Board of Elections March 14-16 Transcript-16CD096(1)

8/18/2019 Board of Elections March 14-16 Transcript-16CD096(1)

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BOARD MEETING - EXECUTIVE SESSION 3/14/2016

www.midwestlitigation.com Phone: 1.800.280.DEPO(3376) Fax: 314.644.1334MIDWEST LITIGATION SERVICES

Page 101

1 MS. GERVASE: Ms. Watson.

2 CHAIRMAN SCHOLZ: Bill, you have her

3 proxy.

4 MEMBER McGUFFAGE: Yes.

5 MS. GERVASE: Vice Chairman Gowen.

6 VICE CHAIRMAN GOWEN: Yes.

7 MS. GERVASE: Chairman Scholz.

8 CHAIRMAN SCHOLZ: Yes.

9 Thank you, Mr. Secler. Thank you,

10 Mr. Fultz.

11 MR. FULTZ: Thank you.

12 MR. SECLER: Thank you very much.

13 MR. MENZEL: Mr. and Mrs. Kaye are

14 present down here on the next matter.

15 CHAIRMAN SCHOLZ: All right. Is

16 everybody present in Chicago? I think that's the

17 case here in Springfield. We'll take up Kaye

18 versus Liberty Principles PAC.

19 We'll hear first from our General

20 Counsel.

21 MEMBER COFFRIN: Mr. Chairman.

22 CHAIRMAN SCHOLZ: Yes, Betty.

23 Ms. Coffrin.

24 MEMBER COFFRIN: I'm going to abstain


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Page 103

1 On this point the hearing officer

2 recommends that the complaint be filed -- found to

3 be filed on justifiable grounds but instead of

4 going to public hearing the committee be directed

5 to make a clear statement in any future materials

6 that it paid for the materials.

7 The committee asserts that the

8 candidate interviews and other content were

9 entirely outsourced to a third party and that there

10 is thus no coordination with any candidates.

11 On that point the hearing officer found

12 the claim that the committee had no control or

13 approval of what the third party produced as

14 straining credulity and recommended that the

15 complaint be found to be filed on justifiable

16 grounds and proceed to public hearing on the

17 coordination issue.

18 The hearing officer also noted an

19 additional issue that the parties did not address

20 in the closed hearing, that the Election Code

21 defines independent expenditures as relating to

22 expenditures for electioneering communications,

23 which are limited to broadcast items, or express

24 advocacy for or against candidates or referenda.


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Page 104

1 The mock newspapers are not broadcast items and

2 they do not expressly advocate for or against the

3 candidate. The public hearing should also address

4 the issue of whether the expenditures for the mock

5 newspapers are independent expenditures under the

6 Election Code, and if not, whether the committee

7 may permissibly pay for them.

8 I concur with the hearing officer in

9 this matter.

10 CHAIRMAN SCHOLZ: All right. Questions

11 for our General Counsel before we hear from the

12 litigants?

13 If not, we'll hear from the complainant

14 first.

15 MS. KAYE: Can we let them go first?

16 CHAIRMAN SCHOLZ: We always --

17 MR. MENZEL: There's two separate

18 complainants.

19 CHAIRMAN SCHOLZ: Oh. We'll hear from

20 the complainant first in Kaye versus Liberty

21 Principles.

22 MR. KAYE: Okay. That would be us.

23 MS. KAYE: This circular was started --

24 received in our district February 12th. It was


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Page 105

1 delivered to the towns of Charleston, Mattoon,

2 Robinson, Marshall, Casey, Lawrenceville, Greenup,

3 Toledo, and Oblong. It's called the East Central

4 Reporter. It has a week of 7 to 13, 2016. No

5 issue numbers.

6 This -- these towns are all in the

7 110th State Representative District. None of the

8 towns listed are outside of the district. All of

9 the towns that are listed there were listed by

10 population rather than geographically or

11 alphabetically.

12 An article on the front page refers to

13 a candidate. "Phillips details reasons for

14 pursuing second term." It was written by Kerry

15 Goff, K-e-r-r-y G-o-f-f.

16 There's also an associated website as

17 well.

18 CHAIRMAN SCHOLZ: I'm sorry. I didn't

19 ask -- I apologize. You have to identify yourself

20 for the court reporter.

21 MS. KAYE: My name is Clair Kaye,

22 C-l-a-i-r K-a-y-e. I'm one of the complainants.

23 CHAIRMAN SCHOLZ: Okay. Sorry for the

24 interruption. Go right ahead.


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Page 106

1 MS. KAYE: Sure.

2 Page 3, as was referred to by General

3 Counsel, has a from the publisher statement. It's

4 rather long, but I will still read it.

5 From the Publisher: Why East Central

6 Reporter? Our representative republican form of

7 government relies on an informed citizenry to

8 function well. As such, our goal is twofold. One,

9 to provide news about state and local policy

10 matters and politics to help you assess whether the

11 policy decisions made by your elected officials are

12 aligned with your values and to explain how those

13 decisions impact your quality of life, and, two, to

14 offer quality local content to help you stay

15 abreast of what's happening in the community you

16 call home. We will present the policy arguments

17 being made and frame the choices being offered in

18 order to foster a dialogue that produces the most

19 productive outcomes available. We will provide

20 contextual and consequential information to give

21 you the whole story. This is a community forum

22 where we speak with you rather than talking at you.

23 Consistent with that notion, we want to hear from

24 you and welcome your story ideas, your editorial


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Page 107

1 submissions, and your constructive critiques. Tell

2 us which stories you find helpful, which stories

3 you enjoy, and conversely, which stories miss the

4 mark. We want to be this outlet -- we want this

5 outlet to be of value to you. We know -- we know

6 that will only happen if we build trust, if we

7 listen, if we respect the broad spectrum of views

8 on a wide array of issues we cover and ultimately

9 if we provide quality content. Thank you.

10 And it's signed Liberty Principles PAC.

11 It has contact us information. It says East

12 Central -- it has a [email protected].

13 It has a 708 phone number, 708-209-8012, and it has

14 a Twitter address.

15 CHAIRMAN SCHOLZ: Again, sorry to

16 interrupt you.

17 But, Mr. Menzel, we have specific

18 language for attribution that's required, the "paid

19 for by" language?

20 MR. MENZEL: It's not specific language

21 -- unlike something that solicits funds where

22 there's a very specific quote type language that

23 you have to put in, attribution of source, it

24 requires an indication of who paid for the


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Page 108

1 materials. While this is -- you know, it says who

2 the publisher is, there really isn't any discussion

3 as to who paid for the materials.

4 CHAIRMAN SCHOLZ: Okay. I'm sorry,

5 Ms. Kaye, go ahead.

6 MS. KAYE: So that was the first

7 complaint is who had paid for this. And clearly,

8 when citizens get a mailer and it says "paid for

9 by", we're trained to understand this is a

10 political mailer. This is not saying "paid for by"

11 and it is confusing, therefore, to readers who

12 might think this is something else other than a

13 paid political statement.

14 Liberty Principles PAC is an

15 independent expenditure committee. It's registered

16 with the Illinois State Board of Elections. The

17 president and treasurer listed are one and the

18 same, Dan Proft.

19 Liberty Principles PAC filed two B-1s

20 in support of Reggie Phillips. On February 1st, in

21 support of Reggie Phillips, a payment was made to

22 Newsinator LLC for $14,166.67 and its purpose was

23 listed as advertising-newspaper, and a second

24 payment was made on March 7th, 2016, for 10,327,


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Page 109

1 again an advertising-newspaper in support of Reggie

2 Phillips.

3 Newsinator has two LLCs on file with

4 the State of Illinois, Secretary of State

5 registration for a limited liability corporation.

6 The first one was filed on March -- or, November

7 26th, 2014. The entity name is Newsinator LLC and

8 the agent name is Brian Timpone, T-i-m-p-o-n-e.

9 And the status of this file, which is File Number

10 04956125, shows that its status is withdrawn, not a

11 current filing. LLC second filing with the

12 Secretary of State, also for Newsinator LLC -- this

13 withdrawal date was January 26th, 2015. On the

14 same day a filing date was made for Newsinator LLC

15 with a different file number with the Secretary of

16 State, File Number 05074797, and it lists the agent

17 name as Andrew J. McKenna, Jr.. So I take it to be

18 that is the current agent of Newsinator.

19 In a Cook County Chronicle article

20 dated February 17th, 2016, it was titled "New

21 weekly newspaper mailers part of GOP Super PAC

22 strategy in west Cook County." It was written by

23 Jean Lotus and it was for Chronicle Media.

24 In it there's an interview with Dan


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Page 110

1 Proft and he explains some of the structure of the

2 way these different entities work together. In

3 one, early in the paragraph -- early in the story

4 he's quoted as saying -- or, the story says "The

5 papers are produced in partnership with River

6 Forest media entrepreneur Brian Timpone, founder of

7 BlockShopper and the former Journatic, LLC - now

8 called LocalLabs, LLC."

9 Also in there was a direct quote from

10 Dan Proft that says "Every newspaper is an election

11 tool. We're just transparent about it. Show me a

12 newspaper that doesn't report on certain candidates

13 and make endorsements. We're just honest about

14 it."

15 Also referred to in this article is an

16 area that says "Proft says he wants to present data

17 on a local level that demonstrates how decisions in

18 Springfield are affecting readers. Working with

19 reporting teams from LocalLabs, Proft says he

20 suggests stories and discusses what reporters

21 should cover."

22 Finally, another quote says -- well, it

23 refers to a discussion that says "So far the six

24 new newspapers will not feature paid advertising,


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Page 111

1 Proft said. It's more of a mission-focused

2 enterprise than a profit-driven enterprise."

3 Now, in this article it refers to

4 LocalLabs. In fact, there is a -- LocalLabs is not

5 a registered corporation that's connected to Brian

6 Timpone. There's a separate filing with the

7 Illinois Secretary of State for a business called

8 Locality Labs, L-o-c-a-l-i-t-y.

9 MS. SVENSON: May I interrupt for just

10 one minute? I'm the attorney for Liberty

11 Principles PAC.

12 I do not recall this evidence being

13 introduced at the closed preliminary hearing. If

14 I'm wrong, please correct me, but I don't remember

15 the Lotus article being introduced. And so I'm

16 wondering if this sort of evidence can be

17 introduced at this time.

18 CHAIRMAN SCHOLZ: Well, we'll hear from

19 you in a moment. Thank you.

20 MS. SVENSON: Okay. I just wanted to

21 just throw that out there. Thank you.

22 CHAIRMAN SCHOLZ: Go ahead.

23 MS. KAYE: So Locality Labs,

24 L-o-c-a-l-i-t-y, Labs, LLC is registered with the


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Page 112

1 Secretary of State, File Number 02632055. And it

2 has a manager -- the LLC managers are two different

3 people, Brian Timpone, T-i-m-p-o-n-e, and Chris

4 Hochschild, H-o-c-h-s-c-h-i-l-d. So it also refers

5 to old LLC names that were Journatic,

6 J-o-u-r-n-a-t-i-c, LLC, as well as BlockShopper

7 LLC. Both of these businesses were referred to in

8 that same news article as being the Brian Timpone

9 who is now running LocalLabs LLC.

10 On the front page of the East Central

11 Reporter there are six direct quotes from the

12 candidate, Reggie Phillips, candidate for State

13 Representative of 110th District. I'll read each

14 one.

15 "'I have been in office a year and it

16 takes about six months to get water under your feet

17 and then another six months to get real work done,'

18 Phillips recently told East Central Reporter.

19 'You've got to have good relationships and you have

20 to build trust.'"

21 Second quote: "'I still finance most

22 of my own campaign, and I work hard at everything I

23 do,' he said. 'If I don't think it is right for my

24 district or for my state, I am not going to vote


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Page 113

1 for it.'"

2 Third quote: "'If you are going to

3 college to get an education and then graduate to

4 find you have no job options, then you have a

5 problem,' he said."

6 Fourth quote: "'I ran for office in

7 the first place because I did not like the previous

8 representative -- who was 'triple dipping' -- and

9 it is not feasible to keep up such practices and it

10 is ..." it not "... it is not feasible to keep up

11 such practices and it not hurt the State of

12 Illinois,' Phillips said."

13 Fifth quote: "'One of the things I

14 find so frustrating is that there are a few simple

15 changes we can make to really get our economy

16 going, but we continue to ignore these simple

17 reforms,' he said."

18 And the final quote: "'Enacting real

19 workers' compensation reform, reducing excessive

20 business regulations and unleashing the full

21 potential of Illinois' natural resources would put

22 us back on course to economic growth and

23 prosperity.'"

24 There are six direct quotes from the


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Page 114

1 candidate in this article. And the quotes are

2 being attributed to -- not to Newsinator. In the

3 quote -- the first quote it says "Phillips recently

4 told East Central Reporter ..." That's the same

5 name that's on the top of here.

6 To be an independent expenditure, you

7 both have to -- you have to -- I'll just read.

8 Independent expenditure means any

9 payment, gift, donation, or expenditure of funds

10 (i) by a natural person or political committee for

11 the purpose of making electioneering communications

12 or of expressly advocating for or against the

13 nomination for election, election, retention, or

14 defeat of a clearly identifiable public official or

15 candidate or for or against any question of public

16 policy to be submitted to the voters and (ii) that

17 is not made in connection, consultation, or concert

18 with the request -- with or -- with or at the

19 request or suggestion of the public official or

20 candidate, the public official's or candidate's

21 designated political committees or campaign, or the

22 agent or agents of the public official, candidate,

23 or political committee or campaign.

24 The fact that they interview the


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Page 115

1 candidate shows that there has been connection,

2 concert, and connection with the candidate in

3 producing this -- this document. So that is the

4 first issue.

5 But the second issue is, as you brought

6 up, if it's not electioneering communication, if

7 they're not expressly advocating for or against

8 this candidate, then it's not allowed to be paid

9 for by an independent expenditure organization.

10 CHAIRMAN SCHOLZ: Thank you.

11 Now, I understand the desire to deal

12 with these together, but I -- should we hear the

13 response to Ms. Kaye's complaint and then go to the

14 second one? What do you think, Mr. Menzel?

15 MR. MENZEL: It seems to me it might

16 almost be more efficient to hear the other

17 complainant.

18 CHAIRMAN SCHOLZ: All right.

19 MR. MENZEL: And to then give

20 Ms. Svenson a chance to --

21 CHAIRMAN SCHOLZ: All right. Since

22 we're going to --

23 MR. MENZEL: They're essentially

24 identical pieces.


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Page 116

1 CHAIRMAN SCHOLZ: So we'll hear from

2 the complainant in Cabay versus Liberty -- if I'm

3 pronouncing that correctly -- Liberty Principles

4 PAC. And then if you could identify yourself for

5 the record and go ahead.

6 We have been asking previous parties to

7 try to limit to around ten minutes since we have

8 such a lengthy docket today. But, you know, we

9 have some flexibility there. So go ahead, the

10 complainant in Cabay.

11 MR. COEN: Yes. My name is Patrick

12 Coen. I'm the attorney for Mr. Cabay. He's

13 present. But because of the time frame that you're

14 talking about, I would just refer to the complaint

15 and to the exhibits, the newspaper, in this case

16 the McHenry Times, and the newspaper article from

17 the Northwest Herald that had interviewed the

18 candidate in question in the 66th District as

19 showing that there was coordination between the PAC

20 and the candidate, Mr. Skillicorn, in this matter,

21 which we believe shows that there is a violation of

22 the statute concerning the use of expenditures from

23 an independent political action committee.

24 We would concur with the first


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Page 117

1 complainant as far as the newspaper in question has

2 exactly the same type of language regarding

3 publication, and, furthermore, the exhibit that we

4 presented concerning the interview by a Northwest

5 Herald reporter to the candidate where the

6 candidate admitted that they had spoken directly to

7 the provider of the newspaper information, and that

8 in addition they had sent out press releases, which

9 shows the coordination and cooperation that is

10 prohibited from being undertaken by an independent

11 PAC.

12 The last item is one of there seems to

13 be an attempt to show that the independent PAC had

14 a second party, this Newsinator, that excused them

15 from complying with the statute. And I would

16 merely point out that under the general principles

17 of agency law, a principal is going to be liable

18 for the actions of their agent unless that

19 principal can specifically show that that agent was

20 operating outside of the authority given by the

21 principal.

22 Secondly, the language that had been

23 quoted concerning electioneering clearly used the

24 word "agents" and therefore clearly shows that the


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Page 118

1 statute anticipated someone claiming that an agent

2 was the one who conducted the affairs and that the

3 principal therefore is not responsible for the

4 agent's conduct. And again, clearly, that's

5 already been provided in the statute. So we

6 believe that the statute has clearly been violated.

7 We also believe that the technical

8 argument that the communications were not

9 electioneering and therefore are also prohibited by

10 the independent PAC requirements has been met.

11 And we simply point out the fact that

12 if this matter is allowed to stand as is, the

13 differentiation that the legislature created to

14 differentiate between an independent PAC and other

15 forms of political action committee will be lost

16 and, therefore, the statute will be meaningless.

17 Thank you.

18 CHAIRMAN SCHOLZ: Okay. Thank you,

19 Mr. Coen.

20 So we have the same respondent for both

21 complaints and the same -- in essence, the same

22 issues, attribution and collaboration.

23 All right. So we'll hear from the

24 respondent then. Could you identify yourself,


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Page 119

1 please?

2 MS. SVENSON: Yes. My name is

3 Christine Svenson, S- as in Sam -v- as in Victor

4 -e-n-s-o-n. I am the attorney for Liberty

5 Principles PAC.

6 So the matter that we're here on today

7 is -- the complaint is baseless and everything

8 brought by the two complainants is based upon

9 speculation and conjecture with no proof whatsoever

10 of coordination. And I will remind you all that it

11 is their burden to prove that there is

12 coordination. And they don't have any.

13 Now, my PAC, Liberty Principles PAC,

14 goes out and hires vendors to create their

15 materials. They are in the business, meaning my

16 PAC is, they are producing electioneering

17 communications. So these vendors have to go out

18 and put these electioneering communications

19 together. They are allowed to go to the Internet,

20 the community at large, and as indeed they have to,

21 in order to produce these materials, whether

22 they're videos, whether they're newspapers,

23 whatever they are. So if the vendors were not

24 allowed to do that, they wouldn't be able to


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Page 120

1 produce these materials.

2 The mere interview of a candidate or a

3 potential candidate, Mr. Phillips or

4 Mr. Skillicorn, does not mean coordination.

5 Mr. Skillicorn -- there was no evidence that

6 Mr. Skillicorn or Mr. Phillips coordinated the

7 production of this ad with Mr. Proft. They simply

8 provided their policy positions to a vendor -- a

9 vendor's actual employee, the reporter who was

10 writing these articles.

11 There's no evidence that Mr. Skillicorn

12 or Mr. Phillips got on the phone with Mr. Proft,

13 who is the chairman of Liberty Principles PAC, and

14 said, okay, let's put together this ad and, you

15 know, skew this in favor of me and this is how I

16 want you to do this. That's what coordination is

17 and that's not what we have here.

18 In addition -- and I wasn't allowed,

19 wrongly, to go into this at the preliminary

20 hearing. Mr. Kaye was able to testify -- or

21 perhaps it was Ms. Kaye -- one of them testified

22 about their knowledge of the subject matter and

23 Mr. Phillips' involvement. I then tried to -- or,

24 I was -- I tried to inquire of Mr. Kaye about


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Page 121

1 whether or not he was approached for an interview

2 with this very same news reporter, the East --

3 whatever it's called, the East St. Louis reporter.

4 I don't recall the exact name of it. And Mr. Kaye

5 refused to answer. And that's because he was in

6 fact asked to comment for the purposes of this

7 article.

8 So our reporters are allowed to go out

9 into the community and gather information for the

10 purposes of generating their materials. That is

11 not coordination and that is not what this statute

12 contemplated.

13 Now, relative to the argument that we

14 are -- that these are not independent expenditures,

15 it's hard to imagine how one can have their cake or

16 eat it too. But an independent expenditure is --

17 it means any payment, gift, donation, or

18 expenditure of funds by a natural person or

19 political committee for the purpose of making

20 electioneering communications.

21 So now we go to electioneering

22 communication defined. Electioneering

23 communication means any form of communication in

24 whatever media, but not limited to radio,


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Page 122

1 television, or Internet communication, that refers

2 to a clearly identified candidate and is made

3 within 60 days.

4 Election -- then (b), this is what the

5 hearing examiner did not go to, Section

6 9-1.14(b)(1). A communication, other than an

7 advertisement, appearing in a news story,

8 commentary, or editorial distributed through the

9 facilities of any legitimate news organization --

10 and then here's the operative words -- unless the

11 facilities are owned or controlled by any political

12 party, political committee, or candidate.

13 Well, that's what this is. This is a

14 political committee doing the communication. So

15 that means that it is by definition an

16 electioneering communication. So we properly --

17 our IE -- our independent expenditure committee is

18 properly doing independent expenditures. We are

19 not making contributions directly to campaigns.

20 Thank you.

21 CHAIRMAN SCHOLZ: So the -- it's pretty

22 clear then that this sort of tabloid campaign

23 piece, either one of them, they were an

24 electioneering communication?


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Page 123

1 MS. SVENSON: It is in our mind.

2 CHAIRMAN SCHOLZ: And so what would

3 that -- that would require attribution then;

4 wouldn't it?

5 MS. SVENSON: Oh, you're referring to

6 the fact that there was no paid for by Liberty

7 Principles language?

8 CHAIRMAN SCHOLZ: Right.

9 MS. SVENSON: Yeah. No. I already

10 conceded in the closed prelim that that was a

11 mistake. One could infer that it was paid for by

12 Liberty Principles PAC because of the fact that

13 there was a note saying publisher Liberty

14 Principles. But that was -- but that was a

15 mistake. And we are willing to accept the hearing

16 officer's recommendation with respect to that

17 aspect of this --

18 CHAIRMAN SCHOLZ: Okay.

19 MS. SVENSON: -- this complaint.


21 Do you wish to respond briefly,

22 Ms. Kaye?

23 MS. KAYE: I do.

24 So in the area under electioneering


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Page 124

1 communications, electioneering communications

2 means, for the purpose of this article -- and I'm

3 reading from 5/9-1.14. Electioneering

4 communications means, for the purposes of this

5 article, any broadcast, cable, or satellite

6 communication, including radio, television, or

7 Internet communication. It does not include a

8 newspaper in that section.

9 MS. SVENSON: May I respond?

10 MS. KAYE: No.

11 MS. SVENSON: It says including but not

12 limited to.

13 MR. MENZEL: That's the prior language.

14 MS. SVENSON: Oh, okay.

15 MR. MENZEL: Prior to 2011.

16 MS. SVENSON: To me, it's not clear

17 either way. And it specifically does not -- it

18 does not disinclude a newspaper.

19 MS. KAYE: I'm reading from today's

20 language. Today's language says electioneering

21 communication means, for the purposes of this

22 article, any broadcast, cable, or satellite

23 communication, including radio, television, or

24 Internet communication -- it does not include


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Page 125

1 newspaper -- that (1) refers to --

2 MS. SVENSON: But it doesn't --

3 MS. KAYE: Excuse me.

4 -- refers to (i), a clearly identified

5 candidate or candidates who appear -- we agree

6 they're there -- and a clearly identified --

7 clearly identified political party, or a clearly

8 identified question that will -- of public policy

9 that will appear on the ballot, (2) is made within

10 (i) 60 days before a general election or

11 consolidated election or (ii) 30 days before a

12 primary election, (3) is targeted to the relevant

13 electorate, and (4) is susceptible to no reasonable

14 interpretation other than as an appeal to vote for

15 or against a clearly identified candidate for

16 nomination for election, election, or retention, a

17 political party, or a question of public policy.

18 If the -- if the interview with this

19 candidate is not a clearly understood target to

20 appeal for a vote, can it be electioneering

21 communication? It appears to be an impartial news

22 story which does not have a vote for message.

23 Also, in the part about election

24 communications does not include there was an


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Page 126

1 exception to allow newspapers to not be part of

2 electioneering. And, yes, there is an exception at

3 the end of that saying that -- there's two nots in

4 there. You can't have it both ways.

5 I'll rest. I'll let the other guys --


7 Ms. Svenson, do you want to respond to that?

8 MS. SVENSON: Yes. So this statute

9 does not rule out the fact that a newspaper can be

10 considered an electioneering communication. And

11 again, this -- this newspaper that we've produced

12 does refer to a clearly identified candidate who

13 will appear on the ballot. And it also was

14 produced by an entity that is a political

15 committee. So again, it's our position that this

16 was clearly an electioneering communication.

17 MS. KAYE: So at this point -- one last

18 time. It's susceptible to no reasonable

19 interpretation other than an appeal to vote. When

20 people get a pretend newspaper and read a pretend

21 article, is it their -- there's no reasonable

22 interpretation except that that's an appeal to vote

23 for that candidate? Because when the article is

24 written by the same group against the opposing


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Page 127

1 candidate, is there also an appeal not to vote for

2 that person?

3 MS. SVENSON: Well --

4 CHAIRMAN SCHOLZ: Go ahead,

5 Ms. Svenson, briefly.

6 MS. SVENSON: No, I have no response.

7 CHAIRMAN SCHOLZ: All right. Are there

8 questions from the Board?

9 Mr. Cadigan.

10 MEMBER CADIGAN: The General Counsel's

11 report notes that the issue of the electioneering

12 communications was not briefed or raised by the

13 parties. Is that right?

14 MR. MENZEL: That's correct.

15 MEMBER CADIGAN: During the -- okay. I

16 think that's significant for points that I'll state

17 later.

18 Mr. McGuffage I believe has something

19 he wanted to say.

20 MEMBER McGUFFAGE: Well, yeah, I agree.

21 If it wasn't raised, it's waived. If they want to,

22 you know, make a complaint about electioneering

23 communication, you know, do it in a separate

24 complaint.


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Page 128

1 CHAIRMAN SCHOLZ: Go ahead, Mr.

2 Cadigan.

3 MEMBER CADIGAN: Well, I want to thank

4 the complainants and their counsel for arguing

5 these issues in a very important way. And as the

6 hearing officer's report says, these are complex

7 matters. And I frankly don't think that the

8 process up to this point has made them any easier

9 to figure out.

10 These changes to the Election Code, as

11 our General Counsel pointed out, were enacted in

12 2011. That change to the Election Code also formed

13 a campaign finance task force. The campaign

14 finance task force -- there's actually language in

15 the code that sets forth the mandate for that task

16 force, directing them to prepare any number of

17 kinds of reports to advise the General Assembly and

18 the regulated community on how to deal with a whole

19 host of issues. This agency provided the

20 administrative support for that task force. The

21 only report that that task force completed was one

22 on public financing.

23 In talking to staff before the meeting

24 today, I just inquired, what was the nature of the


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1 remainder of that task force's work? And the

2 response was essentially it went unfinished, that

3 there was -- interest in that waned and it was

4 never completed.

5 I believe that if more diligence had

6 been shown, they would have taken these issues up,

7 these complex issues of coordination and

8 independent expenditures. But they did not. So

9 that leaves us here in this situation today.

10 Where I believe we can also look for

11 guidance or where -- let me restate that.

12 If this were a federal election matter

13 and not a state matter, the parties would have a

14 well-developed body of regulations to turn to to

15 guide the analysis.

16 Counsel for Mr. Cabay made I believe an

17 accurate statement of agency law. Except that in

18 campaign finance disclosure law sometimes the laws

19 don't mean what they say in other areas. And

20 particularly this FEC rule as it relates to

21 independent expenditures and coordinated campaigns,

22 there is a very dense analysis that the parties go

23 through to determine whether or not a -- there's

24 been coordination.


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1 So I guess this is a long way of saying

2 that I think that if the respondent admits there

3 should have been a disclaimer on there, that the

4 rest of these issues I don't believe we have clear

5 guidance enough to determine whether coordination

6 or electioneering communication has occurred, and

7 we're essentially being asked -- because they

8 weren't argued in the context of the hearing, we're

9 being asked to make policy.

10 And I believe that the better way to do

11 that isn't within -- trying to develop facts on the

12 fly here, is to hold the rules -- you know, we have

13 a process for developing rules. And we should look

14 at what the FEC has done on this, what courts have

15 approved, and start down that path.

16 That way, organizations like the

17 Illinois Press Association -- and I notice there's

18 material in the -- an e-mail from the Illinois

19 Press Association relating to this. It doesn't say

20 whether or not the publication is a member or not.

21 But I would think that an organization as well

22 respected and as long-standing as the Illinois

23 Press Association would want to opine about whether

24 or not papers -- where do they -- newspapers, where


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1 do they fall on this and what is or isn't a

2 newspaper.

3 But again, all those issues I believe

4 are better suited to the rulemaking process and not

5 the facts as we have them before us today. So

6 that's what I would urge the fellow members of the

7 Board to give some thought to and to consider as we

8 proceed to vote on these matters.

9 CHAIRMAN SCHOLZ: Thank you,

10 Mr. Cadigan.

11 Other members of the Board have either

12 questions for the respective counsel or comments?

13 Could certainly use a --

14 MR. COEN: Can I make a summary?

15 CHAIRMAN SCHOLZ: Yeah, go right ahead,

16 Mr. Coen.

17 MR. COEN: Thank you.

18 As counsel for Mr. Cabay, generally, I

19 understand the comments about the issue that was

20 raised by the hearing officer being new, but our

21 complaint clearly indicated through the evidence

22 that was presented in the exhibit from the

23 Northwest Herald that there was communication by

24 the candidate to this entity concerning press


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1 releases and interviews that show the common

2 definition of connection, consultation, or concert

3 that is specifically mentioned in 5/9-8.6 as being

4 not allowed by an independent expenditure.

5 Therefore, we believe that we have produced the

6 evidence that shows that there was conduct by the

7 candidate with this entity that show that there was

8 the necessary connection, consultation, or concert

9 that is prohibited by an independent political

10 action committee.

11 And then the last item, I believe we've

12 beat this horse, but if you look at the section (b)

13 that counsel for the political action committee

14 raised, in essence, it says electioneering

15 communication does not include any legitimate news

16 organization, unless the facilities are owned or

17 controlled by any political party, political

18 committee, or candidate.

19 It's clear that the communication was

20 from a political committee and therefore it does

21 not get excluded. In essence, it's a double

22 negative. It is included. And therefore, it is

23 not, under the statute, allowed by an independent

24 political action committee.


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1 Thank you.

2 CHAIRMAN SCHOLZ: Thank you, Mr. Coen.

3 Ms. Kaye?

4 Ms. Svenson?

5 MS. SVENSON: Yeah, if I may. I didn't

6 really understand counsel's last point, but I will

7 say this: Mr. Skillicorn or Mr. Phillips going

8 around talking to reporters does not constitute

9 coordination. That -- and now we're -- now you're

10 looking at the free speech rights of these

11 candidates. Are they not supposed to go around and

12 talk to people in their community or vendors and

13 share information? I mean, that's the slippery

14 slope that you are going down if you are going to

15 consider this to be coordination.

16 Thank you.

17 MS. KAYE: I have one last thing.


19 MS. KAYE: Then why not attribute it to

20 Newsinator instead of East Central Reporter? The

21 intent is to make it look like East Central

22 Reporter was the reporter.


24 All right. Members of the Board, we'll


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1 take up the recommendation of the hearing officer

2 and General Counsel. Is there a motion?

3 Mr. McGuffage.

4 MEMBER McGUFFAGE: You know, everything

5 we've heard today, I mean, we're going to hear

6 again in a public hearing.

7 I think Bill Cadigan is absolutely

8 right. We need some -- we need a rule on this. If

9 we look at the reports, opinions from hearings at

10 the Federal Election Commission, we can formulate a

11 rule. It makes no sense when we can't make

12 determinations here. I don't see where going to a

13 public hearing at this point is going to do any

14 good other than, you know, rehashing everything

15 we've heard today. I mean, it doesn't make any

16 sense. We need a rule.

17 So I move that we find that the

18 complaint was filed on justifiable grounds but do

19 not proceed to a public hearing at this time.


21 MEMBER CADIGAN: I'll second that

22 motion.

23 CHAIRMAN SCHOLZ: Motion made and

24 seconded.


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1 Go ahead.

2 MEMBER CADIGAN: Well, if it's

3 appropriate -- and maybe for a separate motion --

4 to direct the staff to start the process of

5 drafting rules and look at the FEC regulations as a

6 point to start.

7 And I think that the parties here, if

8 they're inclined -- they've made some wonderful

9 points in a closed hearing, that if they're

10 inclined to do it, want to revisit the issue, be

11 the first to appear and testify at a rulemaking

12 hearing to reiterate the points that they've made.

13 CHAIRMAN SCHOLZ: Vice Chairman Gowen.

14 VICE CHAIRMAN GOWEN: If I understand

15 it correctly, we are down to the issue of

16 coordination, correct, as just the sole issue?

17 CHAIRMAN SCHOLZ: I think the

18 attribution was conceded by Ms. Svenson.

19 VICE CHAIRMAN GOWEN: That's my point.

20 Is that correct, Ms. Svenson?

21 MS. SVENSON: Yes.

22 VICE CHAIRMAN GOWEN: Okay. So we have

23 the one issue. And the other I -- hopefully we can

24 disregard the attribution of source.


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1 MS. SVENSON: Right.

2 VICE CHAIRMAN GOWEN: Okay.

3 CHAIRMAN SCHOLZ: And I agree with the

4 motion. I think the --

5 VICE CHAIRMAN GOWEN: Me too.

6 CHAIRMAN SCHOLZ: I think that it was

7 filed on justifiable grounds in terms of the

8 communication that was documented would amount to

9 collaboration. I also agree with Bill that I don't

10 think the public hearing is -- it's probably, as

11 Mr. Cadigan said, more productive to go to some

12 sort of rulemaking process.

13 Anybody else wish to be heard on the

14 motion?

15 If not, Darlene, could you call the

16 roll, please?

17 MR. MENZEL: Did we get a second?

18 CHAIRMAN SCHOLZ: Yeah, it was seconded

19 by Member Cadigan.

20 MR. MENZEL: I'm sorry. I did not hear

21 it. Thank you.

22 MS. GERVASE: Mr. Cadigan.

23 MEMBER CADIGAN: Yes.

24 MS. GERVASE: Mr. Carruthers.


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1 MEMBER CARRUTHERS: Yes.

2 MS. GERVASE: Mr. Keith.


4 MS. GERVASE: Mr. McGuffage.


6 MS. GERVASE: Ms. Watson.


8 MS. GERVASE: Vice Chairman Gowen.

9 VICE CHAIRMAN GOWEN: Yes.

10 MS. GERVASE: Chairman Scholz.


12 Ms. Coffrin recuses herself, so we

13 should show that on the record.

14 All right. The recommendation will be

15 adopted, other than no public hearing on the second

16 finding, on the finding as to collaboration.

17 But it was very well briefed and

18 argued. So thank you, Mr. Coen, Ms. Svenson,

19 Ms. Kaye. We appreciate your vigilance on all

20 this.

21 Do we need another break? Has it been

22 about an hour?

23 MR. MENZEL: I certainly wouldn't

24 object to a er brief one b t

Board of Elections March 14-16 Transcript-16CD096(1)

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