Independent expenditure committees (“Super PACs”) have become commonplace at the federal level and in a number of states as well. The legal reasoning behind Super PACs, as explained in the Speechnow case (and several other federal and state cases), is that since the Supreme Court has recognized the right of individuals and corporations to spend unlimited sums on their own independent expenditures, then those same individuals and corporations should be able to come together to form a committee that can accept unlimited contributions and make independent expenditures.
Not all state regulators have accepted this view, especially those in the Northeast.
Last week, the New Jersey Election Commission issued an advisory opinion announcing that it will enforce the state’s contribution limits on donations to Super PACs if they qualify as New Jersey political committees. Previous advisory opinions have allowed unlimited fundraising by Super PACs operating in New Jersey as long as they do not meet the definition of a New Jersey political committee. The key is the group’s “major purpose.” If the group’s “major purpose” is to make independent expenditures in New Jersey, it will be a political committee subject to contribution limits, as well as registration and reporting as a political committee. If, on the other hand, the group operates in multiple states (or at the federal level), and does not meet the “major purpose” threshold, then it can accept unlimited contributions. An unintended consequence of the ruling may be less disclosure, with groups encouraged to structure their operations so their state political activity is not run through a New Jersey “political committee.”
The Commission’s 2-1 vote on this issue rests on the view that it lacks authority to decline to enforce contribution limits or declare them unconstitutional. The Commission noted that legislative proposals are pending. Thus, until the legislature makes a change (or a court gets involved), the Commission will continue to enforce the law as written. Since this is an election year in New Jersey, any legislative changes may come too late for this election cycle, so litigation is likely.
Florida's Division of Elections also took a similar position as New Jersey in a recent advisory opinion.
New York has taken a similar position. Last year, a group asked the New York State Board of Elections to allow unlimited contributions to independent expenditure committees. The SBE rejected this request, citing a 1994 advisory opinion holding that contributions to independent spending groups are limited. The group has challengedthis law in court, and that case is slowly winding its way through the process (the trial court declined to issue a preliminary injunction, and a final decision is still pending).
Vermont, too, has said it will enforce limits on independent expenditure committees. That position has also been challenged in court. New York is one of nine states (along with Connecticut, Hawaii, Iowa, Kentucky, Minnesota, Montana, New Mexico, and Washington) that signed a friend-of-the-court brief in that case. The brief maintains that states have a legitimate anti-corruption interest in limiting contributions to Super PACs. The lower court decision focused on the factual issue of whether the group challenging the rules was actually independent of the candidates, so it is possible for the case to be decided without reaching the issue of whether the state can limit contributions to independent expenditure only committees.
The Regulatory Landscape
This map shows states in green that allow super PACs, states in red that do not, and states in yellow where the law is unclear or unsettled.
Click here to view map.
Note that this chart is for illustrative purposes only, and should not be used as a substitute for researching the state law. Also note that local jurisdictions may not be governed by state law and may have different views on the Super PAC issue.
The bottom line for now is that if you plan to be involved in state or local races by making independent expenditures, you will have to determine carefully whether the state allows for Super PACs and, if not, whether you can structure your activity to avoid the state’s laws (like in New Jersey) or will have to abide by contribution limits.