Oregon Advisory Opinions March 29, 1974: OAG 74-24 (March 29, 1974)

OAG 74-24.

These questions involve interpretation of the Oregon campaign spending laws as found in ORS ch 260. Chapter 260 was extensively amended by the 1973 legislature in two bills: Oregon Laws 1973, ch 744 (HB 3077) and Oregon Laws 1973, ch 623 (SB 541). Because of the importance of Oregon Laws 1973, ch 744, §10 to the questions presented here, it is quoted in full below:

"(1) No person or political committee shall make expenditures in support of or in opposition to a candidate except the candidate or an opposing candidate. However, a person or political committee may make expenditures in support of a candidate if the consent of the candidate is previously obtained, or in opposition to a candidate if the consent of one or more other candidates for the same office is previously obtained.

"(2) A person or political committee which receives contributions or makes expenditures in support

of a single candidate, or in opposition to one or more candidates with the consent of a single candidate, is not subject to ORS 260.035 to 260.162 but such contributions and expenditures are conclusively deemed to be those of the candidate on whose behalf they were made.

"(3) Any person or political committee other than a person or political committee described in subsection (2) of this section which receives contributions or makes expenditures in support of or in opposition to a candidate with his consent or the consent of any opposing candidate is subject to ORS 260.035 to 260.162. All expenditures by any such person or candidate shall also be considered to be contributions to and expenditures by the candidate who has consented to them and shall be reported by the candidate as well as by the person or committee making the expenditure.

"(4) Expenses incurred by a person or political committee on behalf of more than one candidate shall be allocated between such candidates on a reasonable basis.

"(5) Expenses incurred by a political committee, not allocable to any particular candidate or candidates, including expenses incurred in solicitation of funds intended to be contributed to candidates to be designated later, shall not be considered expenditures in support of a candidate for purposes of subsection (1) of this section or section 2, chapter 623, Oregon Laws 1973 (Enrolled Senate Bill 541)."

The amendments to ORS ch 260 create a spending ceiling for political campaigns and use the single treasurer concept as the means of accounting and enforcement. Assuming the constitutionality of the act (see Part IV, infra ) most of the questions presented here are specifically answered by the campaign spending laws.

I. Questions 1 and 2: Consent and Allocation

Independent nonpartisan groups who wish to support or oppose a candidate are political committees. ORS 260.005(7), as amended by Oregon Laws 1973, ch 744, §1. It is toward such committees that Oregon Laws 1973, ch 744, §10 is directed. That section provides that expenditure of funds to support or oppose a candidate

shall only be made by candidates or opposition candidates. However, non-candidate persons or political committees may spend funds when consent is obtained from either the candidate who is supported or, if the funds will be used in opposition to a candidate, from another candidate for the same office.

Where a candidate has consented to an expenditure of funds, those funds are to be included in determination of his spending ceiling imposed by Oregon Laws 1973, ch 623. If more than one candidate has given consent for the expenditures the costs are to be prorated. Nonallocable funds (including expenses incurred in solicitation of funds to be contributed to candidates to be designated later) are not charged toward any candidate's campaign spending limit. Oregon Laws 1973, ch 744, §10(2) to (5).

This scheme of requiring consent and then charging the expenditures toward the consenting condidate is designed to provide an accounting of funds which a candidate has attempted to use for his advantage. If an effective campaign spending limitation is to be imposed, a system has to be found to include, within those limitations, expenditures made outside of the candidate's own organization. Without such inclusion, a spending ceiling would be nearly impossible to enforce since once a candidate has spent his own funds he could allow "nonconnected" groups to shoulder the expenses. Since inclusion is vital, consent provisions become necessary so that a candidate will not be driven over his spending limitation by expenditures made entirely outside his control.

We conclude that consent must be obtained from a candidate and that the expenditures are to be charged to the consenting candidate's spending ceiling.

II. Question 3: Control

The campaign spending laws do not specifically indicate that an approving candidate has any control over another person or group wishing to spend money on his behalf, once he has given his consent. However, it must be recognized that consent might well be granted only after a weighing by the candidate of the type of campaign envisioned by the nonpartisan group, the amount of monies available to the candidate and the group, the stage of the campaign, the constituency of the group and a variety of other factors. The candidate, with an absolute right to refuse consent, may grant consent subject to any conditions or control he wishes to impose. Our yes answer to question 3 is, therefore, given with the caveat that while the law does not grant control it also does not preclude the candidate from conditionally granting his consent.

III. Question 4: Editorials

There can be no doubt that editorial endorsements and comments are not to be included within the coverage of the consent/allocation provisions of the campaign spending laws. ORS 260.512, as amended in Oregon Laws 1973, ch 744, §34, specifically disallows any payment designed to induce editorial support or opposition by a newspaper, periodical, radio or television station. Since payments are not allowed, there can be no consent or allocation for them. Where a group can show that its newsletter is in fact a "periodical" neither consent nor allocation of funds would be necessary or allowed for editorial comment. "Periodical" status would probably

be determined by a weighing of regularity of issuance, content, duration, distribution and other factors indicating that the publication is not merely a sham designed to promote the interests of a candidate.

IV. Question 5: Constitutionality

The key question submitted to us here is the constitutionality of the consent requirement of section 10 of Oregon Laws 1973, ch 744. We conclude that given the importance to the public of campaign spending limitations and the availability of other avenues of approach, the Oregon statutory scheme would be found constitutional, as it relates to campaign activities by nonpartisan groups.

The Oregon scheme does not infringe upon the right of a group to promote or condemn an idea or ideology. A group may spend funds to advance whatever cause it wishes. Depending upon the nature of that cause the group may have to file its own campaign expenditure statement, but it need not obtain consent unless expenditures are directed toward a specific candidate.

The constitutionality question arises only in those cases in which a nonpartisan group wishes to specifically support or oppose a candidate. The prohibitory language appears in subsection (1) of section 10 of Oregon Laws 1973, ch 744 and reads:

"(1) No person or political committee shall make expenditures in support of or in opposition to a candidate except the candidate or an opposing candidate . . . ."

"(3) 'Expend' or 'expenditure' includes the payment or furnishing of money or anything of value or the incurring or repayment of indebtedness or obligation by or on behalf of a candidate, political committee or person in consideration for services, supplies, equipment or other things of value performed or furnished in support of or opposition to a candidate, political committee or measure, but does not include expenses for personal transportation of a candidate or a candidate's spouse or filing fees or fees for space in the voters' pamphlet, and does not include contributions." (emphasis supplied)

Only where something of value is paid or furnished in consideration for support for or opposition to a candidate does an expenditure occur. Not all political support or opposition is thus covered. Personal expression or use of personal resources does not constitute an expenditure as it is defined in ORS 260.005(3), as amended by Oregon Laws 1973, ch 744, §1. For example, where a person, supporting or opposing a candidate, paints a sign upon his own piece of wood and places it on his own land he has not made an expenditure. However, if a nonpartisan group pays someone to print leaflets or buys newpaper advertising there would be a furnishing of something of value in consideration for the performance by another in support or opposition to a candidate, and there would be an expenditure. Where internal resources are used this payment does not occur and there is no expenditure.

But there is clearly some infringement on the right of free speech in prohibiting anyone from spending money for an advertisement in support of a candidate without his consent, or in opposition to a candidate without the consent of some other candidate. This is so regardless of the other ways in which opinion may be freely expressed on issues, and even on candidates if no "expenditure" is involved. This is not to say that the law must therefore be held

unconstitutional, since even the most basic constitutionally protected rights may be limited to the extent necessary to protect a compelling state interest.

A balancing test is used, weighing the ". . . individual and social interest in freedom of expression against the social interest sought by the regulation which restricts expression." Emerson, The System of Freedom of Expression , p 717 (1970). Thus in Kovacs v. Cooper , 336 US 77 (1949), a prohibition against "loud and raucous" sound trucks was sustained; the state's interest in protecting the peace of unwilling listeners outweighed the restriction on expression. But an absolute prohibition of all sound amplification would have gone too far. We believe that this is a case in which the state has taken only reasonable and necessary steps to achieve its objectives, and that the balancing test can be met.

It must be conceded that the current grave constitutional crisis in the United States arises in great part from the soliciting and spending of virtually unlimited campaign funds, in secrecy and without accountability. We note, too, that it is urged as a defense that underlings raised the funds and spent them for improper purposes without the knowledge or consent of the candidate on whose behalf they were ostensibly raised and spent. The state clearly has a compelling interest in preventing such abuses, and similar abuses such as the use of improper pressures in soliciting funds.

The statutory scheme devised to accomplish this interest is three fold: first, the expenditure limits; second, personal accountability of the candidate; and third, control of expenditures by the candidate. It clearly appears to have an excellent chance

to accomplish its purposes.

But is the third aspect of the scheme, control by the candidate, necessary to accomplish the desired purposes? We believe that it is.

If expenditures by the candidate are limited but expenditures by others are not, others acting on his behalf, without his consent and even ostensibly against his will, may solicit and expend large campaign funds. The goals of accountability and of reducing excess spending will be frustrated. If a candidate is willing to connive with such supporters, proof that the expenditures should be deemed his would be difficult to obtain.

Thus it is necessary for the limit to be on all spending on behalf of the candidate, or there will in effect be no enforceable limit.

If the limit is made applicable to all spending, but the candidate is not given control over spending by others, he is placed in an impossible position. He may suddenly find late in the campaign that he has exceeded the limit because someone else has bought a newspaper ad or television time. He may be embarrassed or his candidacy may even be injured by political expenditures, on his behalf but without his consent, by supporters with more enthusiasm than discretion.

Thus a spending limit is worthless unless it is applied to all expenditures on behalf of a candidate, with the candidate accountable for all expenditures; and if he is to be accountable, he must also have control.

It is urged that other alternatives exist which make this limitation on expression unnecessary. In particular, it is urged that public funding of campaigns would make an expenditure

limit unnecessary. We conclude that although the concept of public funding has substantial merit, it would fail as an alternative.(fn1)

First, we have seen no workable proposal for determining which candidates would be entitled to public campaign funding. The problem would be especially acute with respect to a primary; unless all candidates are to receive equal funding, the equal protection problems seem insoluble. The potential drain on the public treasury if every serious and every frivolous candidate were to receive enough campaign support to have any significance, would be enormous.

Second, public funding without an expenditure limit would solve none of the problems. If each candidate for the state senate, for example, receives $10,000 in public campaign funds, but the candidates and their supporters are free to raise and spend additional amounts without limit, we will still have excessive spending; we will still have an unfair advantage to the candidate with unlimited funds, or whose program is favored by those with money to donate; we will still have an incentive for candidates to tailor their campaigns, and their service if elected, to the advantage to those who can and do contribute

substantially; we will still have an incentive for candidates or their less ethical supporters to exert improper pressure on potential donors. Thus, public financing, to work, must also be accompanied by an over-all spending limit. And that limit will be subject to exactly the same questions as are now before us; without accountability, it will be worthless, and given accountability, the candidate must have control.

Another factor deserves consideration. It clearly appears from legislative debate that one of the purposes of the legislation is to permit the voice of the modestly-funded candidate to be heard, when otherwise it could be drowned out or blanketed by unlimited use of media by a candidate with unlimited funds. It thus has a purpose to enhance communication, to improve opportunities of all candidates for expression. The upper limit is not set so low as to deprive anyone of ample opportunity to present his viewpoint.

In any statewide general or primary election the voter's eye and ear is sought by astonishingly large numbers of candidates at all levels. Without some limit on permissible expenditures by candidates, the result may be such a flood of attempted communication will occur that meaning is lost. These laws will thus improve voters' access to information, rather than limit it.

As asserted by the U.S. Senate Commerce Committee in its report on a proposed federal election limit:

"Where, as here, legislation intending to preserve the purity of . . . elections by limiting spending, also has one side effect of touching upon First Amendment rights, the criteria for determining its constitutionality are the presence of an evil which may validly

be prevented, a reasonable relationship of the regulation to the evil, and the relative degree of effect upon the right to speak. There is a balancing of the limited effect upon free speech as against the substantiality of an evil to the prevention of which a regulatory statute is reasonably addressed." 1971 Senate Report 31.

In short, these laws have some limiting effect upon free speech, but they do not limit it to any greater extent than necessary to fulfil the statutory purposes. In fact, as to many candidates and the people as a whole, the effect is to enhance the amount of meaningful communication which can occur. The evils sought to be prevented are obvious and real, and although they have not occurred in this state in their most blatant form, the potential exists as much here as anywhere. In view of revelations of recent election practices, it could even be argued that the "clear and present danger" test can be met. Schenk v. United States , 249 US 47 (1919), Brandenburg v. Ohio , 395 US 444 (1969). If the "balancing" test instead is applicable, it seems clear that the actual and potential evils outweigh the limitation, that the limitation is reasonable in light of the general benefit to be gained. We accordingly conclude that it is constitutional to impose a campaign spending limit, to require candidates to be accountable for expenditures on their behalf, and to require consent from a candidate before making an expenditure on his behalf, or in opposition to an opposing candidate.

1 In 7 Harv. Civil Liberties - Civil Rights L Rev 214, 244 (1972) this and other alternatives to expenditure ceilings are discussed. It is suggested that if the court finds any clearly desirable alternative, a spending limit would be held unconstitutional; but if, as seems to be the case, the alternatives raise difficult questions of their own, the legislative judgment should be allowed to stand.