Justia.com Opinion Summary: The Iowa Right to Life Committee (IRTL) filed a complaint in the U.S. district court, alleging, inter alia, that Iowa's campaign finance laws unconstitutionally imposed political committee status on corporations whose major purpose was something other than nominating or electing candidates. The district court certified two questions to the Supreme Court. At issue before the Court was whether a corporation must form a political committee under Iowa law if it wants to spend more than $750 advocating the election or defeat of Iowa candidates. The Court answered that a corporation like IRTL may engage in express advocacy without forming a political committee because a corporation making independent expenditures aggregating over $750 in a calendar year becomes an "independent expenditure committee" within the meaning of Iowa Code 68A.404 but not a "political committee" within the meaning of Iowa Code 68A.102(18) or a "permanent organization" within the meaning of Iowa Code 68A.402(9).
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IN THE SUPREME COURT OF IOWA
No. 11–1068
Filed December 30, 2011
IOWA RIGHT TO LIFE COMMITTEE, INC.,
Plaintiff,
vs.
MEGAN TOOKER, In Her Official Capacity as
Iowa Ethics and Campaign Disclosure Board
Executive Director; JAMES ALBERT, JOHN
WALSH, PATRICIA HARPER, GERALD SULLIVAN,
SAIMA ZAFAR, and CAROLE TILLOTSON, In Their
Official Capacities as Iowa Ethics and Campaign
Disclosure Board Members,
Defendants.
Certified questions of law from the United States District Court for
the Southern District of Iowa, Robert W. Pratt, Chief United States
District Court Judge.
A federal district court certified two questions in a suit challenging
the constitutionality of Iowa’s campaign finance laws and regulations.
CERTIFIED QUESTIONS ANSWERED.
Sean P. Moore, Brian P. Rickert, and Adam C. Gregg of Brown,
Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C., Des Moines,
James Bopp, Jr., Richard E. Coleson, and Kaylan L. Phillips of Bopp,
Coleson & Bostrom, Terre Haute, Indiana, for plaintiff.
2
Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Deputy
Attorney General, and Meghan L. Gavin, Assistant Attorney General, Des
Moines, for defendants.
3
MANSFIELD, Justice.
We have been asked to answer two certified questions of law in a
federal case brought by Iowa Right to Life Committee, Inc. (IRTL)
challenging the constitutionality of Iowa’s campaign finance laws. The
nub of the matter is whether a corporation must form a “political
committee” under Iowa law if it wants to spend more than seven hundred
fifty dollars advocating the election or defeat of Iowa candidates.
Although Iowa’s laws are not entirely clear (which explains the federal
court’s decision to certify), we conclude a corporation like IRTL may
engage in express advocacy without forming a political committee.
The certified questions are as follows:
1. If a corporation that has not previously registered as a
political committee makes independent expenditures
aggregating over $750 in a calendar year, does that
corporation become, by virtue of such expenditures:
(1) an “independent expenditure committee,” as that term
is defined in Iowa Admin. Code r. 351—4.1(1)(d); (2) a
“political committee,” as that term is defined by Iowa
Code § 68A.102(18); or both?
2. If a corporation that has not previously registered as a
political committee and that “was originally organized for
purposes other than engaging in election activities”
makes independent expenditures aggregating over $750
in a calendar year, does that corporation become, by
virtue of such expenditures, a “permanent organization”
pursuant to Iowa Code § 68A.402(9)?
For the reasons discussed herein, we answer the questions as follows:
1. An independent expenditure committee.
2. No.
I. Factual Background and Procedural History.
According to its federal court complaint, IRTL is a nonprofit,
nonstock Iowa corporation and the largest pro-life organization in Iowa.
IRTL is exempt from federal taxes as a social welfare organization. 26
4
U.S.C. § 501(c)(4) (2006).
IRTL alleges that its primary purpose is to
“present factual information upon which individuals may make an
informed decision about the various topics of fetal development, abortion,
and alternatives to abortion, euthanasia, infanticide and prevention of
cruelty to children.” IRTL’s major purpose “is not and never will be the
nomination or election of candidates.”
Nonetheless, in the wake of the U.S. Supreme Court’s Citizens
United decision holding that corporations have a First Amendment right
to make independent expenditures expressly advocating the election or
defeat of candidates,1 IRTL seeks to make independent expenditures in
Iowa to support candidates “who it believes will fight to protect issues
that are important to its organization, such as protecting life.”
IRTL alleges that it is unconstitutionally chilled from making such
expenditures “due to the burdens imposed by [Iowa’s laws and
regulations] . . . and the potential civil and criminal penalties for violating
the challenged provisions.” Among other things, IRTL alleges that if it
made these kinds of expenditures, it would become a political committee
(or PAC) under Iowa law, resulting in “onerous registration, reporting,
and dissolution requirements.”
On September 7, 2010, IRTL filed a four-count verified complaint
in the United States District Court for the Southern District of Iowa. It
named as defendants the executive director and the board members of
the Iowa Ethics and Campaign Disclosure Board (Board).2 Count I—the
count at issue here—challenged Iowa Code sections 68A.102(18) and
1See
Citizens United v. Fed. Election Comm’n, __ U.S. __, 130 S. Ct. 876, 175 L.
Ed. 2d 753 (2010).
2The
Board has the responsibility for administering Iowa’s campaign finance
laws. See Iowa Code § 68B.32A (describing the duties of the Board).
5
68A.402(9) (2011), alleging they unconstitutionally imposed PAC status
on corporations “whose major purpose is something other than
nominating or electing candidates.” Other counts (II–IV) attacked various
Iowa statutes and administrative rules regarding the registration,
reporting, and termination requirements for independent expenditure
committees; Iowa’s ban on corporate contributions to candidates and
committees; and a newly enacted Iowa requirement that corporations
making independent campaign expenditures obtain prior board of
director approval for those expenditures.
IRTL initially filed a motion for preliminary injunction, which was
denied by the district court on October 20, 2010.
Iowa Right to Life
Comm., Inc. v. Smithson, 750 F. Supp. 2d 1020, 1049 (S.D. Iowa 2010).
Both sides then moved for summary judgment. On June 29, 2011, the
district court granted summary judgment for the Board on all counts
except Count I. Iowa Right to Life Comm., Inc. v. Tooker, 795 F. Supp. 2d
852, 873 (S.D. Iowa 2011).
The district court reserved ruling on Count I because it had doubts
about the proper interpretation of Iowa’s election laws. Id. at 861–62. In
particular, the court questioned the premise of IRTL’s constitutional
challenge, namely that IRTL would be deemed a “political committee” or
PAC under sections 68A.102(18) and 68A.402(9) if it made independent
campaign expenditures.
Id.
To eliminate its uncertainty about the
proper interpretation of Iowa law, the district court certified the
aforementioned two questions to this court. Id. at 862.
II. Analysis.
A. Pre-Citizens United Statutory Background. Before we turn
to the certified questions themselves, some historical background is
appropriate.
As this background reveals, as of January 2010, when
6
Citizens
United
was
decided,
Iowa
had
(1) a
ban
on
corporate
expenditures in candidate elections dating back to 1975, (2) a definition
of “political committee” that also went back to 1975 and had gone
through several permutations, (3) a 1983 decision of this court holding
that a nonprofit corporation engaged in a ballot issue campaign could be
deemed a “political committee,” and (4) a separate set of provisions that
first entered the Iowa Code in 1994 and had undergone later
modification
allowing
persons
and
entities
to
make
and
report
“independent expenditures” in some circumstances without forming
“political committees.”
Our story begins in 1907. In March of that year, Iowa enacted a
ban on corporate contributions to political campaigns. It provided:
It shall be unlawful for any corporation doing business
within the state, or any officer, agent or representative
thereof acting for such corporation, to give or contribute any
money, property, labor or thing of value, directly or
indirectly, to any member of any political committee, political
party, or employee or representative thereof, or to any
candidate for any public office or candidate for nomination to
any public office or to the representative of such candidate,
for campaign expenses or for any political purpose
whatsoever, or to any person, partnership or corporation for
the purpose of influencing or causing such person,
partnership or corporation to influence any elector of the
state to vote for or against any candidate for public office or
for nomination for public office or to any public officer for the
purpose of influencing his official action, but nothing in this
act shall be construed to restrain or abridge the liberty of the
press or prohibit the consideration and discussion therein of
candidacies, nomination, public officers or political
questions.
1907 Iowa Acts ch. 73, § 1. This statute followed by approximately two
months Congress’s approval of a similar ban on corporate contributions
to federal campaigns—the so-called Tillman Act. See ch. 420, 34 Stat.
864 (January 26, 1907) (making it “unlawful for any corporation
whatever to make a money contribution in connection with any election
7
at which Presidential and Vice-Presidential electors or a Representative
in Congress is to be voted for or any election by any State legislature of a
United States Senator”).
However, comprehensive campaign finance legislation did not come
to Iowa or the federal government until the 1970s, following the
Watergate scandal. Iowa’s first such campaign finance law was approved
in 1973 and became chapter 56 of the Iowa Code. 1973 Iowa Acts ch.
138. At that time, the 1907 legislation was still on the books in the same
form in which it had been enacted sixty-six years earlier. See Iowa Code
§ 491.69 (1973).
The general assembly did not address corporate
contributions (or expenditures) in the new law, simply leaving the 1907
legislation as it was and where it was. “Political committee” was defined
in the new campaign finance law as follows:
‘Political committee’ means a person, including a candidate,
or committee, including a statutory political committee,
which accepts contributions or makes expenditures in the
aggregate of more than one hundred dollars in any one
calendar year for the purpose of supporting or opposing a
candidate for public office.
1973 Iowa Acts ch. 138, § 3(6).
In 1975, the general assembly revised the campaign finance law
that it had enacted just two years before. 1975 Iowa Acts ch. 57. At that
time, the restrictions on corporate political activity dating back to 1907
were repealed and a modified version of them was placed in the
campaign finance chapter. Id. § 17. Hence, a new provision regarding
corporate political activity was inserted into chapter 56. This provision
read in part:
It shall be unlawful for any insurance company, savings and
loan association, bank, and corporation organized pursuant
to the laws of this state or any other state, territory, or
foreign country, whether for profit or not, or any officer,
8
agent, representative thereof acting for such insurance
company, savings and loan association, bank, or
corporation, to contribute any money, property, labor, or
thing of value, directly or indirectly, to any committee, or for
the purpose of influencing the vote of any elector.
Id. § 16.
The 1975 legislation also replaced the prior definition of
“political committee,” so it now read as follows:
‘Political committee’ means a committee, but not a
candidate’s committee, which shall consist of persons
organized for the purpose of accepting contributions, making
expenditures, or incurring indebtedness in the aggregate of
more than one hundred dollars in any one calendar year for
the purpose of supporting or opposing a candidate for public
office or ballot issue.
Id. § 5.
The following year, 1976, the legislature relaxed the restrictions on
corporate activity somewhat by allowing for a few exceptions. First, it
exempted expenditures in utility franchise elections from the basic
prohibition.
corporations
1976 Iowa Acts ch. 1078, § 14(1).
to
sponsor
political
Second, it authorized
committees,
by
paying
their
administrative expenses, so long as the actual contributions to those
committees came from certain individuals.
Id. § 14(3).
Third, it
permitted nonprofit corporations to make “contributions to encourage
registration of voters and participation in the political process, or to
publicize public issues, or both,” so long as the “contributions” were not
used “to endorse or oppose any candidate for public office or support or
oppose ballot issues.” Id. § 14(4).
Still, the scope of the corporate restrictions was broad. Although
the basic prohibition was aimed at “contributions,” the definition of
“contribution” included a “transfer of money.”
Iowa Code § 56.2(4)(a)
(1977). Also, a prohibited “contribution” did not have to be “to” a person
or an entity, as under the 1907 legislation; it merely had to be “for the
9
purpose of influencing the vote of any elector.”
Id. § 56.29(1).
In
addition, illegal “contributions” included “contributions” by nonprofit
corporations “to endorse or oppose any candidate for public office.” Id.
§ 56.29(4).
Thus, following the 1975 and 1976 revisions of Iowa campaign
finance law, it appeared that the statutory ban on corporate campaign
“contributions” included corporate campaign expenditures as well. The
attorney general agreed with this view, issuing a formal opinion in 1977
that the Fort Dodge Chamber of Commerce could not “raise money and
utilize their staff personnel to present one side of an election issue,
specifically a proposal for a civic center.” 1977 Op. Iowa Att’y. Gen. 307
(1978).
In
1978,
however,
the
U.S.
Supreme
Court
decided
that
corporations could not be constitutionally prohibited from spending
money to influence ballot issue campaigns. First Nat’l Bank of Boston v.
Bellotti, 435 U.S. 765, 795, 98 S. Ct. 1407, 1425, 55 L. Ed. 2d 707, 730.
(1978). Following the Bellotti decision, our attorney general reiterated his
view that section 56.29 was indeed a corporate expenditure ban as well
as a contribution ban and prohibits a corporation from taking a public
position for or against a ballot issue, or from making a financial
contribution to an organized effort to educate the public. 1978 Op. Iowa
Att’y. Gen. 706 (1978). In light of Bellotti, though, he opined that this
aspect of the statute “invades free speech territory the First Amendment
has carved out as hallowed and sacrosanct from statutory infringement.”
Id. at 710.
In 1981, the general assembly responded to the Bellotti decision by
amending section 56.29 to expressly permit corporations to spend money
on ballot issues, while providing that such expenditures remained
10
subject to the disclosure requirements of the chapter. 1981 Iowa Acts
ch. 35, § 14(1). At the same time, the legislature amended the definition
of “political committee” once again:
‘Political committee’ means a committee, but not a
candidate’s committee, which shall consist of persons
organized for the purpose of accepting accepts contributions,
making
makes
expenditures,
or
incurring
incurs
indebtedness in the aggregate of more than one two hundred
fifty dollars in any one calendar year for the purpose of
supporting or opposing a candidate for public office or ballot
issue.
Id. § 1(6).
The legislature also added the concept of a “permanent
organization”:
A permanent organization temporarily engaging in activity
which would qualify it as a political committee shall organize
a political committee and shall keep the funds relating to
that political activity segregated from its operating funds.
The political committee shall file reports in accordance with
this chapter. When the permanent organization ceases to be
involved in the political activity, it shall dissolve the political
committee.
Id. § 6.
In 1983, we had occasion to review and interpret the term “political
committee,” and found that it could include a nonprofit corporation.
Iowans for Tax Relief v. Campaign Fin. Disclosure Comm’n, 331 N.W.2d
862, 865–67 (Iowa 1983), appeal dismissed, 464 U.S. 879, 104 S. Ct.
220, 78 L. Ed. 2d 217 (1983). Following Bellotti, Iowans for Tax Relief
(IFTR) organized a campaign for a constitutional convention to limit the
general assembly’s taxing and spending authority.
Id. at 864.
IFTR
refused, however, to file disclosure reports showing its sources of funds
on the ground it was not subject to chapter 56’s reporting requirements.
Id.
When the case came before us, we held that IFTR, a nonprofit
corporation, met the definition of a “political committee” under both the
pre-1981 and the post-1981 statutory definitions and was subject to the
11
reporting requirements for political committees.
Id. at 865–67.
We
found that an entity could be “organized” for the purpose of supporting a
ballot issue within the meaning of pre-1981 law even if that was not the
entity’s original purpose, its only purpose, or even its primary purpose.
Id. at 865–66. We also held the 1981 amendment to the definition of
“political committee” was merely “clarifying.” Id. at 867.
As the years passed, other adjustments were made to Iowa’s
campaign finance laws. One significant change occurred in 1994 when
the legislature introduced the concept of “independent expenditure”
reporting. Originally, this applied to any person, “other than a political
committee,” that made expenditures in excess of five hundred dollars in
a calendar year “for purposes of supporting or opposing a ballot issue.”
1994 Iowa Acts ch. 1180, § 36(2).
In 1999, the legislature made amendments to reflect the difference
between so-called “express advocacy” and so-called “issue advocacy.”
Thus, “political committee” was redefined to include, among other things:
A committee, but not a candidate’s committee, which that
accepts contributions in excess of five hundred dollars in the
aggregate, makes expenditures in excess of five hundred
dollars in the aggregate, or incurs indebtedness in excess of
five hundred dollars in the aggregate in any one calendar
year for the purpose of supporting or opposing to expressly
advocate the nomination, election, or defeat of a candidate
for public office, or for the purpose of supporting or opposing
to expressly advocate the passage or defeat of a ballot issue
....
1999 Iowa Acts ch. 136, § 2. At the same time the legislature modified
the ban on corporate campaign-related expenditures to limit it to those
that expressly advocated the nomination, election, or defeat of a
candidate:
[It] is unlawful for an insurance company, savings and loan
association, bank, credit union, or corporation organized
12
pursuant to the laws of this state, the United States, or any
other state, territory, or foreign country, whether for profit or
not, or an officer, agent, or representative acting for such
insurance company, savings and loan association, bank,
credit union, or corporation, to contribute any money,
property, labor, or thing of value, directly or indirectly, to a
committee, or for the purpose of influencing to expressly
advocate that the vote of an elector be used to nominate,
elect, or defeat a candidate for public office . . . .
Id. § 10(1).
These provisions reflected existing U.S. Supreme Court
precedent that corporations could be forbidden from spending their
treasury funds to support the election or defeat of candidates, but could
not be prevented from spending money to publicize their positions on
issues. See Austin v. Mich. Chamber of Commerce, 494 U.S. 652, 654–55,
110 S. Ct. 1391, 1395, 108 L. Ed. 2d 652, 661 (1990) (upholding a
Michigan law that prohibited the Michigan Chamber of Commerce from
making independent expenditures to support the election of a candidate);
Bellotti, 435 U.S. at 795, 98 S. Ct. at 1425, 55 L. Ed. 2d at 730.
In
2003,
the
general
assembly
modified
the
independent
expenditure provisions, providing that “individuals” who spent more than
seven hundred fifty dollars in the aggregate to advocate the election or
defeat of candidates would file an independent expenditure report in lieu
of complying with the more cumbersome registration requirements for
political committees. 2003 Iowa Acts ch. 40, § 4(2).3 The Board was also
given authority to adopt rules for the implementation of the independent
expenditure provisions.
Id. § 7(b).
Then, in 2005, the independent
expenditure provisions were made applicable to any “person,” other than
a registered committee. 2005 Iowa Acts ch. 72, § 14 (codified at Iowa
Code § 68A.404(2)(2007)). In 2008, the reporting threshold was lowered
3In
the same legislation, the campaign finance provisions were moved from
chapter 56 to chapter 68A of the Iowa Code. 2003 Iowa Acts ch. 40, § 9.
13
to one hundred dollars in the aggregate.
2008 Iowa Acts ch. 1191,
§§ 116, 117 (codified at Iowa Code §§ 68A.404(1), (3)(a) (2009)).
Thus, at the time Citizens United was decided in January 2010, it
was illegal in Iowa for a corporation “to expressly advocate that the vote
of an elector be used to nominate, elect, or defeat a candidate for public
office.”
Iowa Code § 68A.503(1) (2009).
However, Iowa law did allow
individuals and other entities such as unincorporated associations and
unions to engage in these activities, and it permitted corporations to
engage in express advocacy on ballot issues.
Whenever the entity in
question was a political committee, it became subject to certain
registration, reporting, and dissolution obligations.
According to the
laws then in effect, a “political committee” included the following:
A committee, but not a candidate’s committee, that accepts
contributions in excess of seven hundred fifty dollars in the
aggregate, makes expenditures in excess of seven hundred
fifty dollars in the aggregate, or incurs indebtedness in
excess of seven hundred fifty dollars in the aggregate in any
one calendar year to expressly advocate the nomination,
election, or defeat of a candidate for public office, or to
expressly advocate the passage or defeat of a ballot issue.
Id. § 68A.102(18)(a).
Also, as had been the law since 1981, a “permanent organization
temporarily engaging in activity described in section 68A.102, subsection
18,” was required to “organize a political committee” and “keep the funds
relating to that political activity segregated from its operating funds.” Id.
§ 68A.402(9). As set forth in the relevant statute:
Permanent
organizations. A
permanent
organization
temporarily engaging in activity described in section
68A.102, subsection 18, shall organize a political committee
and shall keep the funds relating to that political activity
segregated from its operating funds. The political committee
shall file reports on the appropriate due dates as required by
this section. The reports filed under this subsection shall
identify the source of the original funds used for a
14
contribution made to a candidate or a candidate’s
committee. When the permanent organization ceases to be
involved in the political activity, the permanent organization
shall dissolve the political committee. As used in this
subsection, “permanent organization” means an organization
that is continuing, stable, and enduring, and was originally
organized for purposes other than engaging in election
activities.
Id.4
Yet Iowa law recognized that some persons and noncorporate
entities and persons could make independent expenditures expressly
advocating the nomination, election, or defeat of one or more candidates
without becoming, or being required to organize, a political committee.
Thus, section 68A.404, entitled “Independent expenditures,” provided in
part:
1. As used in this section, “independent expenditure”
means one or more expenditures in excess of one hundred
dollars in the aggregate for a communication that expressly
advocates the nomination, election, or defeat of a clearly
identified candidate or the passage or defeat of a ballot issue
that is made without the prior approval or coordination with
a candidate, candidate’s committee, or a ballot issue
committee.
2. A person, other than a committee registered under
this chapter, that makes one or more independent
expenditures shall file an independent expenditure
statement.
a. The requirement to file an independent expenditure
statement under this section does not by itself mean that the
4The
rule that the Board adopted to implement this provision read, in relevant
part:
Permanent organizations temporarily engaging in political activity.
The requirement to file the statement of organization applies to an entity
that comes under the definition of a “political committee” (PAC) in Iowa
Code Supplement section 68A.102(18) by receiving contributions, making
expenditures, or incurring debts in excess of $750 in any one calendar
year for the purpose of expressly advocating the election or defeat of a
candidate for public office, or for the purpose of expressly advocating the
passage or defeat of a ballot issue.
Iowa Admin. Code r. 351—4.1(1)(c).
15
person filing the independent expenditure statement is
required to register and file reports under sections 68A.201
and 68A.402.
b. This section does not apply to a candidate,
candidate’s committee, state statutory political committee,
county statutory political committee, or a political
committee.
Logically, it would appear that section 68A.404’s less onerous
obligation of merely filing an independent expenditure statement applied
in at least one circumstance: where the person or entity had reached
only the one hundred dollar threshold of section 68A.404(1) rather than
the seven hundred fifty dollar threshold of section 68A.102(18). Whether
it applied in other circumstances was less clear.
B. Post-Citizens United Legislation. On January 21, 2010, the
U.S. Supreme Court decided Citizens United. See __ U.S. __, 130 S. Ct.
876, 175 L. Ed. 2d 753 (overruling Austin). That case was brought by a
nonprofit corporation—Citizens United—that produced and sought to pay
to air a film critical of presidential candidate Hillary Clinton. Id. at __,
130 S. Ct. at 886–88, 175 L. Ed. 2d at 769–70. Federal law at the time,
like Iowa law, prohibited corporations from using general treasury funds
to make independent expenditures that expressly advocated the election
or defeat of a candidate for federal office. See 2 U.S.C. 441b (2006). The
Court found the ban on such expenditures unconstitutional. It held that
“the Government may not suppress political speech on the basis of the
speaker’s corporate identity.” Citizens United, at __, 130 S. Ct. at 913,
175 L. Ed. 2d at 798–99.
In response to Citizens United, in March 2010, our general
assembly approved S.F. 2354. It was signed by the governor on April 8,
2010, and, as emergency legislation, took effect immediately. 2010 Iowa
Acts ch. 1119, § 7. This law rewrote section 68A.503 of the Iowa Code to
16
remove the prohibition on corporate independent campaign expenditures
and to expressly allow a corporation to “us[e] its funds for independent
expenditures as provided in section 68A.404.” Id. § 5(4)(d)).
The law also rewrote section 68A.404 regarding independent
expenditures.
Id. § 3.
Among other things, the one hundred dollar
threshold for filing “independent expenditure statements” was raised to
seven hundred fifty dollars.
Id. § 3(1).
A requirement that the
independent expenditure be authorized by “the entity’s board of
directors, executive council, or similar organizational leadership body”
was added. Id. § 3(2). The previous requirement that a “person, other
than a committee registered under this chapter, that makes one or more
independent
expenditures
shall
file
an
independent
expenditure
statement” was continued. Id. § 3(3). The proviso that section 68A.404
“does not apply to . . . a political committee” was also continued.
§ 3(3)(b).
Id.
And various modifications were made to the independent
expenditure reporting itself. Id. § 3(4)).
Following the adoption of S.F. 2354, the Board adopted
regulations to implement it. Among other things, the regulations defined
an “independent expenditure committee” as a “person” that is required to
file an “independent expenditure statement.” Iowa Admin. Code r. 351—
4.1(1)(d).5
5The
entire subpart reads as follows:
Independent expenditure committee. A person that is required to file
campaign disclosure reports pursuant to 2009 Iowa Code Supplement
section 68A.404(3)“a” as amended by 2010 Iowa Acts, Senate File 2354,
section 3, due to the filing of an independent expenditure statement
(Form Ind-Exp-O) shall be referred to as an “independent expenditure
committee.” An independent expenditure committee, or a sole individual
making an independent expenditure by filing Form Ind-Exp-I, is not
required to file a statement of organization.
Iowa Admin. Code r. 351—4.1(1)(d).
17
C. The Parties’ Positions. The parties’ differences center on the
interplay among “political committees,” “permanent organizations,” and
“independent expenditures” in current, post-Citizens United Iowa election
law.
IRTL argues that if it spends over seven hundred fifty dollars to
advocate for the election or defeat of candidates in Iowa, it is required by
either section 68A.102(18) or 68A.402(9) (or both) to organize a political
committee.
See Iowa Code § 68A.102(18)(a) (providing that a political
committee includes a “committee, but not a candidate’s committee, that
. . . makes expenditures in excess of seven hundred fifty dollars in the
aggregate . . . to expressly advocate the nomination, election, or defeat of
a candidate for public office, or to expressly advocate the passage or
defeat of a ballot issue”); Iowa Code § 68A.402(9) (providing that a
“permanent organization temporarily engaging in activity described in
section 68A.102, subsection 18, shall organize a political committee and
shall keep the funds relating to that political activity segregated from its
operating funds”).6 In IRTL’s view, this “you must form a PAC to play”
requirement is unconstitutional. As pointed out by the federal district
court, “IRTL’s arguments regarding Count One are all premised upon
IRTL’s assertion that if it makes its intended independent expenditures,
it ‘will be defined by statute as a political committee under Iowa law.’ ”
IRTL contends that under the 2010 amendment to section
68A.404, it also becomes an “independent expenditure committee” if it
6IRTL’s argument based on section 68A.102(18) has to deal with a certain degree
of circularity in the statute. Under section 68A.102(18)(a), “political committee”
includes a “committee, but not a candidate’s committee,” that spends more than seven
hundred fifty dollars on express advocacy. To find out what “committee” means, we
turn to section 68A.102(8), which unhelpfully explains that this term “includes a
political committee and a candidate’s committee.” However, IRTL’s argument based on
section 68A.402(9) avoids this circularity, since “permanent organization” has a
separate definition not tied to the definition of “political committee.”
18
spends in excess of seven hundred fifty dollars expressly advocating the
nomination, election, or defeat of candidates. As IRTL puts it:
Under Iowa’s scheme, the “independent expenditure
committee” definition overlaps the “political committee”
definition because both have a $750 aggregation trigger
(which for PACs aggregates within a year) that can be pulled
by making independent expenditures, so that being an
independent–expenditure committee could also trigger PACstatus (with penalties for non-compliance with PAC
requirements if a group is deemed a PAC without knowing
that it was).
However, IRTL does not argue in Count I of its complaint that the
burdens of becoming an “independent expenditure committee” are
unconstitutional. Its sole objection is to the obligations associated with
being a “political committee.”
The Board differs with IRTL’s overall reading of current law. The
Board does agree that if a corporation makes independent expenditures
aggregating over seven hundred fifty dollars, it becomes an independent
expenditure committee under Iowa Code section 68A.404(3). The Board
denies, however, that such an organization would qualify as a political
committee under section 68A.102(18). Indeed, the Board contends the
two categories are exclusive under Iowa law.
D. This Court’s Discretion to Answer Certified Questions. At
the outset, IRTL urges us not to answer the district court’s two certified
questions. IRTL argues that if we were to answer them constitutionally,
we “would be forced to substantially re-write the provisions or strike
them down in their entirety, and in both instances, render the provisions
meaningless.”
We recognize that this court has discretion in answering certified
questions. Iowa Code section 684A.1 provides:
19
The supreme court may answer questions of law certified to
it by the supreme court of the United States, a court of
appeals of the United States, a United States district court or
the highest appellate court or the intermediate appellate
court of another state, when requested by the certifying
court, if there are involved in a proceeding before it questions
of law of this state which may be determinative of the cause
then pending in the certifying court and as to which it
appears to the certifying court there is no controlling
precedent in the decisions of the appellate courts of this
state.
(Emphasis added.)
See also Foley v. Argosy Gaming Co., 688 N.W.2d
244, 246 (Iowa 2004) (recognizing the court’s discretion whether to
answer certified questions).
We choose to answer the certified questions here. We do not have
a situation where the answers to the questions are fact-dependent or the
facts are in conflict. See Bituminous Cas. Corp. v. Sand Livestock Sys.,
Inc., 728 N.W.2d 216, 222 (Iowa 2007) (declining to answer a question of
fact); Wright v. Brooke Group Ltd., 652 N.W.2d 159, 170 n.1 (Iowa 2002)
(declining to answer questions that require factual determinations); Eley
v. Pizza Hut of Am., Inc., 500 N.W.2d 61, 64 (Iowa 1993) (declining to
answer questions where the stated facts are in conflict and could be a
basis for the court to answer the questions in a variety of ways). These
are pure questions of law.
Also, our answers to these questions will allow the federal district
court to decide the remaining issues in a case with constitutional
dimensions.
The certified questions are not “purely academic or
extraneous.” FDIC v. Am. Cas. Co. of Reading, Pa., 528 N.W.2d 605, 607
(Iowa 1995) (recognizing the court “should reject purely academic or
extraneous questions”).
The only ground offered by IRTL for not exercising our discretion to
answer the questions assumes we will agree with IRTL’s views on both
20
constitutionality and statutory interpretation.
This kind of question-
begging does not advance the analysis, in our view. In the absence of a
good reason not to answer the certified questions, we will now proceed to
respond to the inquiries presented to us.
E. Answering the Certified Questions.
question
asks
whether
a
corporation
that
The first certified
makes
independent
expenditures aggregating over seven hundred fifty dollars in a calendar
year becomes, by virtue of such expenditures, an “independent
expenditure committee,” a “political committee,” or both.
The second
asks whether a corporation making independent expenditures at this
level becomes a “permanent organization” that must form a “political
committee.” For the reasons we have already discussed, the questions
are interrelated.
We agree there is some degree of conflict in the statutes. Under
section 68A.402(9), which predates Citizens United, it appears that IRTL
would qualify as a permanent organization in that it is “continuing,
stable, and enduring, and . . . originally organized for purposes other
than engaging in election activities.” Thus, if that provision were viewed
in isolation, IRTL would apparently have to “organize a political
committee” as soon as it temporarily engaged in activity covered by
section 68A.102(18), e.g., spending in excess of seven hundred fifty
dollars to expressly advocate the nomination, election, or defeat of a
candidate. See Iowa Code §§ 68A.102(18), 68A.402(9).
Also, twenty-eight years ago, when we were asked to interpret the
predecessors to sections 68A.102(18)(a) and 68A.402(9), we held that
Iowans for Tax Relief became subject to the “political committee”
reporting requirements once it established a ballot issue committee to
21
conduct a campaign for passage of the constitutional convention issue.
Iowans for Tax Relief, 331 N.W.2d at 865–67.
On the other hand, under the post-Citizens United legislation, if
IRTL spends over seven hundred fifty dollars to engage in express
advocacy, it becomes an entity making independent expenditures,
defined
under
the
regulations
as
an
“independent
expenditure
committee.” See Iowa Code § 68A.404(1), (3); Iowa Admin. Code r. 351—
4.1(4)(d). And this section of chapter 68A makes clear that it does not
apply to political committees. Iowa Code § 68A.404(3)(b) (“This section
does not apply to . . . a political committee.”). In other words, according
to this part of the law, “independent expenditure committee” and
“political committee” are two mutually exclusive categories.
So we are faced with a situation where if we apply sections
68A.102(18) and 68A.402(9) in isolation, IRTL would be treated as a
political committee or a permanent organization that has to form a
political committee, whereas if we apply section 68A.404 in isolation,
IRTL would become an independent expenditure committee, which
precludes it from being a political committee.
Of course, we do not interpret statutes in isolation, especially when
they are in apparent conflict. Before Citizens United was decided, as we
have noted, it was generally illegal for corporations to spend money
expressly advocating the election or defeat of Iowa candidates. See Iowa
Code § 68A.503(1) (2009).
In 2010, following the Citizens United
decision, the general assembly lifted the ban on corporate express
advocacy, by providing that corporations could engage in “independent
expenditures as provided in section 68A.404.” See 2010 Iowa Acts ch.
1119 § 5(4)(d).
Section 68A.404, of course, is the independent
expenditure provision in chapter 68A.
Simultaneously, the same
22
legislation amended section 68A.404 to require authorization by the
corporate board of directors for any such independent expenditure. See
id. § 3(2). Several other changes to section 68A.404 were made as well,
but the provision that it did not apply to political committees was
reenacted and continued. Id. § 3(3)(b).
Reading the 2010 legislation as a whole, the legislature’s intent
was to allow corporations like IRTL a pathway to engage in express
advocacy under the preexisting independent expenditure provisions of
section 68A.404, while also revising some other aspects of that section.
There is no indication the legislature contemplated that such advocacy
would fall within sections 68A.402(9) and 68A.102(18).
The general
assembly did not say that corporations could use their funds for
independent expenditures “as provided in” section 68A.402(9), section
68A.102(18) or any of the sections relating to political committees.
It
referenced section 68A.404 alone.
True, we held in 1983 in Iowans for Tax Relief that nonprofit
corporations could become political committees even if their involvement
in ballot issue advocacy was “secondary” and not their original or
primary purpose. 331 N.W.2d at 865–67. But at the time we decided
that case, the “independent expenditure” vehicle did not exist.
The
legislature did not enact the “independent expenditure” provisions until
1994. And when the legislature decided to rework its campaign finance
laws in 2010 in light of Citizens United, it threw out the old ban on
corporate express advocacy and said, explicitly, that a corporation could
“us[e] its funds for independent expenditures as provided in section
68A.404.” 2010 Iowa Acts ch. 1119, § 5(4)(d). Because S.F. 2354 only
referenced section 68A.404, and because section 68A.404 by its terms
cannot apply to political committees, we believe the effect of the
23
legislation is to permit corporations like IRTL to engage in express
advocacy
for
or
against
candidates
without
becoming
political
committees so long as they comply with section 68A.404.
“The polestar of statutory interpretation is to give effect to the
legislative intent of a statute.’”
Rolfe State Bank v. Gunderson, 794
N.W.2d 561, 565 (Iowa 2011) (quoting Klinge v. Bentien, 725 N.W.2d 13,
18 (Iowa 2006)).
“In determining legislative intent, we avoid placing
undue importance on isolated portions of an enactment by construing all
parts of the enactment together.” Id. We conclude the legislature made
a choice in 2010 to permit corporate express advocacy in elections while
having it regulated through the independent expenditure provisions of
section 68A.404.
Several other points bolster this conclusion, in our view.
First,
where statutes are in conflict, the later-enacted provisions (here those of
2010 Iowa Acts chapter 1119) take precedence.
Iowa Code § 4.8 (“If
statutes enacted at the same or different sessions of the legislature are
irreconcilable, the statute latest in date of enactment by the general
assembly prevails.”); see also Toomey v. Surgical Servs., P.C., 558 N.W.2d
166, 170 (Iowa 1997) (applying this rule of construction).
Second, the definitional section of chapter 68A, see Iowa Code
section 68A.102, which includes the definition of “political committee,”
id. section 68A.102(18), contains an escape hatch. The definitions apply
“unless the context otherwise requires.” Id. § 68A.102. This suggests
that IRTL does not become (or have to form) a political committee when
the context indicates a different result would be appropriate—i.e.,
treatment of IRTL as an “independent expenditure committee” pursuant
to section 68A.404.
24
Third, the Board—in an advisory opinion—has said that a
corporation making independent expenditures becomes an independent
expenditure committee but not a political committee.
See IECDB AO
2010–03 (April 29, 2010) (stating that a corporation that makes
independent expenditures above the threshold becomes an “independent
expenditure committee” but “will not be subject to the same registration
and reporting requirements as a PAC”).
Notably, within Iowa Code
section 68A.404, the independent expenditure section of the Code, there
is express authority for the Board to “adopt rules pursuant to chapter
17A for the implementation of this section.” Iowa Code § 68A.404(8)(b).
This subsection was reenacted and continued in the legislation that was
adopted in the wake of Citizens United. See 2010 Iowa Acts ch. 1119,
§ 3(8)(b). We believe this grant of rulemaking authority requires us to
give
deference
to
the
Board’s
administrative
determination,
in
implementing section 68A.404, that corporate expenditures on express
advocacy trigger an independent expenditure reporting requirement
under section 68A.404 as opposed to PAC status under sections
68A.102(18) and 68A.402(9).
See generally Iowa Code § 17A.19(10);
Renda v. Iowa Civil Rights Comm’n, 784 N.W.2d 8, 10–14 (Iowa 2010)
(discussing at length when interpretative discretion has clearly been
vested in an agency).
Fourth, the prior versions of S.F. 2354 were quite restrictive, even
though they too operated through section 68A.404.
In theory,
corporations would have been permitted to engage in express advocacy,
in accordance with Citizens United. Yet the earlier proposals would have
tightened that section in various other ways. For example, the study bill
would
have
amended
section
68A.404
to
prohibit
independent
expenditures by any person who was a “party to a contract with the state
of Iowa” or by any for-profit corporation that “receives money from the
25
state or federal government.” See S. Study B. 3210, 83rd G.A., 2nd Sess.
§ 1. Additionally, both the study bill and the first version of S.F. 2354
introduced in February 2010 would have required a corporation making
an independent expenditure to disclose the names and addresses of all of
its individual shareholders, including the names and addresses of
individual shareholders of any parent corporation. See id.; S.F. 2354,
83rd G.A., 2nd Sess. § 1.
Both proposals also would have left the
threshold for triggering “independent expenditure” status at one hundred
dollars, instead of increasing it to seven hundred fifty dollars.
See S.
Study B. 3210, 83rd G.A., 2nd Sess. § 1; S.F. 2354, 83rd G.A., 2nd Sess.
§ 1. These restrictions fell out of the final version of the legislation, but
the reliance on section 68A.404 as the regulatory vehicle remained. This
legislative history supports our conclusion that the legislature believed
that section 68A.404 was an adequate mechanism for regulating
corporate express advocacy, without also resorting to the “political
committee” provisions of chapter 68A.
III. Conclusion.
Accordingly, we agree with the Board that a corporation making
independent expenditures aggregating over seven hundred fifty dollars in
a calendar year becomes an “independent expenditure committee” within
the meaning of section 68A.404 but not a “political committee” within the
meaning of section 68A.102(18) or a “permanent organization” within the
meaning of section 68A.402(9).7
CERTIFIED QUESTIONS ANSWERED.
All justices concur except Appel, J., who takes no part.
7This conclusion applies to corporations whose primary or major purpose is not
the type of activity described in section 68A.102(18). As we have previously discussed,
IRTL alleges it is such a corporation. We do not hold today that a corporation primarily
engaged in campaign activities can avoid political committee status simply because it
happens to be a corporation rather than an unincorporated association. We leave that
decision for another day.
26
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