Opinion ID: 787590
Heading Depth: 2
Heading Rank: 3

Heading: the provisions of act 64

Text: 254 a) Overview 255 Beginning with an overview, Act 64 limits the amount of resources—money and things of value—that may be used by candidates in campaigns and that may be provided by individual supporters or political parties. 4 See Vt. Stat. Ann. tit. 17, §§ 2805, 2805a. It therefore contains limits on direct expenditures of money or use of things of value by candidates for electoral purposes and on direct contributions of money or things of value to campaigns. See id. Such limits would not necessarily reach activities that consume resources purchased and used by individuals and political parties to support a candidate's campaign. However, Act 64 styles these activities related expenditures and treats them both as candidate expenditures and as contributions to a candidate subject to the statutory limits on those expenditures and contributions. See id. §§ 2809(a), (b). Act 64 also requires that, for purposes of applying the limits, contributions to, and campaign expenditures by, state, county, and local affiliates of political parties are determined by aggregating, that is, by treating all affiliates as a single unit. See id. §§ 2801(5), 2805(a), 2809(d). To that end, Act 64 requires that all money raised by state, county, and local affiliates be put in a single bank account. See supra note 1, and accompanying text. 256 Act 64 provides a public financing option for candidates for Governor and Lieutenant Governor. See id. §§ 2851-2856. Eligibility for public financing turns in part on Act 64's definitions of contributions and expenditures, and, therefore, of related expenditures. Were a candidate to raise or expend more than $500 before February 15 of the election year—or have supporters, including a political party, make related expenditures in excess of that amount—the candidate would not be eligible for public financing. See id. § 2853(a). 257 An effort like Act 64 of course must provide some definition of the conduct regulated and the substance of what is prohibited and what is permitted. Where limits on campaign expenditures and contributions are imposed by dollar value, a time frame must be selected. The statutory scheme must also include an enforcement scheme, a delicate matter when electoral speech by candidates and their supporters is regulated by governmental officials— often their opponents—and a multitude of statutory ambiguities and problems of interpretation and valuation abound. Scrutiny of the details of such regulation is necessary to inform the constitutional inquiry regarding the degree of impact on protected speech and conduct, the requisite nexus between the regulation and constitutionally permissible goals, and the accuracy, reliability, and likely adherence to those goals of the designated enforcement mechanisms. 258 b) Two-Year Cycle 259 As noted, establishing a basic legal framework for regulating political campaigns first requires selection of a time frame(s) for the provision of public financing and for totaling candidate expenditures, contributions, and related expenditures by individuals and political parties in order to enforce limits on their size. Act 64 is schizophrenic in that regard. For purposes of public financing, it establishes separate time periods and separate funding for primary and general elections in recognition of the obvious fact that some candidates must fund both a primary and general election campaign while others need fund only a general election. See id. § 2855(a). 260 For purposes of limiting contributions and expenditures, however, Act 64 imposes a so-called two-year cycle approach. See id. §§ 2805(a), 2805a(a); see also 2001 Guide, supra. Under that approach, expenditures by candidates, contributions, and related expenditures by individuals and political parties supporting candidates are totaled over a two-year period for purposes of enforcing the statutory limitations. The effect of the two-year cycle is not inconsequential. Vermont, like most American states, provides both for primaries and for subsequent general elections. See Vt. Stat. Ann. tit. 17, §§ 2103(15),(25), 2351. Because the two-year cycle lumps these elections together, contribution and expenditure limits, including related expenditures by individuals and political parties, are imposed on the total raised and spent by individual candidates in both electoral periods. In other words, Act 64 limits a candidate who must wage a serious primary fight to the same amount of total financing as his or her general election opponent who did not face a primary contest. 261 The two-year cycle introduces another complexity—and creates much room for anti-democratic manipulation—because party primaries in Vermont are not restricted to voters registered in the particular party but are open to all voters, including those registered in other parties. See id. § 2363; see also Ian Urbina, Leveling Politics in the Green Mountain State, The American Prospect, Sept. 25, 2000, at 41 (discussing Vermont's cross-over voting in primaries); Vermont's Senate Race, The Common Man, The Economist, Sept. 5, 1998, at 25. The amount that a candidate must spend in a primary, therefore, may be substantially affected by voters who are seeking to disadvantage the candidate in the general election. 262 c) Limits on Expenditures by Candidates 263 Act 64 defines candidate expenditures to include payments, distributions, and disbursements of money or anything of value for the purpose of influencing an election. Vt.Stat. Ann. tit. 17, § 2801(3). 5 The breadth of this language is indisputable. Given its ordinary meaning, the language includes the value of the use of phones, computers, offices, rooms in residences or elsewhere, paper, pencils, autos, etc. See 2001 Guide, supra; 1999 Memorandum, supra. For example, according to Vermont's Secretary of State, a candidate's use of an auto is an expenditure. See 2001 Memorandum, supra. Candidates therefore may not drive their personal vehicles for campaign purposes without recording every mile driven and treating the costs of that driving as a campaign expenditure. See id. Vermont's Secretary of State has suggested that 31¢ per mile is an accurate measure of expense for this purpose. See id. (She has not changed this figure notwithstanding the facts that the price of gasoline has risen and official Vermont travel is now compensated at 37½¢ per mile. See id; Vermont Dept. of Personnel, Collective Bargaining Agreements, at http://www.Vermontpersonnel.org/employee/labor_dcba.cfm (effective July 1, 2003 to June 30, 2005) (setting mileage reimbursement for Vermont employees at level established by the U.S. General Services Administration, currently 37¢)). These expenditure limits also apply to candidates who exclusively use personal funds to fund their campaigns. See Vt. Stat. Ann. tit. 17, § 2805a(a). 264 Two terms are critical to determining what activities are expenditures subject to the limits: for the purpose of influencing an election, see id. § 2801(3), and candidate, see id. § 2801(1). Notwithstanding the assertion of a footnote in my colleagues' opinion, 6 the breadth of the phrase for the purpose of influencing an election is such as to be in substantial part hopelessly ambiguous and was said by the Supreme Court in Buckley 7 to be unconstitutionally vague. 424 U.S. at 44, 80, 96 S.Ct. 612; see supra note 6. At one end of an interpretive spectrum, that phrase would probably not include a candidate's cost of driving to a town hall to register to vote and, later, of driving to vote, although even that driving fits within Act 64's literal definition of expenditure. At the other end of the spectrum, candidate Jones's purchase of an ad stating Vote for Jones Next Tuesday would certainly be an expenditure. Between those extremes are a multitude of activities that may influence an upcoming election but lack an accompanying statement of express purpose. As to these, the statute offers no guidance. 265 Potentially the most significant area of ambiguity involves activities of incumbent officials. Members of the executive and legislative branches engage in relatively continuous communication with the public that involves the use of resources in a way that will help a reelection effort and would therefore fit within the definition of expenditure, if done by a candidate for the purpose of influencing an election. For example, Vermont's Secretary of State has a publicly funded website that does not avoid capitalizing on the political opportunity offered. See Vermont Secretary of State Website, at http://www.sec.state.vt.us/. The home page features a photo of her with a backdrop of mountains and pine trees. Other pages of the site also find it necessary to include a photo of the incumbent. Such a website not only offers favorable exposure but also involves the preparation of materials easily put to political use as flyers and ads. 8 The Vermont Democratic Party website underlines the political usefulness of the official Secretary of State website by offering visitors to the party's website a link to the official site. See Vermont Democratic Party Website, at http://www.vtdemocrats.org. See also Burlington GOP Website, at http://www.burlingtongop.com (linking to republican Jim Douglas' official Vermont Governor Website). 266 The statute offers no guidance on the many questions of how the relevant language is to be applied in practice to incumbents' activities, even though the answers may have a decisive impact on particular candidates. If most of the resource-consuming activities of officeholders are not expenditures because they occur in the course of the officeholders' public duties, incumbents will have an enormous advantage over challengers under expenditure limits. If most of these activities are expenditures, an incumbent officeholder might well use the bulk of permitted expenditures in the first year of the two-year cycle. There are also hundreds of intermediary positions, all of which are arbitrary to one degree or another. 267 Some interpretive guidance, but not much, may be gleaned from the definition of candidate. A candidate is someone who has taken affirmative action to become a candidate. 9 Contrary to the assertion in a footnote in my colleagues' opinion, 10 the elastic phrase affirmative action and the self-evident circularity of using a word in its own definition leave ample room for disputes over the definition's meaning. Persons who fully intend to run for office, but have not announced, engage in all sorts of conduct to bring themselves into the public eye, to appear interested and informed on public issues, and to commend themselves as potential candidates to the media and political leaders. They attend meetings of school boards, selectmen, and various public forums. See Trial Tr. vol. IX at 135 (Elizabeth Ready). Even these efforts require the use of money or things of value, are intended to influence the outcome of an election, and therefore meet the definition of expenditure if done by a candidate. That issue thus turns on whether such conduct constitutes an affirmative action. 268 A degree of clarity is added by the next sentence of the definition, which states that affirmative action shall include three kinds of acts. However, most of the basic ambiguity is left in place because the use of language of inclusion does not suggest that what follows is an exclusive list of affirmative act[s]. The first set of included acts involves accepting contributions or making expenditures in excess of a total of $500. See id. § 2801(1)(A). This brings into the definition of candidate all of the ambiguities of the term expenditure —and related expenditure—including the pre-campaign conduct noted above that is fully intended to influence the outcome of an election. In addition, as the Secretary of State has noted, an individual not fully decided upon, but considering, a run for statewide office will trigger the definition of candidacy by driving four round trips between Swanton and Brattleboro at (the now obsolete) 31¢ per mile. See 2001 Memorandum, supra. A person's official candidacy can also be triggered by acts of the person's political party deemed to be related expenditures valued in excess of $500. See Vt. Stat. Ann. tit. 17, §§ 2809, 2853(a); see also Ross Sneyd, Progressives' Poll Raises Question About Public Financing, Associated Press, Feb. 21, 2002. The two other acts included are filing a petition for nomination or announcing a candidacy. See Vt. Stat. Ann. tit. 17, §§ 2801(1)(B), (1)(C). However, these provisions clarify things that were not ambiguous. 269 The limits on expenditures by candidates over the two-year cycle vary with the office sought, as follows: Governor—$300,000 Lieutenant governor—$100,000 Other statewide offices—$45,000 270 State senator—$4,000 plus $2,500 for each additional seat in the district County office—$4,000 271 State representative, single member district—$2,000, two member district— $3,000. 272 See id. § 2805a(a). 273 Incumbents may spend 85%—except for legislators, who may spend 90%—of the expenditure limits. See id. § 2805a(c). 274 d) Limits on Contributions to Candidates 275 Contributions are similarly broadly defined as any payment, distribution, advance, deposit, loan or gift of money or anything of value paid or promised to be paid to a person for the purpose of influencing an election . . . . Id. § 2801(2). 11 The limits apply to single source donors, defined as an individual, partnership, corporation, association, labor organization or any other organization or group of persons which is not a political committee or political party. See id. §§ 2801(6), 2805(a). Exempted from the definition of contribution are services provided without compensation by individuals volunteering their time on behalf of a candidate. Id. § 2801(2). 276 Ambiguities lurk in the words paid to a candidate with regard to a resource used in a campaign by the resource's owner, for example, a campaign worker's use of a personal vehicle. Some of these ambiguities are cured in part by the definition of related expenditures, discussed below. 277 Uncured are the ambiguities in the term services provided without compensation by volunteers. These uncertainties are particularly great—and very important— with regard to professional services, particularly legal services, which are of great value to a candidate who runs for office under Act 64. A few of the many questions that will arise are: If an employee or partner engages in political activity during working hours and the firm does not dock the appropriate amount of compensation, is that a contribution by the firm? Can professionals who are not solo practitioners provide free professional services to candidates? If a professional is not generally free under a firm's employment arrangements to moonlight professional services to others, is the provision of such services to a candidate in non-working hours a contribution by the firm to the candidate valued according to the firm's usual billing rate? And so on. 278 The definition of single source also contains ambiguities. For example, rendering a non-obvious interpretation, the Secretary of State has stated that partnerships may make contributions as separate entities from the partners themselves, who are free to make identical contributions as individuals. See 2001 Guide, supra. Questions also arise about corporations with only one shareholder, e.g., are professional corporations operated by solo practitioners firms separate from their owners for purposes of the contribution limits? 279 As noted, the contribution limits also apply to money, goods, or services provided to political parties, and the various affiliates of a party are treated as one unit for the purpose of these limits. That is, a contribution to a Democratic town committee is limited as noted immediately infra, see Vt. Stat. Ann. tit. 17, §§ 2801(5), 2805(a), and is viewed as a contribution to all Democratic town, county, and state committees. Further, that contribution must be paid into a single statewide bank account, see supra note 1 and accompanying text. This provision therefore necessitates statewide reporting and control of spending by affiliates, which can receive funds only from the statewide bank account. 280 The limits on contributions also vary by office sought and political committee as follows: 281 Political party/political committee— $2,000 Statewide office—$400 State senate/county office—$300 282 State representative/local office—$200. 283 See id. § 2805(a). 284 e) Limits on Related Expenditures 285 Turning now to related expenditures, they are defined as expenditures (including, therefore, things of value and importing the ambiguities described above) intentionally facilitated by, solicited by or approved by the candidate. Id. § 2809(c). 12 They include expenditures by individual supporters of candidates and by the political parties that sponsor the candidates. Related expenditures therefore include the value of mileage driven by campaign volunteers, the use by a volunteer of a residence, house phone, or computer, or other expenditures by volunteers for items such as paper, pens, etc. They also include the cost of polling, the printed information on candidates, and offices and phones, etc., provided by political parties. 286 The law regulates related expenditures in two ways. First, it treats them as contributions subject to the limits on contributions described above. Every use of an in-kind resource—car, phone, computer, etc.—must thus be valued and totaled with direct cash contributions on an ongoing basis. See id. § 2809(a). Use of the in-kind resource must cease when the contribution limit is reached. 287 Second, Act 64 also treats related expenditures as candidate expenditures. When an individual's or party's related expenditures exceed $50, the candidate on whose behalf they were made must treat them as campaign expenditures limited by the statute. See id. § 2809(b). 13 This means that, over a two-year period, every supporter of a candidate who drives the family car to campaign meetings or provides paper, pens, phones, refreshments, or rooms for meetings, must keep a running total and, when the total exceeds $50—driving an average of seven miles per month at 31¢ per mile triggers this—the candidate must fit the amount under the statutory limit on candidate expenditures. 288 As noted, related expenditures include activities of political parties, such as polls, mailings, dinners, and other events. 14 If such party activities fall within the definition, they must be treated as contributions to, and expenditures by, the candidate. Such activities can, therefore, trigger an official candidacy, destroy eligibility for public financing, or exhaust the total that a candidate may spend in the two-year cycle. See 2001 Guide, supra; see also Vt. Stat. Ann. tit. 17, §§ 2805a, 2853. It will be recalled that the district court struck down the provisions of Act 64 subjecting related expenditures by parties to the Act's contribution limits, e.g., no more than $400 in cash or related expenditures to a candidate for statewide office. Given the holding of Colorado II, 533 U.S. at 465, these provisions are now revived. 289 To illustrate the effect of these provisions, I have added as Appendix A a letter from the Secretary of State responding to an inquiry as to whether certain party activities should be deemed related expenditures attributable to a particular candidate. The letter makes it clear that parties and their candidates can avoid the risk of an unexpected attribution of a large sum to a campaign only by eschewing normal and necessary political activities. For example, according to the Secretary of State, there is danger in sharing party-funded poll results with candidates or potential candidates; candidates or potential candidates must avoid any knowledge of party mailings; candidates must avoid participation in planning or even approving a party event (a party event at which a candidate is introduced apparently must be a surprise party); and parties must avoid mailings that have a primary thrust of supporting candidates. See Appendix A, infra. The Secretary and Attorney General wisely advise, Each party and potential candidate should review proposed activities with their own counsel, id., although this will be difficult for the candidate where he or she must remain ignorant of the event. 290 f) Costs of Compliance 291 The costs of complying with the law's various provisions are not exempted from the limits on expenditures. See 2001 Guide, supra. Raising contributions itself costs money and is an expenditure. See id. Indeed, the limits on the size of contributions increase these fundraising costs. Moreover, for a candidate to comply with the expenditure limits, he or she must, over a two-year period, either restrict the activities of supporters and the party organization, including the driving of personal vehicles, that constitute related expenditures, or keep in constant contact with supporters and the organization to monitor the size of such expenditures. A failure either to restrict or to monitor related expenditures will create the very real risk that, at a critical stage of the campaign, several supporters or party officials will report that they have exceeded the $50 limit and have, therefore, made expenditures that must be counted as candidate expenditures and may exhaust the campaign limit. In a statewide campaign, the monitoring and limiting of related expenditures by individuals or party organizations might well require a full-time staff member. 292 Moreover, a candidate who does not have legal counsel and other professional services runs great risks. The ambiguities detailed above and problems of valuation will confront candidates and supporters— or at least those who seek to comply with the law as written—with an ongoing need for professional advice. In fact, the Secretary of State and Attorney General advise that parties and candidates retain their own separate attorneys. See Appendix A. As noted, the cost of these attorneys, or the value of their services if obtained as unpaid-for related expenditures by individuals or a political party, are expenditures. See Vt. Stat. Ann. tit. 17, § 2801(3); infra Part V(e). 293 g) Treatment of the Press 294 Although this legislation was fostered by groups experienced in these matters, it does not contain the usual exemption for editorials, op-ed pieces, or even letters to the editor that endorse a particular candidate. See, e.g., N.Y. Elec. Law § 14-124 (exempting any person, association or corporation engaged in the publication or distribution of any newspaper or other publication issued at regular intervals in respect to the ordinary conduct of such business); Conn. Gen. Stat. § 9-333w(c) (exempting any editorial, news story, or commentary published in any newspaper, magazine or journal on its own behalf and upon its own responsibility and for which it does not charge or receive any compensation whatsoever). 295 Vermont's Secretary of State (the one with the photo-heavy website) has warned that if any individual or organization requests a photograph, written presentation, or other assistance or information and informs the candidate that the requested information will be used in a publication... [providing such] will trigger a related expenditure. 2001 Guide, supra. Therefore when: (i) a Vermont candidate meets with an editorial board, commentator, or columnist hoping for an endorsement; (ii) a supporter of the candidate uses campaign materials to author an op-ed article for a paper; (iii) a campaign official sends a letter to the editor; or (iv) a campaign official conveys information to a reporter hoping for a news story; the value of any such publication is, under Act 64, a contribution and a related expenditure. See Vt. Stat. Ann. tit. 17, § 2809(c). See also infra Part IV(d). 296 h) Administration and Enforcement 297 I turn now to the processes governing administration and enforcement of this law. Power is delegated to the Secretary of State to adopt rules necessary to administer the provisions regarding related expenditures. Vt. Stat. Ann. tit. 17, § 2809(f). Additionally, the Secretary of State has a general administrative role under Act 64, see, e.g., id. §§ 2803, 2810a, and she has actively offered her interpretations of the scope and application of the various provisions of Act 64, see, e.g., 2001 Guide, supra; 1999 Memorandum, supra; 2001 Memorandum, supra. As the discussion above indicates, interpretive and valuation questions abound and, as Appendix A indicates, answers that are not prolix or ambiguous are often not available. Moreover, there is at present every indication that the power to adopt rules necessary to administer the statute will be viewed by the Secretary of State as a very broad delegation of power. See infra Part V(e). For example, interpreting a provision requiring that all contributions in excess of $50 be made by check, the Secretary has said that Act 64 allows so-called pass-the-hat fundraisers at which persons may anonymously contribute up to $50 in cash. See 2001 Guide, supra. Because the givers are anonymous, a candidate is not expected to monitor how many times an individual may have put $50 into ever-moving hats at several pass-the-hat fundraisers. This ruling thus promotes fundraising practices that do not really control the size of cash contributions, unless, of course, an anonymous donor foolishly drops a $100 bill into a hat. 298 Finally, candidates who want to seek a determination that an expenditure is a related expenditure made on behalf of their opponents may bring an expedited action in the Vermont Superior Court. See Vt. Stat. Ann. tit. 17, § 2809(e). Candidates wanting clarification of their own expenditures, or persons wishing to make expenditures on behalf of candidates, may request advisory opinions from the Secretary of State. See 2001 Guide, supra. The costs of bringing or defending such actions, or making such inquiries, are not exempted from the definition of expenditure.