Campaign Finance Red Tape: “Worse than the IRS!” According to New Study

J. Justin Wilson
J. Justin Wilson · November 6, 2007

Arlington, Va.—Should Americans be forced to navigate heaps of red tape simply to speak out for or against an issue on the ballot? And if a group of citizens fails to file the proper paperwork with the government, should they get hauled into court for their political speech?

That is exactly what happened to Karen Sampson, Becky Cornwell and their neighbors when they opposed the annexation of their neighborhood of 300 in Parker North, Colo. And, according to a new study, most citizens would likely fall into the same legal trap set by campaign finance laws in all 23 states with regulations similar to Colorado’s.

Dr. Jeffrey Milyo, a campaign finance expert and the Hanna Family Scholar at the Center for Applied Economics in the Kansas University School of Business, asked 255 people to fill out actual state campaign finance disclosure forms for ballot issue committees using a simple scenario of typical grassroots activity—based on the neighbors in Parker North.

The results? As published today by the Institute for Justice in “Campaign Finance Red Tape: Strangling Free Speech and Political Debate,” participants got failing grades across the board. On average, they could not correctly complete even half the tasks, managing just 41 percent.

No one completed the forms correctly. In the real world, all 255 participants could be subject to legal penalties including fines and litigation for their mistakes. And that assumes they knew they had to register with the government to speak out in the first place: Like those in Parker North, the overwhelming majority, 93 percent, did not.

Several tasks common to grassroots campaigns proved especially challenging, such as reporting non-monetary contributions for items like discounted t-shirts and supplies for signs, with average scores ranging from zero to 46 percent correct.

Participants were extremely frustrated with the red tape, calling it “Worse than the IRS!” and noting, “Seriously, a person needs a lawyer to do this correctly.” Not surprisingly, nearly 90 percent agreed that the red tape and the specter of legal penalties would deter citizens from engaging in political activity.

“Ordinary citizens get a failing grade on navigating the red tape required to speak about ballot issues—and that probably makes them less likely to do so,” said Dr. Milyo.

Today, voters in six states will decide 38 ballot measures—just a preview of Election Day 2008. The last presidential election year saw 163 measures nationwide. But, as this study shows, ordinary citizens are losing their ability to speak out and participate meaningfully in the debate over ballot issues.

“In America today, in order to speak out about politics, you need more than an opinion—you also need a lawyer,” said Steve Simpson, an Institute for Justice senior attorney who represents the neighbors in Parker North. “But the First Amendment is supposed to protect free speech and political activity—not mire it down in bureaucratic red tape.”

The results of “Campaign Finance Red Tape” confirmed what the neighbors in Parker North knew all along: the burden of campaign finance laws is real.

“We should not have to register with the government and get buried with mountains of regulations just so we can talk to our neighbors about something we feel strongly about,” said Becky Cornwell.

“Campaign Finance Red Tape” is available at here.