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Judge bars group from running ads against Beshear

October 17, 2011 | | Comments 0

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — A Franklin Circuit Judge issued a rare restraining order Monday to stop a group from airing attack ads against Democratic Gov. Steve Beshear after finding that the organization violated Kentucky’s campaign finance laws.

The Kentucky Democratic Party asked for the order against Restoring America, a third-party campaign committee, after the group failed to properly disclose its donors in a report to the Kentucky Registry of Election Finance in recent days.

The group, organized under section 527 of the Internal Revenue Service code, must report the source of its more than $1.3 million in contributions to the registry, according to state campaign finance laws. But the committee’s finance report listed Restoring America Inc. as its only contributor. Both Restoring America and Restoring America Inc. were started on the same day and use the same mailing address.

Monday’s ruling was believed to be among the first in the nation to halt advertising by a third-party group, sometimes referred to as Super PACs in federal elections.

Jon Fleischaker, a Louisville lawyer who specializes in the First Amendment and media law, said he believed Monday’s ruling would be overturned.

“I think it’s unconstitutional,” Fleischaker said. “Political speech is at the core of First Amendment rights.”

If there is a violation of Kentucky statutes, there are other penalties and avenues available to correct or deter behavior, “but they do not include stopping people from talking.”

Fleischaker, who has been practicing law for 40 years, said Monday’s ruling could be the first that stops a group from airing political advertising in Kentucky.

“There may have been one case and I think it was quickly overturned at the appellate level,” Fleischaker said.

Franklin Circuit Court Judge Thomas Wingate issued the restraining order after a hearing Monday morning. His order bars Restoring America from running any advertisements during the 2011 general election that advocate for or against a candidate or a slate of candidates.

“By hiding the contributors to the 527 from the public, respondents have immediately and irreparably harmed the petitioner and the public of their right to have a transparent campaign finance system whereby all contributors are disclosed publicly,” Wingate wrote.

The Kentucky Democratic Party applauded Wingate’s ruling.

“Shadowy out-of-state groups cannot come into Kentucky and break our laws with illegal money-laundering and false and defaming attack ads,” said Dan Logsdon, chairman of the Kentucky Democratic Party.

Wingate’s ruling came on the same day that Restoring America unveiled four new television advertisements attacking Beshear or touting Republican Senate President David Williams, Beshear’s chief rival in the Nov. 8 general election.

One of the advertisements highlights the fact that Beshear has not attended many public debates or candidate forums. Another advertisement touts Williams and his anti-abortion stance.

At least two other third-party groups have been airing ads that attack Republican candidates for governor and attorney general, but those groups disclosed their donors in state campaign finance reports filed last week.

According to its report with the Kentucky Registry of Election Finance, Restoring America Inc. of Lexington raised $1.365 million on Sept. 26 and spent the same amount on the same date with Strategic Media Placement Inc. of Delaware, Ohio, for “broadcast ads buys for advocacy.”

The report listed the group’s treasurer as Mark Blankenbecler of Powell, Ohio. A call to the phone number listed on the report revealed that his name is Mike Blankenbecler, not Mark.

Restoring America has not returned calls seeking comment.

Groups such as Restoring America do not have to comply with the same state campaign finance laws that regulate candidates.

Individual candidates can’t accept money from corporations and contributions to them are capped at $1,000 per election, but corporations can give an unlimited amount to third-party committees and there are no limits for individual donors.

Michael Beckel, a spokesman for the Center for Responsive Politics, a non-profit group that monitors campaign finance laws, said it has become increasingly common in federal elections for 527 committees to list another organization as its sole contributor and not disclose the names of the donors.

Beckel said, he, too, has never heard of a restraining order being issued against a 527 organization before Wingate’s ruling.

However, the Kentucky Registry of Election Finance issued an advisory opinion in April that said using “pass through” entities such as Restoring American Inc. to hide the names of donors violated the state’s campaign finance laws.

The registry sent Blankenbecler a letter on Oct. 11 asking for clarification on several problems with its 32-day pre-election finance statement.

The letter, obtained by the Herald-Leader through an Open Records Act request, asked Restoring America to explain how it was different from Restoring America Inc. If the funds that were sent to Restoring America Inc. were solicited with the intent of being used in a campaign, then those donors need to be disclosed on the 32-day report, the letter said.

A written response from the group must be filed with the registry by Oct. 20.

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