Buying the State House?

Taking advantage of the fine line between electioneering and ‘issue advocacy’

Say you or your business contributes $100,000 to “Granite Staters for Prosperity.” or GSP.

GSP, a 501(c)(4) nonprofit social welfare organization, then spends $50,000 on mailings to defeat “Senator Swing District,” a New Hampshire state senator who only won by 90 votes last cycle.

The mailings hit the day before the election and proclaim that Senator Swing District voted to enact a levy of 0.50% of employees’ payroll to fund a program; GSP opposes the bill as a stealth income tax.

The mailers include an unflattering photo of Senator Swing District, and on the other side, voters are encouraged to call “Governor Sunshine” to thank him for vetoing the payroll tax.

Senator Swing District loses the next day by 500 votes. And no one will ever have to know your $50,000 went to flipping the district.

How can this be? Don’t political expenditures need to be reported in New Hampshire? How could you or your business practically buy a state Senate seat in this way without anyone ever knowing?

Double secrecy

Under federal law, your contribution to a 501(c)(4) is not required to be disclosed. The industrialist billionaire Koch brothers, for example, have used this pipeline to spend hundreds of millions in elections across the country, including New Hampshire. Under state law, if a 501(c)(4)’s mailers are “educational” expenditures, the group need not register and report such expenditures.

But isn’t the mailer against Senator Swing District clearly designed to impact the election? Of course. But so long as the mailer doesn’t do things like mention the fact of an election or urge a vote against him, it is issue advocacy and part of the mission of GSP to advocate for its pro-growth and economic prosperity message.

If this seems to be a thin line of distinction, it is. Welcome to New Hampshire campaign finance law in 2019.

Are there any limits?

Is it possible to go too far with issue advocacy? We could know soon.

A citizen complained in the fall of 2018 that Americans for Prosperity’s New Hampshire branch went too far by attacking Molly Kelly, a former state senator who lost her race for governor. Technically, the mailings arguably are outside the parameters set forth by the New Hampshire attorney general which state that public officeholders and their record are fair game for stealth political communications masked as issue advocacy. The only hitch? Molly Kelly was technically not a public officeholder at the time of her candidacy, and rather a private citizen seeking public office.

This complaint is a major test for the new New Hampshire Department of Justice’s Election Law Unit (along with a contemporaneous and still-pending complaint that the governor’s 2018 reelection campaign took $20,000 in illegal partnership contributions).

Pending what happens at the Department of Justice, the well-funded Americans for Prosperity might litigate its rights to do issue advocacy without having to register with the state. The Democratic-led Legislature is also trying to tinker with the disclosure laws to reign in issue advocacy with Sen. Dan Feltes’ Senate Bill 106. SB 106 would redefine electioneering by 501(c)(4)’s to include “communications that refer to a clearly identified candidate or candidates or the success or defeat of a measure or measures, and are publicly distributed within 60 days before a primary or general election to an audience that includes members of the electorate for the office sought by the candidate or one or more of the candidates, regardless of whether the communication or communications expressly advocate a vote for or against the candidate or candidates or for the success or defeat of a measure or measures.”

These efforts have drawn bipartisan support, including a unanimous House committee vote, but campaign finance fixes have often floundered under both Republican and Democratic control of the State House in recent years. Stay tuned.

Jay Surdukowski is a trial lawyer at Sulloway & Hollis and also advises clients on political law, including campaign finance.