Most times when I write about campaign finance laws, the context is a presidential race or Supreme Court case. But these restrictions on political speech — the protection of which is the main purpose of the First Amendment — abound in local politics and state courts even without FEC intervention or presidential finger-wagging.
Here’s a case from California that literally just came across my transom:
Last year, John Mlnarik ran for Santa Clara City Council. Mlnarik is the sole shareholder of a small business, a law firm with seven employees — a fact revealed in several mandatory campaign disclosures. Because his money is partly tied up in his business, along with two personal loans to his campaign he also made a third loan (for about $6000) via his business. He fully disclosed the loan and its source.
More than three months later, after the election, the City of Santa Clara issued a citation against Mlnarik for receiving an excessive loan “from a third-party source.” Yet the City Code also states: “For purposes of the contribution limits … [a]n individual and any corporation in which the individual owns a controlling interest, shall be treated as one person .… Nothing … shall prohibit a candidate from making unlimited contributions to his/her own campaign.” And under state law incorporated into the City Code, an individual’s income includes his business’s income; an individual’s real property includes his business’s real property; and an individual’s investments include his business’s investments.
Given this logical overlay, and the fact that his sole ownership and the loan’s source were both fully disclosed, Mlnarik thought he was following the law. After all, as the Supreme Court reiterated in 2008, “the use of personal funds … reduces the candidate’s dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which … contribution limitations are directed.” (Davis v. FEC, quoting Buckley v. Valeo).
The City, however, cited the following from its Code: “[U]nless a term is specifically defined in this chapter, or the contrary is stated (or clearly appears from the context), the definitions set forth in [a portion of the State Government Code] shall govern the interpretation of the provisions of this chapter.” The State Code, in turn, includes a 192-word definition of “candidate,” which — along with many other possible definitions — states that “ ‘Candidate’ means an individual who is listed on the ballot.” Thus, while Mlnarik was free to make unlimited loans to his campaign, he supposedly violated the law by making a campaign loan via his wholly owned business, which itself wasn’t a “candidate.”
Mlnarik argued that the City law was unconstitutionally vague — after all, how is one to know whether a term’s contrary meaning “clearly appears from the context”? (If it does, then the State law’s definition of “candidate” must not be used — and there would be no case against Mlnarik.) As noted above, the “context” was a law that repeatedly makes an equivalence between a person and his or her business; moreover, the law has eight statutory purposes, three of which (Mlnarik argued) were actually advanced by allowing sole business-owners to contribute to their own campaigns via their business, while none of the eight purposes was thwarted. If that’s not the contrary “clearly appearing,” what is?
Nevertheless, the City refused to drop the case, and the trial judge denied that the phrase “the term[‘s] … contrary … clearly appears from the context” was unconstitutionally vague (in a quasi-criminal case!). Mlnarik is now attempting to appeal further, but he has been warned that state law may not permit an additional appeal — even though his constitutional argument couldn’t be heard by the administrative hearing officer, and thus has been heard only once, and then only by one judge.
So not only is there an underlying First Amendment violation, but there are due process infringements squared or cubed. And all this because a candidate for office “loaned himself” $6,000 and fully disclosed all aspects of the transaction.
You can’t make this stuff up!
