South Dakota Lawmakers Push Back Against Campaign Reform Law

By Lacey Louwagie

PIERRE, S.D. – A group of South Dakota legislators is pushing back against a campaign reform law that took effect Nov. 16, claiming that it is unduly burdensome, interferes with free speech and violates voters’ equal rights.

Initiated Measure 22, the South Dakota Government Accountability and Anti-Corruption Act, squeaked into law by referendum vote on Nov. 8 with less than a 52 percent majority.

The Act, meant to lessen the influence of "big money" on elections, sets up a tax-funded "democracy credit" system through which registered voters each receive two $50 "credits" to support the political candidates of their choice.

The Act also limits donation amounts from single donors, narrows the definition of what can be considered a "campaign expenditure," and sets up an ethics board to oversee the program.

But at least two dozen elected officials in South Dakota think the new law goes too far, and they sued the state in Hughes County Circuit Court late last month.

A major point of contention for the lawmakers is a provision in the measure that forbids elected officials from accepting more than $100 in “gifts” annually from lobbyists or organizations that employ lobbyists.

Because the measure includes “employment” and “compensation” in its definition of gifts, legislators who hold jobs with organizations that employ lobbyists are technically in violation of the law.

South Dakota operates with a part-time, “citizen” legislature, in which elected officials are paid $6,000 per legislative session. For the rest of the year, the plaintiffs or their spouses are employed as accountants, consultants, medical professionals, or insurance agents—and they all work for employers who hire lobbyists.

“There is no legitimate purpose in requiring a part-time citizen legislator and his or her family members to choose between his or her employment and participating in the political process,” the lawsuit argues. “The requirement that citizen legislators or their family members not accept compensation from their primary employer if the employer happens to employ a lobbyist is not reasonably related to the purpose of IM22 of preventing corruption.”

The lawsuit also takes issue with the measure’s cumbersome campaign expenditure limits and reporting requirements. In addition to limiting lobbyist gifts to $100, it also requires full donor disclosure, including addresses and places of work, for anyone contributing more than $500 to a campaign. These donations must be reported within five days of being received.

“Based on the many and short deadlines for disclosure, the information that must be disclosed, and the low disclosure threshold, the disclosure requirements in IM22 are unduly burdensome and thereby violate the right to free speech protected by the United States and South Dakota Constitution because they will burden, chill, and reduce individuals’ and organizations’ ability to engage in political speech and activity and do not have a relevant correlation or substantial relation to a sufficiently important governmental interest,” the lawsuit states.

All these campaign finance hoops are meant to even the playing field between moneyed interests and average voters in South Dakota, who will be allowed to contribute up to $100 from a state fund to the political candidates of their choice. But the legislators argue that the so-called “democracy credit” program is essentially a sham.

Although it would cost $54 million to allot democracy credits to all of the state’s 544,428 registered voters, the law caps the democracy credit fund at $12 million.

“The cap on the democracy credit fund allows only a small percentage of currently registered voters to obtain the face value of their democracy credits,” the lawsuit states. “The amounts of the appropriation and cap are arbitrary, thereby creating arbitrary, irrational, and unconstitutional distinctions between voters and candidates who receive the full value of democracy credits and those who receive a smaller, prorated amount or no value at all.”

“Arbitrarily providing more public campaign funds to some voters and candidates than the State provides to other, similarly situated voters and candidates substantially burdens the free speech and political participation rights of the voters and candidates who receive a smaller amount of public campaign funds,” it adds.

The lawsuit also challenges the appropriation of the money for the democracy credit fund as illegal, since it was not passed by a two-thirds legislative majority.

The legislators are asking the court to resolve the issue before the January 2017 legislative session begins.

Attorney General Marty Jackley, charged with defending the unpopular measure, declined to comment beyond saying he was “pretty limited” in what he could say “outside the courtroom.”

The legislators’ attorney, James Moore with Woods, Fuller, Shultz & Smith out of Sioux Falls, South Dakota, did not respond to an emailed request for comment.

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