UNDER SEAL STATE OF WISCONSIN UNDER SEAL IN SUPREME COURT No. 2014AP000296 OA STATE ex rei. TWO UNNAMED PETITIONERS, Petitioners, vs. THE HONORABLE GREGORY A. PETERSON, John Doe Judge and FRANCIS D. SCHMITZ, Special Prosecutor, Respondents. AFFIDAVIT OF THE SPECIAL PROSECUTOR IN SUPPORT OF RESPONSE TO PETITION FOR LEAVE TO COMMENCE AN ORIGINAL ACTION SEEKING DE CLARATORY JUDGMENT AND OTHER RELIEF - (FILED UNDER SEAL) STATE OF WISCONSIN DANE COUNTY ) ) ss. ) FRANCIS D. SCI-IMITZ, being first duly sworn on oath deposes and says that: 1. I am a respondent in the above-captioned proceeding. 2. I make this Affidavit in support of my response to the petition for Leave to Commence an Original Action Seeking Declaratory Judgment and Other Relief. 3. The attachments to this Affidavit are true and correct copies of papers filed in the underlying John Doe proceedings. 4. This Affidavit is Bates Stamped for the convenience of the court. Please note that the attachments are referenced as page numbers below. These page numbers are references to the Bates Stamp numbers of this Affidavit. 5. By order of Judge Barbara A. Kluka dated August 23,2013, I act as the Special Prosecutor for the State of Wisconsin in five John Doe proceedings pending in the Counties of Columbi~ Dane, Dodge, Iowa and Milwaukee. As respects the five John Doe proceedings, an initial investigation was commenced in Milwaukee County as Case Number 2012JD000023 on September 5, 2012. 6. When it became apparent that the investigation involved persons from other counties across the state, on January 18,2013 the investigation was tendered to the Attorney General by District Attorney John Chisholm. On May 31, 20 13, the Attorney General declined to investigate; he recommended the involvement of the Government Accountability Board. Thereafter, inasmuch as the GAB has no authority to prosecute a criminal matter and because of the statutory requirements of Wis. Stat. §§11.61(2) 2 and 978.05(1), the Government Accountability Board and the Milwaukee County District Attorney met with the District Attorneys for the Counties of Columbia, Dane, Dodge and Iowa. John Doe proceedings were thereafter commenced in the Counties of Columbia (2013JD000011), Dane (2013JD000009), Dodge (2013JD000006) and Iowa (2013JD000001) on August 21, 2013. 7. Though pending in five different counties, this is one overall investigation. 8. I have filed the Petition for a Supervisory Writ and Writ of Mandamus following an order entered January 10,2014 by the John Doe Judge, the Honorable Gregory A. Peterson, related to these five aforementioned proceedings. The Order is found at Affidavit p. 0006. Judge Peterson succeeded Judge Kluka as the John Doe Judge after Judge Kluka recused herself from the proceedings. 9. Attached to this Affidavit at pp. 0006 to 0009 is a true and correct copy of the Order dated January 10, 2014 in the John Doe proceedings instituted in the Counties of Columbia, Dane, Dodge, Iowa and Milwaukee. 3 10. Attached to this Affidavit at pp. 0010 to 0011 is a true and correct copy of the Order dated February 24,2014 in the John Doe proceedings. 11. Attached to this Affidavit at pp. 0012 to 0033 is a true and correct copy of the Petition for Supervisory Writ and Writ of Mandamus now pending before the court of appeals. Attached to this Affidavit at pp. 0034 to 0066 is a true and correct copy of the Memorandum in Support of the Petition for Supervisory Writ and Writ of Mandamus now pending before the court of appeals. This Petition was filed Friday, February 21, 2014; it has been assigned the following case numbers: 2014AP000417 (Columbia County); 2014AP000418 (Dane County); 204AP000419 (Dodge County); 2014AP000420 (Iowa County); 2014AP000421 (Milwaukee County). 12. Attached to this Affidavit at pp. 0067 to 0105 is a true and correct 4 copy of the Affidavit ofKevin Kennedy filed in those same court of appeals writ proceedings. "(t"f Dated this '2..5 day ofFebruary 2014. Special Prosecutor State Bar No. 1000023 Subscribed and sworn to before me at Madison, Wisconsin on this )5~day ofFebruary 2014 No ry Public, Dane Coun State of Wisconsin My commission is permanent. 5 STAIE ___OF WISCONSIN IN THE MATIER OF A JOHN DOE PROCEEDING BEFORE THE JOHN DOE JUDGE COLUMBIA COUNTY CASE NO. DANE COUNTY CASE NO. DODGE COUNTY CASE NO. IOWA COUNTY CASE NO. MILWAUKEE COUNTY CASE NO. 13JD000011 13JD000009 13JD000006 13JD000001 12JD000023 DECISION AND ORDER GR..ANTING MOTIONS TO QUASH SUBPOENAS AND RETURN OF FIL·eo PROPERTY JAN 2 2 2014 IvlOTIONS TO QUASH DANE COUNTY CIRCUIT COURT Motions to quash subpoenas have been filed by: (l) Friends of Scott Walker (FOSW); (2) Wisconsin Manufacturers & Conm1erce, Inc. and its affiliate WMC-IMC.; (3) Wisconsin Club for Growth directors and accountant; and (4) Citizens for a StTong America, Inc. directors and officers. The 1notions have been fully briefed. The State,s brief is a consolidated response, so I assume a consolidated decision will not adversely affect the secrecy order. I am granting the nwtions to quash and ordering return of any property seized as a result of the subpoenas. I conclude the subpoenas-·do not show probable cause that the moving parties committed any violations of the campaign finance laws. I run persuaded the statutes only prohibit coordination by candidates and independent organizations for a political purpose, and political purpose, with one minor exception not relevant here (transfer of personalty, Wis. Stat. 11.01(7)(a)2.), requires express advocacy. There is no evidence of express advocacy. The motions were filed over two months ago, before I was even assigned tins case. They are overdue for a decision. This decision will be brief, enabling me to produce it more quicldy. Any reviewing court owes no deference to my rationale, so giving the parties a result is more important that a delay to write a lengthy decision on election and constitutional law. For more detail, readers should consult the parties' briefs. In fact, in order to fully understand the factual and legal context of this decision, that will be necessary for anyone, such as an appellate court, not familiru· with this case. The subpoenas reach into the areas of First Amendment freedom of speech and freedom of association. As a result, I must apply a standard of exacting scrutiny and, in interpreting statutes, give the benefit of any doubt to protecting speech and association. Schmitz Affidavit 0006 As a general statement, independent organizations can engage in issue advocacy yvithout fear of government regulation. However, again as a general statement, when they coordinate spending with a candidate in order to influence an election, they are subject to regulation. The State relies heavily on some rather broad lru1guage in fVisconsin Coalition for Voter Participation, Inc. v. State Elections Board, 231 Wis. 2d 670, 605 N. W.2d 654 (Wis. Ct. App. 1999). This case did give me some pause. Ho~ever, I agree with the Wisconsin Club for Growth that the case is distinguishable. (Club's response brief at 10-14). But even more important, considerable First An1enillnent campaign financing law has developed in the fifteen years since that case was decided. (See, e.g., Wisconsin Manufacturers & Conm1erce initial brief at 5-6). It is unlikely that the broad language relied on by the State could withstand constitutional sc1utiny today. Wisconsin Club for Growth's analysis of the crunpaign financing statutory scheme is particularly helpful. As the Club explains in its reply brief, the legislature crafted definitions of four key tenns: committee, disbursement, contribution and political purposes. All statutory regulations emanate :fi.·om these four definitions. Before there is coordination there 1nust be political pm-poses; without political purposes~ coordination is not a crin1e. i ! ,,f To be a committee, an organization must have made or accepted contributions or disbursements for political purposes. Wis. Stat. 11.01(4). As relevant here., acts are for political purposes when they are made to influence the recall or retention of a person holding office. Wis. Stat. 11.01(16). If the statute stopped here, the definition of political purposes might well be unconstitutionally vague. Buckley v. Valeo, 424 U.S. 1, 77 (1976). But the definition continues: I r- acts for political purposes include, but are not limited to, making a cotnmunication that expressly advocates the recall or retention of a clearly identified candidate. Wis. Stat. 11.01 (16)(a). In GAB 1.28, the Govenllllent Accountability Board attempted to flesh out other acts that would constitute political purposes, but because of constitutional challenges it has stated it will not enforce that regulation. So the only clearly defined political purpose is one that requires express advocacy. ··The·State is not claiming that any of the independent organizations expressly advocated. Therefore, the subpoenas fail to show probable cause that a crime was committed. Friends of Scott Walker is a campaign committee, not an independent organization. Election laws do not ban all coordination between a candidate and independent organizations. As the GAB has recognized, broad language to the contrary is constitutionally suspect. El.Bd. 00-2 Schmitz Affidavit 0007 1 I II (reaffirmed by GAB in 2008). Furthern1ore, I am persuaded by FOSvV that the statutes do not regulate coordinated fundraising. (See FOSW reply at 10-18). Only coordination of expenditures may be regulated and the State does not argue coordination of expenditures occurred. Therefore, tl1e subpoena issued to FOSW fails to show probable cause The subpoenaed parties raise other issues in their briefs, smne quite compellingly. However, given the above decision, it is not necessaty to address those issues. MOTIONS FOR RETURN OF PROPERTY R.L. Jolmson and Deborah Johnson have filed motions for the retmn of property seized pursuant to search warrants. 'H1e Johnsons claim. the wai.Tants were defective for several reasons, son1e of which are among the tmdecided issues in the above decision on the motions to quash. The Joln1s011S have not specifically raised the issues that are decided above. However, in the interests of fairness, the same legal conclusions should apply to all parties who have raised challenges in this case. Therefore, for the reasons stated above regarding the fuuitations on the scope of the campaign finance laws, I conclude that the Johnson warrants lack probable cause. Accordingly, their motions are granted. ORDER The subpoenas issued to Friends of Scott Walker, Wisconsin Manufacturers & Commerce, Inc. and its affiliate Wl\1C-IMC, Wisconsin Club for Growth directors and accountant, and Citizens for a· Strong America, Inc. directors and officers are quashed and any property seized ptu·suant to the subpoenas shall be returned. Any property seized pursuant to search warrants served on R.L. Johnson and Deborah ~ i Johnson shall be returned. I Dated: January 10,2014. By the John Doe Judge: Schmitz Affidavit 0008 BEFORETHEJOHNDOEJUDGE STATE OF WISCONSIN IN THE MATTER OF A JOHN DOE PROCEEDfNG COLUMBIA COUNTY CASE NO. DANE COUNTY CASE NO. 13JD000011 13JD000009 DODGE COUNTY CASE NO. IOWA COUNTY CASE NO. 13JD000006 13JD000001 MILWAUKEE COUNTY CASE NO. F11ftfi0023 ERRATA JAN 22 2014 DANE COUN1Y CIRCUIT COURT In the decision and order dated today, I mistakenly referred to Deborah Johnson section titled "Motions for Return of Property" and in the order. 1n the The reference should be corrected to read Deborah Jordahl. This was brought to my attention by an email from Jordahl's counsel, Dean Strang. Dated: January 10, 2014. By the John Doe Judge: (l~ Schmitz Affidavit 0009 BEFORETHEJOHNDOEJUDGE STATE OF WISCONSIN IN THE MAITER OF A JOHN DOE PROCEEDING COLUMBIA COUNTY CASE NO. DANE COUNTY CASE NO. DODGE COUNTY CASE NO. IOWA COUNTY CASE NO. MILWAUKEE COUNTY CASE NO. 13JD000011 13JD000009 13JD000006 13JD000001 12JD000023 . DECISION AND ORDER GRANTING MOTION TO CLARIFY STAY . The Wisconsin Club for Growth has moved to clarify the stay of th~ January 10 order quashing subpoenas and returning property seized pursuant to search warrants. The Club seeks to prohibit the State from reviewing documents seized from its agents and political associates and from entities that hold records of the Club's donors and expenditures. The Club persuasively argues its request is "vital to maintaining the status quo." . The State opposes the motion~ First. the State· notes the styling of the motion as a clarification is a misnomer because the motion really seeks to expand the stay. While I agree. I do not see that as a bar to considering the motion. The State's primary objection seems to be that it needs to examine all the material in its possession that is not subject to the stay in ·order to find facts to defend against a federal civil rights action and to respond t~ an action seeking original jurisdiction in the state supreme court. According to the State, it seeks "evidence of the multiple roles played by R.J. Johnson, Deborah Jordahl and others in their interaction with WiCFG, FOSW and other entities" during the recall elections. The State claims this evidence i~ "at the core of deciding whether WiCFG. FOSW and other entities were complicit in violations of Wisconsin campaign financing laws.JI The major problem with this argument is that I already ruled in my decision of January 10 that what the State is seeking is not a violation of the ·campaign fi':ancing la"Ys. Furthermore, it seems to me that the defense in the civil rights action, for example, is based on what the State is looking for, not wh~t it is finding. The same is true for the state supreme court proceeding. If my January 10 decision is wrong and the evidence the State is looking for would violate the campaign financing laws, then it doesn't matter what the State has found or might find. Put another way. whether there was probable ca~se for the search warrants and whether the prosecutors acted reasonably will depend on facts that existed at the time, not on facts gathered afterward. Finally, the State argues that the Club's request is unworkable because of the difficulty of determining what constitutes a Club document. Whether the Stat~ is correct or not. there is another solution to the problem. At the time of the January 10 decision quashing the subpoenas and ordering return of property, I focused only on the immediate issues raisedsf2wm~!AffiliactP~o motions. However, if my decision is upheld, the ultimate and inevitable consequence will be to terminate the John Doe investigation. It seems rather incongruous for the State to continue to examine documents based ·on an interpretation of the law that I have ruled is invalid. Therefore, I am granting the motion. For relief, I am amending the January 27 stay order to provide that while the stay is in effect, the State shall not examine any material secured from any source by legal process such as subpoena or search warrant. Dated February 25, 2014. By the John Doe Judge: Honorable Gregory A. Peterson Reserve Judge Schmitz Affidavit 0011 UNDER SEAL STATE OF \VISCONSIN C 0 U R T OF A P P E A L S DISTRJCT I I IV Case No. 20 14AP W STATE of WISCONSIN ex rei. FRANCIS D. SCHMITZ, Special Prosecutor, Petitioner, vs. THE HONORABLE GREGORY A. PETERSON, John Doe Judge, UNNAMED MOVANT NO. 1, lJNNAMED MOVANT NO. 2, UNNAMED MOVANT NO. 3, UNNAMED MOVANT NO.4. UNNAMED MOVANT NO. 5, UNNAMED MOVANT NO. 6, UNNAMED MOVANT NO.7, and UNNAMED MOVANT NO. 8, Respondents. PETITION FOR SUPERVISORY WRIT AND WRIT OF MANDAMUS Concerning John Doe Proceedings in Five Counties Hon. Gregory A. Peterson, Presiding Columbia County No. 13IDOOOOI1; Dane County No. 13JD000009; Dodge County No. 13JD000006; Iowa County No. l3JD000001; Milwaukee County No. 12JD000023 Address Post Office Box 2143 Milwaukee, WI 53201 (414) 278-4659 Francis D. Schmitz Special Prosecutor Petitioner Schmitz Affidavit 0012 STATE OF WISCONSIN C 0 U·R T OF A P P E A L S DISTRICT I I IV Case No. 2014AP W STATE ofWISCONSIN ex rei. FRANCIS D. SCHMITZ, Special Prosecutor, Petitioner, vs. THE HONORABLE GREGORY A. PETERSON, John Doe Judge; UNNAMED MOVANTs NO. l, TO 8 Respondents. PETITION FOR SUPERVISORY WRIT AND WRIT OF MANDAMUS Introduction Special Prosecutor Francis D. Sch1nitz petitions this Court to exercise supervisory and original jurisdiction over Respondent Bon. Gregory A. Peterson, acting as a John Doejudge. This petition relies upon Wis. Stats. §§783 .01 et seq. and 809.51. The John Doe investigation focuses on potentially illegal coordination during the Senate and Gubernatorial rec.aJI elections in 20 ll 2 Schmitz Affidavit 0013 and 2012. In the context of Senate recalls, the inquiry seeks to examine the relationship between the candidates, certain 50 l (c) corporations (e.g, Wisconsin Club for Growth (WiCFG) and Citizens for a Strong A1nerica (CFSA)), the Friends of Scott Walker (FOSW) and R.J. Johnson. In the context of the Gubernatorial recall, the inquiry seeks information on the relationship between FOSW, certain 50l(c) corporations, and certain individuals (e.g. R.J. Johnson and Deborah Jordahl) who simultaneously worked for both WiCFG and FOS W. The investigation focuses on vvhether these v~rious entities coordinated spending, strategy, and fundraising to subvert Wisconsin's campaign :finance laws including those regulating disclosure and contribution limits. In a Decision and Order dated January 10, 2014 (hereafter Order), Judge Peterson quashed certain subpoenas dated September 30, 2013 and ordered the return of property seized fr01n R.J. Johnson and Deborah Jordahl by search warrants executed on October 3, 2013. This process was issued by Judge Barbara Kluka, th~ original John Doe judge. The Order is pre1nised on the e1Toneous view that: (I) Wisconsin catnpaign finance law cannot and does not - consistent with the First Amend1nent - regulate the conduct of coordination between political cmnmittees and 50 l(c) 3 Schmitz Affidavit 0014 corporations engaged in issue advocacy; and (2) the record in the John Doe investigation did not include evidence of "coordinated expenditures'' or "express advocacy." The John Doe Judge also rejected the precedent of Wisconsin Coalition/or Voter Participation, Inc. v. State Elections Board, 231 Wis.2d 670, 605 N.W.2d 654 (Ct. App. 1999), petition for review dismissed, 231 Wis.2d 377, 607 N.W.2d 293 (1999). The Petitioner requests this Court vacate the Order, mandate enforcement of the John Doe subpoenas and affirm the retention or property seized by search warTant Parties Pursuant to Wis. Stat. §809.51 and to permit the Court and its judicial officers to meet their obligations under SCR 60.04(4), Wis. Stat. §757.19, and the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution, the parties are identified as follows: 1. The Petitioner is the State of Wisconsin, by Special Prosecutor Francis D. Sch1nitz. 2~ The Respondent is Hon. Gregory A. Peterson, the John Doe judge. 3. Unnmned Movant No. I is Friends of ~cott Walker (FOSW), the personal ca1npaign com1nittee of Scott Walker. 4 Schmitz Affidavit 0015 4. Unnamed Movant No. 2 is Wisconsin Club for Growth (WiCFG) and its officers and directors, a Title 26 U.S.C. 50l{c)(4) "social welfare'" corporation. 5. Unnatned Movant No.3 is Citizens for a Strong Arnerica (CFSA) and its officers and directors, a Title 26 U.S.C. 50l(c)(4) "social welfare'" corporation. 6. Unna1ned Movant No. 4 is Wisconsin Manufacturers and Commerce (WMC), a Title 26 U.S.C. 50 l (c)(6) ~~business trade" corporation . 7. Unnatned Movant No. 5 is Wisconsin Manufacturers and Comincrce-Issues Mobilization Council, Inc. (WMC-IMC), a Title 26 U.S.C. 50l(c)(4) ''social welfare" corporation. 8. Unnamed Movant No. 6 is Richard Arthur (R.J .) Johnson, a principal agent ofWiCFG and FOSW. 9. Unnamed Movant No.7 is Deborah Hawley Jordahl, a principal agent ofWiCFG and FOSW. I 0. Unnarned Movant No. 8 is Jed Sanborn, an accountant for WiCFG and CFSA. 5 Schmitz Affidavit 0016 Statement of Issues L Consistent with First Amendment principles, do Wisconsin statutes and regulations properly regulate the ·conduct of coordination between 50 l (c) corporations and polilical comn1ittees, while still protecting truly independent speech? A. Do Wisconsin laws properly differentiate bet\veen coordinated speech that may be regulated and truly independent speech that is protected? B. Does vVisconsin Coalition.for Voter Participation, Inc. v. SEB remain valid controlling precedent? II. Does the record provide a reasonable belief Wisconsin law was violated by FOSW's coordination with independent disbursement committees that engaged in express advocacy speech? Reasons For Exercising Jurisdiction 1. Under established precedent, a Supervisory Writ is the process used to review the decisions of a John Doe judge. In re John Doe Proceeding, 2003 WI 30,260 Wis. 2d 653, 660 N.W.2d 260. The State cannot appeal the John Doe judge's Order. This Writ is the sole means by which the State may correct errors below. 6 Schmitz Affidavit 0017 2. The John Doe judge erred in applying strict scrutiny in his constitutional analysis of Wisconsin catnpaign tinance law. 3. The exercise of jurisdiction by this Court is required to address the judge's erroneous conclusions that: a. The State did not present evidence documenting coordination ·of expenditures, and b. The State did not claim that any of the independent organizations expressly advocated. 4. The Government Accountability Board (GAB) is charged by statute to enforce Wisconsin's campaign finance laws. The GAB frequently provides advice concerning Wisconsin's law on coordination to interested parties. That advice is consistent vvith the Special Prosecutor's interpretation in the John Doe Proceeding. As set forth in the Affidavit of Kevin J. Kennedy, GAB Director and General CounseL this Court can clarity Wisconsin catnpaign tinance laws by exercising jurisdiction. 7 Schmitz Affidavit 0018 Facts Procedural History The John Doe investigation was initially cmnmenced in Milwaukee County by Judge Barbara A. K.Iuka on September 5, 2012. · As explained in the record of in re John Doe Proceeding, 2013 AP 2504-08, Wis. Ct. App. Opinion and Order, January 30,2014, additional John Doe investigations were commenced in four other counties on August 21, 2013. These are organized under one John Doe Judge and the Petitioner/Special Prosecutor. On Septe1nber 30, 2013, based upon affidavits submitted to her, Judge Kluka authorized twenty-nine subpoenas. These subpoenas were intended to compel, inter alia, production of docmnents evidencing the conduct of coordination among the subpoenaed parties and with FOSW. On September 30, 2013, Judge KJuka also authorized the execution of search warrants at the homes and offices ·of R.J. Johnson and Deborah Jordahl. Those warrants were executed on October 3, 2013 and property was seized. On October 16~ 20 13 and thereafter, the Unnamed Movants, other than R.J. Johnson and Deborah JordahL tiled Motions to quash the subpoenas. 8 Schmitz Affidavit 0019 On October 29,_ 2013. Judge Kluka recused herself as the John Doe Judge. Judge Gregory A. Peterson was soon assigned to the proceedings in all five counties. On December 4th and 20 111 , 2013, respectively. R.J. Johnson and Deborah Jordahl tiled Motions seeking return of propetiy seized by search warrants. After briefing, Judge Peterson quashed the subpoenas and also ordered return of the seized property. He wrote: I conclude that the subpoenas do not show probable cause that the moving parties committed any violations of the campaign finance laws. I am persuaded the statutes only prohibit coordination by candidates and independent organizations for a political purpose, and political purpose ... requires express advocacy. There is no evidence of express advocacy. Only coordination of expenditures 1nay be regulated and the State does not argue coordination of expenditures occurred. Therefore, the subpoena issued to FOSW fails to show probable cause. I '- 1 Affidavit of Francis D. Schn1itz pp. 16-17. -Unless otherwise noted, all ref-erences to the Affidavit or '"Aff." refer to the Affidavit of Francis D. Schmitz. 2 9 Schmitz Affidavit 0020 On January 27, 2014, Juqge Peterson stayed the Order pending supervisory review. 3 Facts Demonstrating a Reasonable Belief a Crime Occurred The substantive facts central to this Petition are contained in the affidavits submitted in support of subpoenas and search warrants issued by Judge Kluka. These are contained in the Affidavit of Francis D. Schmitz subtnitted with this Petition.'' During the 20 I 1 and 2012 recall elections, R.J. Johnson (Johnson) and Deborah Jordahl (Jordahl) were key operatives advising and directing both FOSW and WiCFG 5 John~on was a paid advisor to FOSW and was paid by WiCFG. 6 Jordahl was paid for placement ofFOSW advertisements, a paid etnployee of WiCFG and a signatory for the WiCFG bank account. 7 Johnson and Jordahl controlled the purse for WiCFG. The bank account is in Johnson's natne, and indeed, Jordahl wrote the checks. 8 Thus far, the investigation has not developed evidence suggesting that the WiCFG officers and directors were anything but figureheads. 3 Aff. 37-39. See footnote 2. 5 Aff. 321. 6 At'f. 147(~12), 170-172,342 (,!69). 1 Aff. 148,319-320. 8 Aft: 623. 4 10 Schmitz Affidavit 0021 Johnson/Jordahl advised on matters regarding: campaign strategies and messages; fundraising; production, dissemination, and spending for print, telephone, radio, and television advertising; and the execution of and spending for opposition research, polling, and get out the vote efforts C'GOTV"). 9 As Governor Walker himself said, Johnson was his "chief advisor" and "kept in place a team that is wildly successful in Wisconsin." 10 ·As part of the coordination strategy, Johnson and Jordahl also created CFSA, their 50 1( c)~ to run advertise1nents and distribute funds funneled from WiCFG to other 50l(c) corporations. 11 R.J. Johnson's wif~, Valerie, was the signatory for the CFSA bank account. 12 The coordination strategy stressed the itnportance of running all issue advocacy efforts through WiCFG, the 50l(c) under the control ofFOSW agents Johnson and Jordahl to "ensure correct messaging." 13 Johnson and Jordahl acted as the hub of activities between FOSW and WiCFG in the 20 ll recall elections. In Johnson's own words in e-mail, Johnson and '' Aff. 147-151 (,11112, 17, 22-24), 170-172, 199,321 (~~19-20), 342-344 (1!~69-74), 366376.389,502-506. IH Aff. 389. 11 Aff. 148-150 (,11!6-19), 181-198,345 (,177), 356,542-544. u Aff. 320. 13 Aff. 385 (emphasis added). ll Schmitz Affidavit 0022 Jordahl ·~coordinated spending through 12 different groups" with funding supplied by "grants fr01n the Club." 14 Johnson's dual role with FOSW and WiCFG is evident from two emails dated April 30, 2012. That day, Johnson worked on both WiCFG donor information and directed the approval ofFOSW advertising. 15 Etnails also docmnent the coordination strategy discussions between tnultiple groups, including WiCFG and FOSW in 2011 and 2012. 16 Coordinated Fundraising Kate Doner and Doner Fundraising were agents ofFOSW and WiCFG and created fundraising plans for both, scheduled meetings with large donors and prepared talking points for Governor Walker to solicit funds for both WiCFG and FOSW. 17 Johnson was also instrumental in coordinating fundraising plans through WiCFG to bene tit candidates in the 2011 and 2012 recall elections. 18 Evidence shows Governor Walker solicited contributions for WiCFG and was instructed to emphasize to would-be donors that corporate 14 Aff. 407-408. Aff. 509-513. 16 Aff. 331-332,380-384,410-4 I I. 17 Aff. 158-159 (,\~50-52), 320 (,116), 328-329 (,141 32-35), 331-332 (~41 ), 345-346 (,!78), 390-398,412, 433,476-481. IS Aft: 354-355, 399. 15 12 Schmitz Affidavit 0023 contributions were allowed, no contribution limits applied and the contributor's identity would not be disclosed. 19 Fundraising scripts provided to Governor Walker by his agents referred to WiCFG as ';your (c)4." Governor Walker himself inquired about sending thank you notes to "all of our (c)4 donors', in reference to WiCFG. 20 The memo lines of many checks written to WiCFG included references to Governor Walker and the 2011 and 2012 recall elections: e.g., "'50 I c4- Walker," "For Governor Walker's Recall Election," •·Governor Scott Walker," "Because Scott Walker asked," "Per Governor Walker," "political contribution [L.B.] fbr Gov. Scott Walker," "Scott Walker project,n '"Senate Recall Support," "To fight the Walker recall," "Recall Elections,', "Recall Campaigns."21 Governor Walker and FOSW campaign 1nanager Keith Gilkes, 22 discussed ''placement" of contributions. To avoid having to defend certain contributions to FOS W, they apparently vetted certain contributors to determine who should contribute to FOSW and be disclosed, or who should contribute anonymously to WiCFG. 23 Contribution records for those mentioned in the discussion reveal Aff. 302, 385-388, 390-398. 466-468, 476-478, 550-551' 582-583. Aff. 392-398, 402-405. 21 Aff. 452 and WiCFG bank records January 2'0 ri-July 2012. 22 Previously, Gilkes was Governor Walker's Chief of Staff. n Aff. 4 IJ-426. I<•·-. ....... ,, ............... , •• ,, ......... 12 Wis. Stat. § 11.12( l)(a) ................................................................................ 24 iii Schmitz Affidavit 0037 Wis. Stat. § 11.16 ......................................................................................... 12 Wis. Stat. § 11.20 ......................................................................................... 12 Wis. Stat. § 11.24(2) .................................................................................... 12 Wis. Stat. §I I .25(1) .................................................................................... 12 Wis. Stat. § 11.26 ..................................................................................... 8, 12 Wis. Stat. § 11.27 ......................................................................................... 12 Wis. Stat. § 11.3 8 ........................................................................................... 8 Wis. Stat. § 11.38(l)(a)l .............................................................................. 12 Wis. Stat. § 11.60 ......................................................................................... 13 Wis. Stat. §11.61 ......................................................................................... 13 Wis. Stat. §227.11(2)(a) ......................................................... :...................... 7 Wis. Stat. §968.20 ......................................................................................... 5 Wis. Stat. §968.26 ......................................................................................... 4 Wis. Stat. §990.0 1(26) .................................................................................. 9 REGULATIONS Wis. Adm. Code GAB §1.20 ...................................................................... 24 Wis. Adm. Code GAB §1.42 ................................................................ 10,24 Wis. Adm. Code GAB §1.42(1) .................................................................. 11 Wis. Adm. Code GAB §1.42(2) .............................................................. 9, 10 Wis. Adm. Code GAB §1.42(6)(a)l.a-c ..................................................... 11 iv Schmitz Affidavit 0038 LAW REVIEW ARTICLES Bradley A. Smith; Super PACs and the Role of((Coordination" in Campaign Finance Law, 49 Willamette L.Rev. 603, 618-19 (Summer 2013) .................................................................................................... 6,21 Richard Briffault, Coordination Reconsidered, 113 Colum.L.Rev. Sidebar 88 (2013) .................................................................................................. 21 Thomas R. McCoy, Understanding McConnell v. FEC and its Implications for the Constitutional Protection ofCorporate Speech, 54 DePaul L.Rev. 1043 (2005) .............................................................................................. 21 OTHER AUTHORITIES El.Bd.Op. 00-2 ...................................................................................... 12, 13 OAB-05-1 0 .............................................................................................. 8, 24 v Schmitz Affidavit 0039 STATE OF WISCONSIN C 0 U R T . OF A P P E A L S DISTRICT I I IV Case No. 2014AP W STATE ofWISCONSIN ex rei. FRANCIS D. SCHMITZ, Special Prosecutor, Petitioner, vs. THE HONORABLE GREGORY A. PETERSON, John Doe Judge, and UNNAMED MOVANTS NO. I to NO.8, Respondents. MEMORANDUM IN SUPPORT OF PETITION FOR SUPERVISORY WRIT AND WRIT OF MANDAMUS I. INTRODUCTION "Prearranged or coordinated expenditures" result in "disguised contributions" and are subject to regulation, while only truly "independent expenditures" are afforded the highest First Amendment protections. 1 The John Doe judge correctly stated: "As a general statement, independent organizations can engage in issue advocacy without fear of government 1 Buckley v. Valeo, 424 U.S. 1, 25,46-47, 78 (1976). Schmitz Affidavit 0040 regulation. However, again as a general statement, when they coordinate spending with a candidate in order to influence an election, they are subject to regulation. " 2 The John Doe judge (hereinafter ')udge") did not apply this statement of Wisconsin law to the facts of this case. The facts before the judge provide reasonable belief that the Friends of Scott Walker (FOS W) and its agents coordinated spending, strategy, and fundraising purposefully and pervasively with a dozen or more 501 (c) corporations to influence elections and subvert Wisconsin's campaign finance laws. Under Wisconsin law and consistent with First Amendment principles, it is the conduct of coordination that demonstrates the intent and purpose to influence elections, resulting in regulated contributions. II. ARGUMENT A. The Exercise of Supervisory and Original Jurisdiction is ' Proper on These Facts. It is firmly established that the Court of Appeals may exercise supervisory and original jurisdiction to issue prerogative writs over the actions of a judge presiding over a John Doe proceeding. See In re John Doe Proceeding, 2003 WI 30, ~, 23 and 41, 260 Wis.2d 653, 660 N. W.2d Schmitz Affidavit 15-17 (emphasis added) (hereinafter '~Aff"). Unless otherwise indicated. by the "f' symbol, the Affidavit references are to Bates Stamp page numbers. 2 2 Schmitz Affidavit 0041 260. A supervisory or mandamus ·writ will not issue unless (I) an appeal is an utterly inadequate remedy; (2) the duty of the circuit court is plain; (3) the circuit court's refusal to act within the line of such duty or its intent to act in violation of such duty is clear; (4) the results of the circuit court's action must not only be prejudicial but m~st involve extraordinary hardship; and {5) the request for relief must have been made promptly and speedily. See State ex ref. Kenneth S. v. Circuit Court for Dane County, 2008 WI App 120, ,8, 313 Wis.2d 508, 756 N.W.2d 573. No direct appeal may be taken from the judge's actions. Petitioner's only remedy is this Writ. The Petitioner submits that the judge misapplied Wisconsin law, as explained below. In addition, the judge failed to address facts in the record substantiating a reasonable belief crimes have occurred. The judge's decision involves a question of law. It is reviewed de novo. Ide v. LIRC 224 Wis. 2d 159, 166,589 N.W. 2d 363 (1999). The 1 erroneous application of the law and facts has resulted in the judge failing to perform his duties, i.e., to enforce the subpoenas at issue and to maintain the seized property as evidence for the investigation. The judge expressly 3 Schmitz Affidavit 0042 invited appellate review to avoid further delays. 3 The Petitioner has promptly sought relief. Accordingly, the Petition is well founded and the requested relief should be granted. B. The John Doe Investigations Have Been Halted by Reason of the Judge's Fundamental Misapplication of the Law. A John Doe proceeding under Wis. Stat. §968.26 is a special investigative proc~eding commenced, as allowed by law, on the basis of a petition alleging a reason to believe that a crime has occurred within the jurisdiction of the court. State ex. rel. Reimann v. Circuit Court for Dane County, 214 Wis.2d 605,611, 571 N.W.2d 385, 386 (1997). The John Doe proceeding is not a procedure for the determination of probable cause so much as it is an inquest for the discovery of crime. State v. Washington, 83 Wis.2d 808, 822, 266 N. W.2d 597(Wis. 1978). These investigations involve an inquiry into possible violations of campaign finance law. 4 Obviously, no charges have been brought. The judge's ruling abruptly halted a portion of the investigations, effectively concluding that there was no reason to believe any crime had been committed. Consequently, this writ proceeding is not about some 3 "Any reviewing comt owes no deference to my rationale, so giving the parties a result is more-important tha[n] a delay to write a lengthy decision on election and constitutional law." See Aff.15. 4 The John Doe Petitions are found at Aff. Pp. 797,800, 805, 809 and 814. 4 Schmitz Affidavit 0043 misapplication of"probable cause" standards to the facts of this case. It is about the judge's rejection of a fundamental premise of one portion of the investigation. That premise is this: the conduct of coordination is legitimately regulated by Wisconsin law and this is true even when a candidate/candidate committee acts in concert with a person engaging in issue advocacy. More than that, however, the judge also failed to appreciate another portion of the investigation evidencing instances of coordination by FOSW or its agents with persons engaged in express advocacy. For these reasons, no discussion of the standards relating to the issuance and/or scope of subpoenas is required. There is no dispute now before the court that the subpoenas sought information within the scope of the original petitions or that the requested documents were relevant to the purposes of the investigation. Likewise, no analysis of the Order returning property is appropriate at this juncture. Although he quashed subpoenas and ordered the return of property (but did so without any hearing under Wis. Stat. §968.20), the judge acted in this manner because of his rejection of an original premise of the issue advocacy portion of the investigation and ·- .---because he failed to appreciate the·express advocacy evidence· in the record. 5 Schmitz Affidavit 0044 The balance of this Memorandmn focuses on the legal reasons why this inquiry rests on a finn statutory and constitutional foundation. C. Consistent·with First Amendment Principles, Wisconsin Statutes and Regulations Properly Regulate the Conduct of Coordination Between SOl(c) Corporations and Political Committees, While Still Protecting Truly Independent Speech. 1. Wisconsin Law Proscribes the Conduct Under Investigation, Even When it Includes Issue Advocacy This is an investigation about conduct--direct dealing with an officeholder or his agents while offering something of value-which provides unique opportunities for corruption to occur and avoid statutorily mandated campaign finance restrictions and disclosure. 5 This investigation is not about persons engaging in their "own speech" ti-~at is truly independent from political committees and thus protected by the First Amendment. The coordinating conduct by a candidate, political committee, or their agents with purported independent issue advocacy 50 l(c) corporations results in the corporations disseminating the candidate's or political committee's speech. Rather than examining- 5 Bradley A. Smith, Super PACs and the Role of "Coordination" in Campaign Finance Law, 4? Willamette L.Rev. 603 (Summer 20 13)(citing Buckley, 424 U.S. at 30). 6 Schmitz Affidavit 0045 under Wisconsin statutes and regulations 6 - the conduct of coordination and the lack ofSOl(c) corporations' independence from candidates and/or political committees, the judge mistakenly focused only on the type of resulting speech, i.e., issue advocacy. The clearly stated purpose of Wisconsin's campaign finance laws is set out in legislative findings at Wis. Stat. § 11.001 (emphasis added): The legislature finds and declares that our democratic system of government can be maintained only if the electorate is informed. It further finds that excessive spending on campaigns for public office jeopardizes the integrity of elections. . . . When the true source ofsupport or extent of support is not fully disclosed, or when a candidate becomes overly dependent upon large private contributors, the democratic process is subjected to a potential corrupting influence ... The United States Supreme Court has also found that the citizens' ''right to know" is inherent in the nature of the political process. Transparency enables the electorate to make informed decisions and gives proper weight to different speakers and messages, even for speech that does 6 Administrative rules are given the effect of law and subject to the same principles of construction as statutes. See Law Enforcement Stds. Bd. v. Village ofLyndon Station, 10 l Wis.2d 472,489,305 N.W.2d 89 (Wis. 1981). "Perhaps the first rule of construction as to administrative rules and regulations is that rules made in the exercise of a power delegated by statute sh~uld be construed together with the statute to make, if possible, an effectual piece of legislation in harmony with common sense and sound reason." Jd The Government Accountability Board has both specific and general statutory authority to --·-promu-lgate rules for the-purpcses efinterpreting or implementing the laws regulating the conduct of elections or election campaigns or ensuring their proper administration. See Wis. Stats. §§5.05(1)(f) and 227.l1(2)(a). 7 Schmitz Affidavit 0046 not contain express advocacy. Citizens Unitedv. FEC, 558 U.S. 310,371 (20 10). In addition, the Wisconsin Attorney General has formally opined that to the extent Wisconsin administrative rules impose registration, reporting, or disclaimer requirements on independent expenditures that are not express advocacy, Citizens United does not make the rules unconstitutional. OAG-05-10, 136 (August 2, 2010). This investigation focuses on the degree of coordination between 50l(c) corporations and candidate or other political committees, as well as between purported independent political committees and candidates. Under Wisconsin law, the act of coordination between ostensibly "independent entities" (such as 501(c) corporations) and political committees has one of the following effects: (1) For candidate committees, the "independent entity" is deemed a subcommittee of the candidate's personal campaign cmnmittee (Wis. Stat. § 11.1 0(4)) and all legal contributions7 and disbursements must be disclosed on the candidate's campaign finance reports pursuant to Wis. Stat. § 11.06, or (2) For all political cmnmittees, coordinated expenditures Inust be disclosed as in-kind contributions on the political 7 Contributions exceeding statutory limits and direct or indirect corporate contributions are not legal. Wis. Stats. §§ 11.26, 11.3 8. 8 Schmitz Affidavit 0047 committee's campaign finance reports pursuant to Wis. St~t. §11.06. Every cmnmittee must register and must file full campaign finance reports that include contributions received, contributions or disbursements made, and obligations incurred. Wis. Stat. §§ 11.05(1) and (6). Committees cannot make contributions or disbursements prior to registering. Wis. Stat. § 11.06(1). Even a corntnittee that is not primarily organized for political purposes is required to report any disbursement that constitutes a contribution to any candidate or other individual, committee or group. See Wis. Stat. § 11.06(2). A person, 8 including a 501 ( c ) corporation, is a ''committee" under Wisconsin statutes, if engaged in making or accepting contributions or making disbursements, whether or not engaged in activities which are exclusively political. Wis. Stat. §I 1.01(4). 9 "Making or accepting contributions" includes the following two acts, among others: I) making or accepting a gift of something of value made for political purposes (Wis. Stat. §11.01(6)(a)); or 2) tnaking a "coordinated expenditure." Wis. Adm. 8 A "person" includes a limited liability company and a corporation. Wis. Stats. §§11.01(6L) and 990.01(26). 9 See also Center for Individual Freedom v. Madigan, 697 F.3d 464, 487 (7 1h Cir. 20ll)(Po-Htical committees need only'encompass organizations that are under the control ofa candidate and expenditures of"political committees" so construed can be assumed to faH under government regulation and are, by definition~ campaign related.) 9 Schmitz Affidavit 0048 Code GAB §1.42(2). Wisconsin law provides that expenditures made in cooperation or consultation, or in concert with, or at the request or suggestion of any candidate, authorized committee, or their agent are deemed "contributions" to such candidate and must be treated and reported as such. Wis. Adm. Code GAB 1.42(2). 10 This Wisconsin regulation is nearly identical to federallaw. 11 See also Center for Individual Freedom (CIF) v. Madigan, 697 F.3d 464,496-96 (ih Cir. 2012)(Upheld Illinois' coordination law and noted that Buckley upheld similar federal provision). An act is for a "political purpose[s] when it is done for the purpose of influencing the election ... of any individual to state or local office [or] for the purpose of influencing the recall from or retention in office of an individual holding a state or local office.'' Wis. Stat. §11.01(16). 10 The language in Wis. Adm. Code GAB § 1.42 uses the broader term "expenditureH instead of"disbursement'' when prescribing the activities that become subject to Wis. Stat.§ 11.06(7). This rule adopted the Federal coordination language and thus established a broader category of activity that constitutes a contributjon to a candidate committee, including coordinated expenditures. The Legislative history of Wis. Stat. § 11.06(7) shows a direct intent to adopt the Federal coordination language. See Affidavit of Kevin J. Kennedy ~1 O.a.iii and Exhibit 4 (November 30, 1979 Letter to Gail Shee instructing that the Federal coordination provision language should be added to the revisions of Wis. Stat. §I I .06(7).} 11 "Expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate." 2 U.S.C. §441 a(a)(7)(B)(i). The tenn "expenditure'' includes any purchase, payment, distribution, ---!<>an,-ad-vance, deposi~ or gift ofmoney or anything of value, -made-by any· person foP-the --·----- -- ·· purpose of influencing any election for Federal office and a written contract, promise or agreement to make an expenditure. 2 U.S.C. §431(9)(A)(i)-(ii). 10 Schmitz Affidavit 0049 Importantly, "political purpose" "is not restricted by the cases, the statutes, or the code, to acts of express advocacy." Wisconsin Coalition for Voter Participation v. SEB, 231 Wis.2d 670, 680, 605 N.W. 2d 654 (Ct. App. 1999)(hereinafter WCVP). Furthennore, Wisconsin law provides that no "expenditure" may be made or obligation incurred over $25 in support of or opposition to a specific candidate unless such expenditure or obligation is reported as a "contribution" to the candidate or the candidate's opponent, or is made or incurred by a "committee" filing the voluntary oath specified in Wis. Stat. § 11.06(7). Wis. Adm. Code GAB §1.42( 1). Coordination between a candidate committee and another entity is presumed- and "any expenditure" of that entity is treated as an in-kind contribution to the candidate committee- when the expenditure is made as a result of a decision by a person who is an officer, a compensated campaign worker, or otherwise an agent of the candidate's campaign committee. Wis. Adm. Code GAB §1.42(6)(a)l.a-c. Finally, Wisconsin law specifically requires financial disclosure when a candidate works in concert with a second cominittee. ------------ _____ .. ___ ·-··· · · -- --Any comrnittee which is organized or acts with-the· --------- · --- --cooperation of or upon consultation with a candidate or agent 11 Schmitz Affidavit 0050 or authorized committee of a candidate, or which acts in concert with or at the request or suggestion of a candidate or agent or authorized committee of a candidate is deemed a subcommittee of the candidate's personal campaign committee. Wis. Stat. §11.1 0( 4 ). By operation of law, any person coordinating with or acting at the request or suggestion of the Governor Scott Walker or his committee, FOSW, is deemed-to be a subcommittee ofFOSW. That person is subject to all campaign finance contribution prohibitions, limitations, and disclosure requirements applicable to FOSW. See, e.g., Wis. Stats. §§ 11.05; 11.06(1 ); 11.12; 11.16; 11.20; 11.24(2); 11.25(1 ); 11.26; 11.27; 11 J8(l)(a)l. Wisconsin law clearly distinguishes between coordinated activities and truly independent activities. It prohibits unlimited and undisclosed spending for coordinated activities even if the resultant speech is issue advocacy. In the context of First Amendment principles, the former State Elections Board explained the application of Wisconsin statutes and regulations to coordinated activities. See EI.Bd.Op. 00-2, pp. 8-13 (affirmed by the G.A.B. on 3/26/08). Wisconsin law treats any coordinated expenditure made at the request or suggestion of the candidate or his agent ..... as a contribution .. -See id. at pp. 11-l-2citingFEC v.-The Christian 12 Schmitz Affidavit 0051 Coalition, 52 F.Supp.2d 45, 98 (D.D.C. 1999). If the spender's communication is made at the request or suggestion of the campaign- or the spender and the campaign act in a joint venture- the coordinating conduct results in a contribution regardless of whether the communication contains issue advocacy. See El.Bd.Op. 00-2 at p. 12. Violations of these laws carry both civil and criminal penalties and such regulation of coordinated conduct is consistent with the First Amendment. See Wis. Stats. §§11.60 and 11.61. 2. There is Good Reason to Believe FOSW and the 50l(c) Respondents May Have Violated Wisconsin Law. In accepting the John Doe Petitions, the initial judge found there was reasonable belief that a crime has. occurred. Information available to the judge provided a reasonable belief that FOSW and its agents, utilized and directed 501 (c) corporations, as well as certain political committees, to circu1nvent Wisconsin's campaign finance contribution limitations and disclosure laws. As one example, Governor Walker and Keith Gilkes, the FOSW campaign rrianager, discussed vetting contributions prior to acceptance, thus giving rise to the reasonable inference that some contributors were directed to Wisconsin Club for Growth (WiCFG) to 13 Schmitz Affidavit 0052 avoid public disclosure by FOSW. 12 At this early stage of the John Doe investigation, the State seeks to obtain additionaJ information relevant to this and other coordination activities. There is ample additional evidence providing a reasonable belief that the conduct of coordination between FOSW and 50l(c) corporations was done for the purpose of influencing the recall from or retention in office of the Governor and State Senators, or the elections, during the 201 I and 2012 recall elections. This is a political purpose. As a result of this "conduct," the speech ofthe 50 I( c) corporations was not their own, but rather that of Governor Walker and FOSW. R.J. Johnson was an agent ofFOSW and WiCFG, among other 50l(c) corporations. 13 His own words remove any doubt that the 501 (c) corporations intended to influence elections. Ads were run on poll tested issues, including fiscal responsibility, tax hikes, wasteful spending and spending priorities that moved independent swing voters to the GOP candidate. 14 There was also sufficient evidence to provide a reasonable belief that the conduct of coordination resulted in "contributions" within the meaning of Wisconsin law. This conduct is within the scope of campaign finance 12 Aff.333-34 Furthermore, the accompanying Petition contains an extended discussion of the facts referenced in this and other sections ofthe Argument13 Aff.407-08. 14 Id. 14 Schmitz Affidavit 0053 regulation, thus requiring disclosure of such contributions. In quashing the subpoenas and ordering the return of property, the judge focused on coordinated fundraising; however the coordinated conduct was far more extensive. The conduct included detailed discussions and agreements regarding: campaign strategies and messages; fundraising; production, dissemination, and spending for print, telephone, radio, and television advertising. See Petition, pp. 8-18. Other conduct included the execution of, and spending for, opposition research, polling, and Get Out The Vote efforts ("GOTV"). Jd FOSW agents, like R.J. Johnson, Kate Doner, and Deborah Jordahl, were simultaneously agents ofWiCFG, Citizens for a Strong America (CFSA), and other 501(c) corporations. See Petition pp. 810. FOSW agents, like Johnson and Doner, planned and executed efforts through WiCFG to "ensure correct messaging." 15 FOSW agents had direct control over WiCFG and according to e-mails, Governor Walker himself wanted "all the issue advocacy efforts run thru one group" to avoid "past IS Aff.385. 15 Schmitz Affidavit 0054 problems with multiple groups doing work on 'behalf of Gov. Walker.'~ 16 FOSW agents specifically stated: In Wisconsin, a 50l(c)(4) is the legal vehicle that runs the media/outreach/GOTV campaign. The Governor is encouraging all to invest in Wisconsin Club for Growth. 17 An August 18, 2011 email summarizes the coordination that occurred during the 2011 recall elections. 18 Our efforts were run by Wisconsin Club for Growth and operatives R.J. Johnson and Deb Jordahl, who coordinated spending through 12 different groups. Most spending by other groups was directly funded by grants from the Club. 19 The coordination included direct control over advertising scripts and placement. See Petition, pp. 12-13. D. Wisconsin Laws Properly Differentiate Between Coordinated Speech That is Regulated and Truly Independent Speech That is Protected. Neither the right to associate nor the right to participate in political activities is absolute. Buckley v. Valeo, 424 U.S. 1, 25 (1976). "Prearranged or coordinated expenditures" are equivalent to "disguised contributions/' subject to the same limitations as contributions. ld at 25, 46-7, 78. Any restrictions on coordinated expenditures are subject to only 16ld Jd (emphasis in original). 17 18 A.ff.407. Aff.407-08 (emphasis added). 19 16 Schmitz Affidavit 0055 the intermediate level of scrutiny-the restriction must be closely drawn to match a sufficiently important government interest. Buckley, 424 U.S. at 25; See also FEC v. Colorado Republican Federal Campaign Committee (Colorado II), 533 U.S. 431,456 (2001). Ever since our decision in Buckley, it has been settled that expenditures by a noncandidate that are 'controlled by or coordinated with the candidate and his campaign' may be treated as indirect contributions subject to FECA' s source and amount limitations. McConnellv. FEC, 540 U.S. 93,202,219-223 (2003); C!Fv. Madigan, 697 F.3d at 496. The U.S. Supreme Court reaffirmed this rationale when it declared "coordinated spending [is] the functional equivalent of contributions." Colorado II, 533 U.S. at 447. Coordinated expenditures for communications, even those that avoid express advocacy, are treated as contributions. McConnell, 540 U.S. at 202. 20 In the context of a political party's coordinated expenditures with candidates of that party, the United States Supreme Court specifically held "[c}oordinated expenditures, unlike expenditures truly independent, may be restricted to minimize 20 Upholding application of2 U.S.C. §441 a(a)(7)(B)(i)-(ii) to coordinated expenditures for communications that avoid express advocacy, which are contributions. 17 Schmitz Affidavit 0056 circumvention of contribution limits." Colorado IL 533 U.S. at 465 (emphasis added). Restrictions on contributions are preventative to ensure against the reality or appearance of corruption created by circumvention of valid contribution limits. See Colorado IL 533 U.S. at 456; Citizens United, 558 U.S. at 356. Contribution limitations and disclosure regulations, whether by direct contribution or resulting from coordinated expenditures, are closely drawn restrictions designed to limit the actuality and appearance of corruption resulting from large individual contributions. This is a sufficiently important government interest to support regulation. Buckley, 424 U.S. at 25-26. The First Amendment permits the governll?-ent to regulate coordinated expenditures. WRTL v. Bar/and, 664 F.3d 139, 155 (ih Cir. 20 11) (Sykes, J.) (citing Colorado II, 533 U.S. at 465). 21 HThe need for an effective and comprehensive disclosure system is especially valuable after Citizens United, since individuals and outside business entities may engage in unlimited political advertising so long as they do not coordinate tactics 21 The Seventh Circuit also emphasized that the "separation between candidates and · ---- ---independent expenditure groups" negates the possibility that independent expenditures will lead to, or create the appearance of, quid pro quo corruption. WRTL, 664 F.3d at 155. 18 Schmitz Affidavit 0057 with a political campaign or political party." CJF, 697 F .3d at 487 (emphasis added). See also Wis. Stat.§ 11.001. "By definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate." Citizens United, 558 U.S. at 360 (citing Buckley, 424 U.S. at 46). Collusion between a candidate and an independent committee is evidence that the independent committee is not truly independent and thus would not qualify for the free-speech safe harbor for independent expenditures. WRTL v. Barland, 664 F.3d at 153, 155. A candidate's coordination conduct which provides knowledge of advertisement "content plus timing makes a huge difference relative to the benefit of the ad to the candidate." Cao v. FEC, 619 F .3d 410, 427, 433-34 (5th Cir. 201 0). This is the type of coordinated activity that implicates the same corruption and circumvention concerns of the Colorado II court. !d. An organization engaged in "issue advocacy'' that coordinates with a candidate is subject to campaign finance regulations; the lack of independence makes the expenditures contributions. FEC v. Christian Coalition, 52 F.Supp.2d 45, 91-2, 98-9 (D.D.C. 1999). Where a candidate has-requested or suggested that the·spender·engagein··certain speech, where 19 Schmitz Affidavit 0058 the candidate or agents can exercise control over expenditures, or where there has been substantial discussion or negotiation between the campaign and the spender over expenditures, such conduct gives the expenditures sufficient contribution-like qualities to fall within the regulation of contributions. Id. This conduct indicates that the speech is valuable to the candidate, regardless of its content. Id. In the proceedings below, the Respondents relied heavily upon FEC v. WRTL (WRTL II), 551 U.S. 449 (2007) and Citizens United v. FEC, 558 U.S. 310 (20 10) for the proposition that the First Amendment requires a court to err on the side of protecting political speech rather than suppressing it. Such reliance is misplaced because WRTL II addressed only truly independent advertisements and no question was raised regarding coordination. See Cao v. FEC, 619 F.3d 410,435 (5th Cir. 2010). In Citizens United, the Supreme Court rejected the contention that disclosure requirements are limited to speech that is the functional equivalent of express advocacy. The Court determined that while disclaimer and disclosure requirements may burden the ability to speak, they "impose no ceiling on campaign-related activities" and "do not prevent anyone from 20 Schmitz Affidavit 0059 speaking." !d. at 366-67, citing Buckley, 424 U.S. at 64 and McConnell, 540 U.S. at 201. Contrary to the judge's assertion that the law has changed in the last fifteen years, legal scholars agree that Buckley and its progeny permit limiting contact between speakers and the candidate or his agents, otherwise known as coordination. 22 The only issue debated is the level of contact between a candidate and the speaker required to establish coordination. Some scholars suggest a broad coordination standard without substantial discussion or negotiation. 23 Other scholars argue that the coordinating conduct must meet the Christian Coalition joint venture standard. 24 Regardless, legal scholars agree that - at a minimum - the Christian Coalition joint venture standard remains an uncontroverted basis to find coordination sufficient to treat purported independent expenditures as contributions consistent with First Amendment speech and association rights. 25 22 See e.g. Smith, supra n.8; Richard Briffault, Coordination Reconsidered, 113 Colum.L.Rev. Sidebar 88 (2013); Thomas R. McCoy, Understanding McConnell v. FEC and its Implications for the Constitutional Protection of Corporate Speech, 54 DePaul L.Rev. I 043 (2005). 23 Briffault, supra n.27. 24 Smith, supra n.8. 25 Smith and Briffault, supra n.8,27. 21 Schmitz Affidavit 0060 As set forth below, Wisconsin adopted the Christian Coalition joint venture standard. E. Wisconsin Coalition for Voter Participation, Inc. v. SEB Remains Valid Controlling Precedent. In WCVP, the Court applied Buckley's determination that "prearranged or coordinated expenditures" are equivalent to "disguised contributions.'' The Court addressed issues nearly identical to those presented in this case and ruled against the parties seeking to halt an investigation into illegal coordination between a candidate's campaign and ·an issue advocacy entity. Contributions to a candidate's campaign must be reported whether. or not they constitute express advocacy. See WCVP, 231 Wis.2d at 679 (emphasis in original). See also Wis. Stat. §11.06(1). The fact that a third party runs "issue ads" versus "express advocacy ads" is not a defense to illegal "coordination" between a candidate's authorized committee and third party organizations. WCVP, 231 Wis.2d at 679 The First Amendment cannot be interpreted to bar an investigation into potential violations of the state's campaign finance law as a consequence of coordination. WCVP, 231 \Vis.2d at 679. WCVP rejected the argument that Wisconsin law first requires speech in the form of 22 Schmitz Affidavit 0061 express advocacy before regulation may attach and it rejected due process notice arguments. The WCVP Court referenced a federal court's "comtnon sense" legal analysis applying coordination principles to issue advocacy expenditures, treating them as contributions subject to regulation. WCVP, 231 Wis.2d at 686, fn. 11 citing FEC v. The Christian Coalition, 52 F.Supp.2d at 92. The court specifically stated: ... the issue before us has nothing to do with the Coalition's partisan or non-partisan status, or the content of its mailing. It concerns only the Board's investigation into whether the Coalition, no matter what purpose it was organized for, and no matter whether some, many, or most people might think the message on the cards wasn't advocating one candidate over the other-made an unreported in-kind contribution to the Wilcox campaign. WCVP, 23 I Wis.2d at 683,605 N.W.2d at 660-661. F. Evidence Supports a Reasonable Belief FOSW Coordinated With Certain Independent Committees Who Engaged in Express Advocacy Speech and Violated Wisconsin Law. Wisconsin statutes specifically provide that a committee wishing to make a truly independent disbursement must affirm that it does not act in concert with, or at the request or suggestion of, any candidate or agent or authorized committee of a candidate. Independent committees must sign an oath. Wis. Stat. § 11.06(7). If an independent committee makes disbursements that are coordinated with a candidate or agent, that 23 Schmitz Affidavit 0062 committee is no longer considered ~'independent." Its disbursements become reportable in-kind contributions to the candidate's campaign committee. Wis. Adm. Code _GAB §§1.20, 1.42. See also WCVP, 231 Wis.2d 670 at fn. 2 citing Wis. Stats. §11.01(6)(a)I. and 1 1.12(l)(a). See also OAB-05-1 0, ~20 (recognizing that a "disbursemenf' may also qualify as a "contribution" under Wisconsin statutes). The judge did not focus on evidence in the record that at least two political committees expressly advocated either for Governor Walker and Senate recall candidates or expressly advocated against their opponents. Coordination regarding such express advocacy was in direct contravention of the oaths of independent disbursements. 26 Emails document coordination between the Republican State Leadership Committee Inc. ("RSLC"), a registered independent disbursement committee, and FOSW agents during the 2011 recall elections. In one such email from R.J. Johnson to an RSLC representative, Johnson wrote: Need to know that you are up and the content of your spot. We are drafting radio to complement. Also need to know if you plan to play any further in WI beyond Holperin. 27 26 21 Aff 225-26, 286-292. Aff 219-20, 400-01. 24 Schmitz Affidavit 0063 These plans were then shared with Governor Walker, Keith Gilkes and Kate Doner in an email dated July 13, 2011. 28 Evidence also included eight separate advertisements sponsored by Right Direction Wisconsin PAC (political committee of the Republican Governor's Association [RGA]) critical of Governor Walker's opponents in the 2012 Gubernatorial recall election. 29 Additional emails document that agents ofFOSW were regularly conducting meetings and conference calls with the RGA 30 to discuss campaign strategy, including polling. 31 III. CONCLUSION Based on the Petition for Supervisory Writ and Writ of Mandamus and the authorities set forth herein, the Petitioner requests the relief sought 28 Aff. 293. Aff. 227-30. 30 Aff. 234,236. 31 Aff. 242. 29 25 Schmitz Affidavit 0064 in the Petition so that this investigation can proceed without further delays. Specifically, the Petitioner requests an order that: 1. Vacates the Hon. Gregory A. Peterson's January 10,2014 Order quashing the subpoenas and directing the return of property seized by search warrants. 2. Directs the John Doe judge to enforce the subpoenas served upon the Respondents. 3. Grants such other equitable relief as the Court may deem just and appropriate. Dated this ·t.t>' day ofFebruary 2014. Respectfully submitted, Attorney Francis D. Sch z Petitioner and Special Prosec Wisconsin Bar No. 100023 Address Post Office Box 2143 Milwaukee, WI 53201 (414) 278-4659 26 Schmitz Affidavit 0065 CERTIFICATION I certifY that this Metnorandum conforms with the rules contained in Wis. Stat. §809.19(8)(b) and (c), for a Memorandum produced using proportional serif font. The length of the portions of this Memorandum described in Wis. Stat. §809.19(l)(d), (e) and (f) is 4,996 words. See Wis. Stat. §809 .19(8)( c) 1. In combination with the Petition that this Memorandmn supports, the total word count is under 8,000. See Wis. Stat. §809.51 (1). ~:r Dated this _3:!_ day ofFebruary 2014, Attorney Francis D. SCfifAJ.t.2~ Petitioner and Special Prosecutor Wisconsin Bar No. 100023 Address Post Office Box 2143 Milwaukee, WI 53201 (414) 278-4659 27 Schmitz Affidavit 0066 STATE OF WISCONSIN C 0 U R T OF APPEALS DISTRICT I I DISTRICT IV Case No. 2014AP W ·· STATE·0fWISGONSIN ex-rel. FRANCIS D. SCHJvliTZ, Special Prosecutor, Petitioner, vs. THE HONORABLE GREGORY A. PETERSON, JohnDoeJudge, UNNA1v.tEDMOVANTNO.l, UNNAMED MOVANT NO.2, UNNAMED MOVANT NO.3, UNNAMED MOVANT NO.4, UNNAMED MOVANT NO. 5, UNNAlvlED MOVANT NO. 6, UNNAMED MOVANT NO.7, and UNNAMED MOVANTNO. 8, Respondents. AFFIDAVIT OF KEVIN J. IffiNNEDY DIRECTOR AND GENERAL COUNSEL ·WISCONSIN-GOVERNMENT-ACCOUNTABILITY -BOARD .... · . . . . . - .. - ... Concerning John Doe Proceedings in Five Counties Hon. Gregory A. Peterson, Presiding Columbia County No. 13JD000011; Dane County No. 13JD000009; Dodge County No. 13JD000006; Iowa County No. 13JD000001; Milwaukee County No. 12JD000023 Francis D. Schmitz Special Prosecutor Petitioner P .0. Address Post Office Box 2143 Milwaukee, WI 53201 (414) 278-465 Schmitz Affidavit 0067 STATE OF WISCONSIN C 0 U R T OF A P PEAL S DISTRICT I I IV Case No. 2014AP W STATE of WISCONSIN exrel. FRANCIS D. SCHMITZ, Special Prosecutor, Petitioner, vs. THE HONORABLE GREGORY A. PETERSON, John Doe Judge, and UNNAlvfED MOVANTS NO. 1 to NO. 8, Respondents. AFFIDAVIT OF KEVIN J. KENNEDY DIRECTOR AND GENERAL COUNSEL . _WISCONSIN GOVERNMENT ACCOUNTABILITY BQARP STATE OF WISCONSIN ) ) ss. DANECOUNTY ) K.evin J. K.ennedy, being first duly sworn on oath, deposes and says that: 1. I am the Director and General Counsel of the Wisconsin Goverrunent Accountability Board (G.A.B.). I was appointed to this position on November 5, 2007. The G.A.B. took over the responsibilities of the fanner State Elect~'?J?~..~~~ ~t~t~ ~thics Boards on January 10, 2008. Schmitz Affidavit 0068 2. Prior to my position with the G.A.B., I seryed for 24 years as the Executive Director of the Wisconsin State Elections Board (SEB), the predecessor to the G .A.B. with respect to election and election campaign administration. for the SEB for 4 years. 4. The G.A.B. is statutorily charged with the responsibility for the administration of Wis. Stats. chs. 5 to 12, other laws relating to elections and election campaigns, as well as lobbying and ethics laws. See Wis. Stat. §5.05(1). 5. The G.A.B. officially began work on January 10, 2008. It was created a year earlier by 2007 Wisconsin Act 1, replacing the State Elections Board and the State Ethics Board. The G.A.B. is made up of six fonner judges, nmninated by a panel of four Wisconsin Appeals Court judges, appointed by the Governor and confirmed by the Senate. The six board 1nembers serve staggered six-year terms; one member's term expires each year. Both the Board and its staff must be non-partisan. Wis. Stats. §§5.05(2m)(d)-(e), 15.60(4)-(8). In a 2010 commentary titled "The --Persistence of Partisan Election Ad1ninistration," Ohio State University lav;--- - 2 Schmitz Affidavit 0069 professor Daniel P. Tokaji states: "The best American model is Wisconsin's Goven1mentAccountability Board, which consists of retired judges selected in a way that is designed to promote impartiality." See Exhibit 1, Election Law@ Mortiz, September 28,2010. Professor Tokaji followed up in 2013 with a draft paper titled "America's Top Model: The Wisconsin Government Accountability Board 11 See Exhibit 2J abstract .-·January 16,2013, paper to be published in U.C. Irvine Law Review, "Symposium: Foxes, Henhouses, and Commissions: Assessing the Nonpartisan Model in Election Administration, Redistricting, and Campaign Finance" (2913, Forthcoming). 6. Pursuant to its statutory responsibilities, the tnission of the G.A.B. is to ensure accountability in government by enforcing ethics and lobbying laws, and to enhance representative democracy by ensuring the integrity of the electoral process. To catry out this mission, the Board and its staff direct their energies toward providing for an informed electorate. The G.A.B. is a source of information about the election process, and the activities and fmances of candidates for public office. 7. The G.A.B. is conunitted to ensuring that Wisconsin elections are ·· -·- --····-----· ·-- -··- --·--·-·administered through open, fair and irnpartial procedures that guarantee-that 3 Schmitz Affidavit 0070 the vote of each individual counts, and that the will of the electorate prevails. The G.A.B. uses infonnation technology and the Internet to make information readily available to the public about the financing of political campaigns, elections, lobbying, and financial inter~sts of public officials. The Board and its staff are dedicated to enforcing the election, ethics, lobbying and campaign finance laws vigorously to reduce the opportunity for corruption and maintain public confidence in representative government. 8. The issuance of a supervisory or mandatnus writ is controlled by equitable principles and an appellate court can consider the rights of the public and thh:d parties. State ex rel. Dressler v. Circuit Court for Racine County~ Branch 1, 163 Wis.2d 622,630, 472 N.W.2d 532 (Wis. Ct. App. ~99l)(citing Cartwrightv. Sharpe, 40 Wis.2d 494, 503, 162 N.W.2d 5 (Wis. 1968)). 9. In the instant matter, ~e G.A.B. respectfully requests t~at this Court consider the rights of the G.A.B., as a third party, and the rights of the public in general. The Court should consider the impact of this matter on: A) The G.A.B.'s ability to provide accurate and consistent advisory opinions to individuals, candidates;-poHtical- committees, and other 4 Schmitz Affidavit 0071 persons (See Wis. Stat §5.05(6a)) and to enforce Wisconsin's campaign finance laws (See Wis. Stat. §5.05(2m));· and B) The ability for the public to satisfy their right to information regarding the true source of a candidate's support or extent of that support, such that our detnocratic .system of government can be maintained (See Wis. Stat. §11!001; See also, Citizens Unitedv. FEC, 558 U.S. 310, 130 S.Ct. 876, 899, 916 (2010).) 10. The G.A.B. is responsible for providing advisory opinions regarding the propriety of a person's actions under Wis. Stats. chs. 5 to 12, subch. III of ch. 13, or subch. III of ch. 19. See Wis. Stat. §5.05(6a). The G.A.B. is also responsible for enforcement of Wisconsin's campaign fmance laws . . . . . . . .. .. - . . .... found in Wis. Stats. ch. 11 and in Wis. Adm. Code GAB ch. L Failure of ~ this Court to ~ddress the instant matter would impact the G.A.B. greatly , and consequently all parties involved in election campaigns, including in the following ways: A. The G.A.B., and previously the SEB, has routinely provided advisory opinions consistent with the State'~ application of Wisconsin law reg~rding coordination of expenditures and its treatment as contributions, In fact, throughout the_re_~~II.e.J~.ctio:qsjn 5 Schmitz Affidavit 0072 2011 and 2012, the G.A.B. provided such advisory opinions regarding coordination. The G.A.B. has also provided advisory opinions to persons involved in the 2014 election campaigns. Those that already received advisory opinions presumably conformed their conduct tQ the advice and would now be at a significant competitive disadvantage to others who may not consider themselves subject to the same rules. In addition, while the G.A.B. continues to render advice consistent with its past application of the law, the instant matter has called that advice into question, creating great difficulties administering the campaign finance law. Clarity is particularly necessary, during this election year. 1. Pursuant to 2007 Wisconsin Act 1, the G.A.B. was requireq to review and affirm (or reject) all prior SEB formal opinions. 2007 Wisconsin Act 1, Section 209 (2)(f). Attached as Exhibit 3 is formal opinion El.Bd.Qp. 00-2, originally adopted by the former SEB in 2000. Pursuant to 2007 Wisconsin Act 1, this formal opinion was reviewed and specifically affirmed by the G.A.B. in a public meeting on ·March 26, ~OOlt Pages 8-13 of the opinion include a detailed_ 6 Schmitz Affidavit 0073 analysis of Wisconsin law regarding a candidate's coordination with issue advocacy groups, and the opinion concludes that such coordination constitutes conduct that is subject to campaign fin~ce regulation because the coordination results in a political contribution. ii. Pursuant to 200iWisconsin Act 1, the G.A.B. was required to review and affinn (or reject) all prior administrative rules originally promulgated by the SEB. Pursuant to its requirements under this Act, the G.A.B. reviewed and specifically affirmed Wis. Adm. Code GAB §1.42. (coordination) in a public meeting In the U.S. Is there any hope for nonpartisan election administration In an era of Intense political I ;;J I January 16. 2013 Abstract; The United Slates Is an oulller among democratic countries when It comes to tha Institutions charged with running our elections. Most other democratic countries have an Independent elecUon authortty that enjoys some lnsulaUon from partisan politics in running elections. In the United States; by contrast, partisan etecllon administration is the near-universal norm at the state level. In most states, the chief election authority - usually the Secretary of State- is elac:lecl to office as a nominee of his or her party, while In almost all the remaining states the chief election official Is appointed by partisan officials. ~. ..___ ____ _ I~~:0 nI'rne To ba published In U.C. Irvine Law Review, Symposium: Foxes, Henhouses, and Commissions: Assessing the Nonpartisan Modef in Election Administration, Redistricting, and Campaign Ffnonce (2013, Forthcoming) Ohio Slate Public LBIV WOrlrillo Paoer No. 184 i _ ,~~~~:~~~~~~~~::~~:::~~~:~:;:;~~;~1 , ~~~1:_ I ~;,. to SSRN pclari~atlon? This article considers this question by examining and assessing the performance of Wisconsin's GAB. It concludes that the GAB has been successful in administering elections evenhandedly during Us lim! live yl!ars of axlstence and, accordingly, U1at it5ervl!s as a worlhy made\ lor other states consld!!flng alternatives to partisan election administration at the state level. Part II discusses the origins and history of the GAB, putting it in the context of other electoral Institutions In the U.S., as welt as electoral Institutions In other democratic countries. Part Ill discusses the most important election administration Issues lhat have come before the Wisconsin GAB since its creation, including fierce partisan debates over voter reglslrallon and voter identification, errant reporting of election results In a very close slate supreme court race, and contentious recall elections of the Governor and prominent state legislators. Part IV concludes by evaluating I he GAB's perfqrmance during these trying Urnes and considering whether tho Wisconsin model can and should be exported to other states. ! .IT l ·lnfo.wisconsln.edu . 'Get on the flexible bachelor's I :information science Info In & I, . Jtechnology i !' l~ I Number of Pages In PDF File: 51 Keywords! election law, voting rights, election adminlstrallon, HAVA, vole suppression, voter fraud, voter ID working papers series Data posted: January 17, 2013; Last revised: January 1B, 2013 Download This Paper http://papers.ssrn.com/sol3/papers. cfm?abstract_id=220 15 87 EXHIBIT 2 Kennedy,Affidavit February 21, zQUil 2/2112014 fficlavlt 0083 America's Top Model: The Wisconsin Government Accountability Board by ,Daniel P. To... Page 2 of2 I Suggested CltaUon I ,tiiiio'li,' Q;,if,;r~:-iimCr~Cii's1'oii"Mciciir:' i'tiii-wiiiiioiiln ac;.,-,;.·,;;•;;-, ·Ac'Cciuntiiiiilitvao8iii(J•ii~ruv ii, ioi:if~ ·: •To be published in U.C. Irvine law Roview. Symrosiuon: Fc,.~s. Henhcusns, Md Convnb•lon•; Asse•sing tho I i 'Ncnp.ortl.an Model In ElocUon Admln!Gttalfcn, Rodislr~/1 0.21 JB/usrn. 2~0 1~~7 i ;~~·::·.-.:.:::::::.-.::=.:=:=:::..:-.:::::•.-:--===:_::..:..~:::_::....:;_-;_·~-:.-:-_::::.:~:...: ...::==:==-"'::.::.._-~.~::..:.=.::.::.::.:.:.=.:.-..:.-::.; j • 1 ! Contact lnrormatlon . 1 • L. __ Daniel P. Tokojl (Contact Author) Ohio Stale University (OSUJ· Michael E. 55 West 12th Avenue I' Morl~ Collage of Law ( ~) Cclumbuo, OH ~3210 UniledStat"!.....- -... - ..- - .. - - - - - _.. ___... ·- - · _ - - - - -... .... _ _ - I . 1 ----·----·--' ·---·----:---:--·---:.,...--~ ® 2014 Soda! Science Electronic Publishing, Inc. AU Rights Reserved. FAO Terms of Use Privacy Policy ~ Contact Us This page was processed by apollo4 In 0.328 seconds and delivered in 2.462 seconds http://papers.ssm.com/sol3/papers.cfm?abstract_id=220 15 87 2/21/2014 Schmllz Affidavit 0084 EI. Bd. 00-2 .(Reaffirmed 3/26108) Summary: Non-registrants, including corporations, may communicate to the general public their views about issues and/or about a clearly identified candidate, without subjecting themselves to a registration requirement, if the communication does not expressly advocate the election or defeat of a · clearly identified candidate; expenditures which are "coordinated" with a candidate or candidate's agent will be treated as a contribution to that candidate; intra-association communications that are restricted to 11 a candidate endorsement, a position on a referendum or an explanation of the association's views and interests" distributed to the association's members, shareholders and subscribers to the exclusion of all others, are exempt frQm ch. 11, Stats., regulation; and a non-partisan, candidate-non-specific voter registration or voter participation drive is not subject to the registration and reporting requirements of ch.ll, Stats. This opinion was reviewed by the Government Accountability Board pursuant to 2007 Wisconsin Act 1 and was reaffirmed on March 26, 2008. Opinion: You have requested that the State Elections Board issue a formal opinion establishing guidelines for voluntary associations and other non-registrants.who wish to spend money for the purpose of publishing and distributing the following types of communications: communications that raise voter awareness about candidates and campaign issues; communications that promote voter registration or voter participation; and communications that are limited to members, shareholders and subscribers. Your requests are as follows: Metropolitan Milwaukee Association of Commerce In the past, if a get-out-the-vote effort did not advocate a specific candidate, they were exempt from state election laws §11.04, Stats. · A November 26, 1999 decision (No. 99-2574, Court of Appeals, District IV) says the Elections Board can investigate get-out-the-vote efforts carried out under §I 1.04, Stats., even if they do not advocate on behalf of any candidate. Based on this recent court decision, if a candidate or campaign is aware or encourages such a non-advocacy effort, the cost of the effort is a reportable contribution that must be fully disclosed. To our knowledge, the Elections Board has never articulated this standard. As Wisconsin's Supreme Court said in its ruling last year in the WMC case: "Because we assume that [persons are] free to steer between lawful and unlawful conduct:, we insist that laws give the person of ordinary intelligence a reasonable -- ···opportunity-to know what is prohibited so that he [or she] may act accordingly." Given 1 EXHIBIT3 Kennedy Affidavit the short time frame prior to the upcoming spring elections, it is imperative for the Elections Board to provide fair warning and guidance to the many organizations conducting get-out-the-vote efforts. WISCONSIN RIGHT TO LIFE I have enclosed copies of some publications, a phone script and a radio ad that we have used in past elections. We would like clarification of how the Board would view these activities in light ofthe Appeals Court decision and Clearinghouse R,ule 99-150. Specifically, we would like to know; I) which of these activities would the Board consider to fall under Clearinghouse Rule 99-150 and, thus, be subject to state election law? 2) if any of these activities were carried out in consultation with a candidate or a candidate's committee, which ones would the Board consider to be a contribution to a candidate's campaign and thus, subject to state election law? 3) if the Board considers any of these materials to be subject to state election law, would they be exempt if they were received only by members of Wisconsin Right to Life? The Elections Board prefaces its commentary on the specifics of a response to your requests with the caveat that three of the areas-- "issue" advocacy, "coordinated" expenditures, and intraassociation communications-- in which you have requested the Board's opinion are so fact intensive that the Board's opinion is virtually limited to the facts upon which the opinion is predicated. Slight changes in the wording of an issue advocacy communication or minimal increases 'in the amount or extent of contacts by a campaign agent regarding an expenditure of an independent committee, or expanding an. intra-association communication beyond the strict limits of "endorsements of candidates, positions on a referendum or explanation of its views and · interests," can completely change the regulatory outcome. I. WRL Reg uest WRL is requesting the Board's opinion with respect to the association's activities in its nonregistrant capacity, not with respect to its sponsored PAC's activity. Consequently, what \VRL is asking the Board is which of the described communications or described circumstances will impose a registration and reporting requirement on the association -- a requirement that the association is not able to meet because of its corporate non-MCFL status. (MCFL status refers to the holding of the U.S. Supreme Court in Massachusetts Citizens for Life v. Federal Election Commission, 479 U.S. 238 (1986) that certain non-profit, ideological corporations may not be prohibited from ·making expenditures for express advocacy purposes. Whether or not WRL would or could qualify for that status is not in issue in this opinion and, therefore, WRL will be treated as a non-registrant for purposes ofthis discussion.) WRL has raised three issues for the Board's consideration and discussion: 1) whether a give1_1 communicatiqn would cross. 'the line from unregulated issue advocacy to regulated express · advocacy; 2) with respect to a communication that would otherwise be unregulated, what kind of "contacts" between officers or agents of WRL and officers or agents of the campaign that "benefits" from the communication would constitute "coordination" between the two entities - causing the- commiul.ication (and the expenditures for it) -to 6e -subjecf to "c-ampaig-n fi[uirice -· .. . 2 Schmitz Affidavit 0086 regulation; 3) if the text of a communication would cause it to be subject to regulation under the express advocacy test, would that communication nevertheless be free from regulation, under §11.29(1), Stats., if the association limited distribution of the communication to members, shareholders and subscribers of the association, to the exclusion of all othe,rs. DISCUSSION A. Express Advocacy vs. Issue Advocacy The tenn "express advocacy,'' in the context of campaign finance regulation, was established in the U.S. Supreme Court's decision in Buckley v. Valeo, 424 U.S. 1 (1976), in the Court's review ·ofthe Federal Election Campaign Act's expenditure limitations, (§608(e)(l) of the federal act): We agree that in order to preser-Ve the provision against invalidation on vagueness grounds, s.608(e)(l) must be construed to apply only to expenditures for communications that in express terms advocate the election or defeat of a clearly identified candidate for federal office. (at p.702) · One concludes from the court's discussion that money that is spent, (by an otherwise nonregistrant), for a communication which expressly advocates the election or defeat of a clearly identified candidate is subject to campaign finance regulation. Conversely, money that is spent (by 11n otherwise non-registrant) for ·a communication that does not expressly advocate the election or defeat of a clearly identified candidate is not subject to campaign finance regulation (absent other circumstances: see the discussion on "coordination"). In applying Buckley, the courts have said that the express advocacy standard establishes a threewprong test for determining whether a communication, and the expenditure for it, is subject to regulation (i.e., contains express advocacy): ' 1. The communication must clearly identity a candidate, Whether by name, description, picture or other depiction, the identity ofthe candidate(s) discussed in the communication must be unmistakable. 2. The communication must advocate the candidate's election or defeat. 3. The advocacy must be express, not implied. Requirements (2) and (3) almost have to be read together such that a message which criticizes a specific candidate but calls for his/her election or defeat only impliedly, not exprt?ssly, is not subject to regulation. And a communication expressly advocating some action other than electing or defeating a candidate is also not subject to regulation. To clarify, or provide examples of, these joint requirements, the Buckley Court added (to the above quoted language on p.702), Footnote 52 to spell out words or terms that expressly advocate election or defeat. Those terms, (commonly referred to as the "magic words"), are: ' 1. «yote for;" 2. "Elect;" 3 Schmitz Affidavit 0087 3. "Support:" 4 .."Cast your ballot for;" 5. "Smith for Assembly;" 6. "Vote against:" 7. "Defeat:" 8. "Reject." The Buckley decision and, particularly, its express advocacy test have been the subject of numerous federal court decisions. Broadly generalized, those decisions go in two different directions. One direction reflected in decisions in the First, Second and Fourth Circuits of the United States Courts of Appeals (and in various district court decisions) takes a strictconstruction approach to the Buckley express advocacy test, requiring use of the "magic words," or an equivalent of those words, to subject a communication to regulation. More significantly, this direction limits the determ ination of express advocacy to the text of the message and virtually excludes examination of the context in which the message is uttered. This approach considers the Buckley Court to have intended the express advocacy test to be a "bright line" demarcation between what may be regulated and what may not. The other direction is reflected in the U.S. Court of Appeals Ninth Circuit's decision in FEC v. Furgatch, 807 ·F . 2d 857 (9th Cir. 1987), which rejected a strict "magic words" approach and added a context-based determination of express advocacy in the form of"limited reference to external events." We begin with the proposition. that "express advocacy" is not strictly limited to communications using certain key phrases. The short list of words included in the Supreme Court's opinion in Buckley does not exhaust the capacity ofthe English language to expressly advocate the election or defeat of a candidate. A test requiring the magic words "elect;" "support," etc., or th~ir nearly perfect synonyms for a finding of express advocacy would preserve the First Amendment right of unfettered expression only at the expense of eviscerating the Federal Election Campaign Act. "Independent" campaign spenders working on behalf of candidates could remainjust beyond the reach of the Act by avoiding certain key words while conveying a message that is unmistakably directed to the election or defeat of a named candidate. (at p.863) We conclude that context is relevant to a determination of express advocacy. A consideration of the context in which speech is uttered may clarity ideas that are not perfectly articulated, or supply necessary pre mises that are unexpressed but widely understood by readers or viewers. We sh,ould not ignore external factors that contribute to a complete understanding of speech, especially when they are factors that the audience must consider in evaluating the words before it. However, context cannot supply a meaning that is incompatible with, or simply related to, the clear import of the words. (at pp.863-864) With these principles in mind, we propose a standard for "express advocacy" that will . _:.. .. .. preserve.the efficacy of the Act without tre:ading upon the ·freedom of political expression. We conclude that speech need not include any of the words listed in Buckley to be express advocacy under the Act, but it must, when read as a whole, and with limited reference to external events, be susceptible of no other reasonable interpretation but as an 4 Schmitz Affidavit 0088 exhortation to vote for or against a specific candidate. This standard can be broken into three main components. First, even if it is not presented in the clearest, most explicit · language, speech is ''express" for present purposes if its message is unmistakable and unambiguous, suggestive of only one plausible meaning. Second, speech may only be termed "advocacy" if it presents a clear plea for action, and thus speech that is merely infonnative is not covered by the Act. Finally, It must be clear what action is advocated. Speech cannot be "express advocacy of the election or defeat of a clearly identified candidat~" when reasonable minds could differ as to whether it encourages a vote for or against a candidate or encourages the reader to take some other kind of action. W~ emphasize that ifany reasonable alternative reacting of speech can be suggested, jt cannot be express advocacy subject to the Act's disclosure requirements. This is necessary and sufficient to prevent a chill on forms of speech other than the campaign . advertising regulated by the Act. At the same time, .however, the court is not forced under this standard to ignore the plain meaning of campaign-related speech in a search for (at p.864) certain fixed indicators of"exprcss advocacy." ~ careful analysis of what the Forgatch court is really saying raises the question whether the court is saying something different from Buckley or saying lhe same thing differently. The answer to that question seems to depend on the analyst's perspective. What the court did say was that Buckley did not establish a "bright Uoe." Also, the three-prong Buckley test becomes a fourprong test: I. Speech is "express" for present purposes if its message is unmistakable and -unambiguous. suggestive of only one plausible meaning. 2. Second, speech may only be termed "advocacy" if it presents a clear plea for action, and thus speech that is merely informative is not covered by the Act. · 3. · FinaUy, it · must ·be clear what ·action is advocated. Speech cannot be "express advocacy of the election or defeat of a clearly identified candidate" when reasonable minds could differ as to whether it encourages a vote for or against a candidate or encourages the reader to take some other kind of action. (emphasis supplied throughout) 4. (Although the court didn't spell the 4th one out: the speech must identify clearly the subject candidate. That is a given under Buckley.) Thus, express advocacy is- speech that is unmistakable nnd unambiguous, suggestive of only one plausib1e meaning, containing a clear plea for action and it must be clear what action Is advocated: vote for or against a [clearly identified) candidate. That sounds a lot like the functional equivalent of the "magic words." But, at least, the Ninth Circuit opened the door to consideration of context in express advocacy determinations. Other federal courts, however, have not' cl:iosen: to·walk tbr6ugh thii.t door. ·· ·· ··· -- ~ · · · .. · ·· ·· ._... · · · · - ~ · ·-·· · · 5 Schmitz Affidavit 0089 Wisconsin codified the express advocacy test in §§11.01{6}, (7) and (16), Stats., which provide that both "contributions11 and "disbursements" must be made for "political purposes" and that "political purposes" includes (but, by the statute's own language, is not to be limited to) "The making of a communication which expressly advocates the election, defeat, recall or retention of a clearly identified candidate or a particular vote at a referendum." To further clarify which disbursements are subject to campaign finance regulation, the Elections Board adopted Wis. Adm. Code ElBd Rule l.28(2)(c), which provides: (2) Individuals other than candidates and committees other than political committees are subject to the applicable disclosure-related and record-keeping-related requirements of ch.l 1 Stats., only when they: (c) Make expenditures for the purpose of expressly advocating the election or defeat of a clearly identified candidate. Note that the rule did not include, or make reference to, the "magic words" test. The Board's application of the express advocacy test became the subject of litigation in 1996, when several non-registrants spent money to comment (positively or negatively) on the views, positions or voting records of specific candidates. In WMC v. State Elections Board, 227 Wis.2d 650 (1999), the State Elections Board made a determination that the defendant, WMC, a nonregistrant, had paid for communications that contained express advocacy, notwithstanding that the text of those communications did not contain any ofthe eight terms of Footnote 52 (or even any equivalent of the terms in Footnote 52). When WMC failed to comply with registration and reporting under ch.ll, Stats., as ordered by the Elections Board, the Board sought to enforce its order in circuit court. . After the Dane County Circuit Court dismissed the Elections Board's complaint on, essentially, due process g~ounds, the Wisconsin Supreme Court .uphelct the trial court's dismissal on the ground that the Board was attempting to do n;troactive rulemaking b)' making a deteJltlination of express advocacy based on context. The Wisconsin Supreme Court said that the Board may not make a detennination of express advocacy, (and thereby impose campaign finance regulation), based on the context in which speech is uttered or a communication is made - unless before making that determination the legislature enacts a statute or the Elections Board adopts a rule spelling out that context-based test. The Court added its opinion that the legislature or the Board may be able to craft a contextoriented express advocacy rule that may be able to pass constitutional muster, but that that rule may only be applied prospectively: We stress that this holding places no restraints on the ability .of the legislature and the Board to define further a constitutional standard of express advocacy to be prospectively applied ... .We encour.age them. to do. so, as_we. ar~ .well.aware ..of. the types Qf compelling state interests which may justifY some very limited restrictions on First and Fourteenth Amendment rights. (at p.32) 6 Schmitz Affidavit 0090 But the Court also qualified any attempt to define "express advocacy" with the proviso that any communication that meets that definition must contain "explicit words of advocacy of election or defeat of a candidate": Consistent with this opinion, we note that any definition of express advocacy must comport with the requirements of Buckley and MCFL and may encompass more than the specific list of "magic words 11 in Buckley footnote 52, but must, however, be "limited to communications that include explicit words of advocacy of election or defeat of a candidate."' (at p.33) (Emphasis supplied) · The Elections Board did attempt, in Clearinghouse Rule 99-150, to promulgate a rule clarifying determinations of express advocacy, but the rule was not context-based. That rule adopted the eight terms of Footnote 52 as examples of express advocacy and added that the texm "express advocacy" also included the functional equivalent of any of those eight tenns. The standing committees ofthe Wisconsin Legislature objected to the Board's rule and the rule was referred to the Legislature's Joint Committee for Review of Administrative Rules (JCRAR). .JCRAR also objected to the rule and introduced a bill amending §11.06(2) and creating §§11.01(13) and (20) and ll.Ol(l6)(a), Stats., requiring reporting of certain "issue advocacy" disbursements made during the last 60 days before an election. Unless (and until) the legislature enacts the legislation recommended by JCRAR, however, the standard applicable in Wisconsin is the one that was applicable before the WMC case: expenditures are subject to regulation on the basis of the message they purchase only if the message expressly advocates the election or defeat of a clearly identified candid~te. The Board believes that that standard means that, even without a rule, a message that does not include some form of the "magic words," or their equivalents, is not subject to campaign finance regulation. Looking at the materials included with WRL's opinion request, Items (1), (3), (4), (6), (7), and (8) do· not include any of the "magic words" or any equivalent of them. Even under the Furgatch test, these items contain no "plea to action" whatsoever, let alone a "clear plea". That means that not only do they not urge the reader or listener or viewer to vote one way or another, they do not urge the reader or listener or viewer to do anything. Consequently, to paraphrase the Court in WMC, they do not "include explicit words of advocacy of election or defeat of a cand idate. " and are not subject to campaign finance regulation (based on their text alone). Items (2) and (5) of the WRL opinion request include the following language that suggests a call to action, but may stop short· of express advocacy: Item (2) The November 3 election offers a clear choice between candidates running in your area . .. __ .Y.~I:l-~~~-!~u!Y...~.i!.~¥-.~..differenc;e for. the. women harmed by abortion and. for..the unborn children whose beating hearts must .not ~e silenced. BE INFORMED. . MAKE A COMPASSIONATE CHOICE. 7 Schmitz Affidavit 0091 This language asks that the reader/voter make a compassionate choice on November 3: and suggests that the compassionate choice is to vote pro-life. The plea to action Is clear; the course of action is not. Item (5) Now he wants to be re-elected to the State Assembly. Can unborn children, parents and taxpayers afford two more years of Virgil Roberts? This language is similar to the "Don't let him do it" in Furgatcb, except it is in rhetorical form rather than in the imperative. The only way to avoid two more years of Virgil Roberts is to vote him out on November 3, but that conclusion is implied not expressed. Whether either on~ of these communications "includes explicit words of advocacy of election or defeat of a candidate may depend on the political orientation of the reader, but they are closer than the other five. B. Coordination of Expenditures vs. Independent Expenditures In striking down limits on independent expenditures - because of the absence of the potential quid pro quo that justified restrictions on contributions -- the Buckley Court recognized an exception to that approach for money spent on communications that are "coordina~ed" with a candidate or his campaign or agents. In thls tension between permissible contribution limits and impennissible independent expenditure limits, the court recognized the necessity of regulating expenditures that were so "coordinated" with a campaign that they ceased to be independent and were enough like contributions to be treated as such: The parties defending [th~ cap on expenditures by individuals] contend that [the cap] is necessary to prevent would-be contributors from avoiding the contribution limitations by th~ simple expedient of pay.ing dire~tly for media advertisements or for other .portions of the candidate's campaign activities ... Yet such controlled or coordinated expenditures are treated as contributions rather than expenditures under the Act. Section 608(b)'s contribution ceilings rather than s.608(e)( I)'s independent expenditure limitation prevent attempts to circumvent the Act through prearranged or coordinated expenditures amounting to disguised contributions. By contrast, s.608(e)(1) limits expenditures for express advocacy of candidates made totally independently of the candidate and his campaign. (Buckley at pp.46-47, emphasis supplied) The Court did !lQt h.owever, provide a definition of, or standard for, "prearranged or coordinated expenditures amounting to disguised contributions." Furthermore, the Buckley court did not distinguish coordinated express advocacy from coordinated issue advocacy or even speak to the question whether one is distinguishable from the other with respect to government's authority to regulate. -· ........ ... The federal courts have begun to look at the issue of "coordinated" issue advocacy. In 1997, the United States Court of Appeals First Circuit, in Clifton v. Federal Election Commission 114 F. 3d 1309, held that the FEC's regulations restricting corporate contacts with candidates (or the 8 Schmitz Affidavit 0092 candidate's agents) with respect to certain fonns of issue advocacy, (voter guides and voting records), were beyond the FEC's authority under the Federal Election Campaign Act (FECA). "The regulation on voter guides provided that either a ·corporation or union publishing a guide must have no contact at all with any candidate or political committee regarding the preparation, contents and distribution of the voter guide or, if there "is such contact, (1) it must be only through written questions and written responses, (2) each candidate must be given the same prominence and space in the guide, and (3) there must be no "electioneering" message conveyed by any scoring or rating system used, or otherwise." (at p.1311) Starting with the FEC rule requiring substantially equal space and prominence, we begin with the proposition that where public issues are involved, government agencies are not normally empowered to impose and police requirements as to what private citizens may say or write. Commercial labeling aside, the Supreme Court has long treated compelled speech as abhorrent to the First Amendment whether the compulsion is directed against individuals or corporations. (at p.l313) · It seems to us no less obnoxious for the FEC to tell the Maine Committee how much space it must devote in its voter guides to the views of particular committees. We assume a legitimate FEC interest in preventing disguised contributions; ... The point is that the interest cannot normally be secured by compelling a private entity to express particular views or by requiring it to provide "balance" or equal space or an opportunity to appear. (at pp.l313-l314) The other rule principally at issue is the limitation on oral contact with candidates. We think that this is patently offensive to the First Amendment in a different aspect: it treads heavily upon the right of citizens, individual or corporate, to confer and discuss public matters with their legislative representatives or candidates for such office. As we have explained, the regulations bar non-written contact regarding the contents, not merely the preparation and distribution of voter guides and voting records; thus inquiries to candidates and incumbents about their positions on issues like abortion are a precise target of the FEC's rules as applied here. (at p.l314) It is hard to find direct precedent only- because efforts to restrict this right to communicate freely are so rare. Btit we think that it is beyond reasonable belief that to prevent corruption or illicit coordination, the government could prohibit voluntary discussions between citizens and their legislators and candidates on public issues. The only difference between such an outright ban and the FEC rule is that the FEC permits discussion so long as both sides limit themselves to writing. Both principle and practicality make this an inadequate distinction. (at p.l314) It is no business of executive branch agencies to dictate the form in which free citizens can confer with their legislative representatives. Further, the restri~tion is a real handicap on intercourse: the nuances of positions and votes can often be discerned only through oral discuss"ion; "as any courtroom. iav:iyer" knows, stilted written interrogatories and answers are no substitute for cross-examination. A ban on oral communication, solely for prophylactic reasons, is not readily defensible. (at p.l314) 9 Schmitz Affidavit 0093 The First Circuit was not saying that issue advocacy could be coordinated and it was not even saying that the FEC could not promulgate a rule prohibiting coordination of issue advocacy. What the court was saying was that the FEC could not attempt to prevent coordination with a propbylaotlc rule against aU oral contact between candidates and committees who make expenditures after that contact. In other words, the FEC may promulgate a rule proscribing illicit coordination, but the rule before the court was not that rule. The further implication of this decision is that the outright ban on MY "consultation, cooperation or action in concert" such as ·appears in the Wisconsin Statute, s.ll.06(7), Stals., (and which is identical to the language of the federal statute), may be unenforceable. Some level of contact between a candidate and a committee making expenditures is permissible.· The Supreme Court has said, in discussing related statutory provisions, that expenditu·res Valeo .... ; but "coordination" in this context implied some measure of collaboration beyond a ·mere inquiry as to the position taken by a candidate on an issue. ... (at p.1311) What constitutes "coordination," however, remained for other courts and other decisions. Recently, in Federal Election Commission y. The Christian Coalition, 52 F. Supp. 2d 45, (August, 1999), the United States District Court for the District of Columbia addressed the question of coordinated expenditures, generally, and coordinated "issue advocacy" in particular. T~e court found that coordinated Issue advocacy was subject to campaign finance regulation, but that ''the standard for coordination must be restrictive, limiting the universe of cases triggering potential enforcement actions to U1ose situations in whlch coordination is eKtensive·enough to make the potential for corruption· through legislative quid pro quo palpable without chilling protected contact between candidates and corporations and unions.'' (at p.91) The court tried to strike a balance between the position of the Coalition that only coordinated expenditures for the purpose of eK.press advocacy could be subject to regulation and the position of the FEC th.at any "consultation between a potential spender and a federal candidate's campaign organization about the c~mdidate's plans, projects, or needs renders any subsequent expenditures made for lhe purpose of influencing the election "coordinated" contributions." (at p.92) While the FEC's approach would certainly address the potential for corruption in the scenario, it would do so only by heavily burdening the common, probably necessary, communications between candidates and constituencies during an election campaign. (at p.96) above~described I take from Buckley and its progeny the directive to tread carefully, acknowledging that considerable coordination will convert an expressive expenditure into a contribution but that the spender should not be deemed to forfeit First Amendment protections for her own speech merely by having engaged in some consultations or coordination with a federal candidate. (at p.97) .A .na.rToW.!¥ tailored. definition of expressive coordinated .expenditures . must fgcus on those expenditures that are ofthe type that would be made to circumvent the contribution limitations. (at pp.97-98) 10 Schmitz Affidavit 0094 That portion of the FEC's approach which would treat as contributions expressive coordinated expenditures made at the request or suggestion of the candidate or an authorized agent is narrowly tailored. The fact that the candidate has requested or suggested that a spender engage in certain speech indicates that the speech is valuable to th~ candidate, giving such expenditures sufficient contribution-like qualities to fall within the Act's prohibition on contributions. (~t p.98) In the absence of a request or suggestion from th~ campaign, an expressive exp~nditure becomes "coordinated" where the candidate or her agents can exercise control over, or where there has been substantial discussion or negotiation between the campaign and the spender oyer, a communication's: (1) contents; (2) timing; (3) location, mode, or intended audience (e.g., choice between newspaper or radio advertisement); or (4) "volume" (e.g., number of copies of printed materials or frequency of media spots). Substantial discussion or negotiation is such that the candidate and the spender emerge as partners or joint venturers in the expressive expenditure, but the candidate and spender need not be equal partners .. (at pp.98-99) At about the same time, (November, 1999), the Wisconsin Court of Appeals, in Wisconsin Coalition for Voter Participation et al. v. State E lections Board (No.99-2574), was asked to review a similar issue: whether the ·State Elections Board could investigate the alleged "coordination" of a communication, (and the expenditures for it), between a candid~te's campaign and a committee called Wisconsin Coalition for Voter Participation, notwithstanding that the communication did not (concededly) expressly advocate the election or defeat of a clearly identified candidate. · The Court of Appeals agreed with the Dane County Circuit Court, (from whose decision the appeal was being taken), that "express advocacy is not a.n issue in this case." (at p.6) The Court of Appeals found-that..while. (under Buckley) "independent expenditures that do not constitute express advocacy of a candidate are not subject to regulation, . . . contributions to a candidate's · campaign must be reported whether or not they constitute express advocacy."(at p.7) Contrary to plaintiff's assertio~s, then, the term "political purposes" is not restricted by the cases, the statutes or the code, to acts of express advocacy. It encompasses many acts undertaken to influence a candidate's election -~ including making contributions to an election campaign .... (at p.8) ' Under Wis. Adm. Code s.EIBd 1.42(2), a voluntary committee such as the coalition is prohibited from making expenditures in support of, or opposition to, a candidate if those expenditures are made "in cooperation or consultation with any candidate or ... committee of a candidate ... and in concert with, or at the request or suggestion of, any candidate or ... committee ... " and are not reported as a contribution ·to the candidate. These provisions are consistent with the federal campaign finance laws approved by the Supreme Court in Buckley -· laws which, like our own, treat expenditures that are •••·•·• . ·"CQ(jrdinated"wltn;ofrnaOe II iif COOperation with"i:irwttfi •fiie.. Of Candidate-:·~ .-Qr.•·an authorized committee" as campaign contributions. (at pp.8-9) COnsenf a II Schmitz Affidavit 0095 There is little doubt that had the coalition given 354,000 blank paid postcards to the Wilcox campaign committee, allowing It to put whatever message it wished on them, this would have been a: reportable contribution .... . If there was consultation or coordination with the WjJcox campaign, it makes no difference that the chosen message was printed by the Coalitlon rather than by the campaign itself. As we have noted above, we think the Board was correct i£L observing (in one of its briefs to the circuit court) that "[i]f the mailing and the message were done in consultation with or coordinated with the Justice WUcox campaign, the [content ofthe message] is immaterial." (at pp.9-JO) In finding that "if the mailing and the JPessage were done in consultation with or coordinated with the Justice Wilcox campaign, the [content of the message} is Immaterial," the court did not determine any standard for "coordination" other than to recite the Wisconsin Statutory standard set forth in the oath for independent disbursements, (s.ll.06 (7), Stats.). That standard is that the committee or individual making the disbursements does not act in cooperation or consultation with, or act in concert with, or at the request or suggestion of, any candidate or agent or authorized committee of a candidate who is supported by the disbursements. The conclusion that appea.rs to follow from these cases is that speech which does not expressly advocate the election or defeat of a clearly identified candidate may, nevertheless, be subject to campaign finance regulation if the following two elements are present: (1) the speech is made for the purpose of influencing voting at a specific candidate's election; and (2) the speech (and or the expenditure for it?) is coordinated with the candida~e or his/her campaign. The Courts seemed to be willing to merge express advocacy with issue advocacy if "coordination" between the spender and the campaign is sufficient that the potential for a quid pro quo is immediate and apparent and, therefore, that the expenditure ought to be treated as a contribution. The Wisconsin Court of Appeals did not need to establish a standard for "coordination" because the proceeding before it was not. one to detennine whether "coordination" occurred, but a proceeding ·to determine whether the Elections Board could investigate whether "coordination" had occurred. But putting the standard established in Christian Coalition together with Wisconsin's statutory language one derives a standard as follows: coordination is sufficient to treat a communication (or the expenditure for it) as a contribution if: The communication is made at the request or suggestion of the campaign (i.e., the candidate or agents of the candidate); or, in the absence of a request or suggestion from the campaign, if the cooperation, consultation or coordination between the two is such that the candidate or his/her agents can exercise control over, or where there has been substantial discussion or negotiation between the campaign and the spender over, a communication's: (1) contents; (2) timing; (3) location, mode, or intended audience (e.g., choice between newspaper or radio advertisement); or (4) "volume" (e.g., number of copies of printed materials or frequency of media spots). Substantial discussion or negotiation is such that the candidate and the spender emerge as partners or joint - -ventllrers-m· the ·expres·sive expenditure; bunlie ·candiaate·ana· spe!i.aei'heea-tiot tie equai · partners. 12 Schmitz Affidavit 0096 Turning to the eight items WRL bas included, all eight would appear to be made for the purpose of influencing voting at a specific candidate's election (ll" one concedes that the purpose of informing voters of a candidate's position on an issue or issues is to influence their voting). Consequently, under the above standard, with respect to such communications, WRL would have to refrain from "discussion or negotiation with the campaign over, a communication's: (1) contents; (2) timing; (3) location, mode, or intended audience (e.g., choice between newspaper or radio a!ivertisement); or (4) "volume" (e.g., number of copies of printed materials or frequency of media spots) such that the candidate and the spender (WRL) emerge as partners or joint venturers in the expressive expenditure, albeit not equal partners." And, of course, WRL could not act at the request or sugge:;tion of the candidate or the candidate's agents. Another approach to the same subject matter is to divide it into two categories: contacts between a campaign and an independent committee in which 1) the campaign is the speaker and 2) the committee is the speaker. Each of those two categories would be divided into two subcategories: IJ discourse on philosophy, views and interests, and positions on issues and 2) discour~e on campaign strategy. In all of the cases discussed above, including Buckley, protection of a candidate's right to meet and discuss, witlt any person (including corporate persons), his or her philosophy, views and interest~, and positions on. issues (including voting record), is absolute. As the First Circuit said in Clifton: ... [as to] the limitation on oral contact with candidates. We think tltat this is patently offensive to the First Amendment in a different aspect: it treads heavily upon the right of citizens, individual or corporate, to confer and discuss public matters with their legislative representatives or candidates for such office. (p.1314) A ca'ndidate's (or campaign!s) rigbt.to .discuss campaign strategy, however, is not so absolute. It is the slippery slope and the best advice is to avoid (or, at the very least, minimize) it. The closer tbat such ·discussion comes to providing details that will facilitate or optimize the independent committee's expenditures, the more that discussion "dissolves in practical application" into coordination. Providing a committee with campaign literature or an 8 x 10 glossy picture is one thing, but providing a committee with an itinerary of media purchases and appearances, including text, is another. Similarly, an independent committee's right to meet and discuss its philosophy, views and interests, and positions on issues, is probably equally absolute to that of the candidate. But the right of the committee to discuss its strategy for the campaign probably doesn't exist if the committee wishes to remain independent. A catnpaign has no need to know that information other than for the purpose of coordination. C. Communications to Restricted Class {Members, Shareholders and Subscl"ibers) Under §11.29(1), Stats., a voluntary association, like WRL, may communicate a candidate endorsement, a position on a referendum or an explanation of the association's views and l3 Schmitz Affidavit 0097 inte'rests with its members to the exclusion of all others without subjecting that communication to campaign finance regulation. In El. Bd. Op. 88~4, the Elections Board issued a formal opinion that says that the statute will be construed strictly. That means the communication's distribution must be limited to the association's members, shareholders and subscribers to the exclusion of all others. A distribution pattern that appears to go beyond the restricted class may render the protection of§ 11.29(1 ), Stats., inapplicable. According to that Opinion, if the communication's message goes· beyond a candidate endorsement, a position on a referendum or an explanation of the association's views and interests, the protection of§ I 1.29(1), Stats., may not apply: Wisconsin law prohibits corporations and cooperatives and unregistered organizations from engaging in political activity. §11.38(2), Stats. The exclusions of §I 1.29(1), Stats., provide an exemption from those requirements. (p.I) Wisconsin law clearly permits any organization to make communications to its membership. Communications of a political nature which consist of endorsements of candidates, positions on a referendum or an explanation of the organization's views or interests are not subject to the registration and reporting requirements of Chapter 11, Stats. This is provided that the communications are funded solely by the organization and the communications are limited to the members of the organization to the exclusion of all others. § 11.29(1 ), Stats. (p.l) The exclusion from disclosure of communications with respect to endorsements and an explanation of the organization's views or interests is designed to permit otherwise political communications by an organization because it does not reach out to the general public. Although the communications may be designed to influence voting, or even expressly advocate the election or defeat of a clearly identified candidate, the communications are not subject to disclosure because the audience and activity are restr~cted. (p.2~ if · a candidate requests 'the orgaujzatio~ to communicate to its membership, the organization may inform its membership of candidate endorsements and an explanation of its views or interests. The views and interests of the candidate do not qualify for the exclusion fi·om disclosure except to the extent that the organization utilizes them in its explanation of its views and interests. To the extent that communication of the candidate's views and interests go beyond the statutory exclusion they are subject to disclosure and limitation under the applicable provisions ofChapter 11, Stats. (p.2) Communications of a political nature which go beyond the scope articulated in § 11.29(1 ), Stats., would be subject to the· registration and reporting requirements of Chapter I 1, If the political communications are done in cooperation or consultation with, in concert with, or at the request or suggestion of a candidate, the communications will be subject to the contribution limits of Chapter 11. (p.l) .. To be on th'e safe side, if an organization confines itself to communicating "a candidate endorsement, a position on a referendum or an explanation of the association's views and interests with its members to the exclusion of all others," pays for the communication with its 14 Schmitz Affidavit 0098 own funds, and does not distribute any candidate literature with the communication, the organization's communications will not be subject to ch.I 1, Stats. Turning to the specific items included in WRL's letter: all eight of the pieces communicate a candidate's views, position or voting record on abortion issues but would probably qualifY as either or both a candidate endorsement or an explanation of the views and interests of the association. While it is true that §11.29(1), Stats., exempts communication of the association's views and interests, not a candidate's, because the material originated with the association, the candidate's views or position set forth therein reflect the association's opinion of those views. Generally, associations have broad latitude when communicating material originating with the association. Associations may not, however, use this privilege to act as a conduit for campaign literature or campaign solicitations. II. MMAC Request Guidelines Relative to N on-advocacy Voter Regis tration and Voter P articipation E ffo r ts MMAC is also requesting the Board's opinion with respect to the association's activities in its non-registrant capacity, not with respect to its sponsored PAC's activity. What MMAC is asking the Board, in addition to the issues raised and discussed above, is: to what extent may an unregistered association or other non-registrant conduct voter registration or voter participation drives without being subject to a registration requirement or sul:iject to other compliance requirements ofch.ll, Stats. The initial response to the opinion request from MMAC is to note that the law has not changed: a ·non-partisan, candidate-non-specific voter registration or voter participation drive is not subject to the registration and reporting requirements ofch.ll, Stats. The governing statute is s.ll.04, Stats., which has not changed in many years and is' quite clear in its command: 11.04 Registration and voting drives. Except as provided in s.ll.25(2)(b), ss.ll.OS to 11.23 and 11.26 do not apply to nonpartisan campaigns to increase voter registration or participation at any election that are not directed at supporting or opposing any specific candidate, political party, or referendum. What that language is saying is.that a committee of persons who engage in an effort to "raise voter turnout" or voter regrstration, and who do so on a nonpartisan basis without directing their effort at "supporting or opposing any specific candidate, political party or referendum" are not required to comply with §§11.05 to 11.23, Stats., (which are the registration and reporting provisions of ch.ll, Stats.), or§ 11.26, Stats. ( ch.ll's limit on contributions). As long as an organization confines itself to the specific language of§ 11.04, Stats., the organization would appear to have a safe harbor. Concededly, however, some issue.s have arisen about the interpretati!)n of some of the language in §11.04, Stats. · ....... ........~-The-~itigatiea- te which· MMACs letter refers raised a cantroversiai· issue about the meaning of the tenn "nonpartisan" in the statutory phrase: "nonpartisan campaigns to increase voter registration or participation." Neither §11.0 1, Stat~., nor §5 .02, Stats., (the two statutory sections 15 Schmilz Affidavit 0099 defining terms for election and campaign finance purposes), defines the term "nonpartisan." The American Heritage Dictionary defines "partisan" as follows: Partisan - n. I. A militant supporter of a p,arty, cause, faction, person or idea; adj. 2. Devoted to or biased in support of a single party or cause. The Board believes that, at the very least, the legislature intended that an organization's message urging citizens to register and to vote could not, within the exemption of§ 11.04, Stats., exhort or suggest that they vote to support one party or another or exhort the voter to participate in a designated party's partisan primary. This meaning is sometimes referred to as "Partisan" with a capital "P". The legislature could also have intended that a voter registration or participation drive, seeking to qualify for the exclusion of § 11.04, Stats., could not be partial towards any "cause, faction, person or idea." This is sometimes referred to as "partisan" with a lower case "p". Either interpretation of the term "partisan" or "nonpartisan" incorporates a certain amount of redundancy into § 11.04, Stats., because of the subsequent phrase in the statute: "that are not directed at supporting or opposing any specific candidate, political party, or referendum.~' The best way to avoid this issue is to refrain from mentioning any "party, cause, faction, person or idea" in the text of the message communicated to the public. Instead, by confining the message to registration and going to the polls, the meaning of the statute, and the meaning of the message, do not require interpretation. Finally, with r~spect to the "coordination" issue alluded to in your letter, suffice it to say that the decision to conduct a voter drive and"the particulars of that drive, including the funding of it, are best not discussed with a candidate or any agent of a candidate. That does not mean that an organization may not discuss with a candidate his or her views on issues important to the organization, but the organization is well advised not to include in that discussion the organization's consideration of a voter drive or the particulars of that drive. . .... . . ·-····· ··- ... ...... · -' '""' ' ·-··· . ,,. .. ·-· ... · · · ·-~ · -·-· · · · - .... ···-·-··-······· ...-... ·-·· ·--·-··-·-···-- ····· .... . ·-··-· ·- ·-- . ,..., . ........... . . ..·-·· 16 Schmitz Affidavit 01 00 .. '"; • r ,. '\)·· ..... . .. .. : ., . , • >' ... ( -.:' ·' \. .. ~ · ~ 0 07l~ ~·i: ·tflJoo-t, .·: ·. •:.u. lloo:t '""' ~II'~~'Jri Gu.~-t • :l.flllM""•' !i~·a'l>ll:1rliJ jl;l'f~ :hT!>:~ioo.r to ,Ul.V ' t•Jllol :l.ot1t""• ;11q011il" !14•>~ lfHI Jllh h th• r-.a,flll A•n~s· llh!oh t:t1 }:lt. b'a ~be~ibut•d l'orth• hM'}to1• '1v ll.oa {~}f • . v ' . ·, ' . • • • , n~•ll 111' c"4~ 41Lthc'Ot. •)'oo~•t•~lQ!l o~ o...,ll\ll.~~!;\ •~ 'iiY tr'ndU•h lln'11 •u~fla•.h~d· 99-«~l ~~~. "" o.,e~l~ ot ~·n-Jid•h 1aa ..Oiob h ilob I)Odo 111 bano.~b wiEll,•·oi- 11.t f'IJlUHO or •••.; ut~~ or, ·~y.or\WlJll~·..: ol'.''lu1)r P~bh'l11'1,h~ ~..,.....J.tt~ .. or "-r11~~ .•.r jluo!t oMd~daao. • ' . •r . ~; or tho ..sv~:~t~~· .;t' "•Jl!4·ttllb to~•m..111!!,1"""" 1a·'hrt la;;~t opin!O"!' 0!1 d~uil.hi'a~t;f>~ 'tl~tqr~ tht f'SJ: 11tn b• ~.:.ru'l 6o : •· Oh\ '\:Q ~!to b1.1il i.t t-o • th~ .rr~iv! d•~.,· Jn> l1 .~ JZ Iff 1$ II 17 u n.IJ .u i' zo.o ~ ~ .n ~ tt."• tl' ~ 23•' 0 '. .. • ~~ D 24 .~ ,.tS' . ad' 1 .• ~ ~ ,, . ·~ • I •, • • Schmitz Affidavit 0102 • .;J:~~u.ia..-.• . I ..,. ». ~l.M (~f·-.:,~ ...~~~~~ eainsl sa. u .•. ~.a~-~W-.1 .. (l~t~W . . .. . . ~u. al:.., 1•1 ~·•·~ ta' ·--~~~~~~ii!t:tK r • . t j.$ na41 • • 11( . u fl (2 . I .,.. • ,, .. ... ' . . ... '. • • • ,:•. ', ; . .• . . ':. ... . . .. P..rt . . 'far· ~ 'tlitll'tlai. ..u.. .,. .• ~~~4·!·-·~;,'i, . .. ' . . ,. ' . .. . :.. .•.. ~, . . . . ~ . ......, fu.dd t'aMJIC"'. ·if~kw:u.. " " " ~ttA:Mot'.- .~ ~1 ~.. .. ~ ~. . 1& . ao· ' 11.!1' ('f), ~;Nlif·. ~ Mftt. ~I nacPill It •.~;rmt~~ . 1J • • ... u.. ,.·Ol ~ u. ~ ,_. •' ~·11M. . .... .... ....•._ ~ • • • .J.u. ~!AH...•• ~ ,h-J. . '1.tHU 11t-. ~·u~.-' ~~ ,. ;;;, , IU'fS!)ir . • ''· ..... • ....,... &ttl~~, ~ ' ... • mM w · . u.~·m ~~·~·- ~l#!l.lllii ··~·· ~ ~ · ·~wf ~ ....;...,.·~ ..-.~ ~~.w. · : ·~- ta.·~, ~.c·~-~~-~·~-~ .. • • • • •jl ~ ''" :;t").:; ,I ·~-.... -.it:W .. ~.·~· ... ...-~'d".:U:..<;,l,ti~i...t._:,: .-··- ~ ~~-~, t • • .:' •••• • • • .t • • • • • ., ;:,·· -k4 ...~..,.haft.~~-~~~~~~~~.~·. . .. ;,. ..... . ' 24 ~hi~'*-~•;....,.·oif~·cl~~· · 'f~t!'' . .s·' . ~~~~ma~~~ .u..t.w ..r._.;~._~,·:,·: :~~ · · ·. ;~ •. . .. ilmol.-.: UM·C;Q..~ -~, : fs.fli.-"3~M~ " . I . • • :r l!ldi· . • • i.. . . .·~:--. :·:~~.u~-..cp . .. " . .J,Mi~;·--~~.-~:J.fi~~ •., ..li\.'11 , ···- .. • . . . .• t4 • • Schmitz Affidavit 0103 - -- . Hawk'an . . ?n ?mu-?I?a?n'u?Jll .. grim}; ?Hi: . "a - 5v wr-rr, ?h Fig! .r .F15; Main mic: 1i.ch new 09.58.01: at nag-tug: gm" "gog at gr E'ou munitftidm p?m .r'Fiian?u ?251:: uggwimujuauut? ??brin-t. 7 In . tb- Zanix?tcisu alien's 'ggt?h . . gi5: minis: 26L 1m; 5 ta 'iir m! ?owl-ear .- - -- .. . . I, I: ?Hwtr?m?-or-cwlul-wa the individualAging: Incl: aha-13:9 or consulate-1m 111may:an con-inc: of candida" uba .ii a: WFFM: . .. an; Midi}:ij or cabins: doe- n93. 1.34:1; ?m'ih'h'qlml? oz.- ?an Iotl'm endingIf'?h?v-p on 91:945. 1min, ?ight . 11was"In 12Schmilz Af?davit 01 D4 -~ ·-....-:-eo r <"• .e:. .' . ::"' . :~,:". . ._.. ... . ........ .. . t ... -~ .·· ·::~~~• .. . ,.... .. ;. -. ··. ·' ,........ .'•. Schmitz Affidavit 0105