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Government Accountability Board Looks to Change Campaign Landscape With Regulation of Issue Ads

Government Affairs Compliance Alert Jeff Peelen

Following the lead of many other states that limit who can pay for election-related communications, the Wisconsin Government Accountability Board ("GAB") recently took a giant step forward in its effort to regulate issue advertisements - those political "attack ads" that increasingly seem to be front and center on TV and radio in the weeks leading up to elections. As was well publicized during the 2008 Wisconsin Supreme Court race between Louis Butler and Michael Gableman, these issue ads are not run by the candidates themselves, but are sponsored by independent third party groups with an interest in the outcome of the election.

Issue ads have long been unregulated in Wisconsin because they have not been viewed as "express advocacy," which is necessary to be considered "for a political purpose" and therefore subject to Wisconsin's campaign finance law and its disclosure requirements. Because these ads have fallen outside of the reach of the campaign finance law, Wisconsin's strict prohibition against the use of corporate funds for political purposes has not applied, enabling groups with agendas - backed by corporate dollars - to indirectly attempt to influence an election that they could not directly influence.

Whether it is your opinion that these issue ads are bad - because you believe they compromise the integrity of elections and turn the public off to the electoral process - or you view them as being good - because they serve to educate and inform the electorate on matters of public importance - their days in Wisconsin appear to be numbered.

Express Advocacy or Issue Advocacy - Which Is It?

The First Amendment to the U.S. Constitution guarantees us all nearly unrestricted freedom of speech. Among the types of speech that are most highly prized is "political speech," which is so integral to the public debate that makes our democracy work. Political speech can take many forms, including monetary contributions in support of or opposition to candidates for office or other matters in the political realm.

Freedom of speech is not wholly unfettered, however, as different kinds of speech are subject to varying levels of regulation. Political speech is no different, and within the body of campaign finance law a distinction has developed between the type of political speech that can be regulated and that which cannot - the distinction between "express advocacy" and "issue advocacy."

Express advocacy occurs when the message uses clear language to encourage the listener to vote a specific way with respect to a candidate for office. Express advocacy can take the form of "magic words," such as vote for, elect, support, cast your ballot for, Smith for Assembly, vote against, defeat and reject or analogous language. Such express advocacy may permissibly be regulated, which can take the form of limitations on who can engage in such speech (i.e., prohibitions on corporate contributions), how much a person may contribute in support of such speech (i.e., contribution limits), and disclosure (i.e., registration and reporting requirements).

By contrast, issue advocacy occurs when the message is used to inform, educate or generate action with respect to an issue of public importance, commonly a public policy or legislative matter. Issue advocacy does not directly encourage action with respect to the election of a candidate for office; therefore, speech that constitutes issue advocacy is unregulated, and any person, including a corporation, can generally spend unlimited funds to engage in issue advocacy.

While easy to conceptualize, the practical distinction between these two forms of political speech is often very blurry. In FEC v. Wisconsin Right to Life in 2008, the U.S. Supreme Court attempted to clarify this gray area by stating that a communication crosses the line from issue advocacy into express advocacy when it "is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." It is against this backdrop that the Wisconsin GAB is acting to regulate issue ads.

Wisconsin's New Approach to Issue Ads

The U.S. Supreme Court's clarification of where the line falls between express advocacy and issue advocacy, the public's discomfort with the tenor of the ads in the last two Wisconsin Supreme Court races and the creation of the GAB (which is arguably a stronger regulatory body than its predecessor, the State Elections Board) has driven the efforts we currently see to change the law in Wisconsin.

Wisconsin's campaign finance regulations, which use the term "political purpose" synonymously with express advocacy, have long limited the definition of "political purpose" to the seven "magic words" and similar language. As a consequence, groups that ran ads that did not contain the magic words or like language were not required to register or disclose their funding or activities, and corporations that were otherwise prevented from engaging in election-related political communications were able to use their treasury funds to directly support these groups. The result has been the proliferation of issue ads, many of which have become increasingly controversial in recent elections.

Following a nearly year-long period of consideration, the GAB recently promulgated a new regulation, Section GAB 1.28 of the Wisconsin Administrative Code, which expands the definition of "political purpose" to sweep in the types of issue ads seen in the last two elections, effectively serving to eliminate issue ads run by "stealth groups" that are financed by corporate dollars. Specifically, the new regulation classifies a communication as being for a "political purpose" if it (1) contains a "magic word" or a functional equivalent or (2) is susceptible to no other reasonable interpretation other than as an appeal to vote for or against a specific candidate. For a communication to be considered "susceptible of no other reasonable interpretation," it (a) must be broadcast within the 60 days leading up to a general or special election or within the 30 days leading up to a primary election and (b) must refer to or depict a clearly identifiable candidate for office and (i) refer to that candidate's personal qualities, character or fitness; (ii) support or condemn the candidate's stance on an issue or (iii) support or condemn the candidate's public record.

Reflecting on many of the issue ads that were aired in the weeks leading up to the recent elections in Wisconsin, it is clear that those ads would be considered as having a "political purpose" under the new rule and would be subject to regulation.

Will We See a Difference in the 2010 Elections?

The GAB's new regulation, if not overruled by the Wisconsin legislature, will take effect after publication; however, this will likely not happen until the summer of 2009, as the GAB has indicated that it will not publish the rule until the U.S. Supreme Court has rendered a decision in the currently pending anti-Hillary Clinton movie case (Citizens United v. Federal Election Commission). This is a precaution in the event that the Supreme Court alters the constitutional precedent upon which the new GAB regulation is premised.

It is also worth noting that the new regulation will not go unchallenged. The proponents of many Wisconsin issue ads - including many politically active trade associations and businesses - have objected to the regulation all along, questioning the GAB's authority to promulgate such a rule when the legislature has declined to do so. This argument may be rendered moot, however, because bills have been presented in both the Wisconsin Assembly and Senate that place similar restrictions on issue ads. Regardless, whether new restrictions on issue ads come in the form of legislation or the GAB's rule, such restrictions are bound to be challenged as an unconstitutional limitation of free speech. Therefore, whether we have seen the end of "attack ad" issue advocacy in the long run remains to be seen.

Wisconsin's New Approach is Consistent With Other Jurisdictions

Wisconsin's attempt to expand express advocacy to include more than the "magic words" or their functional equivalent brings it into line with many other jurisdictions that prohibit direct corporate contributions to influence elections. The new Wisconsin regulation resembles federal campaign finance regulations pertaining to "electioneering communications," and it is similar in effect to limitations on who may finance election-related communications in Arizona, Colorado and North Carolina, among other states.

If you would like additional information on whether and how you may be affected by this new Wisconsin regulation or by similar regulations in any other jurisdiction, please contact Steve Burk at 414-277-3045 / steven.burk@quarles.com, Jeff Peelen at 414-277-5773 / jeff.peelen@quarles.com, Monika Harris at 414-277-5367 / monika.harris@quarles.com or your local Quarles & Brady attorney.