Missouri campaign reporting requirements in the shade of Citizens United.

AuthorLevin, Benjamin N.
PositionNOTE
  1. INTRODUCTION

    In 1914, future Supreme Court Justice Louis Brandeis, writing about the corrosive effect of concentrated capital on democratic institutions, said, "Sunlight is said to be the best of disinfectants." (1) One hundred and three years later, the mandatory disclosure of political contributions and expenditures remains one of the most popular tools governments use to enlighten citizens about the machinations of politics. (2) In an era where political contributions and expenditures are less regulated than ever, disclosure requirements have taken on outsized importance. (3)

    In Geier v. Missouri Ethics Commission, the appellant, Gerald Geier, asked the Supreme Court of Missouri to consider the constitutionality of Missouri's reporting requirement statutes as applied to Stop Now!, an inactive political action committee ("PAC"). (4) Geier argued that the reporting requirement failed to meet the exacting scrutiny standard because the State's interest in receiving reports of inactivity did not outweigh the burden placed on Geier by the requirement. (5) This Note analyzes the court's application of exacting scrutiny in the instant decision. It also notes the limits of PAC disclosure requirements as a public policy tool in the absence of sensible laws regarding what is and is not a PAC and discusses the practical import of narrow disclosure regulations in an era increasingly dominated by unlimited and independent political expenditures. The limits of Missouri's PAC disclosure requirements, illuminated by the court's reasoning in the instant decision, will continue to hinder the average Missouri citizen's ability to participate in his or her democracy, while enabling the richest Missourians to operate in the shade, away from the disinfecting light envisioned by Justice Brandeis.

  2. FACTS AND HOLDING

    In 1991, Gerald Geier created and registered the PAC "Stop Now!" with the Missouri Ethics Commission ("MEC"), with the intention of advocating against ballot initiatives to raise taxes in the Kansas City area. (6) In 2003, the PAC became inactive, and in 2006, the PAC's bank account was closed after bank fees depleted its balance to zero. (7) Geier did not notify the MEC of the account's closure as required under Missouri Revised Statutes section 130.021.7. (8)

    The PAC, while bereft of any funds from 2006 onward, remained registered with the MEC, and from 2004 to 2010, Geier continued to file quarterly disclosure reports as required under Missouri law. (9) In the first three quarters of 2011, Geier did not file these reports, at which point the MEC opened an investigation. (10) Following the opening of the investigation, Geier filed the overdue reports and the necessary paperwork to dissolve the PAC. (11) Despite the dissolution of the PAC, the MEC filed a complaint against Geier, in his capacity as its treasurer, for failing to file the 2011 disclosure reports on time and for failing to notify the MEC that Stop Now!'s bank account was closed in 2006. (12)

    Following a finding of probable cause against Geier in a closed hearing, Geier appealed to the Administrative Hearing Commission ("AHC"). (13) Geier admitted the statutory violations but attacked the constitutionality and applicability of the statutes themselves. (14) First, he argued the reporting statutes were unconstitutional as applied in this case under the First Amendment to the U.S. Constitution because Stop Now! was inactive prior to the MEC's enforcement action, and, therefore, the application of the reporting statutes to inactive PACs ran afoul of the exacting scrutiny standard. (15) Under Citizens United v. Federal Elections Commission, exacting scrutiny is applied to all campaign reporting statutes. (16) Second, he argued the requirements imposed such a burden that they had a chilling effect on the political speech of others. (17) Third, he challenged the constitutionality of the MEC's closed hearing under the First Amendment and Sixth Amendment of the U.S. Constitution. (18) Lastly, Geier argued any violations of law had to be attributed to Stop Now!, and not him personally, because there was no mechanism to hold an individual liable for a campaign committee's violations. (19)

    The AHC rejected the first and second claims because it has no authority to invalidate statutes for any reason. (20) That power, according to the AHC, was reserved to courts of law. (21) On the issue of personal liability for the illegal conduct of a PAC, the AHC found that Missouri Revised Statute section 130.058 designates a committee treasurer personally responsible for fulfilling the reporting requirements. (22) Gerald Geier was the treasurer of his PAC. (23) On this basis, the AHC entered summary judgment for the MEC. (24) Geier appealed, adding a claim that the reporting requirement was unconstitutional not only as applied, but facially as well, because of its chilling effect on political speech. (25) The Circuit Court of Jackson County, after considering the AHC's rulings in an appellate capacity, also granted summary judgment for the MEC. (26) Geier appealed to the Supreme Court of Missouri.

    The Supreme Court of Missouri held that the circuit court properly granted judgment in favor of the MEC because campaign disclosure regulations, as regulations on speech, are subject to "exacting scrutiny." (27) For a law to survive exacting scrutiny in a First Amendment context, there must be a substantial relationship between the law and a sufficiently important government interest that reflects the seriousness of the burden imposed on a citizen's First Amendment rights. (28) The Supreme Court of Missouri determined that the MEC's regulatory scheme did indeed serve such an interest and that this interest was present, even if the PAC was inactive. (29) The court reasoned that the interest survived because the MEC would have no way of knowing, absent a termination statement, which non-filing PACs were shirking their reporting duties and which were actually inactive. (30) Meanwhile, the Supreme Court of Missouri did not reach Geier's substantive argument that the reporting statutes are facially unconstitutional because they chill speech, ruling that the issue was not justiciable because it was contingent on future events and facts that Geier did not allege in his petition. (31) The court also did not accept Geier's argument that a closed administrative hearing was unconstitutional under the First and Sixth Amendments of the U.S. Constitution because the Sixth Amendment only guarantees a public trial when criminal liability is possible, and Geier's hearing could not have led to such liability. (32) In addition, there is no authority that has extended to the media a First Amendment right to attend an investigative proceeding for assessing non-criminal liability. (33)

  3. LEGAL BACKGROUND

    This Part first covers the basic contours of Missouri campaign finance law, with a focus on the reporting requirements that ensnared Geier and Stop Now! in the MEC's administrative procedures. Next, this Part gives an overview of the First Amendment in its application to campaign finance law, with an emphasis on previous Eighth Circuit rulings that concern campaign finance law and the exacting scrutiny standard.

    1. Reporting Requirements

      Under Missouri campaign finance law, every PAC shall have a treasurer with the authority to withdraw funds from a designated depository account. (34) A PAC like Stop Now!, which focused exclusively on ballot measures, is defined as "any combination of persons, who accepts contributions or makes expenditures for the primary or incidental purpose of influencing or attempting to influence the action of voters for or against... passage or defeat of any ballot measure." (35) The treasurer is the fiduciary of the committee and is responsible for creating, dissolving, and filing paperwork on behalf of the committee. (36) The treasurer is responsible for disclosing all contributions to and expenditures from the designated bank account, along with the names of all contributors, all debts, and an accounting of the committee's current balance. (37) The treasurer must file these reports at least quarterly until the committee has been dissolved, regardless of whether the committee has undertaken any activity in the previous quarter. (38) Although the Missouri General Assembly does not provide legislative histories of its bills, it is safe to assume the public policy rationale behind these laws tracks the judiciary's rationale for upholding them: To provide an informational benefit to the public, to combat the prospect of corruption, and to aid in enforcement actions for other violations of Missouri law. (39) In 2008, Missouri's campaign disclosure scheme was given a "B" rating from the Campaign Disclosure Project, ranking seventh out of all states. (40)

    2. The Missouri Ethics Commission

      The MEC is an administrative agency whose purpose is to administer and enforce the State's campaign finance laws. (41) If there are reasonable grounds for believing that a committee or a committee treasurer has violated these laws, the MEC will conduct a hearing pursuant to the Missouri Administrative Procedure Act, absent evidence that a criminal statute has been violated. (42) The hearing will be closed, and a probable cause standard will be used to determine guilt. (43) A person found responsible can appeal the finding to the AHC, which will stay the MEC's decision until the matter is resolved. (44)

    3. First Amendment

      Because the First Amendment was incorporated to the states in Gitlow v. State of New York, Missouri is required to abide by federal constitutional law concerning political speech when enforcing its campaign finance laws. (45) In Citizens United v. Federal Election Commission, the Supreme Court of the United States noted that although disclaimer and disclosure requirements may burden the ability to speak, they are distinguishable from other burdensome campaign finance laws...

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