08

By Marilyn Odendahl

The Indiana Citizen

September 7, 2023

Even though state officials maintain Indiana law allows unlimited contributions to super PACs, the Indiana Right to Life Victory Fund is not so sure, going before the Indiana Supreme Court on Thursday to get assurance that it can accept a $10,000 contribution without violating the state statute.

What they and officials from the Indiana Attorney General’s office received instead was a grilling from frustrated justices wanting to know why the parties were fighting in court when they should have been able to reach an agreement among themselves.

“Why are you here?” Chief Justice Loretta Rush asked.

The IRTL Victory Fund filed a federal lawsuit in November 2021 against the secretary of state, the attorney general, members of the Indiana Election Commission and the prosecutors of Marion and Monroe counties, claiming the state’s limits on corporate contributions to political action committees are unconstitutional.

Operating as an independent expenditure PAC, commonly known as a super PAC, the Victory Fund wants to receive the contribution from Bloomington-based Sarkes Tarzian, Inc., operator of two Central Indiana radio stations, WTTS (92.3 FM) and WCGL (1370 AM).  As a super PAC, the money would be used to advocate for specific issues or causes, rather than dispersing the dollars to specific candidates or political parties.

However pointing to the state election code, which limits corporate contributions to PACs to $5,000, the Victory Fund is concerned it will be slapped with fines and possibly criminal penalties if it accepts Sarkes Tarzian’s money. The fund is seeking the court’s affirmation for its argument that Indiana cannot restrict corporate giving to super PACs.

The U.S. District Court for the Southern District of Indiana dismissed the case, finding the plaintiffs did not have standing, because they had neither exchanged the contribution nor been found to have violated the state’s caps on corporate contributions to political action committees.

When the Victory Fund and Sarkes Tarzian turned to the 7^th U.S. Circuit Court of Appeals, the panel decided to refrain from issuing a ruling and instead asked the Indiana Supreme Court to clarify Indiana law.

The federal appellate court wanted the state’s highest court to answer the question: Does the Indiana Election Code prohibit or otherwise limit corporate contributions to PACs or other entities that engage in independent campaign-related expenditures?”

Oral arguments on that question were held in the Supreme Court’s courtroom and lasted an hour. James Bopp, Jr., the Indiana lawyer who successfully overturned federal limits on corporate campaign contributions in Citizens United, represented the Victory Fund. Kyle Hunter, assistant section chief of civil appeals for the attorney general, represented the defendants.

The justices pressed the attorneys on why they were choosing to litigate since the state’s position that statute does not limit contributions to super PACs aligns with the Victory Fund’s argument that any limits would be unconstitutional.

After Rush asked why the parties were in court, Justice Geoffrey Slaughter described the plaintiffs as taking an “oddball position.” He queried Bopp about why his clients turned to the federal court, rather than accept the state’s interpretation that the statute does not regulate independent expenditures and, therefore, does not limit the contribution from Sarkes Tarzian.

Justice Mark Massa also took up the issue.

“Mr. Bopp wins either way, right,” Massa questioned Hunter. “If your interpretation of the statute is that it doesn’t apply to his clients, he wins. If you’re wrong on that and it does apply to him, then surely the 7^th Circuit will strike it down. So again, that being the case, why are we here? Why can’t the parties have settled on a declaratory judgment?”

Hunter did not answer the question directly but reiterated that the members of the election commission have not indicated they will do anything but make a constitutional reading of the state statutes.

Bopp responded his clients would be happy to reach a settlement, but the state has not made an offer.

The Bopp Law Firm is not only opposing the attorney general in this case but is also working for the state’s top lawyer on other matters. In April, the attorney general contracted with Bopp’s firm to provide assistance with litigating civil cases. Attached to that contract, was a conflict waiver which allows Bopp to continue representing the Victory Fund in the lawsuit against state officials.

Textual reading of state statute

Justice Christopher Goff further pressed Bopp, noting the district court found IRTL Victory Fund – which is the PAC for the nonprofit Indiana Right to Life organization – did not have standing. The Victory Fund was not able to show it had been harmed by the statutes and the enforcement agencies have said they would not take action.

Bopp interjected that the 7^th Circuit reversed that finding by the district court.

Goff continued, “If the regulatory agencies have taken the position that, ‘Hey, this is unconstitutional for us to enforce this in the way that you’re saying the statute reads,’ why should we take action that the legislature has chosen not to?”

Bopp replied the members of the election commission have not done anything to prevent the law from being applied as clients fear. “They have done nothing, nothing legally binding on anyone.”

He also asserted even though his clients have not been found to have violated the election law, they still have standing to bring this lawsuit. He argued that the statute is the source of the injury, regardless of “what the bureaucrats say or their empty promises.”

“We are entitled to bring what’s called a pre-enforcement facial challenge because the statute is the source of the injury not the meaningless promises of the couple of the people who would otherwise enforce it,” Bopp said.

Hunter countered the state law on political contributions was intended to prevent quid pro quo corruption between elected officials and donors. “Despite the ambiguity within the statutes, the General Assembly wasn’t intending to or purporting to regulate independent expenditures,” he said.

However, Rush was skeptical, noting the Victory Fund has been registered as an Indiana PAC and the state has conceded it is a PAC.

“I’m taking a purely textualist approach,” Rush said. “I’m not finding the ambiguity.”

Hunter replied that a PAC can only receive contributions or make expenditures but an independent expenditure PAC, also known as a super PAC, “doesn’t do either of those things because the definition of contribution and the definition of expenditure both limit themselves, it creates ambiguity.”

Rush pushed back, pointing to what she called a “catch all” in Indiana Code section 3-9-2-3. The statute identifies the specific political activity a corporation or labor organization may contribute to, but the catch all holds that those contributions are limited by the other sections in the statute.

In particular, I.C. section 3-9-2-4 lists the caps on contributions, including no more than $5,000 for state Republican or Democratic committees and $2,000 for candidates running for the Indiana General Assembly.

Rush reiterated the statute seems to contain a catch all encompassing any type of contribution made by a corporation. “You want us to read ‘except for an independent expenditure PAC,’” she asked.

Hunter conceded the legislature could have been “more clear” by specifically excluding independent expenditure PACs from the statute. Even so, he said, the legislature’s intent is “clear by their silence.”

Rush was not persuaded.  “I struggle with that,” she said. “We have a lot of cases that come up that we don’t read into silence.”

After asserting the statute has not been enforced in the way the Victory Fund is suggesting, Hunter returned to his contention about the vagueness in the state law.

“But the statute itself is ambiguous,” he said. “It leaves ambiguity that allows for an interpretation of these statutes to not define a Super PAC as a PAC and to that end, we can call it something different. We can call it the independent expenditure organization.”

That caused Massa to pick up Rush’s line of questioning and ask how does Indiana law differentiate between a super PAC and a PAC? “Where do we find that distinction in the statute?” Massa asked. “We infer that from the silence?”

When Hunter responded that the distinction is the ambiguity in the statute as to what a PAC is, Rush jumped in and noted the statute defines a PAC as an organization that accepts contributions or makes expenditures to influence an election or an issue.

“When I read the legislative definition of a PAC, I’m finding everything applies to an (independent expenditure) PAC,” Rush said.

The case is Indiana Right to Life Victory Fund and Sarkes Tarzian, Inc. v. Diego Morales, et al., 23S-CQ-108. When the justices issue a ruling, the case will return to the 7^th Circuit.

Dwight Adams, a freelance editor and writer based in Indianapolis, edited this article. He is a former content editor, copy editor and digital producer at The Indianapolis Star and IndyStar.com, and worked as a planner for other newspapers, including the Louisville Courier Journal.