Wisconsin's campaign finance disclosure system once was the envy of the nation but now leaves a great deal to be desired. That sad reality came into sharp focus with the recent revelation that a private school voucher advocacy group, the American Federation for Children, told its members and funders that it spent close to $2.4 million last year to influence elections in Wisconsin after reporting less than $345,000 in campaign spending to state election authorities.
That hidden $2 million only came to light because of an enterprising news reporter, and now is the subject of a formal complaint seeking an investigation and enforcement of existing disclosure rules. The American Federation for Children was able to hide that electioneering because of a decision made nearly three years ago by Wisconsin's Government Accountability Board.
In March 2010, the GAB unanimously approved an amendment to the state's disclosure rules closing the very loophole AFC exploited last year to keep nearly all of its election spending a secret. The new rules took effect on August 1 of that same year. They remained in effect for nine days. Interest groups on both the left and the right sued the GAB in three different courts. Before any judge ruled on the cases, the GAB surrendered on August 10, agreeing not to enforce key parts of the new rules.
The decision looked like capitulation at the time, but the GAB insisted that under the agreement it still would be able to "require disclosure of the identity of those sponsoring communications that are susceptible of no reasonable interpretation other than as an appeal to vote for or against a candidate. Such ads do not need to say 'vote for' or 'support' to be subject to regulation."
Time has told. The GAB has not acted on that ability. Since 2010, not a single group I am familiar with that sponsored messages plainly aiming to elect or defeat candidates but masquerading as "issue ads" has been required to come clean and disclose their election activity, not even in a case where a group ends up admitting publicly that its so-called issue advocacy was really intended to get its favored candidates elected.
It is clear that the GAB is not doing what it said back in 2010 it would be able to do. And the American Federation for Children revelation makes it equally clear it is time for the board to take down the white flag of surrender and start enforcing its disclosure rules in their entirety.
If the GAB does that, it will be sued again. Interest groups on the left and the right will again argue the rules are invalid because the board lacked the authority to make them. They'll say only the Legislature can close the issue ad loophole. There are two problems with this argument. First, state law says interest groups that spend money for a "political purpose" are subject to registration and reporting requirements under the law and the Legislature's own attorneys said the GAB has the authority to define what "political purpose" means. Second, Wisconsin's elections board has always defined what constitutes a political purpose and these interest groups never challenged the board's authority when past definitions were to their liking. It's only when the definition threatened to cramp their style that they questioned the GAB's rulemaking authority.
The special interests also will challenge the constitutionality of the GAB's disclosure rules. The board is on solid ground here as well. In FEC v. Wisconsin Right to Life, with Chief Justice John Roberts writing for the majority, the U.S. Supreme Court ruled that disclosure can be required if an ad is the "functional equivalent" of advocacy for or against a candidate. Roberts went on to explain what he meant by "functional equivalent," namely advocacy that is "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." The GAB borrowed his definition for the 2010 amendment to Wisconsin's disclosure rules.
In Citizens United v. FEC, eight of the nine justices on the nation's highest court again came down squarely in favor of disclosure and again upheld Roberts' functional-equivalent test.
Ads like those sponsored by the American Federation for Children clearly meet that test. Groups engaging in such electioneering should have to fully reveal their activities. The Government Accountability Board has the authority and the power and the legal grounds to make that happen, if not the nerve.
It is time for the GAB to summon the nerve.