DENVER (Legal Newsline) - The Colorado Supreme Court last week ruled that state law permits some political groups to spend unlimited funds in support of state candidates -- as long as they avoid certain "magic words."

In its Feb. 21 ruling, the Court affirmed a decision of the state Court of Appeals, dismissing a case against political organizations Senate Majority Fund and the Colorado Leadership Fund.

The Court of Appeals had affirmed the decision of an administrative law judge, who dismissed the case for failing to state a claim upon which relief could be granted.

The state's high court said the Court of Appeals correctly interpreted "express advocacy" as limited to speech that explicitly advocates for the election or defeat of a candidate through the use of so-called "magic words" -- i.e. "vote for" or "elect."

In particular, at issue in the case is the meaning of "expressly advocating the election or defeat of a candidate," as that phrase is used within the definition of "expenditure" in Article 28 of the Colorado Constitution.

The state's primary campaign finance law was proposed by citizen's initiative as Amendment 27 and adopted by popular vote in 2002.

During the November 2008 election season, both SMF and CLF were registered with the IRS as so-called "527" tax-exempt political organizations.

SMF's stated purpose was "supporting candidates for the state Senate." CLF's purpose was "electing Republicans." Both SMF and CLF concede they were political organizations.

However, neither SMF nor CLF complied with the special rules governing "political committees," including the registration requirement and the restriction on political committees that they may not accept contributions of more than $500 per person or organizational donor.

In the run-up to the November 2008 election, SMF distributed eight printed political ads and one television ad and CLF distributed eight printed ads -- all of which are the subject of the current dispute.

None of the 17 ads contained words or phrases that specifically directed the viewer to "vote for," "elect," "support," "cast your ballot for (candidate)," "vote against," "defeat" or "reject." Also, none of the ads included the phrase "(candidate) for (office)."

However, Colorado Ethics Watch filed civil complaints against SMF and CLF with the Colorado Secretary of State, alleging that their advertisements violated Article 28.

The secretary of state then referred the matter to an administrative law judge for a hearing.

SMF and CLF argued that "express advocacy" encompasses only those advertisements that explicitly exhort the viewer, listener or reader to vote for or against a candidate in an upcoming election. This includes the use of the "magic words" or those words "substantially similar."

Ethics Watch argued that the category of advertisements that "expressly advocate" is more expansive and encompasses any advertisement that is the functional equivalent of "express advocacy" -- that is, any advertisement that has no reasonable interpretation other than that it supports or opposes a candidate's election.

Ethics Watch further contended that the ads by SMF and CLF constituted "express advocacy" for or against the election of the candidates they depicted and thus amounted to "expenditures" of more than $200.

The group claimed this elevated the status of SMF and CLF to political committees.

In doing so, SMF and CLF violated Article 28 by failing to register as political committees and by failing to adhere to the contribution limit of $500 per person or organization that applies to political committees, Ethics Watch argued.

The state's high court ruled in favor of the political organizations.

"Ethics Watch argues that under the plain meanings of the words 'express' and 'advocacy,' the definition of 'expenditure' in section 2(8) of Article 28 was clearly intended to cover all ads that unmistakably communicate support or opposition to a candidate," wrote Chief Justice Michael L. Bender.

"This interpretation of Article 28, however, would require us to ignore the settled definition of 'express advocacy' that existed at the time that Amendment 27 was adopted by the voters."

Given the "well-settled" definition of "express advocacy," the Court said it declined to "make a leap" that could potentially render Article 28 unconstitutional under the U.S. Constitution.

"A functional equivalence test might be found to create an unwieldy standard that would be difficult to apply and, as a result, potentially serve to unconstitutionally chill protected political speech," Bender wrote.

Luis Toro, director of Ethics Watch, said in a statement last week that the group was "clearly disappointed" with the Court's ruling.

However, he still believes that voters who passed Amendment 27 "meant to strengthen" the state's disclosure and contribution laws.

"The opinion does leave open the possibility of strengthening Colorado's campaign finance laws in the future, and it emphasizes that Amendment 27 anticipates stronger regulation of spending in the time periods just before an election. Our fight against secret money in Colorado elections will continue," Toro said.

From Legal Newsline: Reach Jessica Karmasek by email at

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