March 3, 2006

Elections panel drops hidden-donor complaint

by Eric Resnick

Columbus--A state elections panel will take no action on a complaint that two anti-gay campaigns illegally hid their donors behind non-profit charities in the 2004 election. But it cleared the way for the case to be pursued in court.

The Ohio Elections Commission, after two hours of wrangling over rules, told LGBT activist Gary Wright and former Cincinnati mayor Bobbie Sterne that it will not pursue their complaint against the anti-gay groups that campaigned for the Ohio marriage ban amendment and to oppose the repeal of Cincinnati?s Article 12.

Wright and Sterne say that Citizens for Community Values and Phil Burress? other anti-gay enterprises, along with several national anti-gay groups, illegally concealed contributors to the two 2004 campaigns by passing millions of dollars through nonprofit charities that are not required to disclose who their donors are.

Ohio election law requires that contributors to political campaigns for candidates or issues be reported. In 2004, the Ohio Supreme Court let stand a lower court ruling that nonprofit corporations cannot be set up as proxies for campaign committees.

The commission?s February 23 vote was partisan, with Republicans wanting the case dismissed and Democrats wanting it to go forward.

Five of the seven-member panel were present, but they couldn?t muster the four votes required to totally end the case. After hearing suggestions from both sides? lawyers and parsing every applicable administrative law, they decided to consider it an ?administrative dismissal,? meaning that they are done with the case, but the parties involved may continue it elsewhere.

The hearing was a preliminary look at the evidence to see if there is ?probable cause? that the allegations in the complaint have merit and need to be investigated further.

Columbus attorney Rick Brunner, who represents Wright and Sterne, told the panel that they had this probable cause for three reasons:

? The campaign to retain Article 12 identified only 0.3% of its contributors, and the one for the state marriage ban amendment only identified 2% of them. The rest of the money came from a few charities, namely Citizens for Community Values Action, a nonprofit set up to do limited political work in exchange for contributors forgoing tax deductions.

CCV Action, noted Brunner, was initially set up to be a political action committee, requiring disclosure, then changed its status half way through the campaign.

? A statement made by Burress to the Cincinnati Enquirer in October that he was collecting donations anonymously to keep donors from being harassed. The ban amendment?s campaign website also had a donation button that led directly to CCV?s non-profit site.

? Later filings with the Internal Revenue Service showed that over 90 percent of the cash received in 2004 by CCV and CCV Action went to fund the two campaigns.

Columbus Attorney Matthew Kairis, representing Burress, CCV vice president David Miller, and their enterprises, argued that Wright and Sterne don?t have a constitutional right to discover who the donors to the nonprofits are, and that all the paperwork their groups filed was in order.

Kairis said that non-profit corporations are allowed to contribute to issue campaigns, and that not all corporate contributions constitute PAC contributions.

Kairis told the commission that the website link between CCV and the Ohio Campaign to Protect Marriage ?may be an issue for the IRS, but not for here.?

Kairis said the 2005 state Issue 1 campaign, which was a constitutional amendment allowing bonds to be let for economic development, ?was funded 99.97 percent by corporations? and said no one had any quarrel with that.

In his rebuttal, Brunner countered that the 2005 campaign was funded by a multitude of corporations with interests in its passage, not just two entities providing nearly all the money.

Columbus attorney William Todd, representing the out-of-state groups Focus on the Family and Family Research Council plus their treasurers, said that his clients are both large faith-based organizations with multiple interests, and that the Article 12 campaign was a ?miniscule? activity for them, thereby keeping their contributions legal.

?This is a chill on First Amendment activity,? said Todd, adding that the Reform Ohio Now group that sponsored the 2005 Issues 2 through 5 got $500,000 from the liberal People for the American Way.

Washington, D.C. attorney Jeffrey Shafer, who represents the Alliance Defense Fund, told the panel that Brunner should be sanctioned for filing a ?frivolous? suit against his client.

ADF?s contributions were mostly in the form of a letter posted on the marriage ban campaign?s web site encouraging churches to contact them if their political activity is questioned. Since there were no direct cash transfers, Shafer argued that his client should not be part of the suit.

During rebuttal, Brunner continued to argue that the nonprofits were acting illegally as PACs and as such, should be made to disclose their contributors.

?Can I prove the case today?? said Brunner, noting that Kairis has not allowed any discovery. ?No, but I don?t have to. All I need to show is probable cause that discovery needs to be done, and the case should go forward.?

Prior to the arguments, commission member Harvey Shapiro, a Newark attorney and the commission?s only independent, recused himself from the proceedings saying he ?contributed to Issue 1 in a significant way.?

Shapiro contributed $1,000 to the campaign against the marriage ban amendment, which was Issue 1 on the 2004 ballot.

Former Cincinnati state senator William Mallory, a Democrat, was absent.

Maumee attorney Benjamin Marsh, a Republican, led the effort to dismiss the case completely. He made the motion to do it, after asking the opinion of commission director Phil Richter, which was seconded by fellow Republican Martin O. Parks, a retired judge from Mentor.

After much discussion as to whether or not the law was sufficient to rule on this case, and argument over what the commission?s options could be, Marsh and Parks convinced commission chair Catherine Cunningham, a Columbus Republican, to vote with them.

The Democrats present, former House member William Ogg of Wheelersburg, and commission vice chair William D. Booth, a township trustee from Deshler, voted against Marsh?s motion.

According to the commission rules, four votes are required for complete dismissal, leaving the decision as to what to do in limbo.

Cunningham then called for a ten-minute recess to consider options.

After more consultation, Cunningham decided that the commission cannot take action without four votes. So, the case would be taken off the commission?s docket, with the parties free to pursue the action in an Ohio court, even though the commission?s rules do not include such a provision.

Brunner pointed out that the decision was ?other than on the merits of the case.?

Shafer indicated that he might file an action to get his client ADF out of the case, and put comments to that effect on the record.

Brunner said Wright and Sterne and Equality Cincinnati would need to decide what they wanted to do with the case, and that he would investigate the best way to go forward.

?It?s not over,? said Brunner.

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