Legislature(2011 - 2012)CAPITOL 106
02/23/2012 08:00 AM STATE AFFAIRS
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HJR 33-AMEND U.S. CONST RE CAMPAIGN MONEY 8:10:21 AM CHAIR LYNN announced that the first order of business was HOUSE JOINT RESOLUTION NO. 33, Urging the United States Congress and the President of the United States to work to amend the Constitution of the United States to prohibit corporations, unions, and individuals from making unlimited independent expenditures supporting or opposing candidates for public office. 8:10:28 AM REPRESENTATIVE LES GARA, Alaska State Legislature, presented HJR 33 as sponsor. He explained the changes that would be made under the proposed committee substitute (CS), Version 27- LS1231\I, Bullard, 2/16/12. He said that in response to Representatives Seaton and Gruenberg, the words "supporting or opposing candidates for public office" appear following "expenditures", on page 2, lines 12-13, as well as in the bill title. He related that in response to Representative Johansen, the word "unions" was added following the word "corporations", on page 1, line 7. He said the reference to "unlimited expenditures by individuals" was deleted, so that under Version I, the focus is on the Citizens United v. Federal Election Commission, 180S. Ct.876(2010) ("Citizens United") case, which related to unlimited contributions by corporations, unions, and other organizations. CHAIR LYNN interjected that [corporations, unions, and other organizations] were defined as "persons" by the U.S. Supreme Court. REPRESENTATIVE GARA stated his personal belief that unlimited contributions by individuals should be regulated; however, he said he thinks the committee made "a fine call" by limiting HJR 33 to a Citizens United resolution. He noted that he fixed "a typographical error" on page 1, line 13, to clarify that before the Citizens United ruling, states and Congress had the option to ban unlimited independent expenditures from corporations and unions. 8:13:17 AM REPRESENTATIVE GRUENBERG moved to adopt the proposed committee substitute (CS), Version 27-LS1231\I, Bullard, 2/16/12, as a work draft. There being no objection, Version I was before the committee. 8:13:49 AM REPRESENTATIVE GARA opined that corporations and unions should not be considered "persons" for the sake of elections, and society should be able to limit the amount of expenditures that flood into political campaigns. He relayed that on the federal level, "the candidate with the most money wins ... 95 percent of the time." CHAIR LYNN ventured the same is true on the local level. REPRESENTATIVE GARA stated that the intent of the proposed resolution is "to help build a movement nationally for Congress to amend the Constitution, to reverse the Citizens United ruling," so that states and Congress have the option to regulate corporate and union contributions. He said, "I don't see this as a benefit for either side of the aisle. There are those of us who are going to be targeted by corporations, there are those who will be targeted by unions ...." He pointed out that contributions to candidates are limited. He opined, "The moment you have ... $500 million of contributions going into a Presidential campaign from outside sources is the moment you have less accountability in the political system." 8:16:48 AM REPRESENTATIVE GARA, in response to Chair Lynn, confirmed that HJR 33 would give states the discretion to decide whether to regulate contributions from corporations and unions. He conveyed that in the past, Alaska exercised that discretion. 8:17:21 AM REPRESENTATIVE GARA, in response to Representative Petersen, confirmed that HJR 33 is encouraging an amendment to the U.S. Constitution. He said there are two ways to amend the Constitution, but the only way that has worked in the past is by a vote of two-thirds of each house of Congress, followed by ratification by three-quarters of the states. 8:18:04 AM REPRESENTATIVE SEATON noted that Representative Gara had consistently used the word "contribution." He offered his understanding that Citizens United took away the ability to limit independent expenditures, but did not affect the ability to make political campaign contributions to candidates. REPRESENTATIVE GARA confirmed that is correct. He said Citizens United opened the floodgates "to unlimited contributions by corporations, unions, and organizations for independent expenditures." 8:19:45 AM CHAIR LYNN offered his understanding that HJR 33 would not affect contributions from individuals or political action committees (PACs). REPRESENTATIVE GARA confirmed that is correct. He said Alaska currently has strong limits on direct contributions to candidates. 8:20:47 AM ARTHUR MARTIN specified that although he is an intern for Representative P. Wilson, he is testifying on behalf of himself in opposition to HJR 33. He indicated that he was initially in favor of the proposed joint resolution until he began researching information regarding Citizens United. He offered his understanding that the issue of "corporations being people" is a separate argument under the Fourteenth Amendment and is not related to Citizens United. He said Citizens United dealt with the First Amendment and questioned why corporations and unions, which held the same First Amendment rights as individuals and non-profit organizations, did not also share the right to make independent expenditures. Mr. Martin opined that there are no facts or data to justify any of the statements made in HJR 33. He directed attention to page 2 of a handout in the committee packet containing information published by OpenSecrets.org, to a chart showing total outside spending for election cycles from 1990 to 2012, and he offered his understanding that the chart does not show an increase in independent expenditures made since the Citizens United case. 8:24:01 AM MR. MARTIN directed attention to the "WHEREAS" clause, on page 2, lines 1-5 of HJR 33, which read as follows: WHEREAS much of the hundreds of millions of dollars being spent by corporations, unions, and other organizations since the ruling of the United States Supreme Court in Citizens United v. Federal Election Commission is going to negative ads, which often misinform voters rather than lead to a productive discussion of the states' and nation's most important issues; and MR. MARTIN indicated the proposed legislation includes no data to support the statement that much of the money is going to negative advertisement. Regarding the issue of misinforming voters through negative advertisement, Mr. Martin said that assumes that voters are "empty vessels." He indicated that people's votes are guided by their religion, family values, and "where we come from," and he opined that the assertion that corporations or unions will unduly influence the opinion of voters is unfounded. MR. MARTIN questioned what the "harmful effects of Citizen United", as referred to on page 2, line 6 of HJR 33, would be. In regard to the proposed amending of the U.S. Constitution, he questioned which part of the U.S. Constitution would be amended. Mr. Martin, in response to the "BE IT RESOLVED" portion of the bill [on page 2, lines 11-14, said it is not the job of the President to propose amendments to the U.S. Constitution; therefore, he said that language needs to be removed. 8:27:18 AM MR. MARTIN concluded by asking the committee to consider whether there really is a problem wherein corporations and unions are unduly influencing elections and, if there is a problem, is rewriting the U.S. Constitution the right answer? He urged the committee not to support HJR 33. He said he provided alternatives, listed on a handout in the committee packet, including: requiring shareholders to approve political spending by their corporations, requiring corporations to disclose money used to influence public opinion, requiring the chief executive officer of a corporation that pays for a political commercial to appear as the sponsor, and strengthening Federal Election Commission (FEC) regulations to increase transparency and disclosure. He talked about an idea to have "democracy facts," listed, in much the same format as nutritional facts are listed for food items. 8:30:28 AM CHAIR LYNN pointed out that opinions are, by nature, subjective and based on perception of fact. He said, "An ad that is perceived as negative by one is perceived as truth by the other." He ventured that as a citizen of the U.S., the President could submit a request for an amendment to the U.S. Constitution. 8:31:37 AM REPRESENTATIVE GRUENBERG pointed out that President Abraham Lincoln proposed the 13th, 14th, and 15th Amendments to the U.S. Constitution. MR. MARTIN, in response to a question, said he is a student at the University of Alaska, Fairbanks. REPRESENTATIVE GRUENBERG complimented Mr. Martin for using non- traditional logic in his testimony. 8:34:00 AM REPRESENTATIVE SEATON said although he appreciates Mr. Martin's proposed solutions, they would be actions of Congress, and the issue before the committee concerns financial disclosure and contribution limits that were embedded by the FEC and Congress but were overturned by the U.S. Supreme Court. 8:35:08 AM MR. MARTIN responded that the aforementioned alternatives would not go against the ruling made by the U.S. Supreme Court in Citizens United, but would "create more oversight on these corporations." REPRESENTATIVE SEATON said corporations are creations of the individual states, and he offered his understanding that "this" would require Congress to come in, in federal elections, and "regulate what individual shareholder actions and ... rights would be under the varying states' corporation laws." MR. MARTIN said HJR 33 is asking Congress to alter the U.S. Constitution and the Bill of Rights, and he said he is uncomfortable with that. He said corporations are people who have come together and have certain rights, and he posited that they are not all "money-seeking." He said Citizen United was about letting the people in corporations express themselves under the rights they already have. 8:37:58 AM REPRESENTATIVE PETERSEN offered his understanding that Mr. Martin said that negative advertising is not effective, and he ventured that Newt Gingrich would probably disagree. He said studies have shown that people remember negative advertising after fewer repetitions than positive advertising. He said, "They wouldn't be spending tens of millions of dollars on negative ads if they didn't work." Regarding Mr. Martin's previous remark that there was not much of an increase between the 2008 and 2010 [campaign] expenditures, he pointed out that 2008 was a Presidential election year, and Presidential elections, in general, have more expenditures than non- presidential years. He said he thinks that by the end of 2012, the amount of campaign expenditures could easily double, or even triple, what was spent in 2008. 8:40:00 AM SHEILA FINKENBINDER stated that although she serves as a staff member to Representative P. Wilson, she was testifying on behalf of herself in opposition to HJR 33. She opined that the language of the "WHEREAS" portions of HJR 33 are "assumptions that are believed by many but are not based on research that demonstrates they are true." She said even assuming that the statements are true, she believes asking Congress to create a Constitutional amendment is not the best solution. MS. FINKENBINDER posited that many "reasonable people" would not agree that the influence of large amounts of money in political campaigns harms the ability of the average citizen to have a voice in his/her government, but would instead argue that people continue to have the ability to weigh the truth in advertising and make independent decisions regarding how to vote. She stated that several reports have shown that the Citizens United decision has had only an incremental effect on campaign finance, and that large campaign expenditures occurred before the U.S. Supreme Court decision. Ms. Finkenbinder argued that there has not been a breakdown in the electoral process "in spite of all that money." She said whether ads run by corporations are negative is a debatable point, and she opined that "we" have managed to "do our own thinking" and have elected "decent and credible candidates in spite of all this." She indicated that there has been no evidence to suggest that the corporate media should have its First Amendment rights infringed. MS. FINKENBINDER said Congress has had a number of options to "clean up campaign finance," as previously mentioned by Mr. Martin, "almost since the very day the Citizens United decision was made," and she ventured that these options will continue to be researched and debated until solutions are found. 8:44:08 AM MS. FINKBINDER argued that amendments to the U.S. Constitution can be incredibly complicated, controversial, and time- consuming. Further, she said only 27 Constitutional amendments have been adopted in the U.S., out of the 10,000 amendments that have been proposed; therefore, she ventured, the chances of the amendment proposed under HJR 33 happening are small. She echoed Mr. Martin's remarks regarding the inappropriateness of asking the President to initiate the amendment process, and she indicated that support for this comes from "a document directly from the government." 8:46:33 AM REPRESENTATIVE GARA, regarding the argument that there is no evidence that the public opposes unlimited corporate and union contributions, stated that every poll his staff found shows the opposite to be true, and he said he could provide those polling results to the committee. Regarding the point made that the President has no role in the amending of the U.S. Constitution, he echoed Representative Gruenberg's remark that President Lincoln was the one who proposed an end to slavery. He said President Lincoln had to work with Congress, who had to enact the amendment, and he opined that the President should be active in those issues in which he/she believes. Regarding the remark by Mr. Martin that there is no evidence that Citizens United has had any impact, he echoed the previous comment made by Representative Petersen that in Presidential election years, independent expenditures and campaign contributions are much higher. He said Citizens United was adopted in 2010 - a non- Presidential year. He said, "Four years before that - 2006 - independent expenditures rose from $68 million to $304 million. That's a substantial increase in two, successive non- Presidential elections." He said "there is every expectation" that by the end of the 2012 Presidential election, it will be shown that in Presidential elections, as well, independent expenditures have increased. REPRESENTATIVE GARA, regarding the suggestion that "we don't know what corporate contributions had been," explained that is because corporations don't have to reveal what they spend in independent expenditures. He said he thinks the same probably applies to unions. He said, "They put money into fake groups or groups that have nice names," such as "People for the American Way," which does not reveal who donors to groups are. REPRESENTATIVE GARA stated that he thinks the proposed joint resolution is factually accurate, with some opinion, as is put in resolutions, and he would "leave it to the committee's discretion" whether or not to pass HJR 33. He commented that even though he does not agree with the testimony heard today, it was well-reasoned. He stated, "It is easier to say somebody's not telling the truth; its' harder to address somebody's good argument head on." 8:50:09 AM CHAIR LYNN closed public testimony. 8:50:23 AM REPRESENTATIVE P. WILSON indicated that since [Citizens United], campaign expenditures have been more transparent. 8:51:15 AM REPRESENTATIVE GRUENBERG moved to report CSHJR 33, Version 27- LS1231\I, Bullard, 2/16/12, out of committee with individual recommendations and the accompanying fiscal notes. 8:51:23 AM REPRESENTATIVE KELLER objected. He posited that HJR 33 would affect First Amendment rights and "gets ... onto a slippery slope that we don't want to be on." He said there are many ways that people are influenced, including by on line social networking, and he questioned where the limit on control may end up. He stated that corporations are made of people, and to restrict them is to make the statement that "people aren't smart enough to figure out what's going on." 8:53:00 AM REPRESENTATIVE JOHANSEN expressed appreciation for the sponsor's passion on the issue, even though he said he cannot align himself with it philosophically. 8:53:37 AM REPRESENTATIVE SEATON stated that corporations are economic creatures of various states, and reiterated that in general, their sole duty is to make money. Following Citizens United, the board of directors and the management can use corporate funds to oppose or support certain candidates to align with their economic interests, but not at the unanimity of the shareholders of those corporations. He said he is not opposed to people forming associations and PACs "for the purpose of putting their money together to do things"; however, he stated that he finds it problematic when political choices are made by management that are not related to the owners of the company and do not benefit the shareholders' interests. He said he thinks the only way to get around this is to revisit the restrictions that have been around for 100 years wherein economic corporations do not have political free speech in the same way an individual does. He stated his support for HJR 33. 8:56:03 AM CHAIR LYNN commented that foreign nationals sometimes serve on the boards of corporations. 8:56:24 AM REPRESENTATIVE PETERSEN recalled that when the Citizens United decision was made, the majority of the feedback he received from his constituents was in opposition to the decision. He said that when the House State Affairs Standing Committee previously worked on legislation that required corporations to disclose who was behind expenditures, he received numerous communications from constituents congratulating the committee for doing such good work. He stated his belief that the people who voted for him would like him to support HJR 33; therefore, he stated his support of the proposed legislation. 8:57:27 AM REPRESENTATIVE JOHANSEN, regarding Representative Seaton's prior comment, stated that he thinks the interests of corporations and shareholders are one and the same. Further, he said an individual has the choice to socially invest in corporations with similar philosophies. 8:58:23 AM REPRESENTATIVE GRUENBERG stated that his motion was not on the merits of the proposed legislation, but on the right to debate the bill. He opined that it is ironic and unfortunate that those supporting the right of corporations to participate in the political process and exercise the right of free speech would vote against allowing HJR 33 to move to the full body, so that the full body can exercise its right to debate the bill. He said he probably would not feel so vehement if the bill were not about the right of free speech. 9:00:09 AM A roll call vote was taken. Representatives Seaton, Gruenberg, Petersen, and Lynn voted in favor of the motion to report CSHJR 33, Version 27-LS1231\I, Bullard, 2/16/12, out of committee with individual recommendations and the accompanying fiscal notes. Representatives P. Wilson, Keller, and Johansen voted against it. Therefore, CSHJR 33(STA) was reported out of the House State Affairs Standing Committee by a vote of 4-3. 9:00:45 AM REPRESENTATIVE P. WILSON commented that she is proud of her staff. 9:01:21 AM REPRESENTATIVE GRUENBERG, to the previous testifiers, paraphrased Patrick Henry, by saying, "I may not always agree with what you say, but I certainly support your right to say it."