thank you our may please the court ryan banker on behalf of the appellant's missouri ethics commission director clar and commissioners this case presents two questions a very broad question as as to a facial constitutional challenge to the pac to pac contribution ban that was implemented in minute two by seventy percent of missouri voters the second question is a more narrow as applied challenge to that statute as it applies only to the ban applied to pacs that contribute only to that make it only independent expenditures you're out of this first question the cost of the at the facial challenge is the one that i intend to spend most of my time on today and that challenge your honor we believe is foreclosed and answered by the eleventh circuit in the elevation a democratic conference versus attorney general case would be for close but you can argue whether it's case you're out of this case this question is governed by exacting scrutiny an exacting scrutiny there's no quit is no dispute among the various parties that exacting scrutiny is the appropriate mode of analysis and under exacting scrutiny the challenge to the pack to pack contribution ban stands if the ban is closely drawn to serve a sufficiently important state interest your honor this this ban meets that fours their first there is a very sufficient and adequate state interest at play here that multiple state interests president is clear that it is sufficient to uphold a ban on contributions in this case this is a contribution ban not a ban on independent expenditures the state interest is sufficient to uphold a contribution ban when that ban is designed to promote to prohibit and address the the risk of quid pro quo corruption and there is no question here your honor that this man is exactly design to do that quid pro quo corruption is a concern that the missouri voters had in mind when they passed amendment two hundred for the interest certainly wrong so quid pro quo corruption arises primarily in the context of contributions made to candidate committees to candidates the very concept of quid pro quo corruption is that a donor will give money to a candidate and as a result of that the candidate will feel indebted to the don't feel obligated to the donor that's the very essence of quid pro quo corruption that's the issue that was addressed in both the verses of alayo from that the state has additional adjacent interests that are very important and that may also support limitations on contributions such as the contribution imitation we have here why doesn't why doesn't the why doesn't  pro quo pro quo corruption in the sense that it dilutes the influence you don't know who actually made the contribution so why doesn't do it do exactly the opposite of what you're saying but you're on this because this interest that we're contributions are a very unique animal in the campaign finance face because they pat can contribute make and can bake both independent expenditures as well as contributions to candidate committees is that second type of contribution contribution to a candidate committee that gives rise to the interest in preventing quid pro quo corruption but the more pacs that the money goes through the last able you are to trace it to a particular donor so when that decrease the amount of influence the donor would constellation of pacs that hover around a central pac there are various ways you can do this donors are not simply limited to giving money to a single packet than give to a candidate the pac can give to an additional pac which can give to an additional pac your coordinated what's the hypothetical you're worried about what you mean if they're coordinated and working together house certainly or let me give you a hypothetical let's say that there is a wealthy donor who was like to give more money to candidates in the missouri state election that is and i'll show you why so you have more than the limit that's right so how does he do it with these pacs in your view he can contribute to a paki can form a pac and contribute unlimited funds to that pac there's no limitation amount of money he can give to a hack the only donor to the pac in your hypothetical he can be or he could have other donors giving money as well but i know you can't i'm trying to understand what you're worried about or if you have one hundred donors then mccutcheon says that reduces your interest so i'm trying to understand if you're just saying making the same argument that was rejected in mccutcheon or whether you've got a different hypothetical and i know you are not making the same argument and mccutchen are making the this is a very different factual situation let's say you have a single donor let's take that hypothetical single donor who gives money to a pac that that donor has formed and that either that donor controls directly or that donors associates control that pac and then give money to other pacs a grouping of pacs around it that are also under the control of that donor or us or his or her associates that constellation of pacs thing and then can then pass money to candidates all that money is coming from that single donor all that money is coming from that single individual so you're hypothesizing single dollar who gives a large amount of pac number one and he also sets up packs number two through ten he's at the idea and then pats number one and gives a big amounts to pacs two through ten and then those pacs give twenty six hundred to the candidate that is certainly one very simple way that this can be done and that is absolutely one of the concerns at the state house that very real is there any record that that's ever happened or that's very realistic or you're out of there is certainly evidence in the record when the amendment to an amendment to was passed by the voters the voters were concerned about the possibility of pacs being used by wealthy donors to circumvent campaign finance limitations  o that happen thetic or would that be so the concern is that that expenditure or contribution limits would be exceeded or that contributions that any contributions would be attempt to circumvent contribution limits on your own of the law definitely prohibits conference contributors from circumventing in various ways but your honor we do not believe that the path to pac contribution ban is completely duplicative of those limitations certainly that's something that the f l these have argued this goes to the closely drawn issue in this case your hypothetical be legal but for the pac to pac man your honor there are if the money is earmarked if the money is earmarks by the contributor then that money must be reported back to the missouri ethics commission but it is not earmarked if it's simply given with a wink and a nod then that that that kind of situation could be very difficult for the missouri ethics commission to track now you clearly do to get back to judge collins hypothetical couldn't a donor achieve the exact same thing by giving twenty six hundred dollars to pacs one through town or one through twenty or one through fifty and then have the money passed on to a cad what it seems to me that there's a problem here as well which is you don't actually solve the problem that you're trying to solve that yes run of the donor could achieve the same result that way but it would be much more transparent and easier for the missouri ethics commission to track down and here's why because if the donor gives in his or her own name to ten separate pacs and those pacs then make a direct contribution to a candidate those pacs will be reporting back that the money came from the same donor but here's the problem i'm having for the same reason that you're citing a candidate is not going to be able to trace the money any easier or just as you know it's going to be just as hard for the donor to trace as a will be for the state so the more you have packed back contributions the less able to candidates going to be able to trace it for the same reason that that that the state won't be able to trace it either and so i think there's an inconsistency there aren't but i hope you can address certainly i think what you're saying is if the donor doesn't realize that it is if the candidate doesn't realize that it is donor a who is giving the money then they won't feel as obligated to granted i mean that that basically the pact back contributions shield the money from the donor just like it shields the money from the state and so the more you argue the state needs to be able to to be able to trace that money you have the same problem with respect to the donor in a completely antiseptic world that may be the case but in the in the hustle and bustle of politics it's very often known who's giving the money and that's the problem we're concerned about is not the aseptic hypothetical where the only way that a candidate may have knowledge of who's giving the money is by looking at n b c filings but that's not the world that we live in in the reality is that candidates know from whence the money comes but the n b c in the public may not it's not as transparent to them and this gives that are transparency interest because transparency although i know the pelleas have argued it doesn't exist it's very much  limitations and that is the concern transparency certainly supports the ability of the state to regulate in this area without transparency the state will not be able to determine whether or not circumvention has occurred and certainly the pelleas have argued that tr that is not sufficient nor is that capable of addressing the more sophisticated instances where a wealthy donor with means is able to create multiple pacs and have those passed contribute amongst each other into each other ultimately with the money coming out the other end to the  this entire process may be well visible to the candidate and understood by the candidate but the public and the m d c does not have the same level of visibility therefore transparency supports the interest in transparency supports the in the states true interest fearful of your own of the district court and i saw in the briefing there was reference to editorials in publicity about different things but i'm interested in proof of that what you concerned about is actually occurring or if it is how big a problem that is there are two two responses to that question one because we are operating under exacting scrutiny of the evidence jury burden is quite low here and in fact if you look at the shrink missouri pac case the supreme court talked about the various ways that these interests can be proved up newspaper articles are certainly sufficient also the mere fact that a large percentage of missouri voters voted to approve  itself that there was public concern if you look at the fact that amendment to you as it was advertised to the voters dealt with anti corruption that is in the record also a newspaper articles addressing the concern of political leaders in the state of missouri and i can give you a few record cites if you would like the fact that seventy percent of the voters approved and then that too is found at appendix twelve nineteen there is an article that was written by mr bush was a lot of your article in tw fifteen that addressed that could deep concerns about corruption that could arise from the fact that missouri was affectively the wild west there were no real meaningful limitations on contributions before minute she was put in place that's an appendix twelve eighty eight there's a very deep being money that can't be traced money that's not apparent money money that is not transparent to the regulators were the public being used by wealthy donors to support candidates that's it appendix thirteen twenty eight also the concern that donors would use pacs to obscure the source of funding that's an article of appendix thirteen thirty nine so there are certainly newspaper articles articles expressing public concern about the use of pacs to subvert and circumvent campaign limitations now the example that i gave earlier of the very detailed example that is not in those articles i will tell you that is not in those articles but you can infer from the articles that that kind of construct is a concern when you talk about dark money that concept of dark money is circulating in missouri even now and the concern that money can come from unidentified sources to support candidates is certainly something that the public is concerned about and your honor i see that my time is up it'll all end with this in addition to a concern about circumvention you also have the concern about the public's perception of corruption and the supreme court has been very clear that a concern about public perception of corruption is something that the state absolutely may respond to with lawmaking that is exactly what happened here the public was deeply concerned as evidenced by the record cites i have given as well as other evidence in the record the public had a deep concern about the use of dark money about the use of pacs to circumvent campaign finance limitations the public responded to that concern by passing amendment two and that is absolutely a sufficient and important state interest to which the law may respond very well thank you may please the court i'd like to start where we ended which is on the evidence for the record the judge shepard has raised it is not there is not a sufficient record here that pact to pack transfers give rise to corruption or even the appearance of corruption the record evidence test do with editorials and commentary that were speculation this is not in the court can see oh my i won't over characterize them but this is not fact reporting so and so gave money so and so was indicted for giving money this is not the type of a evidence that we've seen in other cases such as bans on riverboat gaming contributions where you have evidence of indictments you have evidence of actual corruption there's no evidence this is mere speculation as was in shrink back it's not our main argument as the court knows but i wanted to make sure we made that clear i went back over that we did and i thought the supreme court upheld the lines and they did the five they said no mere speculation though we've never relied on their speculation they have an affidavit from the sponsor of the bill about the factual issues that were occurring they had fact reporting they did rely on newspaper articles about transfer excessive contributions that had been made in that case fact reporting not just opinions so in the alabama case that the state talks about  if the court goes and looks at that decision alabama democratic conference that case was actually sent back once and then the decision that the state relies on was the second time around the first the first decision is reported  five forty one said appendix nine thirty one and it says the state presented ample evidence of possible corruption through pact back transfers a t c in the democratic party made contributions to each other second many members of the executive committee are also members of the pat committee there was overlapping control of the two committees third several candidates made contributions to the pac on around the dates when commensurate amounts were paid to the pact why isn't it enough for missouri to say people in missouri can read then opinion and see exactly how it's done and we don't want him to be able to do that in missouri so we want to enact this prohibition well why do they have to show that it's already happened why can't they show that there's an obvious risk of it happening and we want to prevent it from happening before it you know before the fact well i think shrink tells us we that normally the state has to come forward with some evidence of its interest they can't just say about that each of these cases you have to look at the system and you have to look at where we are in campaign finance regulation what that particular scheme as remember as the court knows mccutcheon specifically over rules a portion of the buckley case from one nine hundred seventy something and they say times are different things have changed this is a different regulatory scheme and that gets to this issue of fed which i think was from sitting over there the most interesting part of the whole discussion the state certainly has an interest in quid pro quo corruption or the appearance of quid pro quo corruption no doubt about that supreme court's been clear on this this court has been clear on that how do you regulate quid pro quo corruption you regulate the handing of checks to candidates so that there's not an appearance or the actual the actual you know giving of one thing in return for the contribution the state talks about a donor who would have i'm going to throw a number here a million dollars that he wants to distribute out to candidates so he sends to different pacs you can do that through one step illegal stearing understand the hypothetical are positive the donor gives money to pack and says will you please pass this through to pack b that's illegal by the way under missouri law how can you agree to do that and they passed the money to pack b and they say to pack b would you please agree to pass this through to the candidate that's also will legal so as mccutcheon says you have to assume that an independent actor is going to agree to take money that they they could use however they see fit except the direction from the donor you have to accept that independent after the pack is going to agree to violate the law to believe it's a crime in the statute but not just that pack the second pack as well that's one of the fit problem comes in but what about the are the counterargument by the state which is there's a traceability problem that the state can't see that that's happening when you have a path back contribution transparency is derivative of the interest in it in quid pro quo corruption the appearance of corruption of the public can see these transfers reduces the likelihood of corruption these contributions are all reported they must be reported but more importantly if the state has a transparency concern regulate the transparency concerned don't just ban the pack to pack transfer mccutchen talks about all the different things you could do to make a rule that you have to make you have to report contributions within a certain time if you if you get a contribution from a candidate from someone and it goes out the doors a candidate within a certain period of time let's let's make that a special report i don't know that would make it any more transparent well and that and then the traceability problem i think is is probably one of the state's most serious arguments and it's really made worse by the fact that a donor could conceivably tell the candidate down the line hey i gave money that's packed when we put it through seven or eight different pacs and eventually reached you but the state would never have any ability to know that and what's your response to that well a couple things first of all the donor might say that anyway right candidate calls a donor and says i need some money in the donor says well i give money to the republican party didn't you get it so adorable i'd say that anyway that doesn't necessarily mean that there was a violation of law and so i'm sorry on the just that that the donor can make clear the candidate right given the money but the donor is not exactly going to go to the state and say hey we ran this money through multiple pacs in other words the state's at a disadvantage there well and so but it begs the question of whether the donor did i guess is what i'm getting at so the donor month certainly might say that the donor might imply that a donor that you know of the missouri system there is no limit on how much a donor can give to a pac was or is chosen not to regulate that in this contribution limits but is that really immaterial distinction i think it is first of all i guess i want to reject the i the idea that a circuit splits necessarily a bad thing if they're wrong it was i'm just asking whether we would i know you didn't but the why or if you think it's really different in a material way well i'm going to start with it's really different in a material way and i'm reading from page ten seventy of that opinion now the a t c which was the packet issue there the a cannot contribute to each other but pac and go out and contribute in one step as much as it wants so in our hypothetical where a donor gives money the pac pac can still make unlimited contributions to the candidate all day of age limits and all that sort of thing you're going to have to go to a different it's a different analysis but but more importantly what's the speech i'm on is sidetracked on your thinking there judge what's the speech right in alabama the pa still make an expenditure in whatever amount it wants directly to a candidate that the package give the way i read this opinion a million dollars to the governor under missouri law that the state has already limited how much the pac can give to the governor they've already put some restrictions on that they've already put a reporting restriction they've already put limitations restriction so to the extent there is some sort of evasion interest the state has limit it's certainly limited address that evasion interest with these contribution limits do they really need another ban on the pack to pack transfer to address that interest and i think that's really our issue with with this case i don't think we're not asking this court to say that no state could ever come up with a pact a pact transfer ban that would fit oh the other thing in alabama when you read the beginning of that case the real restriction there is on packs that give to multiple candidates contributing to other pacs that give devolved candidates and in the introduction that case they talk about exceptions to the pac to pac transfer ban i will say it's not completely clear from the way the facts are described in that case as to what they mean by that but there are there are situations in alabama where one pac can give to another pac that is clear in that case so i think there are some differences there i'm not sure that the eleventh circuit is right in the alabama case because when you read m n and you read the discussions of the evasion issues i mean mccutcheon is an evasion case that's what it's about when the state professes to regulate speech to prevent evasion of another regulation what is the analysis and i think mccutcheon says that because of the reduced risk of corruption because of the independent actors that would have to all conspire together to violate the law it is not a realistic interest you add that to this case where you know it's really a triple prophylactics a prophylaxis as i said the first amendment does not allow the state to require suspenders when a vote will do and in this particular case missouri's other limitations get the job done would it be a real and would it be more realistic if there were has a record here that showed that one of the you know that the single prophylaxis rule wasn't being followed and that in fact they needed a double prophylaxis to be able to catch the violators it would and there isn't there isn't that type of evidence in this particular case  that sort of bounce back but that that's the what is on up the maybe can just clarify for me i think i read in the material that federal tax so called federal tax are not covered under this correct how does that play and how is it played is that is that relevant at all i'm not sure it's it's very relevant i thought you had the point that somebody could accomplish the same thing by giving federal pact which didn't do that well and that's true is that you sure so they could give to it that's a great point so they could give to a federal brief right to read it well i guess what the reason i say i don't know that's very relevant i think you could subscribe to move in the bigger argument that the state appears to be regulating some sort of two step of asian and when you could accomplish it the same thing with one step of asian i guess that's what i'm trying to get at so but that's true a federal pac that's a pac to pac transfer but the ethics commission is taking the position generally that they don't regulate federal pacs and this doesn't apply to federal pacs but could a person is easily it would be very realistic that giving you a federal pac is going to allow you then to get money back into missouri  efficiently as given to missouri pacs well i thought your argument was well they could just do this in the in three other ways and so right that shows that this is ineffectual and right somehow effects without mentioning the other reason that the alabama case is different and i'm reading again from page to ten seventy the a d c the pac offered no evidence that it contributed to other pacs prior to the van ban or that it seeks to now i think that gets lost but the eleventh circuit made that point that there was no evidence in that case that the plaintiff had contributed to pacs or that it sought to in the future that there was a speech issue that they were challenging in this case there is that evidence the district court specifically discusses that evidence that my client in particular had contributed to specific packs port packers the one that he talked about a lot in the decision so that's the other way that the eleventh circuit opinion is different there there was a different regulatory scheme and a different factual record oh mr grainge the remainder of our time ok mr hatfield thank you for your argument thank you mr graham we'll hear from you any grime for the free and fair election of the talk very briefly about independent expenditures in i e only pacs i have really just two points to make one is going to relate more to what you were just talking with the other attorneys about in the other is a point that has to be raised because i think a point was made for the first time in a reply very i want to make sure that that we don't go straight on that point first of all the state did not appeal its l on f e s as applied challenge and i think that's an important point because if for any reason the court today decides that the pack the pack contribution ban does comport with the first amendment which we don't agree with it should only modified just courts injunction so that reflects the court's decision in favor of f f f i it's as applied challenge now here's why i bring this up in its recent use of a why do the briefs go back and forth and about why the statute should be construed narrowly and so for that they didn't appeal well because if you look it's sort of a a long point but what they have said is that the agency himself has asked for a modification of the injunction to not cover and explain it and explain it in a panic spencer only packs he's done that but the reason for that is that the age he and the missouri ethics commission claim that their own advisory opinions as a matter of construction find that when you give to an id pac it's not a contribution so the way they litigated this question wasn't the way they litigated other parts of the two that clearly violated the constitution on this point they try to give themselves wiggle room for later challenges along the lines of the a t c case so they said one amendment to despite the text doesn't cover this and by the way you guys who are litigating here you're not proper lead against because you're not truly independent but the court made three findings that in fact at that b f is independent and so the appellate brief would have been the place to have said we dispute those findings in fact  under the clear air standard the court could not have found that you've got to go back and re mandate will care but but isn't the issue before us whether the statute does in fact cover you well that's that's the first issue  new injunction should be if you deny the facial challenge so that's why they've done it and it was it was sort of ahead in the u s to be to that then why do you think we should not construe the statue definition is very clear that supporting a political committee that goes out and makes independent expenditures is a contribution there's no question about that the opinion the ethics commission says well we've got these other ethics opinions that don't relate to this issue but somehow they stablish this historical tradition that when you give to an i e only committee it's not a contribution well the problem is if that's true then all the disclosure rules go out as well because we're outside the campaign finance system so you've got no disclosure those pacs right because they're not contributions anymore so it can't it can't work i mean they've they've tried as hard as they can to avoid a finding that that part of the amendment to is unconstitutional which is why we're in this kind of twisted conundrum and we're just simply telling the court that if for any reason you don't go with the pack the pack finding and the facial finding at the very least the judgment should affirm the as applied when that f e m a has but i wanted to make a few other quick very quick points on this about i e only packs think about some of the circumvention arguments that were given here about other things that could be done or what they've missed is the actual dark money argument the dark money argument is not pack the pack contribution someone gives to a c four whose donors are not disclosed they're only shown to the i r s and then the c four gets to a path that's the dark money issue and that's not covered by a pac the pac transfer ban so whatever the article say about dark money i see amount of time i'll just be because before because i know there are corporation that can give to a pac and so the entire dark money issue is a red herring it's not what they're actually covering nobody believes  the dark money issue these are these transfers are disclosed in campaign finance reporting and the press and political consultants are checking the m e c website constantly during the forty eight hour five thousand dollar contribution reports so it's a it's a false argument and frankly if somebody really wants to show that they are involved in helping a candidate you would route money through many different committees and then later tell them hey i gave that committee number one and they were out of it through you would give a million dollars to an  pac which under citizens united the court says there's not raise a risk of corruption and you can do that so that's what donors will do and if that's ok surely we don't think it's more corrupt or there's a higher risk of corruption to give to one can raise five or ten thousand dollars everyone's join together all that path turns around and realizes ten thousand dollars doesn't biased a single unit of t v time and so they've got another friend over here who did raise the money well they've got to be able to associate with them it really helps the small donor people who don't have enough money to just give to an i e only group by themselves and go out and have ads run and so freedom fair election my client wants to be able to pull from these other committees that don't have enough money by themselves to do something it's an important association all right and we're completely gutting it and the interest of transparency or anti circumvention when in fact there's other things they can control for that so we're cutting right at the association all right but we're not really solving for the problems they claim are out there thank you ok thank you mr grimes mr banger we'll hear from you in the bottle thank you are allowed to start by addressing this issue of whether or not the alabama democratic conference case is on all fours in this case we believe it is your honor we believe that a departure from the ruling in that case would open up the circuits but here's why because in alabama the law prohibits pack to pack pack contributions just like the law here does now mr hatfield raised one distinction that i want to address right now and that is in alabama you don't have the same kind of base contribution limit imposed on pacs giving the candidates that is true but it's not particularly material here and here's why because as pointed out all you have to do is create more pacs you still have the circumvention of problem you have to work a little bit harder to get at it and your honor this is a very important point that the circumvention can occur gives rise not only to the very real possibility of circumvention and corruption but a public perception of corruption and the supreme court has been very clear that combating a public perception of corruption is every bit a valid and important and sufficient governmental interest to pose regulations of this of the sort in the alabama case the alabama democratic conference w pac that made both independent expenditures and contributions directly to candidate committees so it made both the court held that held that you could that the state could prohibit those kinds of pac to pat transfers to c why why is that because there was still a perception of corruption there was still a perception that the a t c could steer money to candidates and then make independent expenditures on the side to support those same candidates and there is no evidence in the record that c had adequately separated out the decision making process here or here we don't have any evidence in the record that pac and they see pat hasn't posed any kind of separation in his decision making process it could very easily absorb money from another pac and then steer that money to candidates as well as make independent expenditures you have the same risk of corruption the same risk of perception of corruption in this case that we have in the alabama democratic conference case i want to ask you about the last count was arguing which is whether the issues relating to the free election and fund is are actually before us and whatever answer that question as whether or not we actually have to answer the statutory interpretation question about what a contribution is yes there are before the court in a very narrow way we do not contest that a ban on contributions from one pac to another where the recipient pac makes only independent expenditures which is clearly the case with  it has limited itself on this record to being an independent expenditure only pac we do not contest that if the ban were to extend to that factual situation as applied it would be unconstitutional now our content our argument is that it does sufficient that they feel or or could be reasonably threatened with prosecution or with violating the law that they don't necessarily trust the advisory opinions from the attorney general they don't know whether they can go forward and so could still speech is that sufficient t before us only if only if that belief feeling that believing that she was reasonable an argument is your honor that based on the interpretation of the n b c and the reading of the statute is not a reasonable belief now the provision extends to balance expenditures they're not going to be not tied to a candidate certainly roger that question that's precise question was not raised on an as applied basis in this case but the supreme court has been clear that contributions to ballot initiative only committees look and feel a lot like independent expenditures and if that question were to be presented to the n b c the m d c would need to answer that question and your honor i won't speculate as to how my client would answer that question but there is some authority you're telling us that we should apply to somebody who's going to make an expenditure about a ballot initiative even though the plain language says that it covers ballot initiatives that's the part i'm trying to understand right or wrong of the very the very narrow question about whether or not a ballot initiative committee or a ballot initiative committee that makes only contributions to those types of issues whether that is an independent expenditure is not before the court right now but there was no party below who said raise your hand is that i am a ballot initiative only committee but if that question were to arise i think there's there's certainly an argument to be made that those types of committees look and feel like independent expenditure on the committees ok well thanks for your