Institute for Justice Joins Colorado’s Independence Institute In Legal Challenge To Campaign Finance Regulations

John Kramer
John Kramer · April 6, 2006

Arlington, Va.—The Institute for Justice—a public interest law firm with a long and successful history of protecting free speech—will now serve as the lead legal counsel in the Independence Institute’s challenge to Colorado’s campaign finance regulations.

Nationwide, campaign finance laws, which many hoped 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 in December 2005 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.

Jon Caldara, president of the Independence Institute, said, “I am thrilled that the Institute for Justice has committed to take on our case. It proves that this is not just a Colorado issue, but rather a national issue of free speech. During the recent election the tax-increase campaign used their nuisance lawsuit against us as a way to drain us of time, energy and resources. Beyond that, they wanted to send the message to those who might dare to publicly question their tax increase that intimidation and harassment would follow. All Americans have the right to freely express themselves. And with IJ’s help, the Independence Institute is fighting to protect that right. Future groups should not have to go through what Independence did merely to comment on issues of public importance.”

Steve Simpson, an Institute for Justice senior attorney who is lead attorney in the Independence Institute case, said, “Campaign finance laws affect everyone—not just the big political parties. Any group that voices an opinion about an election can find itself being prosecuted under these laws. Such assaults on free speech shouldn’t be allowed by the legislature, enforced by the executive branch or tolerated by the court.”

This case doesn’t affect just non-profit 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 wants 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.

Simpson continued, “Forcing people to disclose their identities in order to support ballot initiative campaigns violates their right to anonymous speech and association. The public has no right to know which way you are going to vote in an issue election; it should not be able to force you to disclose which side you will support during the campaign.”

Chip Mellor, president and general counsel of the Institute for Justice, said, “Ballot initiatives offer ordinary citizens a voice in politics and the direction of their government. Colorado’s campaign finance laws threaten to silence that voice.”

Mellor added, “Those who claim campaign finance 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.

The case is on the forefront of a national battle that pits political speech and association against the reformist zeal to control campaigns.

The Institute for Justice is currently defending free speech from the encroachment of campaign finance laws in Arizona and Washington state.

The Institute for Justice Arizona Chapter is litigating a federal court lawsuit challenging the Grand Canyon State’s system in which 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. (Among other ways it stifles 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.)

In Washington, the Washington Supreme Court this week agreed to hear the Institute for Justice Washington Chapter’s challenge to that state’s campaign finance laws. 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. The case is expected to be heard this spring.