Scott Gessler rule changes rejected, watchdog groups pleased

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Secretary of State Scott Gessler wants to make it easier for political groups to remain secretive about their spending by rewriting election rules and weakening disclosure laws. That's according to two watchdog groups, who praise a court ruling that blocks most of Gessler's efforts. Denver District Court has struck down key campaign finance rule changes adopted earlier this year, but the case isn't closed yet: Gessler says he plans to appeal.

The ruling is a win for Colorado Ethics Watch and Colorado Common Cause, which have filed multiple lawsuits accusing Gessler of greatly overstepping his bounds.

"This ruling shouldn't have surprised anyone," says Luis Toro, Ethics Watch's director. "The only question is, is he going to keep on doing this...making people drag him into court?"

Here's a rundown of the case and the ruling, which was issued on Friday. Colorado Ethics Watch and Colorado Common Cause filed a complaint against Gessler in April, asking the court to invalidate rule changes that they believe would have allowed some organizations to support races without revealing their finances or even their identities. In the lawsuit, the groups say these policy alterations make the campaign finance process in Colorado less transparent.

In his ruling, Denver District Court Judge J. Eric Elliff struck down several of Gessler's rules arguing that the secretary exceeded his administrative authority by writing rules that would excuse most 527s (defined as tax-exempt political organizations) from any disclosure requirements. The ruling also eliminated rules that would have reduced disclosure requirements of issue committees and state PACs as well as reduce penalties for failure to report large contributions.

"While the Secretary's pragmatism is to be respected, removing a critical element of 2(12)(a) [one of the rules in question] by rule goes beyond the Secretary's powers," the decision says.

Another part of the ruling argues that "the Secretary's rules improperly narrow the definition of 'political organization,'" meaning that, under the changes Gessler proposed, it would basically be easier for groups to avoid disclosures:

These narrowing rules effectively eliminate distinctions between "political organization" and "political committee." Political committees, subject to a constitutional contribution reporting limit of $200, could switch to a "political organization" and avoid this restriction under the challenged rules. Such a result is contrary to the clear terms of the statute and the intent of the legislature.

In other words, Gessler's rules give groups the opportunity to avoid reporting requirements even as they contradict legislative regulations -- which is not the secretary's job as part of the executive branch of government.

"If [Gessler] wants to change these things, he needs to go to the legislature and convince them to pass a bill or go to the people and convince them to amend the state constitution," Toro says.

Page down to read Gessler's response and see the full ruling. The decision did uphold a Gessler rule about "electioneering communications," which refers to disclosure requirements for ads that don't use words that expressly state support or opposition to a candidate. The secretary says the rule change is just a clarification and in his decision, the judge seems to agree. (Ethics Watch argues that the old rule isn't justified, either).

A spokesman for Gessler tells us that the secretary is planning to file an appeal of the decision, perhaps as early as today or tomorrow.

The argument from Gessler's office throughout this battle has been that the secretary is tasked with administering the law, and in some cases, there may be conflicts in written law that require clarifying. The secretary's office also argues that court decisions in some cases have deemed laws unconstitutional, forcing Gessler to step in and write clarifying rules. It's also a matter of First Amendment rights, the secretary's officer argues, adding that Gessler is striving for a balanced approach to make sure groups and small committees are complying with regulations. However, he's also trying to maintain basic free speech opportunities, his spokesman says.

Here's Gessler's official response to the recent ruling, which takes a dig at the watchdog groups:

Today's ruling is problematic. On one hand, we prevailed on the most important issue. On the other, it prevents me from following free speech protections handed down by federal courts. The people of Colorado remain mired in uncertainty. Small community groups face heavy fines and ambush lawsuits, while big-money groups can afford attorneys and accountants to navigate the difficult campaign finance laws."

This case isn't about transparency. When these partisan attack groups start revealing who pays for their activities, then I'll believe that they care about an equal playing field.

In response to Gessler's comment about the organizations, Ethics Watch's Toro says, "That's a distraction. The real issue is, do we know who is spending money for elections?...He never expresses interest in transparency except as a weapon to bash his critics."

Ethics Watch and Common Cause both describe themselves as nonpartisan groups.

Toro says the case is about making basic information about campaign finance publicly available. "Colorado voters have said time and time again that they don't want to cast their ballots in the dark. They want to know who is spending money to support and oppose candidates."

Here's the full ruling:

Colorado Ethics Watch v.Gessler.8.10.12 Opinion

More from our Politics archive: "American Constitution, Libertarian and Green Parties criticize Scott Gessler's new rules"

Follow Sam Levin on Twitter at @SamTLevin. E-mail the author at Sam.Levin@Westword.com.

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