
for the comprehensive public funding program; and provide administrative and
staff support to the committee.
20. The Commission must develop a comprehensive report for the legislature on the
comprehensive public funding program.
This point regarding additional duties and responsibilities resulting from a new program
is further illustrated by the staff's need to gear up reporting deadlines, training, and
changes to the electronic filing system for the special election on April 23, 2009 for the
Honolulu City Council, District 3. Planning for this election immediately became a
priority, during the midst of the legislative session and other projects.
II. Operation of Act 244
Act 244 entitles a candidate for the county of Hawaii council elections who is "certified"
by the Commission to receive:
• The base amount of funds; and
• "Equalizing funds."
Apr-13-09 09:00am From-Campaign Spending Commission 8085860288 T-823 M5/17 F-562
The Honorable 7 Yoshimoto
Testimony on Resolution 98-09
April 13, 2009
Page 4 of 7
The Commission, however, "shall not distribute comprehensive public funding to
certified candidates that exceeds the total amount of $300,000 for all candidates subject
to this Act in any given election year in which this Act is operative."t
Based upon preliminary calculations, the base amount of funds and equalizing funds that
would be available to candidates for election to the county of Hawaii council in 2010 (if
H.B. No. 345 does not pass) is set forth in the following table:
Primary General base Base funds Equalizing Two candidates w/ equalizing
basefunds funds in primary Fundsin funds
and general primary and
general
District l $7,159 $788 $7,947 $15,894 $31,788
District2 $19,669 $2,769 $22,438 $44,876 $89,752
District 3 S23,016 $546 $23,562 $47,124 $94,248
District 4 537,479 $7,746 $45.225 $90.450 $180,900
District 5 59,826 $5,619 $16,445 $32,890 $65,780
District 6 537,795 $455 $38.250 $76,500 $153,000
District7 $14,363 $6,218 $20,581 $41,162 $82,324
District 8 $752 $220 $972 $1,944 $3,888
District9 $14,206 $484 $14,690 $29,380 $58,760
Total :6164,265 $25,845 $190.110 (if $380,220 (if one $760,440 (if two candidates in
one candidate in each race in the primary and
candidate in each race in the general election; all candidates
each race in primary and receive maximum equalizing
the primary general election; funds)
and general all candidates
election) receive
maximum
equalizing
funds)
t Act 244, Section 12 (a).
Apr-13-09 09:00am From-Campaign Spending Commission 8085860288 T-823 P-06/17 F-562
The Honorable J Yoshimoto
Testimony on Resolution 98-09
April 13, 2009
Page 5 of 7
A. Base amount
The base amount in a contested primary election is the "average of the amount spent by
winning candidates in the previous two county council primary elections of the same
district, reduced by ten per cent."
The base amount in a contested general election is the "average of the amount spent by
winning candidates in the previous two county council general elections for the same
district, reduced by ten per cent," 2
The base amount in an uncontested primary election is "thirty percent of the amount
provided in a contested election;" no funding is provided in an uncontested general
election.3
If "the revenues are insufficient to meet distributions to certified candidates under this
section or $300,000 is distributed, the commission shall permit certified candidates to
accept and spend contributions, subject to the campaign contribution limitations set forth
in section 11-204, Hawaii Revised Statutes, up to the applicable amounts, including
equalizing funds the certified candidate would have received from comprehensive public
funding."
B. Equalizing funds
Equalizing funds "means additional public funds released by the commission to a
comprehensive publicly funded candidate to allow the publicly funded candidate to stay
financially competitive with a nonparticipating candidate in a contested election and to
penalize a nonparticipating candidate for filing false or late reports,"5
If a certified candidate is "outspent by an opposing nonparticipating candidate," the
certified candidate may receive equalizing funds up to the base amount allotted to the
candidate and subject to the $300,000 expenditure cap for all candidates. Equalizing
funds are available in increments of 25% of the base amount.
A certified candidate is outspent if the base amount is exceeded by the aggregate of the
following:
Act 244, Section 12(c), (d).
a Act 244, Section 12(e).
Act 244, Section 12(b).
s Act 244, Section 2.
Apr-13-09 09:00am From-Campaign spending Commission 8085860288 T-823 P. 07/17 F-562
The Honorable J Yoshimoto
Testimony on Resolution 98-09
April 13, 2009
Page 6 of 7
• The nonparticipating candidate's committee's expenditures or contributions,
whichever is greater,
• Added to any independent expenditures made in support of that nonparticipating
candidate or against the opposing certified candidate reported by any person,
• Minus any independent expenditures made in support of the certified candidate or
against the nonparticipating candidate reported by any person.b
In order to determine whether a certified candidate is outspent, Act 244 requires that
additional reports not required under the current law be filed by a nonparticipating
candidate and any other person making independent expenditures.
• Beginning forty-five days before the primary election day, a nonparticipating
candidate shall file an initial excess report with the commission within twenty-four
hours after aggregate contributions are received, or expenditures are made in an
election that exceeds one hundred one per cent of the base amount of
comprehensive public funding allotted to an opposing certified candidate in a
contested election. Supplemental excess reports must be filed within twenty-four
hours after the nonparticipating candidate's aggregate expenditures exceed $1,000
since the filing of the prior report.?
• Beginning forty-five days before the general election day, noncandidate committees
and any other persons that make independent expenditures that expressly advocate
the nomination, election, or defeat of a certified candidate shall file the initial
independent expenditure report with the commission within twenty four hours after
expenditures exceed $1,000 in aggregate in an election. Supplemental independent
expenditure reports must be filed within twenty-four hours after the aggregate
expenditures exceed $1,000 since the filing of the prior report. The independent
expenditure reports shall identify the nonparticipating candidate or certified
candidate for whom the independent expenditure is intended to influence the
nomination, election, or defeat.8
If a nonparticipating candidate fails to file a timely initial excess report or supplemental
excess report in a contested election or files a false excess report or supplemental excess
reports, the commission, within twenty-four hours of verifying the failure or falsity, shall
inform the comptroller. The comptroller then must pay to the certified candidate
equalizing funds equivalent to the base amount, subject to the $300,000 expenditure cap.
III. Remove equalizing fund provisions
Notwithstanding the complexities in the law discussed above, the Commission
recommended removal of the equalizing fund provisions based upon In re McComish v.
6 Act 244. Section 13(b).
Act 244, Section t4(a)(1).
6 Act 244, Section 14(a)(2).
Apr-13-09 09:01am From-Campaign Spending Commission 8085860288 T-823 P.08/17 F-562
The Honorable J Yoshimoto
Testimony on Resolution 98-09
April 13, 2009
Page 7 of 7
Brewer. No. 2:08-cv-1550, Order (Aug. 29, 2008). The Court, therein, determined that
Arizona's equalizing find provision "violates the First Amendment of the U.S.
Constitution." A copy of the Order is attached to our testimony. The Commission
prefers proactive action, rather than passively await possible costly litigation involving
equalizing funds.
The foundation for the Order by the McComish Court is the United State Supreme
Court's decision in Davis v. Fed. Election Comm., 128 S.Ct. 2759 (2008). Under federal
law, candidates for the U.S. House of Representatives are subject to a $2,300 per election
contribution limit, as well as a limit on coordinated party expenditures (i.e., expenditures
made by a political party in coordination with the candidate benefiting from the
expenditure).
When a candidate for the U.S. House of Representatives spent personal funds in excess of
$350,000, as explained by the Davis Court, "a new, asymmetrical regulatory scheme
[came] into play." The self-financing candidate remained subject to the original $2,300
contribution limit and coordinated spending limit, while a non-self-financing opponent
was permitted to receive contributions up to treble the original limit (i.e., $6,900 rather
than $2,300) and the coordinated party spending limit was eliminated. The Court found
that the asymmetry of this arrangement "impermissibly burden[ed] [the plantiff's] First
amendment right to spend his own money for campaign speech." Davis at 2771.
Attachment (Order, In re McComish v. Brewer. No. 2:08-ev-1550)
Apr-13-09 09:01am From-Campaign Spending Commission 8085860288 T-823 P.09/17 F-562
ATTACHMENT
~r 1
2
3
4
s
6 IN THE UNITED STATES DISTRICT COURT
7 FOR THE DISTRICT OF ARIZONA
8
9 John McComish, et al., No. CV-08-1550-PHX-ROS
10 pwatiffs, ORDER
11 vs.
12
Jan Brewer, et al.,
13
Defendants.
14
15
16
17 Before the Court is Plaintiffs' Motion for a Temporary Restraining Order ("TRO")
18 (Doc. 13). Plaintiffs seek to enjoin enforcement of the matching funds provisions of
19 Arizona's Clean Elections Act, A.R.S. § 16-952 (A), (B) and (C), asserting that these
20 provisions impermissibly burden their First Amendment rights to freedom of speech.
21 For the reasons below, Plaintiffs' requested relief will be denied.
22
BACKGROUND
23
The Arizona Clean Elections Act (the "Act" or "Arizona Act") was approved by
24
Arizona voters in 1998. The Act sets up a voluntary system of campaign financing in which
25
candidates who choose to be "participating candidates" may receive funds from the Citizens
26
27 Clean Elections Fund ("CCEF'7. Participating candidates are limited in the campaign
contributions they may receive and personal expenditures they may make. In return, they
28
ase 2;08-cv-01550-ROS Document 30 Filed 08/29/2008 Page 1 of 9
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1 receive campaign funds from the CCEF in a set amount.' Sgg A.R.S. 16-941, -945; egg
2 ALig, Citizen Clean Elections Commission, "Voter Education Guide" (2008) available at
3 http://www.cci!c.state.az,us/ccecweb/ceecays/ccecPDF.asp?docPath=docs/2008PrimaryC
4 andidateStatementPamphlet.pdf (hereafter "Voter's Guide').
5 When participating candidates have opponents who are non-participating -
6 "traditional candidates"- they can also receive matching funds. Once a traditional candidate
7 exceeds the spending limit for a given race, her participating opponent or opponents will
8 receive dollar-for-dollar matching funds from the CLEF. These funds cap out at three times
9 the applicable spending limit= Independent expenditures by Political Action Committees
10 ("PACs') made on behalf of a traditional candidate or in opposition to her participating
11 opponent also count towards the spending limit.
12 Plaintiff9 here are non-participating candidates. Plaintiff John McComish is the
13 current Arizona State House of Representatives Majority Whip, currently running for re-
14 election. Plaintiff Nancy McLain is a current member of the Arizona State House of
15 Representatives, currently running for re-election. Plaintiffs Doug Sposito, Frank Antenori,
16 and Tony Boui: are candidates for the Arizona State House of Representatives. Plaintiff
17 Kevin Gibbons is a candidate for the Arizona State Senate. Gibbons, Sposito, and Bouie
18 have recently triggered matching funds to their opposing "participating" candidates by
19 making direct expenditures to their campaign. ,&& Gibbons Afl:, 112, Ex. A.1; Bouie Aff.,
20 ¶ 9, Ex. B.1; Sposito Aff., ¶ 11, Ex. C.1.. Further, all three report that their campaign
21
22 ' For candidates for the state legislature, primary spending limits are $12,921 and
general election spending limits are $19,382. Legislative candidates may collect up to
23 $3,230 in individual early contributions of no more than $130 during the exploratory and
24 qualifying periods, and may use $610 of personal monies for their campaigns. For
candidates for Corporation Commission, the primary spending limit is $82,680 and the
25 general election spending limit, $124,020. Candidates may collect up to $12,920 in early
26 contributions o!' no more than $130 and contribute $1,230 of their personal monies. ,egg
A.R.S. § 16-951; Voter's Guide.
27 z The thatching fimds are a dollar-for-dollar thatch minus 6% meant to compensate
28 for the fundraising expenses incurred by traditional candidates. A.R.S. § 16-952(A). \ -
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( 1 expenditures have been chilledbecause ofthe possibility oftriggeringfutthermatchingfunds
2 to their opponents, making them reluctant to spend money they would otherwise have used
3 to fund campaign activities. egg Sposito Aff., ¶ 12; Gibbons Aff.,110-11; Bouie Aft:, ¶ 8-
4 10.
5 The Act's provision can be manipulated in a number of ways. Because PACs may
6 make expenditures on behalf of traditional candidates without their consent or even their
7 knowledge, they may air ineffective - even deliberately ineffective - advertising that then
8 triggers matching funds that participating opponents can use at their discretion. The
9 occurrence of this was alluded to at the hearing for a TRO. Similarly, candidates may use a
10 "slate" strategy against their opponents. Bouie provides an illustrative example arising out
I 1 of his district where a traditional incumbent, Representative Sam Crump, and a participating
12 challenger, Carl. Seel, running in his district (where two seats are available) have emerged as
13 a "slate," sharing joint advertising. Bouie Aft:,121-23, Ex. B.2. Thus, money spent by
14 Crump generates matching funds for Seel, effectively aiding both candidates.
15 ANALYSIS
16 I. Standard
17 The standard for issuing a Temporary Restraining Order ("TRO") is the same as that
18 for issuing a preliminary injunction. Gonzalez v. State. 435 F. Supp. 2d 997, 999 (D. Ariz.
19 2006). In the Ninth Circuit, there are two sets of criteria for a court to use when evaluating
20 a request for a 17RO. First, a plaintiff must show:
21 (1) a strong likelihood of success on the merits,
2 the possibility of irreparable injury to plaintiff if preliminary relief
22 i3 not balance of hardships favoring the laintiff, and
23 ~4) advancement of the public interest (m certain cases).
24 Earth Island Ins -y-U.S. Forest Sm.. 351 F.3d 1291 (9th Cir. 2003) (quoting lohnsgn v. Cal.
25 State Bd. Of Accgun 72 F.3d 1427,1430 (9th Cit. 1995). Alternately, a plaintiff may
26 "demonstrate[] "either a combination of probable success on the merits and the possibility o
27 irreparable injury or that serious questions are raised and the balance of hardships tips sharply
28 in his favor"' jL These two tests represent a continuum; "[t]hus, the greater the relative
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1 hardship to [Plaintiffs] the less probability of success must be shown." Eg&Wap-d, 351 F3d
2 at 1298.
3 H. Applicadon
4 a. L,ikeli ood o Success on JU Merits.
5 The history of campaign finance jurisprudence is extensive and convoluted. In
6 AU9kLqy v Y&% 424 U.S. 1(1976), the Supreme Court rejected a cap on expenditures by
7 candidates of their personal funds. The Court explained that a "candidate has a First
8 Amendment right to engage in the discussion of public issues and vigorously and tirelessly
9 to advocate his own election," and that a cap on personal expenditures by a candidate
10 constitutes "a su:bstantial," "clea[r]," and "direc[t] restraint on that right." a at 52. Thus,
11 while states rwiy place certain reasonable limits on campaign contributions, personal
12 expenditures mazy not be restrained. L. at 21-22, 51.
13 Less clear, however, has been the fate of statutes like Arizona's which, rather than
14 placing a direct cap on personal expenditures, instead create a system that incentivizes - or,
15 perhaps, coerces - candidates to opt into a public financing program that includes limits on
16 contributions and personal expenditures. Several circuits have considered this variation to
17 the statute in fiWckley. The First, Fourth and Sixth Circuits have ruled such schemes
18 constitutional. In N.C. Right to Life- Inc. Y. Le 524 F.3d 427 (4th Cit. 2008), the court
19 held an act similar to Arizona's was constitutional. 'The plaintiffs remain free to raise and
20 spend as much money, and engage in as much political speech, as they desire," wrote the
21 court. "They will not be jailed, fined, or censured if they exceed the trigger amounts."
22 Similarly, the First Circuit, in Dagael1 Coll M'n on GovertL*nPntal Ethics & Election
23 P,talk a, 205 F.3d 445 (1st Cit. 2000), held that Maine's matching fund provision was
24 constitutional, writing that "[t]he public funding system in no way limits the quantity of
25 speech one can engage in or the amount of money one can spend engaging in political speech,
26 nor does it threaten censure or penalty for such expenditures." U at 464; sge also Gable v.
27 142 F.3d 940 (6th Cit. 1998) (holding that a Kentucky campaign finance law which
28
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ase 2:08-cv-01550-ROS Document 30 Filed 08/29/2008 Page 4 of 9
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I Lifted ertpendinrre limits for participating candidates when non-participating candidates
2 exceeded those limits was constitutional).
3 Of the circuits that have considered the question, only the Eighth Circuit has found
4 matching fund provisions like those in the Arizona Act to be unconstitutional. In Dv-vv.
5 Hoja, 34 F.3d 1356 (8th Cit. 1994), a Minnesota law provided that candidates would
6 receive one half the amount of independent expenditures made by opposing candidates. The
7 court emphasized the "'self-censorship' that has occurred even before the state implements
8 the statute's mandates," "no less a burden on speech that is susceptible to constitutional
9 challenge than is direct government censorship." L& at 1360. The court also found that the
10 speech restriction could not be considered content neutral; "[fnndependent expenditures of any
11 other nature, supporting the expression of any sentiment other than advocating the defeat o
12 one candidate or the election of another, do not trigger the statute's provisions." LL at
13 1361. There was, however, one substantial difference between the statute at issue in jay and
14 the Arizona Act. In Minnesota, the participation rate among candidates was approaching
15 100% (in Arizona, it is closer to 60%), leading the court to declare that "no interest, no matter
16 how compelling, could be served" by the restrictions on the remaining candidates.
17 For all that these cases have long muddied the matching funds landscape, a recent
18 Supreme Court decision sheds light upon the issue. In Davis v. FgdElection conmi!n. 128
19 S. Ct. 2759 (2008), the Court quoted from ply extensively and affirmatively, while ignoring
20 the conflicting opinions entirely. && id, at 2772. Ultimately, the Court found that provisions
21 of the Bipartisan Campaign Reform Act of 2002 ("BCRA') - the so-called Millionaire's
22 Amendment- violated the Constitution's First Amendment free speech protections. 2U.S.C.
23 §44la-1(a); jd, at 2774. The Millionaire's Amendment was triggered when a non-
24 participating candidate's personal expenditures caused her total campaign expenditures to
25 exceed $350,000, At that point, an opposing participating candidate was allowed to receive
26 individual contributions at three times the normal limit (the limit for non-participating
27 candidates remained the same), and could accept coordinated party expenditures without limit.
` 28 LL at 2766. The Court found that the asymmetry of this arrangement "impermissibly
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1 burden[ed] [dke plaintiff's) First Amendment right to spend his own money for campaign
2 speech." U at 2771. Thus, although under the BCRA candidates can choose to spend their
3 own money as desired, they "must shoulder a special and potentially significant burden if they
4 make that choice.- Davis. 128 S.Ct at 2771.
5 Because, the BCRA "impose[d] a substantial burden on the exercise of the First
6 Amendment right to use personal funds for campaign speech, the provision [could] not stand
7 unless it [was] `justified by a compelling state interest. 11 at 2772. The Court found that
8 the government's stated interest of "level[ing] electoral opportunities for candidates of
9 different personal wealth" was not a compelling state interest. 11 at 2773. "[P]reventing
10 corruption or the appearance of corruption" are legitimate. a However, it did not find that
11 the BCRA was justified by such an interest; "reliance on personal funds reduces the threat of
12 corruption, and therefore (the challenged provision), by discouraging use of personal funds,
13 disserves the anticorruption interest." LL (emphasis in original).
14 The law at issue in pgyig differs from the Arizona Act in that the latter does not
15 inequitably raise the contributions limit, instead providing matching funds from the CCEF. C
16 The Defendants point to this in their brief, quoting the Supreme Court's statement that "we
17 have never upheld the constitutionality of a law that imposes different contribution limits for
18 candidates who are competing against each other. , . L, Thus, Defendants argue, "[t]he
19 Act hero imposes no asymmetrical burden on a traditional candidate's ability to contribute or
20 expend his or her own money."
21 However, the Davis court focuses not merely on the fact that the contributions limit
22 differs for participating and non-participating candidates, but also forcefully on the fact that
23 "the vigorous exercise of the right to use personal funds to finance campaign speech produces
24 fundraising advantages for opponents in the competitive context of electoral politics." LL at
25 2772. Likewise, the Supreme Court has held (in a passage quoted approvingly in David that,
26 while one does not "have the right to be free from vigorous debate, one "does have the right
27 to be free from government restrictions that abridge its own rights in order to 'enhance the
i
28 relative voice' of its opponents." Pacific Gas & Elec. Co. Y. Pub. Utilities Comm'n _ 475 U.S.
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.i
( 1 1,14 (1986) (emphasis in original). The "statutorily imposed choice" provided by the BCRA
2 was not sufficient to save its constitutionality. Davis. 128 S. Ct. at 2772. Though the Arizona
3 Act's mechanism for funding differs, the effect, which forces a candidate to choose to "abide
4 by a limit on personal expenditures" or else endure a burden placed on that right, is
5 substantially the same. LL
6 It is in the presence of a compelling state interest that the Arizona Act has the potential
7 to most sharply distinguish itself from the BCRA. The Arizona Act perhaps better serves the
8 interest of discouraging corruption; it provides matching funds for - and thus discourages -
9 private contribution. However, as Plaintiffs point out, the Act opens up new avenues for
10 possible corruption. Because matching funds will be provided to participating candidates for
11 expenditures that PACs make on behalf of traditional candidates, PACs can run ineffective,
12 umwished for advertising that generates funds for the participating candidate to use at her
13 discretion. The Act also allows the unofficial "slate" strategy seen in Bouie's race, which
14 allows traditional candidates to trigger matching funds that will be used partially in their own
( 15 support. The possibility of such gamesmanship mitigates against any decrease in corruption
16 or in the appearance of corruption. The Arizona Act cannot be found to serve this interest any
17 more narrowly than did the BCRA.
18 Accordingly, Plaintiffs have established that the Matching Funds provision of the Act
19 violates the First Amendment of the U.S. Constitution.
20 b Lrrenarable Iniurv
21 Plaintiffs can be said to suffer impartible injury both through the dispensation of funds
22 that will be used to oppose them and through the mere fact that their speech is being burdened.
23 The Supreme Court has held that "(t]he loss of First Amendment freedoms, for even minimal
24 periods of time, unquestionably constitutes irreparable injury." Elrod v. urns, 427 U.S. 347,
25 373 (1976).
26 c. Ba ange of Harms and the Public Interest
27 The balance of harms at issue is not a simple one. On the one hand, Plaintiffs suffer
28 a burden on their First Amendment rights and have proffered some evidence that the
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1 candidates opposing them benefit directly from that opposition. On the other hand, the State
2 Defendants have a clear interest in running a smooth and orderly election which, in this case,
3 includes a significant number of candidates who have been operating under the assumption
4 that matching fiords would be distributed and planning their campaign strategies accordingly.
5 Those disadvantaged candidates are not currently parties to this litigation, but disrupting their
6 expectations of funding shortly before an election surely interferes with the State's interest
7 in holding a fair, contested election. Furthermore, courts have traditionally treated injunctions
8 in election cases differently than in other contexts, as "[i]n this case, hardship falls not only
9 upon the putative defendant" but on all citizens of the state. Southwest Voter Re 'sgr trati
on
10 Ed=. Pried v. Shelley, 344 F.3d 914, 919 (9th Cir. 2003). Certainly the fair nature of this
11 election has been tainted by the constitutional violations with which it is entwined. However,
12 as Defendants point out, "[c]hanging the rule now would irreparably harm the candidates who
13 in good faith chose to accept public funding by participating in Arizona's Clean Elections
14 program." Defendants provide affidavits from at least two candidates who state that they are
15 relying on matching funds to run an effective campaign. Kelty Aff., 134; Valdez Aff., 14.
16 And the length of time Plaintiffs waited to file their TRO also weighs in the balance
17 against the Plaintiffs on the public interest determination. Candidates began qualifying for
18 clean elections finding after January 1, 2008, candidates were required to file nomination
19 papers by June 4, 2008, and DA3da was decided on June 27, 2008. While it appears Plaintiffs'
20 counsel acted quickly upon learning of the case, the fact remains that Plaintiffs filed their
21 complaint on August 21, 2008 and their Motion for Temporary Restraining Order was filed
22 five days later on August 26, 2008. An Oregon district court decision noted the "eleventh-
23 hour" nature of a challenge in denying a TRO in an election case as bearing against the public
24 interest. Grud saki y Bradbury, 2007 WL 2733826, at •3 (D. Or. Sept. 12, 2007). Further
25 the case law discussed previously addressing matching funds were not resolved in the context
26 of a TRO or preliminary injunction..
27 The tardiness of the challenge has inhibited a thorough determination of the harms on r
28 each side. In order to accurately assess the balance of the hum, Plaintiffs need to present l
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( 1 further evidence of harm done to them through expenditures of matching funds at this late
2 stage of the election. Defendants, similarly, need adequate time to develop and present
3 evidence as to the disruptive effect enjoining matching funds will have at this stage of the
4 election.
5 CONCLUSION
6 Plaintiffs have shown success on the merits. However, given the special nature of an
7 election and the, seriousness of enjoining a critical facet of it at this stage in time, Plaintiffs
8 have not shown that the balance of harms tilts in their favor.
9 Accordingly,
10 IT IS ORDERED Plaintiffs' Motion for a Temporary Restraining Order shall be
11 DENIED.
12 IT IS FURTHER ORDERED a hearing willbe held on September 3,2008,1:30 p.m.
13 to determine whether a preliminary injunction should be granted or, should the parties decide
14 that discovery is necessary, the preliminary injunction hearing will be continued and a status
15 hearing will be held in its place.
16 DATED this 29d day of August, 2008.
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Uni S tea District Judge
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