Monday, September 25, 2006

Green denied

I have read Judge Niess' decision denying Mark Green's motion for an injunction blocking enforcement of the State Election Board's decision requiring him to divest certain money that had been converted from his federal to his state account.

To begin with, I do not discount what the judge had to say because he is a Doyle appointee. Judges, in general, struggle to get beyond that and his opinion should be judged by the strength of his legal reasoning and not by the provenance of his place on the bench. There is no reason to think that Judge Niess did anything other than try to call it as he sees it.

Having said that the conclusion he reaches is far from obvious.

It is painful to read the mischaracterization of it in the blogoshere. Xoff, for example, says the judge ruled that the conversion was illegal. Close, but not quite. He ruled that Green had not demonstrated a reasonable likelihood of success which was the only issue before him on a motion for preliminary relief. The merits of Green's claim are, strictly speaking, still before him.

But Bill's misstatement is not so bad given that I think it's likely that the judge will ultimately rule that the SEB was right. This is so because he bought into the argument that, even thought this may have been a change in state law - in other words, Green was not permitted to do something that (four years earlier) Tom Barrett (over Xoff's objection) had been allowed to do - the reason is because of a subsequent change in federal law.

The lefty blogosphere acts as if this change was obvious. It's not. In fact, I think it may be a fairly weak argument. The claim is that a 2004 amendment in the BCRA (the Orwellian-named "Bipartisan Campaign Reform Act"), listing permitted uses for federal campaign contributions, prohibited the type of conversions that Wisconsin had always permitted. This is so, the Court reasoned, because the amended BCRA permits donations to state and local candidates only in conformity with state law.

There are two problems with this. One is that when we speak of "what is permitted by state law" might that not include the fact that the SEB in Wisconsin had, in the few cases which it came up, permitted conversion of federal contributions to state accounts? How can we carve out only some state law (those on regulation of PACs making in-contributions)and not the law permitting conversions?

The second is that a conversion is not obviously the same as a donation to a state and local candidate. The latter seems just as likely to refer to money given to someone else than money that one already possesses converted to a different use. We normally don't think of money that we give to ourselves as "donations."

The circuit court's decision amounts to a holding that Congress placed a new limit on federal to state conversions without expressly saying so. That can happen, but I think it would be a disfavored interpretation.

The court (in fairness, this was a preliminary decision) did not say much to justify that conclusion. Only about 3 pages of it's 15 page decision are devoted to the merits and my first objection is unaddressed while my second is relegated to a footnote. The footnote says that, if Congress wished to exclude donations to oneself, it could have said so. True. But one could just as easily say that, if Congress wanted to federalize the application of limitations on contributions to state candidates to conversions, it would have said so. That's a pretty big thing to do by implication.

Even if the circuit court was right, it is not obviously right (all questions do not have obvious answers) and to say, as Doyle's campaign blog still does, that this means that Green "chooses with laws to obey" in an "outrageous" manner is more than I could ever do.

And I'm a shark. As we used to say, in the day, grok that.


steveegg said...

My non-lawyer mind does not see how the BCRA, after its amendment to allow transfers of funds from federal to state campaigns, prohibited the conversion of Green's federal campaign to a state one, considering that at the time of the conversion, Election Board rule 1.39 stated that such conversions were legal. Morever, both previous SEB formal opinions regarding PAC donations and the fact that the SEB felt compelled to create the emergency rule in question after Green's campaign made its conversion strongly suggest that even the amount from out-of-state PACs was legal under the fed rule.

My biggest hang-up with this episode is that Team Craps is relying on ex post facto laws to first rob the Green campaign of $468,000 and ultimately of $1.24 million (see the DOJ arguments for going after the other money, using the revised ElBd 1.39 that prohibits conversions of federal campaigns to state ones, instituted on December 1, 2005). Their judge (unlike you, I do question Niess' connection to Doyle) has already rejected the existence of ElBd 1.39 as it existed on January 25, 2005.

Dad29 said...

Agreed that the judge is working on being non-partisan. In fact, he's working so hard on being non-partisan that he deliberately ignored the substance--which you outlined very nicely.

"Conversion" is not "gift."

"BCRA" is not Wisconsin law.

xoff said...

"Conversion" is a term George Dunst invented in 2001 when Barrett wanted to use his federal PAC money. It was not in the law.

The case was assigned to a judge who had not been appointed by Doyle, Chief Judge Michael Nowakowski. Green got a Doyle appointee by asking for a substitution.

steveegg said...


How, then, do you explain the existence of the version of ElBd 1.39 that specifically allowed conversions before you crashed and burned before the SEB in 2000, a version that was still in existence on January 25, 2005 and indeed was in existence until December 1, 2005?

Anonymous said...

Before the passage of the McCain/Feingold bill, federal law allowed the transfer of money from federal campaign accounts to state campaign accounts. I believe this is why Rep. Tom Barrett was allowed to transfer funds from his federal account to his state campaign.
After, McCain-Feingold in 2002, the Federal Elections Commission ruled that federal officeholders were prohibited from using federal dollars to finance non-Federal campaigns.
A short two years later, tucked in a massive congressional appropriations bill was language to reinstate the ability to use congressional campaign funds for state elections, if state law allows it. This change only pertained to federal law. State law also must allow the state campaigns to accept contributions from federal candidate campaign committees.
Election Board rules require that funds from federal campaigns comply with state laws. Under state law, PACs can only contribute $485,000 to Governor campaigns every four years and any PAC contribution must come from a PAC registered in Wisconsin. That is the basis for the Election Board ruling.
Judge Niess's opinion first determines the procedural and jurisdictional issues, since in most cases involving violation of an administrative body, the Elections Board, the issue should have been appealed to an administrative law judge under Chapter 227. I'm sure this issue will reappear as the issue goes forward.
The ultimate issue for the Judge was what was Green's "conversion." He felt it fell under 2 U.S.C. § 439a(a)(5), as a is a "contribution" subject to the limitations and other regulations contained in Chapter 11 of the Wisconsin statutes governing the use of money in Wisconsin political campaigns. Not as Green was arguing under 2 U.S.C. § 439a(a)(6) as a contribution, "for any other lawful purpose unless prohibited by subsection (b) of this
section." As the Judge wrote, "The problem with this argument is that subsection (6), both by its own terms and by basic rules of statutory construction, does not apply if the transfer of funds is governed by subsection (5). '[A]ny other lawful purpose' in subsection (6) means any lawful purpose other than those already addressed in the statute. As the Court has found, the transfer of funds at issue here is unquestionably a 'donation' to a state candidate and therefore already specifically addressed in subsection (5)."
So, rather than get into many of the other thorny issues, the Judge adroitly states that "whether the Elections Board is enjoined from enforcing the Emergency Rule and Order or not, Green's duties under the law remain the same. Under 2 U.S.C. 439a(a)(5) and Chapter 11 of the Wisconsin statutes which it
incorporates, Green must subject the donation from the federal campaign to the provisions of Wisconsin law governing "contributions" to political campaigns." He did not do so and so must return the money.
As for "ex post facto" law, that is clearly not the applicable standard. When Green made the transfer he should have been aware that he must comply with state and federal law. Furthermore, not all retroactive legislation is unconstitutional. In Wisconsin, the Supreme Court has adopted a standard where the private right must be counterbalanced with the public interest. Martin v. Richards, 192 Wis. 2d 156, 531 N.W.2d 70 (1995). I think the state can demonstrate a pretty compelling interest in the regulation of campaigns.

steveegg said...


The problem with your argument is that, on January 25, 2005, the date that the Green campaign converted from a federal campaign to a state campaign, the body of state law did, in fact, allow the conversion, including the transfer of the funds on hand from the federal campaign to the state campaign. ElBd 1.39 was not amended to prohibit instead of allow such conversions until nearly 11 months after that date. Emergency Rule ElBd 1.395 to restrict the use of certain converted money was neither adopted nor published until after that date. Election Board Opinion and Order 2001-07, which specifically allowed out-of-state PAC donations to a federal campaign to be used in state campaigns, was still in force (indeed, as of August 29, 2006, the SEB had not issued a ruling declaring that rescinded).

Considering that, between February 9, 2005 and July 13, 2006, ElBd 1.395 was suspended and thereby not part of the body state law, the attempt to apply it to any moneys spent in that time frame is a working definition of ex post facto. One can also make the logical argument that its mere adoption for the 2006 election cycle only after Green converted his campaign is its own violation.

Further, any attempt to apply ElBd 1.39, as revised on 12/1/2005, to any part of the converted funds is undeniably a violation of the prohibition of ex post facto laws. Such application is necessary to make a logical claim that the federal BCRA was violated.

If the conversion were a violation of federal law, why did the SEB never address that issue? If it were a violation of federal law, why did nobody run to the US Attorney in either Eastern or Western Wisconsin to seek charges? Why did nobody run into a federal court, lawsuit in hand? Could it be that, despite the Doyle campaign's and their minions' late-rising claims, it isn't a violation of federal law?

Anonymous said...

I think you are misreading the decision. Whether you agree with the Judge's decision or not, he clearly sidesteps any of the issues relating to the Election Board emergency rule and looks at the relevant statutes in question. In other words, the Election Board rules cannot contradict state law. Chapter 11 and particularly, § 11.01(6)(a)1, Wis. Stats., provides what type of contributions the candidate can accept. The federal law which
authorized candidate Green to donate his federal campaign committee funds to his state
campaign committee ("Green for Wisconsin") conditioned that donation upon compliance
with Wisconsin campaign finance laws. The Judge ruled that Green's conversion had to comply with 2 U.S.C. § 439a(a)(5), which required Green to comply with § 11.01(6)(a)1.
The State Elections Board has no authority to relieve Green of that requirement whatever their rules may have provided prior to 2005.
As to Barrett, if this issue had come to court, perhaps the court would have ruled similarly and disallowed the conversion. However, we will never know this because no one appealed that ruling. The Elections Board's rules may have been wrong for years, yet never challenged.
As indicated earlier, the passage of the McCain-Feingold bill, which outlawed federal to state conversions, would appear to be a superseding event and did change the rules of the game.
Again, no ex post facto law, both 2 U.S.C. § 439a(a)(5)and § 11.01(6)(a)1 existed at the time of Green's conversion.
It appears you want the Election Board rules to supercede state law. They can't. In effect, the emergency rule of the Election Board had no effect on Judge Niess's ruling. He relied on state and federal statutes. If the appellate courts view the case the same way, Green will never prevail.

Rick Esenberg said...


I get the argument from the BCRA and I suggested why it may be wrong. No response from you on that.

But the bigger picture, as this thing plays itself out, is that all the Dems are retreating from the incendiary language. "We never said it was dirty money." "We never called Green a crook."

Maybe you didn't, but Doyle did. Maybe you can live with that kind of sleaze because he'll honor the teacher's union and won't allow restrictions on abortion. Good luck with that.

Anonymous said...

Personally I am more interested in the legal issues than the political ones. I'm not sure either side should use this issue for political reasons, since it really has to do with what most people believe is pretty arcane law. Nevertheless the media seems fixated by it and both candidates and the political parties are issuing multiple press releases.
I think your question refers to why no one brought this forward in federal court or to the U.S. Attorney. I believe that no saw this as a obvious place to go. I think there were too many intangibles -- jurisdictional issues, standing issues -- that were unknown. Now that the Democracy Campaign has filed an FEC complaint, maybe the issue may end up there.
I think everyone believed the Elections Board was the obvious place for this issue. And despite the change in federal law under BCRA, the Elections Board attorney believed their existing rules were still applicable. I think Green got bad advice.(Probably not the first time someone relies on bad advice from a state or federal agency.) However, none of this was apparent until the Election Board acted and Green filed suit. When a court looked at the issue, it found the statutes trumped the Elections Board rules. A bit ironic that it's Green's own actions that brought this result.

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