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What you need to know about Missouri’s evolving campaign finance laws

  

JEFFERSON CITY, Mo. – Attorney General Josh Hawley announced last week that he would appeal a decision from U.S. District Court Judge Ortrie Smith from early May that found many parts of Missouri’s new campaign contribution limits amendment unconstitutional.

“As attorney general, I have a duty to defend the laws and constitution of the State of Missouri,” Hawley said in a brief statement. “The people of Missouri overwhelmingly voted to place these rules in our constitution, and my office will defend them.”

Despite Hawley’s commitment to appeal the decision on an amendment approved by 70 percent of Missouri voters, he may run out of time to stop Smith’s changes from going into effect. The decision on Missouri Electric Cooperatives v. Missouri came down May 5, and had a 45-day enforcement stay attached to it. On June 20, Missouri’s campaign finance laws will once again experience drastic changes for the second time in roughly six months.

The Missouri Ethics Commission even updated their own primer on the constitutional amendment and how the decision affected it, and MEC Director James Klahr issued an advisory opinion that political party committees in the House and Senate are not bound to the $25,000 aggregate limit in accordance with the ruling.

So what are some of the most significant changes Missouri campaigns will need to consider as they ramp up fundraising efforts ahead of the 2018 election? Here are a few of the most basic rules that will go into effect June 20 in accordance with Smith’s ruling.

  • The $2,600 limit per candidate per election from individual donors and political action committees (PACs) is still in place
  • Donations to political parties from various types of committee types are still capped at $25,000
  • Candidate committees cannot donate to other candidate committees or PACs
  • Money transfers can continue between PACs. This activity was banned under Amendment 2 but overturned by the court decision
  • Labor unions and corporations (both in-state and out-of-state) cannot contribute to candidate committees, exploratory committees, political party committees or political parties
  • Labor unions and corporations (both in-state and out-of-state) can donate to state PACs and ballot measure campaign committees. This was also banned under Amendment 2 but overturned by the court decision
  • Candidate, political party and campaign committees cannot contribute to PACs and continuing committees

Attorney Chuck Hatfield was one of the lawyers who sued the state on behalf of electric co-ops for the state. He added that some of the major changes to the law have occurred in regards to ballot measures. Ballot measure campaign committees, he says are “wide open” after the decision. “You can take as much as you want from pretty much whoever you want.”

Another major change is that those co-ops, along with banks and insurance companies can now freely contribute funds to their own PACs. Under the original amendment, PACs can only accept contributions from corporations formed under certain sections of the statute, which didn’t include banks, insurance companies or electric co-ops. Thus, PACs could not accept funds from them.

The final large change is that PACs are now free to accept an unlimited amount of funds from other PACs and donate to other PACs. Those kinds of donations were completely prohibited under the constitutional amendment, but Hatfield suspects this is the primary part of the law the attorney general plans to appeal.

The Missouri Times reached out to the attorney general’s office for specifics on what precisely Hawley would seek to appeal but did not receive that information as of press time.

However, one more wrinkle adds to the complexity of the new regulation: the rise of candidate PACs. In May, Rep. Holly Rehder, a prolific Republican fundraiser, announced the formation of the “Holly PAC” to help raise money for labor and tort reform candidates.

The PAC essentially functions as a state PAC as there is technically no such filing as a candidate PAC. They are able to give unlimited money to fellow state PACs and ballot measure campaign committees and limited to $2,600 candidate campaign committees. So long as Rehder has no direct oversight over the workings of the PAC, only raising funds for it and not involved in anyway with the disbursement of those funds, it’s completely legal.

Still, Hatfield says it’s a gray area and likened it to Gov. Eric Greitens’ A New Missouri, Inc. While Greitens has often stated he has no control over the day-to-day operations of the political nonprofit, Hatfield noted not many candidates control the day-to-day operations of their own campaign committees.

“Calling a committee ‘Holly PAC,’ after the name of the candidate and then saying the candidate doesn’t control or direct it… You’re asking for trouble,” Hatfield said.

Given the pending litigation with Hawley’s appeal, Klahr did not answer too many specifics regarding the evolving situation, but he said that his office would seek to answer any questions regarding the changes. He urged anyone with specific inquiries to simply call into the MEC offices.

“We continue to get questions for guidance and either through the formal and informal process,” Klahr said “We’re continuing to provide advice as best we can.”