My pre-6 a.m. pass at trying to get a handle on this week’s campaign spending bill at the Legislature got too confusing, so I deferred posting in order to have another pass at the issues

The situation is confusing enough without reporting that adds further layers of confusion.

Attention this week was on HB 2455, which passed out of the House Judiciary Committee. Here’s how the Star-Bulletin reported it.

A $1,000 cap on political contributions by corporations would be eliminated under a proposal advancing in the state House.

Critics say the measure would be a step backward in campaign finance reform, while supporters say it clarifies the law to allow corporations to donate the same amounts allowed by individuals.

Candidates still would be limited in the amounts they could accept from donors during a campaign cycle.

House Bill 2455 stems from a recent case involving Maui Mayor Charmaine Tavares.

The Campaign Spending Commission had ruled Tavares’ 2006 campaign had accepted contributions of more than $1,000 from three corporations.

Tavares’ campaign sued, arguing that the commission had misinterpreted amendments to the campaign spending law that took effect that year. Maui Circuit Judge Joseph Cardoza ruled in Tavares’ favor in May, and that decision is being appealed by the commission.

The commission ruled that corporations were limited to giving just $1,000 during a two-year campaign period. Meanwhile, individuals could contribute from $2,000 to $6,000 in a two- or four-year campaign period.

Unfortunately, that isn’t quite correct.

What the campaign Spending Commission actually did was to restrict corporations from contributing more than a total of $1,000 to all candidates combined, although the law appears to clearly say something quite different. Here’s the section of the statute defining contribution limits:

§11-204 Campaign contributions; limits as to persons.

(a)(1) No person or any other entity shall make contributions to:
(A) A candidate seeking nomination or election to a two-year office or to the
candidate’s committee in an aggregate amount greater than $2,000
during an election period;
(B) A candidate seeking nomination or election to a four-year statewide
office or to the candidate’s committee in an aggregate amount greater
than $6,000 during an election period; and
(C) A candidate seeking nomination or election to a four-year nonstatewide
office or to the candidate’s committee in an aggregate amount greater
than $4,000 during an election period.

That seems straight forward. No person or entity can contribute more than the specified limits to a candidate.

What the Campaign Spending Commission did was to apply a totally different section limiting contributions to non-candidate committees to $1,000.

Here’s the provision in question: ” (b) No person or any other entity shall make contributions to a noncandidate committee, in an aggregate amount greater than $1,000 in an election.

In the commission’s view, a corporation becomes a non-candidate committee once it decides to make political contributions. And if it is a non-candidate committee, then it can’t accept more than $1,000 from its own bank account to distribute to candidates. And so, in the commission’s view, once a corporation has taken $1,000 out of its bank account to make contributions–say $250 each to four candidates–then it had reached its overall limit for the election and could not contribute to any other candidates.

The confusion appears to stem from the fact that a corporation that makes campaign contributions with its own funds is by definition a political committee for purposes of reporting and disclosure. A corporation can also establish a political committee with a separate legal life, usually referred to as a political action committee.

The provision limiting contributions to noncandidate committees would appear to apply to those separate committees, but the commission believes the law requires it to also apply the provision to a corporation itself whenever it makes contributions to candidates. In the commission’s view, the corporation is considered to first transfer the money to itself acting as a committee, a transfer subject to the $1,000 limit, before the contributions are actually made to a candidate.

Maui Judge Joseph Cardoza rejected the Commission’s interpretation of the law in a July 2007 decision, as did Attornrey General Mark Bennett.

HB2455 attempts but fails to clarify. It proposes adding the clause in bold:

(b) No person or any other entity shall make contributions to a noncandidate committee[,] in an aggregate amount greater than $1,000 in an election[.]; provided that this limitation shall apply to corporate contributions to a noncandidate committee only when a corporation makes a contribution directly from its own treasury to the noncandidate committee.

I don’t think this succeeds.

The Senate bill (SB 3141) tries slightly different language.

It provides:

“(b) No person or any other entity shall make contributions to a noncandidate committee, in an aggregate amount greater than $1,000 in an election[.]; except that in the case of a corporation or company using funds from its own treasury, there shall be no limit on contributions or expenditures to the corporation or company noncandidate committee.“

But even this doesn’t quite work. This would appear to allow unlimited transfers even to a separate PAC set up by a corporation, while the “fix” is limited to not imputing a transfer between committees when a corporation or other entity established for another purpose spends its own money for campaign contributions.

That’s about as far as I can take this right now. Perhaps I’ll try to come back to it later as time permits.

But action has to be taken because, in the meantime, the Campaign Spending Commission has said it will not enforce general reporting and disclosure requirements for noncandidate committees. That could mean the 2008 elections could go by without corporations or unions filing the normal reports detailing their political activities. That’s a prospect that should worry the public a lot.

Of course, it probably makes more sense to simply bar direct corporate contributions, as is the case in federal election law, but that’s a whole different fight.

And this Friday’s Feline is Mr. Romeo, in a photo taken just a few minutes ago. He’s sitting on the deck just outside the door, apparently trying to pretend that he isn’t interesting in taking over a dish of food that I just put out for Ms. Harriet.

Oh–for those who have asked–the lost pig was reunited with its owner and, I’m told, squealed in delight when they met!