Independence Institute v. Williams: the Tenth Circuit's Proper Ruling of Colorado's Disclosure Law and Increased Flexibility in State Disclosure Law

• Publication year: 2022

51 Creighton L. Rev. 487. INDEPENDENCE INSTITUTE V. WILLIAMS: THE TENTH CIRCUIT'S PROPER RULING OF COLORADO'S DISCLOSURE LAW AND INCREASED FLEXIBILITY IN STATE DISCLOSURE LAW

INDEPENDENCE INSTITUTE V. WILLIAMS: THE TENTH CIRCUIT'S PROPER RULING OF COLORADO'S DISCLOSURE LAW AND INCREASED FLEXIBILITY IN STATE DISCLOSURE LAW

CHRISTOPHER KULESZA and Clifford Fisher(fn*)

ABSTRACT:

THE CITIZENS UNITED V. FEC decision generated immense doubt about the future of state campaign finance regulation. Since the Citizens United v. FEC decision, opponents of campaign finance reform are becoming increasingly successful in challenging state regulations. Among campaign finance regulations, disclosure requirements have traditionally found the most support among the courts. Even though disclosure requirements were upheld in Citizens United v. FEC, they have been placed under pressure by federal district and appeals courts. Indeed, the Eighth Circuit has used Citizens United v. FEC to strike down state disclosure requirements. It does not appear, however, that these decisions are a part of a broader trend. This Article reviews Independence Institute v. Williams, where state disclosure requirements were strongly upheld by the Tenth Circuit under the review standards set in Citizens United v. FEC. The Tenth Circuit reiterated the strong support Citizens United v. FEC gave to disclosure requirements under the exacting scrutiny test, which has been a source of ambiguity in other disclosure decisions. Further, the court signaled that states have leeway in their ability to set campaign finance disclosure laws that match the cost of campaigning in their state.

I. INTRODUCTION

States have regulated campaign contributions to remove corruption from the political process since the late 1800s.(fn1) These regulations took the form of campaign contribution limits, expenditure limits, public financing, and disclosure.(fn2) Of course, public financing, expenditure limits, and campaign contribution limits attempt to directly remove money in politics by statutorily barring donations.(fn3) On the other hand, disclosure laws "require electoral actors (candidates, political committees, political parties, and others) to report campaign funds, both raised and spent, to a government agency."(fn4) Ultimately, disclosure requirements attempt to provide information to voters about the relationship between donors and political campaigns rather than specifically barring the flow of money to candidates.

In part, because disclosure requirements do not directly stop contributions and other campaign related activity, they have enjoyed a unique place among the four campaign finance regulations.(fn5) Unlike various forms of campaign contribution limits,(fn6) public financing,(fn7) and expenditure limits,(fn8) disclosure requirements have been routinely up-held by the United States Supreme Court.(fn9) Indeed, in the highly-de-bated Citizens United v. FEC,(fn10) disclosure requirements were provided strong support in the majority opinion, even though the case put all other forms of campaign finance regulations in an exceptionally precarious position.(fn11) Because of this, disclosure requirements have oftentimes been considered the most defensible among campaign finance regulations.

In recent decades, tides were turning against disclosure regula-tions quite quickly in federal district and appellate courts.(fn12) Most re-cently, the number of challenges to state disclosure requirements dramatically increased.(fn13) Federal courts increasingly met state disclosure requirements with skepticism.(fn14) Disclosure requirements in Galassini v. Town of Fountain Hills(fn15) and South Carolina Citizens for Life v. Krawcheck(fn16) were struck down largely due to the overbreadth in how the term "political committee" was defined.(fn17) Of these, Iowa Right to Life Committee, Inc. v. Tooker(fn18) and Minnesota Citizens Concerned for Life, Inc. v. Swanson(fn19) are of most interest to this analysis. In these cases, both state disclosure requirements were struck down, even while Citizens United provided strong support to these regulations.(fn20) These cases left unanswered the question of whether Citizens United could be used to strike down disclosure requirements in future decisions.

Recent cases at the federal district and appellate levels signal that the courts are still struggling with how to properly apply Citizens United to disclosure requirements.(fn21) Indeed, Citizens United may continue to be troublesome for state disclosure law in future cases. Scholars have been exceptionally concerned(fn22) about the decisions in Tooker and Swanson.(fn23) The fallout from both cases, however, may be quite limited if the current trend continues. Indeed, both cases were decided by the United States Court of Appeals for the Eighth Circuit and do not seem to be a part of a larger nationwide trend. Even though federal courts beyond the Eighth Circuit have ruled state disclosure requirements are unconstitutional, other courts, such as the court in Independence Institute v. Williams,(fn24) are upholding the requirements under the reasoning of Citizens United.(fn25)

This Article will discuss the challenge to Colorado's disclosure regulation in Williams in four parts. First, this Article will provide a brief history of state campaign finance disclosure law.(fn26) Second, this Article will discuss the central legal standards that have been used by courts to analyze state campaign finance disclosure law.(fn27) Third, this Article will provide the facts of Williams.(fn28) Fourth, this Article will provide an analysis on how the court properly applied precedent on campaign finance regulation and how it may allow states to broaden their disclosure requirements.(fn29)

II. A BRIEF HISTORY OF STATE CAMPAIGN DISCLOSURE LAW

Disclosure requirements in the states predate federal regulations.(fn30) In 1890, New York was the first state to enact disclosure re-quirements.(fn31) This initial law required candidates to itemize their campaign expenditures, but not their campaign contributions.(fn32) Colorado and Michigan both passed very similar laws in 1891.(fn33) Unfortunately for state reformers, these laws were largely unenforceable and plagued with significant loopholes.(fn34) Further, these statutes lacked severe punishments for those who did not properly report their campaign expenditures.(fn35)

By the turn of the twentieth century, eighteen states enacted disclosure requirements, but three statutes were quickly repealed.(fn36) The first enforceable state campaign finance disclosure law was the California Purity of Election Act of 1893.(fn37) In contrast to the Michigan, Colorado, and New York statutes, the California act severely punished those who did not comply with the law.(fn38)

However, the California law was not long lived. California state officials attempted to enforce the act across both primary and general elections. The statute was challenged in the California Supreme Court in 1896 because it did not apply to primary elections, an argument that would be used against federal laws in future court cases.(fn39) In response, the legislature passed the Purity of Primary Elections Law in 1897. However, the law was constitutionally flawed. The law required individuals to take an oath that their vote in the primary would directly translate to support in the upcoming general election.(fn40) The statute was immediately challenged in Spier v. Baker,(fn41) and the California Supreme Court nullified the law soon after.(fn42)

In 1907, the California state legislature repealed the Purity of Elections Act of 1893 and replaced it with a significantly weaker law. Although the new statute still required expenses to be reported after an election, it no longer provided stiff punishments for candidates who violated the law. The new statute lacked the original public office forfeiture requirement and made failure to report campaign contributions a misdemeanor.(fn43) For the next forty years, the law was further amended to include primary elections and to bar any candidate from receiving a certificate of nomination until he or she disclosed campaign expenses. The law was still not effective, however, after the amendments were enacted. By the 1950s, only one individual had been prosecuted for election code violations.(fn44)

Campaign finance reform was relatively delayed at the federal level. Serious federal efforts to regulate campaign finance began nearly twenty years after the first statutes were adopted in the states, coinciding with the advent of the Progressive Era. Unlike the states, the federal government began first experimenting with campaign contribution limits, not disclosure requirements. The 1904 presidential election cycle generated controversy when it was revealed that President Theodore Roosevelt accepted campaign contributions from corporations.(fn45) Facing significant criticism, President Theodore Roosevelt called for prohibitions against union and corporate contributions in 1905.(fn46) Congress responded by passing the Tillman Act,(fn47) which was signed by President Roosevelt in 1907. Like state campaign finance regulations, the Tillman Act was nearly impossible to enforce.(fn48) The Tillman Act, however, was the first major step to regulate campaign contributions at the federal level.

The Federal Corrupt Practices Act(fn49) ("FCPA") introduced federal disclosure requirements for United States House of Representatives...