SBOE clarification on bond ads 'half a loaf' for committee

Posted December 18, 2015

This is an image of the North Carolina state flag flying in downtown Raleigh.

— Despite claims that restricting coordination between promoters of the $2 billion bond referendum and candidates will "dramatically and seriously inhibit" the campaign, state elections officials are sticking by the bulk of an earlier ruling that curbs how anyone who is running for office in 2016 can participate in the pro-bond effort.

However, a letter issued Friday by Kim Strach, executive director of the North Carolina State Board of Elections, does create some loopholes in an opinion she issued earlier this month. If that ruling had stood without clarification, bond supporters say, it could have kept the very people who pushed the bond onto the ballot, including Gov. Pat McCrory and legislative leaders, from helping with the effort to pass it.

Voters will decide March 15 whether to borrow $2 billion for university buildings, parks and National Guard facilities.

Strach's first opinion was issued following a letter from Raleigh lawyer Michael Weisel, and could be read as prohibiting the bond campaign from even mentioning someone who was a candidate for office. That would have put a damper on a kickoff event planned for the first week of January that was to feature McCrory, House Speaker Tim Moore and other elected officials.

"We were getting questions from all of our stakeholders," said Chris Sinclair, a consultant hired to help promote the bond.

Those working to promote the bond, Sinclair said, were worried that a cocktail party invitation or letter to potential supporters could run afoul of campaign finance laws.

"It dramatically shifted everything that we were doing," he said

So Steven Long, a lawyer for the bond committee, asked Strach to reconsider. Long wrote that Strach's original opinion "will have the effect of preventing elected officials from attending forums or other meetings where ballot referenda are addressed out of concern that the cost of the gathering, partly paid with corporate funds, will be treated as illegal contributions to their campaigns if they attend and speak up."

Bond committees are special types of campaign organizations under North Carolina law. They are allowed to take large contributions in excess of limits placed on candidates, and they can take corporate contributions. Candidates for office cannot take contributions directly from businesses and can take only $5,100 per election from individuals.

Strach's first letter seems aimed at ensuring that a candidate doesn't inadvertently benefit from serving as the face of a bond campaign. However, in her latest letter, she does walk back what had initially seemed to be a total prohibition on mentioning candidates.

A "referendum committee is free to clearly identify candidates, appropriate their statements, and incorporate video of the candidate in its communications without fear of making a contribution, so long as those efforts are not coordinated with the candidate committee," Strach writes.

That distinction seems esoteric but is legally important for anyone running for office. It means that the bond committee can't hand policymakers talking points before an event or sit them down for the express purpose of taping a commercial on behalf of the bond.

However, if the candidate were to speak at event where they were recorded, the bond campaign could use that footage. Similarly, it could quote a politician in a direct-mail piece, as long as that politician wasn't notified in advance of the mailer going out.

"It's half a loaf," Sinclair said, adding that the rules will still "have a chilling effect" on efforts to promote the bond.

"I've worked on bond campaigns all over the country, and this has never been an issue," he said. "The chilling effect that it could have, to me, is a problem in terms of free speech."


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