Circuit Hears Hawaii Campaign Finance Case

by Tim Hull, Courthouse News October 14, 2013 

(CN) - The 9th Circuit heard arguments on a challenge to Hawaii's campaign finance laws, but hinted that it may delay a ruling until the U.S. Supreme Court decides a similar case.

A-1 A-Lectrician Inc. sued the Hawaii Campaign Spending Commission in 2010, arguing that state's "non-candidate" committee donation caps, advertising definition and disclaimer requirements, and its ban on government contractors donating to candidates were all unconstitutional.

Under the island state's campaign spending laws, organizations and companies, like A-1, that spend more than $1,000 during an election period must register as a non-candidate committee and comply with spending caps and reporting rules.

U.S. District Judge J. Michael Seabright in 2012 found the non-candidate committee and expenditure definitions constitutional, upheld the definition of advertisement and the disclaimer requirement, and agreed that the government contractors' ban was constitutional as well.

During oral arguments in Hawaii recently, Chief Judge Alex Kozinski questioned the very nature of the government contractor's ban, a debate over which took up most of the hearing.

"Wouldn't everybody in the legislature be automatically covered, because they all have to vote on appropriations?" Kozinski asked A-1 A-Lectrician attorney Randy Elf.

"No, because appropriating money for a contract is not the same as deciding who gets the contract," Elf said, "and it's not the same as overseeing the contract."

"That is highly short-sighted and not really realistic," Kozinski countered. "It's all tied together...I don't see how you can cut out people who ultimately have oversight."

"Influence is not corruption," said Elf, quoting Citizens United, the epochal campaign finance case that inspired this and other challenges to state-level laws governing donations and political advocacy.

Kozinski continued to attack the logic of a government contractor ban after hearing from Deirdre Marie-Iha, the attorney for the Hawaii Campaign Spending Commission.

"Here's what it looks like to me," the chief judge said. "You don't have a contract with the state, you then make a bunch of contributions, you get in good with them, you get a contract, and then you stop making contributions, until the contract runs out, and then you go out and make more contributions, get another contract ... Why isn't this backwards? Why isn't the way that the law is drafted entirely irrational? It seems me the people who don't need it, who already have the government largesse, and the people who don't have the government largesse to pay their way to play ..."

Marie-Iha said that because "Hawaii's a small state, Honolulu is a small town," the same companies compete year after year for contracts.

Kozinski also hinted that the three-judge panel might delay ruling on the Hawaii case until the U.S. Supreme Court decides McCutcheon v. Federal Election Commission, which the high court heard last week.

In that case, Alabama Republican activist Shaun McCutcheon is challenging the overall cap on contribution limits that has been law since the 1970s.

Kozinski asked both lawyers if the 9th Circuit should delay its ruling pending a decision on McCutcheon.

"I don't think the McCutcheon case is going to "change the game on the contribution ban," Elf said, but added that "you never know what the Supreme Court is going to do until it does it."

"And there is no better example of that in campaign finance law than Citizens United, which was an enormous surprise to our office, and we represented Citizens United in the lower court," Elf said. "It did not come out the way we thought it would."