Colorado Free Speech
Stifling Political Speech: Stifling Political Speech: Challenging Colorado’s Campaign Finance Regulations
Nationwide, campaign finance laws, which many hope would be used to “clean up” elections, are instead being widely abused to stifle the speech of those who are unpopular with the political establishment. In Colorado, the Independence Institute, a free market non-profit think tank, faced charges under the state’s campaign finance laws for merely speaking out on statewide ballot referenda.
During the 2005 election season, the Independence Institute, a long-time proponent of lower taxes and fiscal responsibility, commented extensively on Referenda C & D, which it believed would raise taxes and increase government spending. After running a series of radio ads criticizing the referenda, the Institute found itself the subject of a complaint filed with the Colorado Secretary of State claiming that it was not an educational non-profit, but an “issue committee” that was “campaigning” against the referenda and had violated campaign finance laws by failing to register with the State, report all expenditures and contributions, and disclose the identities of its supporters.
Although the complaint was ultimately thrown out as unwarranted, after experiencing firsthand how these laws can be used as a political weapon to stifle free speech and impose steep financial and opportunity costs on dissenters, the Independence Institute filed suit challenging the vague language of Colorado’s campaign finance laws as well as their disclosure and reporting requirements that chill political speech and association. The Institute is also challenging the laws’ requirement that contributors’ identities be disclosed as a violation of individuals’ right to anonymous speech and political participation.
Unfortunately, a Colorado appeals court upheld the law and, in November 2009, the U.S. Supreme Court declined review of that decision. As a result, nonprofit groups like the Independence Institute continue to be chilled. But the fight isn’t over—IJ is litigating a separate challenge to Colorado’s campaign finance laws in federal court, Sampson v. Buescher.
William R. Maurer
Managing Attorney of the Institute for Justice Washington Office
John E. Kramer
Vice President for Strategic Relations
Director of Paralegal Services & Senior Paralegal
Get in touch with the media contact and take a look at the image resources for the case.John E. Kramer Vice President for Strategic Relations [email protected]
Unfree to Speak in Colorado—For Now
Will Colorado’s Supreme Court Protect Free Speech?
First Amendment Setback:
The First Amendment vs. Campaign Finance:
For nearly a century, ballot initiatives have given Colorado citizens an important alternative to relying on politicians and bureaucrats for political change. By allowing voters to affect government policy directly, the referenda and ballot initiative process gives voters a voice in a government that is too often distant and unresponsive.
Colorado campaign finance laws are now, however, threatening to silence that voice.
The Denver-based Independence Institute discovered this after being dragged into court for trying to educate Coloradans about two ballot issues, referenda C & D, that it believed would raise taxes and increase government spending. As a non-profit educational organization, the Independence Institute has commented on fiscal and tax policy, among many other subjects, for more than 20 years. Yet when it ran a series of radio ads claiming that Referendum C would weaken Colorado’s Taxpayer’s Bill of Rights—a view at odds with the desires of the political establishment—it found itself the subject of a complaint filed with the Colorado Secretary of State.
The Institute’s alleged crime? By commenting on Referendum C, the Institute was accused of acting, not as an educational non-profit, but as an “issue committee” and “campaigning” against the referendum in violation of Colorado’s campaign finance laws. As an issue committee, the complaint alleged, the Institute had to register with the State, file monthly reports of expenditures and contributions, and disclose the identities, addresses, and even employers of its contributors.
The complaint was a strike at the heart of the Independence Institute’s very existence. The Institute’s whole purpose is to speak to and educate Coloradans about matters of public importance. Yet the law the Institute was accused of violating would impose the huge expense on the small organization of tracking and reporting its every comment about an important ballot initiative. The Institute survives on charitable donations, yet the law threatened to force it to violate the privacy of its contributors by disclosing their identities. The rights to speak and associate on political matters, and to do so anonymously, are vital to political participation and part of the American tradition. Yet Colorado’s campaign finance laws threatened to punish the Independence Institute and its contributors for exercising these rights.
In short, the complaint threatened to force both the Independence Institute and its supporters into an impossible position. If the Institute were considered an “issue committee” it would have to choose between its ability to function as an educational non-profit and its right of free speech; its supporters would have to choose between their right to privacy and their right to association and free speech.
In America, a nation founded on political freedom and self-government, this choice is intolerable. The First Amendment makes clear that “Congress shall make no law . . . abridging freedom of speech . . . or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” Whatever questions may exist about its reach in some cases, Americans have recognized since the founding era that the First Amendment protects political speech and participation. As if to emphasize this point, each state has its own separate constitutional protection for rights to speech and association.
Recognizing the importance of the issues at stake, the Independence Institute fought back, filing its own constitutional challenge to the campaign finance laws in Colorado District Court in September 2005. The suit, Independence Institute v. Richard Evans, and Gigi Dennis, Secretary of State, State of Colorado, charges that Colorado’s campaign finance the laws violate the First Amendment to the U.S. Constitution and the free speech and association clauses of the Colorado Constitution. 1
This case doesn’t affect just nonprofit organizations. It affects everyone. It affects everyone who simply wants to talk about issues publicly, without specifically telling people which way to vote. It affects any person who want to contribute to initiative campaigns because, in fact, everyone in Colorado who makes such contributions will have their names, addresses and probably employers disclosed to the public.
Now, joining Colorado’s premiere pro-freedom policy organization in this battle is the Institute for Justice, the nation’s premiere pro-freedom public interest law firm, which will represent the Independence Institute in its constitutional challenge.
A National Battle
The case is on the forefront of a national battle that pits political speech and association against the reformist zeal to control campaigns. In recent years the federal government and most states have stepped up their regulatory efforts, inevitably leading to abuses of First Amendment rights. Among the more egregious abuses are:
· Campaign finance laws used as weapons to attack political opponents and even limit freedom of the press. For instance, after two popular talk radio hosts in Seattle made favorable comments about a ballot initiative that sought to repeal a new gas tax, several municipalities and a law firm that stood to benefit from the gas tax sued the initiative campaign. Their claim? The on-air comments—the very kind of vital public discussion that should be encouraged in a civil society—amounted to “secret in-kind contributions” that the campaign failed to report. 2
· Draconian limits on campaign contributions and expenditures that make it nearly impossible for candidates to communicate their messages to voters. Vermont recently passed the strictest limits on contributions and expenditures in the nation. 3 And in Arizona, political candidates who opt out of a state-funded campaign program face severe contribution limitations and State matching funds paid to their opponents whenever the candidates exceed statutory levels in their campaign spending. 4 (Among other ends that stifle private participation in public elections, Arizona pays matching funds to government-funded candidates based on the gross amount of money that their privately supported opponents raise (without subtracting what their opponents spend to raise it). So, if a privately funded candidate spends $250,000 to raise $1 million, that candidate nets $750,000, but the government-funded candidate receives the full $1 million in taxpayer money to offset the gain by the privately funded candidate.)
· Federal and state bans on “electioneering communications”—broadcast advertisements funded by corporations that mention a candidate for office within 30 days of a primary and 60 days of an election. 5 Billed as measures to prevent “big corporations” from influencing politics, the impact of the laws in fact fall most heavily on small, grassroots lobbying organizations that often want to run ads that ask citizens to contact their representatives and express support or opposition to legislation. 6
· Laws that impose high costs on the ability of grassroots policy groups to organize and speak out on important social and political issues. The U.S. Senate is currently considering proposals that would require grassroots lobbying organizations to register with the government and disclose contributors when they call upon the public to contact federal lawmakers about policy issues. 7
What Campaign Finance Laws Really Do: Limit Political Speech
Dubbed as efforts to control the influence of “money” in politics, campaign finance laws in fact regulate what money buys—political speech—and what it represents for many citizens—a meaningful opportunity to participate in political campaigns. Tragically, the First Amendment—and the sacred freedoms of speech and association it protects—get lost in the debate. The media report about each side’s political war chest, while so-called campaign “reformers” complain about the amount of time and money politicians spend getting elected. Those who advocate more regulation claim that money “corrupts” politics, while ensuring us that more laws will not inhibit free speech and political association.
Yet, in 1997, 38 U.S. senators actually voted to amend the First Amendment to the U.S. Constitution to weaken its protections for free speech and make room for more campaign finance regulation. The amendment would have allowed Congress to impose “reasonable” restrictions on political speech, 8 essentially repealing the First Amendment as it applies to political speech. 9
The amendment effort failed, but it signals an undeniable fact about so-called campaign finance reform: campaign finance laws are in direct conflict with free speech. Those who claim that the laws will not erode political speech and participation or that they regulate only “money” but not speech either do not understand the operations of these laws, or, worse, do not care.
The Independence Institute’s case illustrates this point: if the reason to regulate campaign finance is to prevent the corruption of politicians, then regulating ballot initiative campaigns is pointless because ballot initiative elections are about voting for issues, not politicians; if there is no politician involved, then there is no one to be “corrupted” by the temptation to trade political favors for campaign contributions. The only purpose these regulations serve, therefore, is to limit the ability of citizens to speak out about ballot issues and to restrict the public’s participation in campaigns.
Founded in 1985, the Independence Institute is a non-profit organization dedicated to educating Coloradans about the virtues of the free market and the vices of unchecked government power. 10 Its research and educational objectives range from health and education policy, to Second Amendment rights, fiscal responsibility and government regulation. In the area of fiscal policy, the Institute advocates lower taxes and less government spending. It has been a outspoken advocate for Colorado’s Taxpayer Bill of Rights (TABOR). TABOR, which was passed in 1992, required voter approval of most tax increases, limited increases in government spending by tying it to increases in inflation and population, and required refunds to taxpayers of revenues in excess of these limits. 11
Thus, when the Colorado legislature placed two initiatives on the November 2005 ballot that were designed to eliminate some of TABOR’s provisions and raise spending, it was no surprise that the Independence Institute had a lot to say about them.
The initiatives, known as “Referenda C & D,” were sponsored by a coalition of business interests and elected officials, including some long-time critics of TABOR, who believed that TABOR was too limiting and did not allow the state to spend as much money as it wanted to. Referendum C was designed to eliminate provisions of TABOR that required refunds to taxpayers of revenues collected in excess of TABOR’s limits. Referendum D was designed to allow the State to borrow money and issue bonds to finance certain alleged “critical needs” projects. 12
The Independence Institute strongly disagreed with TABOR’s critics and viewed their arguments as the same old tax-and-spend rhetoric the Institute was founded to oppose. When the referenda were placed on the ballot in the Spring of 2005, the Institute set out to educate the public about the benefits of TABOR and the negative impact Referenda C & D would have on Colorado’s fiscal health. The Institute published op-eds, reports and articles on the issue, and posted this and other information on its fiscal policy website, www.taxincrease.org. In keeping with the Independence Institute’s educational mission, the website featured not only information and arguments against the referenda, but also linked to the websites of a number of groups that supported the referendum—the very organizations that opposed the Independence Institute’s own views.
Separate from these efforts, Jon Caldara, president of the Independence Institute, personally founded an issue committee, “Vote No; It’s Your Dough,” to campaign actively against Referendum C. 13 Caldara, a long-time activist in Colorado, wanted to do more than simply direct the Independence Institute’s efforts to educate the public about TABOR and Referendum C. He wanted to tell voters that they should vote against the referendum—something the Independence Institute could not legally do. As a non-profit educational corporation organized under section 501(c)(3) of the Internal Revenue Code, the Independence Institute generally cannot participate in political campaigns. Under Colorado law, those who want to campaign for or against ballot initiatives—that is, who want to “expressly advocate” the approval or defeat of an initiative by telling voters to “vote yes” or “vote no” on the initiative—must form regulated “issue committees.” Issue committees must register with the Secretary of State, periodically report all contributions and expenditures, and disclose the identities, addresses, and even employers of all contributors.
As chairman of the Vote No issue committee, Caldara volunteered his time and kept his efforts separate from his job as president of the Independence Institute. 14 The issue committee was not affiliated with the Independence Institute and maintained a separate address and separate finances. It was Jon Caldara’s personal project done in his personal capacity as an interested citizen of Colorado, and it complied with Colorado law.
With other groups forming their own issue committees both for and against Referenda C & D, and other non-profits disseminating information and arguments on both sides of the issue, the campaign was shaping up to be precisely the sort of grassroots political debate the First Amendment was designed to encourage and protect.
By the summer of 2005, however, the Independence Institute had apparently raised the ire of some of its opponents. After running four radio ads during the summer of 2005 that criticized Referendum C, the Institute found itself the subject of an administrative complaint filed with the Colorado Secretary of State on August 4, 2005. 15 The complainant was Richard Evans, who worked for and contributed to the Vote Yes on C & D issue committee, 16 and someone who obviously disagreed with the Independence Institute’s views. The complaint alleged that the Independence Institute violated Colorado’s campaign finance laws because it failed to register as an “issue committee” and it failed to disclose all of its expenditures and contributions as all issue committees must do.
In effect, the complaint claimed that the Independence Institute was not a non-profit policy organization, but a mere campaign committee; that its purpose was not to inform and to educate on a wide variety of issues, but simply to defeat Referenda C &D; that by daring to criticize the referenda, the Institute had somehow been transformed from a 20-year advocate for liberty in Colorado, into a single-issue campaign organ.
Even worse, the laws on which the complaint relied were broad and vague enough to justify this interpretation.
Under Colorado law, an “issue committee” is any group of two or more persons or any corporation that “has a major purpose of supporting or opposing any ballot issue” and that accepts or makes “contributions or expenditures” of more than $200 toward that end. 17 Because “major purpose” is undefined, any group that speaks out about ballot issues and spends even small amounts of money toward that end can become an issue committee and subjected to the laws’ burdensome regulations.
For the Independence Institute, the implications of being considered an issue committee were grave. First, issue committees must file monthly reports of all expenditures made to support a ballot issue, meaning that the Institute would have to determine precisely how much money and time it spent on activities related to educating the public on Referenda C and D each month. 18 Second, issue committees have to disclose all contributions and the identities, including the addresses and employers, of all contributors. 19 Thus, anyone who contributed to the Independence Institute regardless of their reasons for doing so was in danger of finding themselves, their addresses, and employers listed on the Secretary of State’s website as a “contributor” to an “issue committee” opposed to the referenda. Not only would this be untrue—contributors to the Independence Institute obviously believe they are contributing to a non-profit policy organization and not an issue committee—it would be a gross violation of contributors’ privacy. Such an action would seriously discourage political participation.
Finally, the threat of suddenly being transformed into an issue committee would place the Independence Institute in an untenable position. Would it be an issue committee anytime it spoke out about ballot issues? If not, how much speech would qualify it as an issue committee, and for how long would it remain one? Would it have to begin telling donors that it cannot guarantee their anonymity? What impact would the issue committee designation have on its non-profit status and the tax-deductibility of contributions? The statute answers none of these questions, and leaves organizations like the Independence Institute in a perpetual state of uncertainty.
In short, the law would force the Independence Institute to choose between its ability to function as a non-profit policy organization and its free speech. And its supporters would have to choose between their privacy and their right to associate with and contribute to an organization like the Independence Institute.
Viewing this as no choice at all, the Independence Institute fought back. It opposed the administrative complaint, arguing that the statutes should not be interpreted to include the Institute within the definition of issue committee. It also filed a constitutional challenge to the laws in Colorado District Court in Denver on September 26, 2005.
In its lawsuit, the Independence Institute challenges the laws under both the First Amendment to the U.S. Constitution and the freedom of speech and association guarantees in the Colorado Constitution. The Institute contends that the definition of “issue committee” is unconstitutionally vague because virtually anyone commenting on a ballot initiative could be said to have a “major purpose” of influencing the initiative. It also argues that the disclosure and reporting obligations for issue committees unconstitutionally chill political speech and association by imposing huge burdens on any group that exercises these rights. Finally, the Institute argues that disclosing contributors’ identities violates their right to anonymous speech and political participation.
The Independence Institute prevailed in the administrative proceeding, but its victory was only a temporary reprieve. The administrative law judge concluded, in a highly fact-dependent decision, that the Institute’s activities did not, in this case, rise to the level of a “major purpose.” This leaves open the very real possibility that the Institute will face a similar complaint when it next comments on the issues raised by a ballot initiative. And even this slim victory came at a substantial cost—upwards of $50,000 in litigation expenses—which is a huge price for any organization to pay to exercise its right of free speech.
The Independence Institute’s lawsuit continues, however, and, even though the election is over—Referendum C passed and D was defeated—the lawsuit is now more important than ever. Ballot initiatives are a fundamental part of Colorado government, so the clash between campaign finance laws and the right to speak and associate in this area will inevitably recur. Moreover, on the heels of the U.S. Supreme Court’s now-infamous decision in McConnell v. FEC, which upheld key provisions of the federal Bipartisan Campaign Reform Act, state and federal efforts to pass more campaign finance regulations have grown. The zeal to regulate is currently high, with proposals to regulate even grassroots lobbying, speech and political participation.
The U.S. Supreme Court has long recognized that whatever difficulties may exist in determining the precise scope of the First Amendment, “a major purpose of that Amendment was to protect the free discussion of governmental affairs.” 20 Protections for free speech are particularly important in the context of political campaigns, and, indeed, the constitutional protection afforded political speech has its fullest and most urgent application precisely to the conduct of political campaigns. 21
Closely related to the right of political speech is the right to associate. 22 As the U.S. Supreme Court stated, “effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association.” 23 The right of association is crucial in preventing the majority from silencing the views of unpopular dissenters. 24 Thus, like free speech, the right of association lies at the foundation of a free society.
To vindicate these rights, the Independence Institute asserts three claims in its lawsuit under the U.S. and the Colorado Constitutions.
1. Colorado’s Ballot Initiative Campaign Finance Laws Are Unconstitutionally Vague
In a free society, the laws must be clear and well defined so citizens can understand their meaning and act accordingly. Vague laws rob citizens of the ability to predict whether their actions are legal or illegal, and they grant too much discretion to enforcement officials, raising the specter of uneven and biased enforcement. This is especially problematic in the context of free speech because individuals will often refrain from speaking altogether rather than risk being penalized for violating a vague law.
As the U.S. Supreme Court has put it, vague laws “trap the innocent by not providing fair warning,” they “foster arbitrary and discriminatory application,” and they “inhibit protected expression by inducing citizens to steer far wide of the prohibited zone.” 25
This is an apt description of Colorado’s ballot initiative campaign finance laws. The onerous reporting and disclosure obligations apply to “issue committees,” which are groups that have a “major purpose of supporting or opposing” a ballot initiative. But in the midst of a ballot initiative campaign, what group that is willing to spend time and money speaking out about the issues in the campaign would not arguably have a major purpose of supporting or opposing it? As the Independence Institute found, the answer will often require a costly administrative proceeding—costing it not only money, but that equally precious commodity in political battles: time. As a result, many groups that wish to speak out about ballot initiatives will not know whether the laws apply to them until it is too late.
To make matters worse, vague campaign laws can be used as political weapons, whether intentionally or not. Richard Evans, the complainant in the Independence Institute’s case, was a founding member of the Vote Yes on C&D issue committee who obviously disagreed strongly with the Institute’s views. He also filed a complaint against another organization that was outspoken in its criticism of referenda C & D. By contrast, no one filed complaints against many of the other non-profits in Colorado that, according to the Colorado Nonprofit Association, contributed critical resources to the campaign in favor of Referendum C, including money, in-kind contributions and even radio ads, and were instrumental in getting the referendum passed. 26
2. Colorado’s Ballot Initiative Campaign Finance Laws Unconstitutionally Burden Rights to Free Speech and Association.
Faced with the administrative burden of complying with campaign finance laws, many groups will simply refrain from speaking out about ballot initiatives. Compliance requires tracking and reporting all expenditures made to support a ballot initiative, and reporting all contributions, including the identities of all contributors.
Perversely, individuals and groups can even find themselves punished for trying to comply with the laws. Jon Caldera, the Independence Institute’s President, established the Vote No issue committee so he could actively campaign against the referenda on his own time. Yet in the administrative proceedings against the Independence Institute, the complainant argued that the existence of Caldera’s entirely independent issue committee was itself evidence that the Independence Institute should be considered an issue committee as well.
Campaign finance laws thus present groups like the Independence Institute with a Catch-22: speak out too much about political issues and you will be regulated under the campaign finance laws; but if you or your affiliates try to campaign legally by establishing issue or political committees, you will be considered guilty by association, and regulated under the campaign finance laws. The clear message: don’t speak out about political issues unless you want to be regulated under the campaign finance laws.
3. Colorado’s Ballot Initiative Campaign Finance Laws Violate the Right to Anonymous Political Speech and Association.
It is practically an article of faith in this country that we have the right to keep our votes and our political views confidential. Confidential balloting is a fundamental pillar of our political system, and anonymous speech and association are part of the American tradition. 27
“Anonymity,” as the Supreme Court has put it, “is a shield from the tyranny of the majority. . . . It thus exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation—and their ideas from suppression—at the hand of an intolerant society.” 28
Yet, flying in the face of this standard, Colorado’s campaign finance laws require those who contribute to ballot initiative campaigns to disclose their identities, their addresses, and even their employers for all the world to see. This would be bad enough if it meant only that contributors were being forced to publicly declare their association with a particular group or cause. But because ballot issue elections involve voting for political issues, rather than candidates, contributors who must disclose their identities are essentially being forced to disclose their specific views on an issue and how they will vote on it.
In short, if the public has no right to know which way you will vote in an issue election, why should it have a right to know which side you will support during the campaign?
Disclosure laws force citizens to choose between their right to keep their political views private and their right to political speech and participation. For instance, what public school teacher would contribute to a ballot issue campaign that opposed more funding for public schools when they risk incurring the wrath of fellow teachers, principles, or the union? How likely will a Republican be to contribute to an initiative campaign in favor of gay marriage when his support might be disclosed to his family, his business colleagues, or the members of his church?
Although concerns about intimidation may seem distant to some, consider that many of the most controversial issues of the day—gay marriage, affirmative action, assisted suicide and medical marijuana, to name just a few—are the subject of ballot initiatives
Indeed, it is precisely to protect individuals from threats of intimidation and retaliation that the U.S. Supreme Court has struck down attempts by government to compel the disclosure of a speaker’s or political participant’s identity. For instance, in 1958 the Supreme Court prevented the State of Alabama from forcing the NAACP to disclose its members’ identities because that would subject them to intimidation and would deny the NAACP and its members’ right to associate. 29 Citing similar concerns, the Supreme Court has struck down laws that ban anonymous political leaflets 30 and that require the disclosure of contributions by minor political parties. 31
Throughout our history, anonymity has been vital to political speech and participation. During the ratification debates over the Constitution, James Madison, John Jay and Alexander Hamilton published the Federalist Papers under the pseudonym “Publius” as a series of articles urging support for the new constitution. Those opposed to the new constitution often did the same. Should they have been forced to disclose their identities because they were “supporting or opposing” the Constitution? Should civil rights groups be forced to disclose the identities of their members when they support or oppose a ballot initiative?
Disclosure laws serve only to punish those who wish to join together and speak about ballot initiatives.
The Independence Institute’s case illustrates that the fight over campaign finance laws is not a distant battle that affects only national political parties and professional politicians. It is a fight that affects ordinary people and their ability to exercise their rights to participate in and speak out about politics. Those rights are central to American political tradition and absolutely necessary to sustain a free nation. Yet they are under attack in his country, and laws that impair and even ban their exercise have too often been upheld by courts throughout the nation. If the rights to political speech and participation are going to survive, ordinary people will have to stand up for them.
The lead attorney in this case for the Institute for Justice is Senior Attorney Steve Simpson. Simpson litigates free speech, economic liberty and property cases nationwide. He was most recently part of the litigation team in Swedenburg v. Kelly, in which the Institute won a victory in the U.S. Supreme Court against New York’s discriminatory ban on interstate direct shipping of wine. He is joined by William H. Mellor, president and general counsel of the Institute for Justice. Assisting the Institute for Justice as co-counsel are Shayne Madsen and Tim Odil of McKenna Long & Aldridge in Denver.
For more information contact:
John E. Kramer (Vice President for Communications)
Lisa Knepper (Director of Communications)
Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203
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