Posted September 13, 2007 by Paul S. Ryan

Washington Supreme Court Upholds Regulation of 527 Organization as a “Political Committee”

The Supreme Court of the State of Washington issued its decision today in Voters Education Comm. v. Wash. Public Disclosure Comm’n, affirming a lower court decision that a 527 organization funded entirely by the U.S. Chamber of Commerce could constitutionally be regulated as a “political committee” subject to Washington state campaign finance disclosure laws.  The Campaign Legal Center filed an amicus brief in support of the defendant Public Disclosure Commission.

Washington state law defines “political committee” to mean “any person . . . having the expectation of receiving contributions or making expenditures in support of, or opposition to, any candidate or any ballot proposition.”

In September 2004, the 527 organization Voters Education Committee (VEC) received a single contribution of $1.5 million from the U.S. Chamber of Commerce and began airing a television ads criticizing Deborah Senn, a candidate for attorney general in the 2004 election who had previously served the state as insurance commissioner.  The state’s Public Disclosure Commission sent a letter to VEC stating its opinion that VEC’s advertisements constituted express advocacy and directing VEC to register as a political committee and file disclosure reports.  VEC then filed a civil action against the Commission, seeking a declaratory judgment that the state’s political committee reporting requirements were unconstitutional as applied to the VEC’s ads, arguing both that the definition of “political committee” is impermissibly vague and that its ads did not constitute “express advocacy” and, consequently, could not be regulated.  A state trial court issued an oral ruling denying VEC’s summary judgment motion and dismissing the case.  VEC then sought direct review by the Washington Supreme Court, which the court granted.

The state supreme court decision today rejected VEC’s claim that the state definition of “political committee” is unconstitutional.  The court reasoned that, unlike the statute at issue in Buckley v. Valeo limiting independent expenditures “relative to a clearly identified candidate”—which the Buckley Court found to be vague and narrowly construed to mean only express advocacy—the state statutory phrase “in support of, or opposition to, any candidate” is not unconstitutionally vague.  The Washington court determined, therefore, that the “express advocacy” standard is inapplicable to the state’s determination of an organization’s “political committee” status.  The court further noted that the U.S. Supreme Court in McConnell v. Fed. Election Comm’n had ruled that BCRA’s “promote, attack, support, oppose” test—virtually identical to the operative language of the state’s definition of “political committee”—is not unconstitutionally vague.

The court went on to find that the VEC ad criticizing Senn, who was a candidate but not an incumbent, “had contemporary significance only with respect to Senn’s candidacy for attorney general,” and was clearly money spent in “opposition to” a candidate.

Finally, the court also explicitly noted approvingly our amicus brief analysis of the relevance of VEC’s 527 tax status:

Moreover, as CLC observes, VEC “is registered as a Section 527 political organization under the Internal Revenue Code.”  CP at 4.  A section 527 “‘political organization’” must be “organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures . . . for . . .the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office.”  26 U.S.C. § 527(e)(1)-(2).  As VEC notes, the definition of “political organization” in section 527 does have a broader sweep than does the definition of “‘[p]olitical committee’” in former RCW 42.17.020(33).  However, VEC fails to justify how it qualifies as a “political organization” but not a “political committee.”  Thus, the fact that VEC registered as a “political organization” under section 527 organization is a persuasive fact that indicates that VEC was seeking the tax benefits of section 527 while disingenuously seeking to avoid the disclosure requirements of the FCPA.