New Hampshire Bar Journal
2012 Fall, Pg. 20.
THE INVENTION OF THE NEW HAMPSHIRE SUPER PAC: Two Case Studies: Gay Marriage; the Gubernatorial Race
New Hampshire State Bar JournalVolume 53, No. 3Fall 2012THE INVENTION OF THE NEW HAMPSHIRE SUPER PAC: Two Case Studies: Gay Marriage; the Gubernatorial RaceBy Jay SurdukowskiI. NEW HAMPSHIRE SUPER PAC MAN -ONE EXPENSIVE VIDEO GAME
Recently I had occasion to witness a friend running for political office take a rare five-minute break to play the 1980s arcade game Super Pac-Man at a diner near the University of New Hampshire. Pac-Man was gobbling everything in sight, but in this later version of the game, the ubiquitous white dots consumed by the ravenous yellow head were replaced by keys, which opened doors to bountiful food stuffs and other prizes such as "Galaxian flagships." Pac-Man became Super Pac-Man when he consumed certain magic pellets.
Ironically the game reflected the new reality of the election cycle in New Hampshire. Thanks to a quiet change in campaign finance law with $20 million consequences. New Hampshire now has its own ravenous Super PAC-men (and women).
The New Hampshire version of Super Pac-Man started without fanfare this summer, with a letter from the New Hampshire Attorney General's Office. While New Hampshire law historically limited individual contributions to "political committees" (popularly known as "PACs," echoing the well-known federal "Political Action Committee") to $5,000, the attorney general issued new guidance, in a form of an August 1, 2012, opinion letter to the NH Secretary of State, which was a game-changer.(fn1) The letter states that the $5,000 limit on contributions to political committees making only independent expenditures is no longer valid in light of the Citizens United case and several that followed it. Citizens United, and subsequent cases, allow individuals and corporations to give unlimited amounts of money to PACs that only make independent expenditures, also known as Super PACs. Super PACs can raise and spend limitless funds to support and defeat candidates, so long as they do not coordinate with campaigns. Unlike traditional PACs, Super PACs may not give directly to candidates and may only make independent expenditures.
Since 2010, Super PACs have registered specially with the federal government, agreeing to make only independent expenditures. In the wake of the attorney general's opinion. New Hampshire's equivalent of federal PACs can now effectively walk and talk like a federal Super PAC. It is fair to say that overnight. New Hampshire political committees that only make independent expenditures were turned loose to raise and spend infinite amounts of money And spend they did in the 2012 state elections.
This article presents two case studies focusing on issues where what I call the "New Hampshire Super PACs" were heavily engaged: first, the battle over maintaining or repealing New Hampshire's same-sex marriage law. The second case study centers on the 2012 gubernatorial race, which featured record-breaking spending (at least $19 million by entities other than the two candidates, and at least $23 million including the candidates' personal fundraising). In no other state contests were passions as high and wallets emptied with such abandon by New Hampshire Super PACs and other "outside" money groups.(fn2)
"Game-change" - a term of art in politics made popular by the eponymous book in 2010 and the 2012 award-winning HBO movie of the same name - is the only way to describe this development, which has the potential to affect Granite State politics for decades in ways we may not yet totally grasp. In a state where all major offices turn over every two years, the rules of engagement are radically altered by the advent of the New Hampshire Super PAC, as this article will show.
CITIZENS UNITED, SPEECHNOW.ORG AND THE RISE OF THE FEDERAL SUPER PAC MEN
To understand how we arrived at the brave new world of New Hampshire Super PACs, it is important to understand their brief history and their rapid rise to power. In my subheading, "PAC Men," is not just a reference to the video game - this is indeed a "PAC-man's world." As of late May 2012, 70 percent of political donors have been men.(fn3) More specifically, a small club of fantastically wealthy white men - mostly Republican - have grabbed headline after headline with their feats of donation prowess. Of the top 15 super PAC donors through June of this year, only one, Amy Goldman, is a woman. Although recent election filings reveal that more women are engaging in six-figure donations. The Women Vote! Super PAC took in five six-figure checks from women in August of 2012.(fn4)
Perhaps the most notorious Super PAC Man is Sheldon Adelson. The casino magnate contributed upwards of $150 million dollars to Super PACs and other independent groups supportive of Republicans nationally. Adelson famously single-handedly kept Newt Gingrich's candidacy alive and then switched loyalties and checks over to Mitt Romney after the Republican presidential primary.
So, what has ushered in the age of the Super PAC-Man (and Super PAC-Woman)? The origin of this avalanche of electoral cash is the United States Supreme Court case of Citizens United and its recent progeny. Decided in 2010, Citizens United stands for the proposition that corporations and unions, in the words of Mitt Romney, "are people too, my friend," and therefore are entitled to the same political speech rights as natural persons under the First Amendment. The court held that there was no sufficient governmental interest to impose limits upon the speech of corporations. The court reasoned that independent expenditures, including those made by corporations, do not give rise to "corruption or the appearance of corruption" -preventing corruption and the appearance of corruption being the twin legitimate reasons for government restrictions in the campaign finance arena.(fn5)
The immediate after-effects of Citizens United are well-known - a massive influx of cash into races across the country. These contributions fueled the GOP tidal wave in 2010 in many states, including New Hampshire. Citizens United also ushered in a new legal reality, as federal appellate courts have followed the Supreme Court's lead, becoming more solicitous of the idea that campaign funds are a matter of speech. Although Citizens United dealt in the currency of expenditure limitations, later cases have applied the "money as speech" rationale to campaign contribution laws. The DC Circuit Court very neatly explained that since independent expenditures are not inherently corrupt, there is no reason to put a cap on the sources of such expenditures: "because Citizens United holds that independent expenditures do not corrupt or give the appearance of corruption as a matter of law, then the government can have no anti-corruption interest in limiting contributions to independent expenditure-only organizations." SpeechNow.org v. FEC, 599 F.3d 686, 695 (D.C. Cir. 2010). Although Citizens United gets all the buzz, it was really the SpeechNow.orgcase that gave birth to federal Super PACs as we know them today.
These figures illustrate the magnitude of federal Super PAC activity: As of the time of this writing (fall 2012), 1,122 groups organized as federal Super PACs reported total receipts of $661.7 million and total independent expenditures of $680.3 million in the 2012 election cycle.(fn6)
THE NEW HAMPSHIRE ATTORNEY GENERAL OPINION: GREEN LIGHT
August 1, 2012, is the date that changed New Hampshire politics forever.
Noting that his office had received "several inquiries regarding the United States Supreme Court ruling in Citizens United v. FEC," Assistant Attorney General Matthew Mavergeorge of the New Hampshire Department of Justice effectively nullified RSA 664:4's caps on political donations to political committees that make only independent expenditures in a letter issued on behalf of the NH Attorney General's office. In short, the attorney general cleared the way for the "New Hampshire Super PAC."
The opinion letter first details the specifics of the Citizens United case and its precedential basis in the court's distinction between limits on free speech represented by contribution and expenditure limits, respectively. Citizens United prohibits federal limits on expenditures by corporations. The letter notes that the Supreme Court held that expenditure limits are subject to constitutional "strict scrutiny, which requires narrow tailoring to meet a compelling government interest." Citizens United, 130 S. Ct. at 898. Such sufficiently compelling or important interests may include combating actual corruption or the appearance of corruption. See Davis v. FEC, 554 U.S. 724, 737 (2008).
In contrast, contribution limits are subject to lesser scrutiny because...