Thursday, August 30, 2007

What does Wisconsin's case mean to us?

Still trying to get details of what All Children Matter of Michigan did in Wisconsin that landed them in legal trouble, and what is the status of that trouble, I have turned up what look like the attorneys' explanations of what the complaints are and what ACM's answers are.

It boils down to this: Several people and organizations accused ACM of engaging in "express advocacy" in a state Senate district in Wisconsin without every registering with the appropriate state authority and reporting their activities, which is required by Wisconsin law of groups that intend to conduct "express advocacy" political action. "Express advocacy," as they explain it, means sending mail or making telephone calls urging people to vote for or against a candidate. Here's the sticky point. I think I've interpreted the complaint correctly to say that ACM did register as a "nonresident political committee" with the secretary of state's office in Wisconsin, which appears necessary to do business in the state. But it never registered as a "political committee" with the state board of elections, which is necessary to conduct political activity in the state. Under Wisconsin law, there's a difference.

So, without filing the paperwork that would allow it to conduct "express advocacy" political activity, ACM "disseminated communications to electors of the 21st Senate District via direct mail advertisements in which it expressly advocates that voters defeat Democratic candidate John Lehman. [The] advertisement states the following: 'There are over $12 billion reasons to vote against John Lehman'.”

Additionally, Wisconsin law requires that when a political committee sends "direct mail" like this, the mail has to include one of those disclaimers at the bottom that says, “Not authorized by any candidate or candidate’s agent or committee.” But they didn't do that, either.

And finally, the law requires that if they engage in this kind of "express advocacy," they have to file campaign finance reports like any other political action committee, and they didn't do that, because they never registered as one with the board of elections.

Please trust that I have read the whole document and condensed several pages of legal-ese into these few sentences. But if you want to read it for yourself, it's here (

How does this affect Utahns? Well, we have millions of dollars from ACM flowing into our state through Parents for Choice in Education (and I should mention a little later something I've learned in my searches about how PCE is an odd bird in the ACM family of political action committees), and we have PCE already sponsoring a nasty push-poll about the voucher referendum. Are our laws in Utah as tight as the Wisconsin laws that govern this activity? Or are looser election laws another reason that ACM was drawn to push its experiment here? I don't know this, but I hope someone does and can report it.

When ACM responded to the complaint, it said that there's a difference between "issue advocacy" and "express advocacy," and what it had done was "issue advocacy," which didn't require it to file with the board of elections or report its campaign finances like other political action committees. Assuming that the board of elections would accept its hair-splitting of "issue advocacy" from "express advocacy," then ACM confesses that it has done "issue advocacy" in Wisconsin "from time to time." As for registering with the appropriate authorities, ACM says it did all it was required to do under the law, since it was only doing "issue advocacy."

So the main question seems to be, what's the difference between "issue advocacy" and "express advocacy"? And which did/does ACM do?

This is dry stuff, but here's what Wisconsin says: Express advocacy is communication that expressly advocates the election or defeat of a candidate or that is "unambiguously related to the campaign of that candidate."

Even ACM itself, in its attorneys' answer to the charges, said that "whether the Lehman Ad unambiguously advocates the defeat of Assemblyman Lehman is a close question. To be sure, the Lehman Ad notes that there are 'over $12 BILLION reasons to vote against John Lehman'.” (As a member of the legislature, Lehman voted on the state budget, and ACM says he shouldn't have voted for a $12 billion budget expense, which is why they wanted him to lose his race for Senate.)

So how does ACM say it escapes guilt? It says, "the Lehman Ad does not ask recipients to vote against Lehman." Instead, they say that because the mail "expresses an anti-tax message," it is "issue advocacy" and not "express advocacy." The complaint documents include the text of the "direct mail" piece, so you can read the message for yourself and see if this is a pro-Lehman or anti-Lehman advertisement:

The “Lehman flier,” and its subject language, reads as follows:

There are $12 BILLION reasons to vote against John Lehman.
John Lehman wants over $12 BILLION in HIGHER TAXES.
$12 BILLION. That’s right. BILLION with a “B.”
That’s how much John Lehman wants in higher taxes.
John Lehman supports raising payroll taxes by more than $12 BILLION dollars.
It’s a tax that would devastate small businesses, job creation, and Wisconsin’s economy (
Lehman wants to raise our sales taxes, too.
Lehman’s tax proposal includes higher state sales taxes, taxing Wisconsin families on the things they need most.. (Milwaukee Journal Sentinel, Nov.3, 2002)
John Lehman even voted to tax Social Security benefits. Lehman voted to keep the tax on Social Security benefits. (AB 100, 6/22/05)

Do you think they were asking people to vote against Lehman?

Here's a good question. If we get nasty "push-poll" telephone calls at home or "direct mail" telling us to vote for the voucher plan but no one identifies ACM as the source of funding for these activities, have they committed a crime under Utah law? I just don't know how strict or how lenient our laws are about these activities, and how far ACM-PCE are required to go to report what it's doing. It's clear from the Wisconsin complaint that ACM is willing to lean as far "over the line" as it can, and then will use attorneys and legal-ese to confuse a simple issue.

And here's one more thing. In its response to the complaint in Wisconsin -- seeing that it was caught "unambiguously" advocating for the defeat of a candidate -- ACM asked the board of elections not to go any further in "litigating the issue," since ACM has, since the complaint was filed, registered as a political committee with the board. The reason for this request seems clear to me: If ACM can stop the board of elections there from issuing a ruling on what constituted "express advocacy" in this case, then ACM is free to continue doing the same thing in that state, and it blocks Wisconsin from offering that sort of definition to other state boards of election as an example to follow. Of course, there's also the likelihood that if the Wisconsin board found that ACM had engaged in "express advocacy" after all, then it clearly broke state law and would have to pay expensive fines.

So there's a lot at stake in ACM's legal struggles in Wisconsin that could affect what it does in states like ours. A ruling against ACM in Wisconsin would cause other state authorities to consider what ACM is doing there.

Here's how the plaintiffs' attorneys answered ACM's explanation and pleas for leniency (I'm cutting out a lot to make this brief):

Notwithstanding ACM’s request for leniency, the circumstances here call for the imposition of a meaningful penalty.

ACM was fully aware of its obligations... As a pro-school voucher organization founded by prominent Michigan Republicans Richard and Betsy Devos in the Spring of 2003, and backed by Wal-Mart heirs John and Jim Walton to the tune of $6.2 million, ACM has funneled millions of dollars into state legislative campaigns to elect pro-private school voucher legislative majorities in states across the country.

ACM, Inc. in Alexandria, Virginia, is registered under section 527 of the U.S. Internal Revenue Code, and in its tax return Form 990 plainly states its primary purpose as: “supported nonfederal committees and candidates . . . through direct contributions, in-kind contributions and independent expenditures in the form of media and direct mail.”

Despite its high-profile and financially potent presence in numerous state legislative elections, ACM pleads for leniency in the imposition of a fine here in Wisconsin because it “mistakenly” and “unintentionally” used the phrase “vote against” in its anti-Lehman ad sent to the electors of the 21st Senate District. The notion that ACM accidentally crossed the line from issue advocacy to express advocacy for the defeat of a candidate is belied, however, by ACM’s subsequent course of conduct. It has engaged in express advocacy in at least two other legislative races where it expressly advocated for the defeat of Pat Kreitlow in the 23rd Senate District and Corey Mason in the 63rd Assembly District.

ACM is a sophisticated and well-financed advocate for certain political candidates in state legislative races across the country. ACM has substantial resources staked by some of America’s largest financial empires. It has deployed these resources nationwide to leverage substantial influence in the selection of predominantly conservative Republican legislative candidates sympathetic to private school vouchers. ACM’s political largesse has wended its way -- via issue ads as well as by express advocacy – into Wisconsin’s electoral arena and our ongoing debate on the use of public tax dollars for private school vouchers. Wisconsin’s campaign finance registration and disclosure provisions are not abstract requirements for clean and tidy elections. Rather, they are intended to ensure that the electorate knows whose resources have successfully resulted in the selection of our elected officials, so that issues of political accountability are evident and transparent to the public once a successful candidate assumes political office.

Even if it did unwittingly, or accidentally cross the line in the Lehman race into express advocacy, ACM must understand that there are consequences for doing so. If ACM wishes to be a political influence in Wisconsin’s state legislative process, it must comply with our state’s campaign finance requirements. If it fails to do so, the legislature has provided for a range of relatively modest civil penalties to ensure compliance and to deter future noncompliance. To be sure, the legislature’s statutory enforcement scheme contemplates that more serious and intentional violations shall be subject to criminal prosecution. However, the full range of such civil penalties are plainly appropriate in the instant case where a non-resident political action committee has spared little in attempting to influence the outcome of a wide range of important legislative elections in Wisconsin.

If you're interested in seeing how ACM does its business from Michigan through a network of state political action committees across the country, it's explained in a document that was filed by Alliance for Choice in Education, one of ACM's big donors. ACE is listed as a defendant in the Wisconsin litigation, so they're concerned too with how the state board of elections decides this case. They submitted this document on November 29, 2006. You can find the whole document here ( but I picked out this part to show how the money flows -- and how ACM money from Michigan and elsewhere gets to Utah.

At a board meeting of Alliance for Choices in Education (ACE) on April 26, 2006, the board approved a request to spend up to $200,000 on issue advocacy in Wisconsin.

On September 21, 2006, ACE sent $90,000 to All Children Matter (a Virginia state PAC hereinafter referred to as ACM-VA State PAC) with explicit instructions that the funds be used for issue advocacy in Wisconsin (attached to this verified answer as Exhibit 1 is the transmittal letter from ACE to ACM-VA State PAC that accompanied ACE’s donation, which clearly states that the $90,000 is to be used for issue advocacy).

On September 29, 2006, the $90,000 donation from ACE to ACM-VA State PAC was reported by ACM-VA State PAC to the Virginia State Board of Elections. The $90,000 was deposited in the bank account of ACM-VA State PAC, which was the source of funds for issue advocacy in Wisconsin in 2006. ACM-VA State PAC could not have used ACE’s donation for express advocacy unless ACM VA-State PAC deliberately ignored ACE’s instructions and chose to use funds specifically restricted to issue advocacy at the very time that it had other unrestricted funds eligible to be used for express advocacy readily available.

Under any circumstances, once ACE gave ACM-VA State PAC $90,000 and directed that it be used for issue advocacy, that donation was no longer under ACE’s control. Notably, ACM-VA State PAC did expend more than $90,000 for issue advocacy in Wisconsin. All express advocacy done in Wisconsin was paid for by ACM-WI State PAC.

So it looks like big donors are told to contribute directly to ACM's political action committee in Virginia and to include some instructions about how they want their contributions spent.

I didn't intend to get lost in the hills on ACM's trouble in Utah, but I learned a lot about how it behaves when it gets caught leaning way over the line of the law and how they take great pains to hide everything they can get away with hiding.