Pearce may tap $900K war chest
Judge’s ruling calls state policy unconstitutional
A federal judge said Tuesday that U.S. Rep. Steve Pearce can use his $900,000 congressional war chest to run for governor, dismissing concerns that allowing the Hobbs Republican to flood the race with cash he raised while on Capitol Hill would bust apart New Mexico’s restrictions on money in politics.
The Secretary of State’s Office had maintained Pearce would have to stick to the $11,000 limit that applies to any campaign donating funds to another campaign. But Pearce’s aides countered that such a cap would violate Pearce’s right to freedom of speech.
U.S. District Judge Judith Herrera agreed, describing the state’s policy as unconstitutional and issuing a preliminary injunction against the Secretary of State’s Office that allows Pearce to use the funds in the gubernatorial race, at least for now.
“The public has a right to hear speech and use information during campaigns to protect ‘enlightened self-government,’ ” Herrera wrote, citing the controversial 2010 campaign finance case Citizens United v. the Federal Election
Commission. “Because the funds at issue are necessary for Rep. Pearce to increase the quantity of his campaign speech for the 2018 gubernatorial race, the public interest in protecting the First Amendment is served.”
The decision could be a big boost for Pearce, who has lagged in fundraising behind Democrat Michelle Lujan Grisham, a congresswoman from Albuquerque who entered the race nearly a year ago and is positioning herself as the front-runner for her party’s nomination.
According to campaign finance reports, Pearce — the only Republican seeking his party’s nomination for governor — has raised about $1 million.
Lujan Grisham has raised nearly $2.3 million, and another Democrat, Jeff Apodaca, has amassed about $900,300. There are four Democrats in that party’s primary.
In a hearing last month, Pearce’s advisers said he was at a financial disadvantage without the funds raised by his congressional campaign.
Observers expect the campaign for governor next year will be expensive. Gov. Susana Martinez’s campaign spent nearly $9 million during her re-election bid in 2014.
Unclear is what the decision might mean more broadly for New Mexico’s campaign finance laws.
Herrera’s order Tuesday does not end the lawsuit Pearce’s campaign filed against the Secretary of State’s Office. Instead, it only bars the state from enforcing the office’s interpretation of the campaign finance law as Pearce’s case continues to wend through federal court.
A spokesman said the Secretary of the State’s Office is reviewing the decision but maintains it was merely abiding by state law.
Still, the case raises novel questions about federal officials running for state office and bringing into play two sets of laws.
Aides working with the longtime congressman from Southern New Mexico had asked the Secretary of State’s Office as early as last year about transferring money from his congressional campaign to finance a run for state office.
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 Secretary of State’s Office and Pearce’s campaign have been at odds over what exactly that answer means.
Maggie Toulouse Oliver, a Democrat who succeeded Winter as secretary of state last year, told Pearce’s campaign that funds should be treated like any donation from one political committee to another.
Lujan Grisham’s aides apparently received the same answer from the Secretary of State’s Office when they made a similar inquiry as she entered the race.
In turn, Lujan Grisham’s congressional campaign effectively stopped raising money, donated only a few thousand dollars to her gubernatorial bid and gave away large chunks of the remaining cash to other candidates as well as political action committees.
Pearce’s aides argued that the Secretary of State’s Office is misinterpreting the law.
They have maintained the state’s cap on political contributions should apply only to the individual contributions the congressional campaign has collected.
And since the federal campaign finance limits are tighter than New Mexico’s, a donor could not have given more to his congressional campaign than they would have been allowed to give his campaign for governor.
A court previously ruled unconstitutional part of a state law prohibiting candidates from using funds raised for a federal campaign during a race for state office.
But that decade-old decision preceded New Mexico’s campaign donation limits, leaving unanswered the question of whether the state could cap transfers of such funds.
Herrera, who was appointed by Republican President George W. Bush, based much of her decision on the principle that money is speech.
While the Secretary of State’s Office argued the campaign finance limits are crucial in a state with a history of rampant corruption, Herrera dismissed those concerns, writing that Pearce is effectively giving money to himself.
And Herrera said New Mexico already allows candidates for state office to roll over funds from one election year to another.
So while the state caps donations, candidates can effectively pile up contributions from major donors over the course of several years, rolling over the funds repeatedly.
“Today’s ruling confirms what we have always maintained,” Pearce campaign spokesman Greg Blair said in an email. “The transfer of funds is fully compliant with the First Amendment, existing New Mexico law, a previous court ruling, and a previous opinion from the Secretary of State’s office.”
But Democrats countered that the decision “highlights what’s wrong with the campaign finance system — it affords people with more money more political speech than those who do not have the same means to make their voices heard.”
“Steve Pearce should spend less time trying to figure out how to inject big money into the governor’s race and circumvent campaign finance laws, and more time playing by the same rules as everyone else,” state Democratic Party Chairman Richard Ellenberg said in a statement.