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Battle Over State's Campaign Finance Reform Law Moves To Federal Court

EDMUND H. MAHONY

January 13, 2010

As an uncharacteristically active political campaign season begins in Connecticut, the landmark campaign finance reform law that was supposed to clean it up and pay for it is headed for new constitutional challenges in federal court.

The state's political establishment will be represented today before the U.S. 2nd Circuit Court of Appeals in New York in an effort to salvage the law, which was gutted last year. A federal district judge concluded that its public financing provision would put minor-party candidates at an unconstitutional disadvantage against better-financed major-party candidates.

The mechanism for delivering public tax dollars to political campaigns has dominated the talk about the law. But another of its provisions — one the district judge upheld — also is under attack: A ban on lobbyists and state contractors, as well as their families, from contributing to or advocating on behalf of political candidates.

Uncertainty among candidates about a promise of tens of thousands of dollars has thrown a wrench into the gears of aspiring campaigns. But in a larger sense, there is concern over campaign finance reform as a political reality in Connecticut if the 2nd Circuit upholds Judge Stefan R. Underhill's September ruling.

There already is talk at the state Capitol of filling an expanding state budget deficit with money allocated for political campaigns if the appeals court sides with Underhill and invalidates language at the heart of the reform law, known as the Citizens Election Program, or CEP.

"Here we are five months from state conventions and eight months from primaries and we don't even know what the rules are," said Secretary of the State Susan Bysiewicz, who is expected to announce today that she is running for the office of state attorney general. "CEP may or may not be upheld. If it is, the big 'if' is whether the money will still be in the program. People are trying to raid the money to balance the budget."

Contractors' Challenge

The General Assembly, prodded by Gov. M. Jodi Rell, enacted the electoral reform law during a special session in December 2005. Rell pushed lawmakers that year to create a blue-ribbon committee to craft a bill, and she convened the special session that adopted it. It was quickly challenged.

One early challenger was a securities industry trade group, which objected to a part of the law requiring state elections officers to publish the names of securities industry employees, as well as the names of their wives and children, on a public Internet site. The requirement was part of the law's effort to enforce a ban against political contributions by contractors, which securities advisers and their families are considered to be.

The securities industry dropped its challenge. But the same issues are being pressed by lobbyists and other contractors, who claim that the law illegally violates their political free speech rights. If the spouses and children of lobbyists and contractors are included under the ban, thousands of people could be affected.

"It has become so extreme now that someone like me, or someone else from a nonprofit organization, can't even go to a fundraising party simply to socialize with friends," said Andrew Schneider, executive director of the American Civil Liberties Union of Connecticut, which successfully challenged the CEP in District Court on behalf of minor-party political candidates. "I can't even talk favorably about a candidate if someone interprets that to be supporting a candidate."

"One estimate is that the contractor ban would remove 10,000 people from the political process," Schneider said. "I think that is conservative."

Attorney R. Bartley Halloran, who will argue for the lobbyists today, said that the law could put them out of business. If the law was strictly enforced, he said, lobbyists would be prohibited from performing their central function — evaluating legislators for commercial clients trying to push issues at the General Assembly.

Underhill ruled that the ban on contributions and advocacy by contractors and lobbyists was constitutional. The ACLU, joined by contractors and lobbyists, will ask the appeals court to reverse that decision. A representative for state Attorney General Richard Blumenthal's office will argue that Underhill was correct, if only on the subject of lobbyists and contractors.

'Incumbents Protection Act'

Much of the argument in New York today is expected turn on the state's effort to overturn Underhill's rejection of the better-known aspect of the law, the part that distributes public money to campaigns. Underhill was emphatically critical of what he called a well-intentioned but constitutionally flawed legislative effort to even the playing field on which rich and poor candidates compete.

The law established a system under which candidates qualify for public campaign subsidies by achieving electoral milestones. Those milestones involve, among other things, initial private fundraising, the collection of petition signatures and the success of minor-party candidates in the previous election. The problem, Underhill wrote in his decision, is that the milestones for minor-party candidates are more difficult to achieve that those established for better-heeled Republicans and Democrats.

"It's kind of like an incumbents protection act," Schneider said. "We are all for laws that increase the ability of more people to participate in the democratic process. But Connecticut's law did the opposite by creating a different set of rules for unaffiliated and minor-party candidates that made participating even more difficult."

Blumenthal, who has a long record of fighting what he calls the corrosive influence of contractor money on political campaigns, disagreed. He said that the law cleans up campaigns without diminishing political opportunity for any candidate and that Underhill's decision was the result of a flawed legal analysis.

"The overriding point is that these reforms help to address the deep-seated state contracting corruption and abusive campaign finance practices that give us the name Corrupticut," Blumenthal said. "And the legislature's decisions are entitled to deference, not just as a matter of public policy but constitutional law because the clear doctrines in all of the cases say that a compelling interest like stopping corruption justify these very moderate and sensible reforms."

Underhill issued a stay in September that postpones his invalidation of the campaign finance law until after the appeals court rules. Mindful that 2010 is an election year, the appellate judges agreed to expedite the case but have not signaled when a decision can be expected.

If the appeals court upholds Underhill on the way that the law would distribute campaign money, the legislature could take the law back and correct what the judge called its constitutional defects. But observers, Bysiewicz among them, question the legislative will for another contentious crack at campaign finance reform.

In the meantime, political candidates throughout the state are making fundraising decisions that gamble on the outcome. Depending on how the court rules, the government might underwrite campaigns. Or it might not.