U.S. judge holds key to Pearce’s war chest
No ruling yet on whether candidate can transfer nearly $1 million in campaign funds
ALBUQUERQUE — More than $900,000 that Republican Congressman Steve Pearce hopes to use to finance his bid for governor rests for now in the hands of a federal judge as an unusual lawsuit over New Mexico’s campaign finance laws wends through the courts.
Pearce has that much money left in his congressional campaign’s war chest after several terms on Capitol Hill. But the Secretary of State’s Office says that under New Mexico’s limits on political donations, Pearce’s congressional campaign can only contribute $11,000 to his campaign for governor — the same amount any other committee could give.
With hundreds of thousands of dollars at stake in the race for New Mexico’s highest office, Pearce’s campaign maintains he should be able to use all the funds the Hobbs Republican has raised to run for Congress through the years.
And the campaign has asked a federal judge to intervene, leading to a daylong
hearing in Albuquerque on Monday that raised allegations of partisan bias by New Mexico’s top election official and concerns that big donors could effectively skirt the state’s donation limits. But it still didn’t settle the question of what will become of Pearce’s campaign cash.
U.S. District Judge Judith Herrera did not issue any decisions from the bench after the hearing but suggested any ruling that bars the Secretary of State’s Office from enforcing its interpretation of New Mexico’s campaign finance laws would likely hinge on the First Amendment.
Citing the U.S. Supreme Court decision in Citizens United v. FEC, Pearce’s attorney, Matthew Hoyt argued the Secretary of State’s interpretation of the law violates Pearce’s right to free speech by tightly restricting money he has raised.
Pearce’s aides asked about transferring money from his congressional campaign to finance a run for state office last year before he ever declared his candidacy for governor. Staff under then-Secretary of State Brad Winter, a Republican, said such a transfer would be subject to New Mexico’s limits on campaign contributions.
But the ensuing legal battle centers on what exactly that answer meant.
Maggie Toulouse Oliver, a Democrat who succeeded Winter as Secretary of State last year, maintains Pearce’s congressional campaign funds should be treated like any other donation from one political committee to another.
Another member of Congress running for governor, Democrat Michelle Lujan Grisham, apparently got the same answer from the Secretary of State’s Office when her aides made a similar inquiry as she entered the race.
Lujan Grisham’s congressional campaign has given only a few thousand dollars to her campaign for governor and has been donating large chunks of the remaining cash to other candidates as well as political action committees. But Pearce’s aides interpret the law differently. They maintain the state’s cap on political contributions should apply only to the individual contributions the congressional campaign has collected. The federal limit on campaign donations is even lower than the state’s, they argue, and so there should be no concern that donors to Pearce’s congressional campaign gave more than they would have been able to under New Mexico law. And state officeholders such as legislators can roll over the funds they raised in past campaigns to run for other offices. Transferring his congressional campaign funds should be no problem, they argue.
The federal courts have not grappled with this issue since Bill Richardson, then a congressman, considered running for state office in the mid-1990s. A federal district court judge said the New Mexico government could not bar federal officeholders from using their campaign funds to run for state office.
But New Mexico did not have limits on campaign contributions at the time.
So part of the hearing before Herrera on Monday turned into a defense on the state’s limits on political donations, with lawyers from the Attorney General’s Office calling on a former legislator who helped draft major campaign finance reforms nearly a decade ago.
Former Sen. Dede Feldman, a Democrat from Albuquerque, recounted some of the worst corruption scandals of the previous decade, which spurred the state’s current limits that passed in 2009. Transferring large sums of money between campaigns, she argued, undercuts the contribution limits that were intended to restore the public’s trust in New Mexico government following those disgraces. “In the mind of the public, it looks suspicious,” she said. But lawyers for Pearce’s campaign accused the Secretary of State’s Office of playing politics, a charge its lawyer strenuously denied.
The campaign, Pearce’s lawyers argued, is not challenging New Mexico’s limit on political donations. “We intend to live by it,” Hoyt told the court. The campaign is asking Herrera to issue a temporary injunction, effectively voiding the Secretary of State’s interpretation of the campaign finance law while Pearce’s lawyers pursue the case, which could take years.
In the meantime, Pearce’s aides say the campaign is suffering without the money. Though the campaign recently touted raising about $1 million over the last six months as “record breaking,” campaign manager Paul Smith said they have held off on hiring staff.
The campaign reported spending only about $89,000 over the last six months while Lujan Grisham spent more than $520,000 and raised about $1.3 million during that same time.
Smith said that with the future of this roughly $900,000 in doubt, they are holding on to cash in anticipation of needing those funds to buy ads later in the election season.
“We need to keep the vast majority of this money on hand,” Smith testified.
Pearce is the only Republican in the race for governor so far while four Democrats are vying for their party’s nomination.
Still, Andrea Goff, a top adviser, said that with Pearce’s congressional campaign funds up in the air, rumors are swirling other Republicans might challenge him in the primary and seek the party’s nomination for governor.
“While a million dollars is a lot, it’s not enough to dissuade a self-fund[ed candidate],” she testified. “… We don’t have an opponent yet, but we don’t know.”