board of elections march 14-16 transcript-16cd096(1)
TRANSCRIPT
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
www.midwestlitigation.com Phone: 1.800.280.DEPO(3376) Fax: 314.644.1334MIDWEST LITIGATION SERVICES
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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
www.midwestlitigation.com Phone: 1.800.280.DEPO(3376) Fax: 314.644.1334MIDWEST LITIGATION SERVICES
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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BOARD MEETING - EXECUTIVE SESSION 3/14/2016
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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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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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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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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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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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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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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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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.
20 CHAIRMAN SCHOLZ: Thank you.
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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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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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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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 --
6 CHAIRMAN SCHOLZ: All right.
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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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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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.
18 CHAIRMAN SCHOLZ: Yes.
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.
23 CHAIRMAN SCHOLZ: Thank you.
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.
20 CHAIRMAN SCHOLZ: All right.
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.
3 CHAIRMAN SCHOLZ: Yes.
4 MS. GERVASE: Mr. McGuffage.
5 MEMBER McGUFFAGE: Yes.
6 MS. GERVASE: Ms. Watson.
7 MEMBER McGUFFAGE: Yes.
8 MS. GERVASE: Vice Chairman Gowen.
9 VICE CHAIRMAN GOWEN: Yes.
10 MS. GERVASE: Chairman Scholz.
11 CHAIRMAN SCHOLZ: Yes.
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