June 16, 2006

Chamber lawyer claims Elections Commission ignored federal cases

Decision on mailers possibly rushed, substantial fines, lawsuit could follow

By Daniel DeBolt
Staff Writer

The Chamber of Commerce’s campaign mailers singling out mayoral candidate Cindy Chavez’ voting record have been an explosive blow to the chamber’s reputation, with five prominent members resigning and the top five mayoral candidates coming out against the “hit pieces.”

But what hasn’t been fully reported by the Mercury News and others is that the elections commission may not have studied pertinent federal court decisions before making its decision that the Chamber violated election law.

At its meeting May 31, the elections commission decided the Chamber had violated section 12.06.310 of the San Jose municipal code by accepting contributions above the $250 limit, per contribution, in raising money for their campaign that ended up singling out Chavez.

That is a mistake that could cost the chamber $5,000 for each check over $250, something the commission is considering. The fines could add up to a lot of money for a campaign that may have cost as much as $250,000. The chamber would not disclose how many contributions it received over $250 and a city investigation into the matter is not complete.

But Chamber lawyer Jim Sutton believes it is obvious that the Chamber is in the right, legally, because federal courts have found laws like San Jose’s section 12.06.310 to be unconstitutionally vague.

It’s an important case involving the issue of free speech, Sutton said, and the all volunteer commission with only one, newly-appointed, young lawyer did not consider how federal courts have ruled in a rush to come to a decision before the June 6 election, he said.

And Sutton said he was shocked by the advice given to the commission about their responsibilities by Norm Sato, assistant city attorney. Sutton said Sato told the commission, in effect, that they did not have to consider the federal cases.

“I couldn’t believe it,” Sutton said, as he watched Sato tell the commission “to look at the language (of the San Jose law) and not the (federal) cases.”

Sato disagreed about the characterization of what he said at the meeting.

“What I told the commission was it had to apply the facts of the case to the San Jose ordinance,” Sato said.

“What the city attorney said is the city is above the Supreme Court and the constitution,” Sutton said. “None of the commissioners turned and asked what they think about those cases.”

While the commission doesn’t hold the legal power of a court, the issue may likely end up in one.

“I guess in San Jose you are guilty until you are proven innocent,” Sutton said.

Sutton said he didn’t think Sato had looked at the federal cases, but Sato said he had.

“We have not changed our position,” Sato said. “I read several cases that he pointed to in his talk”

All press calls to the commission have been directed to its chair, Thomas Mertens, who said he thinks the commission has done its job well. He said election law was very complicated and there were lots of people making emotional and non-factual statements.

But taxpayers may soon be paying for a legal battle between the Chamber and the city.

In May 2006 a decision was made in the Louisiana case Center for Individual Freedom V. Carmouche that ruled an ordinance much like San Jose’s to be too broad. The ordinance limited an independent committees funding of activities for “anything of value made for the purpose of supporting or otherwise influencing an election.”

In its decision, the federal appellate court said it applied Buckley’s “limiting principle” to “conclude that the statute reaches only communication that expressly advocates the election or defeat of a clearly identified candidate.”

The San Jose ordinance in question reads, “No person shall make nor shall any person accept any contribution to or on behalf of an independent committee expending funds or making contributions in aid of and/or opposition to the nomination or election of a candidate for city council or mayor which will cause the total amount contributed by such person to such independent committee to exceed two hundred fifty dollars per election.”

Sutton argues that the law is so broad there are too many activities that could be seen in “aid of and/or opposition” of a mayoral candidate.

“If a veteran’s organization was in a Memorial Day parade and invited Cindy Chavez to sit in the car that says ‘Cindy Chavez for mayor’ is that subject to the campaign finance law?” Sutton asked.

In San Francisco, determining what kind of materials are subject to contribution limits is bit simpler.

“Usually if you use the words ‘vote for or against’ that has been the standard,” said John St Croix, executive director of the San Francisco ethics commission.

In recent years the San Diego ethics commission felt it had to “modernize” the election code to regulate mailer campaigns waged by independent groups, said Steve Ross, legal assistant to the commission. Language was borrowed from the state code, he said, to identify materials that “expressly advocated for or against a candidate.”

Sutton said that because Chavez wasn’t named as a candidate in the mailers and didn’t tell people how to vote, the mailers were within the law.

San Jose could actually fix the code and punish people who single out candidates in campaign mailers, Sutton said, but until the code is more specific, the city probably won’t win in court.

And a court battle isn’t something the Chamber wants, Sutton said. He has been directed to look into the legal options the chamber has.

Because the campaign mailers don’t label Chavez as a candidate for mayor or talk about an election, Sutton said the content was within the law.

A statement from Mike Fox Jr., chair of the Chamber’s political action committee (COMPAC) board of trustees, said the Chamber had shown their mailers to two election law attorneys, Russ Miller and Pete Bagatelles. Bagatelles served as legal adviser for mayor’s Tom Mchenry and Susan Hammer.

The mailers were not shown to the city attorney’s office prior to being sent out.

San Jose could actually change its municipal code to punish people who single out candidates in campaign mailers,
Sutton said, but until the code is more specific, the city probably won’t win in court.

Sato said there won’t be a court battle until someone files a lawsuit.

Cindy Chavez turned the Chamber’s campaign against her into an opportunity to call on her supporters to raise money at the last minute. According to a CBS poll following the initial reporting on the mailers, Chavez led the mayor’s race by seven percentage points. She held 25 percent of the poll, Cortese followed with 18 percent and Pandori was close behind at 17 percent. Of course, on election day Chavez came in second behind Reed and will head to a run-off election in November.

While the Chamber may win a complicated free speech battle, the reputation it enjoyed for many years may never be the same. The mailers singled out Chavez for advocating the use of eminent domain at the Tropicana shopping center and for withholding information about the $4 million subsidy she supported for the San Jose Grand prix.

Four of the Five to resign have made statements condemning the Chamber’s mailers; Mike Fox Sr., Kathryn Meier, Susanne Wilson and John Neece. Mike Fox Sr.’s resignation puts him at odds with his son, COMPAC chair Mike Fox Jr.

Chamber Chair Terry Austen, resigned following complaints to his employer, Kaiser, about the Chamber’s activities. Kaiser issued a press release stating that its non-profit status did not allow the company’s assets to be engaged in partisan political activities.

Susanne Wilson was a former city councilmember and county supervisor. As a board member of COMPAC she voted along with everyone except one person in the committee to pursue an issues campaign during the election. She didn’t know it would single any one candidate out.

The final content of the campaign was decided on by COMPAC’s executive committee, and Wilson noted how efforts were made to keep the finished mailers away from the rest of COMPAC’s 30 to 40 members.

The elections commission is also working on the prospect of publicly funded elections as proposed by Mayor Ron Gonzales. Mertens said that work hasn’t been set back by the complaint about the Chamber, which was filed by Steve Preminger of the County Democratic Party.