Mass Fiscal - OCPF Comment Letter - 2018-02-13

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Mass Fiscal - OCPF Comment Letter - 2018-02-13
  February 13, 2018 Michael Sullivan, Director Office of Campaign and Political Finance One Ashburton Place Boston, MA 02108 RE: Comments of Massachusetts Fiscal Alliance on Proposed Amendments to 970 C.M.R. § 1.00 et seq. Dear Director Sullivan: The Massachusetts Fiscal Alliance (“Mass Fiscal”) appreciates the opportunity to provide these comments on the proposed amendments to the Office of Campaign and Political Finance regulations, 970 C.M.R. § 1.00 et seq. Mass Fiscal is a non-partisan, IRS-recognized 501(c)(4) non-profit organization that advocates for fiscal responsibility, transparency, and accountability in state government, and increased economic opportunity for the people of our Commonwealth. Mass Fiscal appreciates the thoroughness with which OCPF has approached the task of revising its regulations, and agrees that many of these proposed changes are necessary and appropriate. However, Mass Fiscal has significant concerns about the proposed revisions to 970 C.M.R. § 1.22, the section that governs when nonprofit organizations like Mass Fiscal may be required to publicly disclose their donors. In specific, Mass Fiscal is concerned that that the proposed changes to 970 C.M.R. § 1.22 would expand the scope of the agency’s discretion beyond what is authorized by the campaign finance statute (G.L. c. 55). Mass Fiscal believes that several of the proposed changes are impermissibly vague, preventing both donors and organizations from knowing before the fact whether or not disclosure of a given donation will be required. And Mass Fiscal believes that several of the proposed changes improperly shift the burden of proof from OCPF to the donor, while depriving donors of critical due process protections. Donors, nonprofit organizations, OCPF, and the general public alike benefit when campaign finance regulations provide clear and objective rules — not vague and subjective ones  — for when the identities of donors will and will not be disclosed. For instance, under G.L. c. 55, § 18F, only donations “to make electioneering communications” must be disclosed, meaning that donations to the general treasury of a nonprofit organization need not  be. Yet the proposed revisions to 970 C.M.R. § 1.22 would effectively insert an asterisk to the statute: That under some  circumstances, OCPF would   have regulatory discretion to determine — after-the-fact — that certain general treasury donations must  be disclosed nonetheless.  2 If adopted, the proposed revisions to 970 C.M.R. § 1.22 will generate a substantial chilling effect, as nonprofit organizations will be unable to guarantee to their donors at the time of donation whether their identity will or will not be disclosed. A nonprofit donor who is uncomfortable with the possibility that her identity may be publicly disclosed — and who makes her donations in the form of general treasury funds (rather than for specific advocacy activities)  based on the reasonable understanding that such donations are non-disclosable — may well elect not to donate at all  under the regulations as proposed, out of concern that an after-the-fact determination by OCPF will force public disclosure of that donation. Where changes to campaign finance law will lead to consequence of this magnitude, those changes should be left to the auspices of the Legislature, not to the regulatory amendments of an executive branch agency. Fortunately, Mass Fiscal believes that the proposed 970 C.M.R. § 1.22 can be further amended to be consistent with G.L. c. 55, in order to provide objective rules that donors and organizations can follow and that OCPF can objectively enforce. Mass Fiscal provides its  proposed revisions in these comments. I.A BOUT M ASS F ISCAL As is true for every 501(c) organization, Mass Fiscal sustains its activities through the generous financial donations, large and small, of individuals and organizations who support our social welfare mission. Our advocacy work centers on encouraging all Massachusetts residents to become active participants in the effort to confront hard fiscal challenges and identify sustainable fiscal solutions for the Commonwealth, by giving residents the tools they need to make the best decisions. Because our mission involves advocating for fiscal responsibility, transparency, and accountability in state government, our activities frequently include efforts to ensure that governmental agencies and public officials are listening to — and held accountable to — the citizens who employ and elect them. The nature of Mass Fiscal’s mission thus means that on occasion, our advocacy activities — in which we engage year-round — occur simultaneously with local and state elections for public officials. As OCPF is aware, in certain circumstances, advocacy activities that would not otherwise constitute “electioneering communications” as defined by G.L. c. 55 and 970 C.M.R. may nonetheless become subject to those laws, simply because the activities occur within 90 days of an upcoming election. Over the past several years, Mass Fiscal has frequently engaged with OCPF to obtain its advice about whether a given activity might constitute an “electioneering communication,” in order to ensure that Mass Fiscal remains compliant with the law. II.L EGAL B ACKGROUND TO C OMMENTS As OCPF is aware, G.L. c. 55, §§ 18A & 18F are criminal statutes: Violation of either “shall be punished by a fine of not more than $5,000 or by imprisonment in a house of correction for not more than 1 year.” The Supreme Judicial Court has confirmed that “[i]t is a well-established proposition that criminal statutes are to be construed narrowly,” Commonwealth v. Kerr  , 409 Mass. 284, 286 (1991). The Supreme Judicial Court has also confirmed that that  3 courts “must resolve in favor of criminal defendants any reasonable doubt as to [a] statute's meaning.”  Id  . Given the Supreme Judicial Court’s unequivocal holdings in Kerr  , both G.L. c. 55 §§ 18A & 18F must be construed “narrowly” — and any ambiguity in the statute must be interpreted in favor of the donor and against the government. Equally as important, any regulations promulgated to interpret a criminal statute must be restricted to the same narrow scope as the statute, and conform with the statutory text. Furthermore, when a statute or regulation that requires or proscribes conduct is impermissibly vague, it is unenforceable and void as a matter of law. As the Supreme Judicial Court held in  Department of Youth Services v. A Juvenile , 398 Mass. 516, 522 (1986), a law is void for vagueness “if persons of common intelligence must necessarily guess at its meaning and differ as to its application.” The Court held that such a result is warranted because otherwise, “individuals do not receive fair notice of the conduct proscribed by a statute and because vague laws that do not limit the exercise of discretion by officials engender the possibility of arbitrary and discriminatory enforcement.”  Id  . III.C OMMENTS ON P ROPOSED 970C.M.R.§1.22 A.C OMMENTS ON S UBPARAGRAPH (3) The proposed 970 C.M.R. § 1.22(3) would establish new rules about the “types of  political committees that may be created under 970 CMR 1.22(2)”. Mass Fiscal’s comments focus on the final sentence of this section, which is proposed to read: If an organization raises money to make electioneering communications, it must disclose donors and electioneering communication expenditures in the organization’s reports of electioneering communications. First, Mass Fiscal notes that an organization that engages only  in electioneering communications is not   a political committee under 970 C.M.R. § 1.22(2) or G.L. c. 55, § 1. Including the above sentence (referencing electioneering communications) in the proposed 970 C.M.R. § 1.22(3) would create significant and unnecessary confusion, since the sentence refers to circumstances covered by neither   Section 1.22(2) nor Section 1.22(3). Mass Fiscal encourages OCPF to relocate this sentence to a new subsection to avoid such confusion, or to retitle the section to “Organizational Activities Requiring Disclosure” (or a similar variant) that is inclusive of each of the types of covered activity referenced. Second, Mass Fiscal notes that the word “raises” in this sentence is inconsistent with G.L. c. 55, § 18F, which expressly states that “any entity not defined as a political committee who makes electioneering communication expenditures in an aggregate amount exceeding $250 during a calendar year who  receives  funds to make electioneering communications” shall make certain reports (emphasis supplied). The word “raises” indicates an active  effort by the organization itself, where the word used by the Legislature — “receives” — indicates the  passive receipt by the organization of funds provided by a donor and earmarked for that express purpose.  4 Substituting “raises” for “receives” in 970 C.M.R. § 1.22(3) would thus impermissibly  broaden the scope of the statute beyond its plain text. For instance, this substitution could be read to authorize OCPF to require donor disclosure from an organization that raises  general treasury funds and subsequently  elects to use those funds for electioneering communications — even when the donors of those funds had only intended to make general treasury donations, which are not   disclosable. To remain consistent with the statutory text, OCPF should replace “raises” with the word intentionally chosen by the Legislature: “receives”. B.C OMMENTS ON S UBPARAGRAPH (6) This section of the proposed amendment focuses on an organization’s statements regarding the sources of funds it receives. It would revise the current 970 C.M.R. § 1.22(4) and renumber it as 970 C.M.R. § 1.22(6). Mass Fiscal has three comments on the proposal. First, Mass Fiscal is concerned by the last two sentences of the proposed 970 C.M.R. § 1.22(6), which are proposed to read as follows: If a statement is not provided to the committee in response to its request  , or if a statement that is provided is determined by OCPF to not be credible, OCPF may require the committee to return the contribution. OCPF shall assess the statement’s credibility, after  providing an opportunity for the entity submitting the statement to also submit evidence and argument to support the credibility of the statement. As noted, G.L. c. 55, §§ 18A & 18F are criminal statutes: Violation of either “shall be  punished by a fine of not more than $5,000 or by imprisonment in a house of correction for not more than 1 year.” Apart from the requirement that such statutes must be construed narrowly, where the penalties for violation of a statute are criminal, the legal presumption is — and must  be — that the actions of a donor organization are consistent   with the law, with the legal burden resting with the government (here, OCPF or the Attorney General) to demonstrate otherwise. The proposed revisions above would reverse this fundamental presumption, placing the burden on the donor organization to demonstrate why his or her donation is  permissible, even after the donor organization has provided a statement “under the penalties of perjury. ” The proposed revisions would grant OCPF unfettered discretion to determine whether a statement provided to OCPF is “credible” or not. The regulation neither provides objective criteria upon which OCPF will assess the statement’s credibility, nor establishes the legal standard that OCPF’s evidence is required to meet to reach such a conclusion. “[V]ague laws that do not limit the exercise of discretion by officials engender the possibility of arbitrary and discriminatory enforcement.”  Department of Youth Servs. v. A Juvenile , 398 Mass. 516, 522 (1986). In order to ensure due process, Mass Fiscal urges OCPF to delete the last two sentences of the proposed 970 C.M.R. § 1.22(6) and replace them with the following: If a statement is not provided to the political committee in response to its request  , OCPF may require the committee to return the contribution. If a statement is provided, the entity submitting the statement shall be entitled to a presumption that the statement is accurate, and the entity may (but shall not be required to) submit additional evidence and
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