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Zimmerman Lawsuit Not First Challenge

HomeCity of AustinCity CharterZimmerman Lawsuit Not First Challenge

City has a mixed record of defending attacks on City Charter’s restrictions for campaign finance

In 1998 with more than $672 million in bond propositions at stake in an upcoming election, The Greater Austin Chamber of Commerce and Texas Society of Association Executives wanted to leave nothing to chance. They sued the City and won, overturning City Charter restrictions on the $100 limit for contributions to support or oppose ballot measures.

Marc Katz
Marc Katz

In 2003 mayoral candidate Marc Katz, owner of the now-defunct Katz’s Deli, figured he needed to raise $300,000 for a strong campaign and then do it again if he got into a runoff. He sued the City to challenge the City Charter’s $100 limit on how much an individual could contribute to a candidate’s campaign. He lost the lawsuit and placed a distant third to then-Council Member Will Wynn, who won without a runoff.

Don Zimmerman
Don Zimmerman

Now comes District 6 Council Member Don Zimmerman, who sued July 27 to challenge not only contribution limits (currently $350) but several other restrictions on campaign finance. We are far from knowing whether he will succeed in overturning City Charter restrictions twice approved by Austin voters.

The Zimmerman suit against the City of Austin seeks to overturn multiple aspects of the Austin City Charter with the explicit goal of building his campaign war chest and boosting his odds for reelection in November 2016.

The Charter restrictions attacked

The lawsuit seeks to eliminate the prohibition, or “blackout period,” on fundraising that only allows soliciting and accepting contributions within 180 days of the election; eliminate the restriction on how much a candidate can accept from an individual donor (currently $350 for the general election and another $350 if involved in a runoff); allow unlimited fundraising from anywhere in the country; and lift the restriction on how much a winning candidate can stockpile in an officeholder’s account.

An officeholder account starts with campaign contributions left over from a winning campaign and these funds can be used for political purposes in the next election. Winning candidates are currently allowed to retain $20,000 in an officeholder account.

Zimmerman wants to leverage the considerable advantage he already enjoys as an incumbent: He has a high public profile, enjoys frequent press coverage, and is building a strong record, for good or for ill, depending on one’s political leanings.

To beat back Zimmerman’s legal challenge, the City of Austin has the burden of proof to defend City Charter restrictions.

Steve Bickerstaff
Steve Bickerstaff

Attorney Steve Bickerstaff, who founded the Bickerstaff Heath law firm in Austin and retired in 2001, has taught law at the University of Texas and is an expert on campaign finance and voting rights issues. He boiled the Zimmerman case down to this:

“He wins if there’s not a justification on the limit of someone’s ability to give money. Money is speech, and the law requires there be a justification. The justification for contribution limits has to be the appearance of or actual corruption.”

“If we have something that impedes the ability to contribute money and there is no justification, you lose.”

Will City mount vigorous defense?

Fred Lewis
Fred Lewis

Attorney Fred Lewis has been immersed in campaign finance issues going on two decades in Austin and he has no faith in the City of Austin’s willingness to fight to uphold hard-won restrictions on campaign finance imposed by the Austin City Charter. Lewis recites numerous situations that brought him to this conclusion.

1997 proposition—Austinites for a Little Less Corruption had to sue to get the City Charter measure on the ballot in 1997, due to the city’s wrongheaded methods for reviewing the group’s petition signatures and the resulting City Clerk’s ruling that the petition was insufficient.

U.S. District Judge Sam Sparks wrote a scathing opinion of the city’s petition-review process and ordered the measure be put on the ballot, where it was approved by 72 percent of voters November 4, 1997.

1998 lawsuit—Lewis intervened in the Greater Austin Chamber et al lawsuit on behalf of Austinites for a Little Less Corruption. Lewis jumped into that legal battle because even then he did not believe the City of Austin would put up a strong defense, he said.

“I think they rolled over,” Lewis said of the city’s defense. “I made an argument for 45 minutes.”

Nevertheless the plaintiff’s won. The order signed by Judge Sparks ruled the restrictions on contributions for ballot measures were “clearly unconstitutional” and he enjoined the City of Austin from enforcing that part of the City Charter.

All 10 bond propositions passed by wide margins.

Brian Rodgers
Brian Rodgers

Those who had supported the restrictions strongly favored the fight Lewis waged to maintain them, including civic activist Brian Rodgers, who was a co-plaintiff in the Austinites for a Little Less Corruption lawsuit that got the petition on the ballot in 1997. As I reported in the In Fact newsletter September 15, 1998, Rodgers said, “It’s not a participatory democracy when you go straight to the corporate till.”

2002 proposition—Another citizens’ initiative, this one led by Clean Campaigns for Austin, petitioned and gathered 28,000 signatures to get Proposition 1 on the ballot. If approved by voters it would have created a system of partial public funding for qualified candidates.

As I wrote in my “City Ink” column in The Good Life magazine in May 2002: “A participating candidate’s spending limits would be adjusted upward to match the amount spent by any opponent who exceeds the voluntary spending limit, whether from personal funds or contributions. A participating candidate’s spending limits also would be adjusted upward to match any independent expenditures opposing the candidate or supporting an opponent if the independent expenditures exceed $25,000 in a council race or $50,000 in a mayoral race. These measures will level the playing field and give qualified grass-roots candidates a fighting chance to win election.”

The Proposition 1 campaign drew support from some two-dozen organizations but was vigorously opposed by the Greater Austin Chamber of Commerce, Real Estate Council of Austin, and public safety unions. Seventy-four percent of voters cast “no” ballots on Proposition 1 May 4, 2002.

The cost of the system would have been about $806,000 for the 2003 election, backers said, but the city’s estimate was in the neighborhood of $4.7 million, according to the In Fact Daily October 26, 2001.

Lewis, who was lawyer for and on the executive committee of Clean Campaigns for Austin, attributed the failure of Proposition 1 to the “biased information” put out by the City Council and City Attorney. “The city was unmitigatedly hostile—lawyers, council, everybody—and weren’t fair in my humble opinion. Their legal analysis was jaded and slanted.”

Zimmerman lawsuit—Given these and other experiences Lewis has had with the City of Austin involving campaign finance issues, when it comes to the Zimmerman lawsuit, he said, “The City Attorney—to do the job right—has to cross-examine Zimmerman and I think that puts her (Interim City Attorney Anne Morgan) in an untenable position.”

As to the challenge of the individual contribution limits now in effect, Lewis said, “Whether or not contribution limits are constitutional is a fact question and depends on generally whether candidates can get out their message to the voters. That’s a fact question, not a legal question alone.

“The fact that a particular candidate cannot raise money doesn’t mean the system doesn’t work. Regarding the only plaintiff in this lawsuit (Zimmerman) there are a number of reasons why he may not be able to raise money that have nothing to do with the $350 limit.

“Is the City Attorney willing to put him on the stand and ask about flaws in his candidacy that might make it hard for him to raise money?

“Not every candidate has sued a journalist and lost,” Lewis said, referring to Zimmerman’s failed defamation lawsuit against The Austin Bulldog, for which he still owes an unpaid judgment of $10,000.

“Not every candidate settled a divorce case in which he signed off on a finding of fact that he had a history of mental and physical child abuse.

“Not every candidate made statements that some find racially offensive.

“Is the city attorney willing to cross-examine Zimmerman and point out his flaws in raising money that may not apply to other candidates?”

Should city hire outside counsel?

Regarding whether the City of Austin should hire legal help from outside the city bureaucracy, attorney Bickerstaff said “this is an important lawsuit” and there are two key issues to consider.

“The city should use counsel that has an expertise in these cases. I do not know who Zimmerman is using, but the city needs good counsel. I think it should use someone experienced in the relevant issues (First Amendment and campaign finance restrictions) and in actually trying difficult litigation.

“A second issue is the City Council’s influence behind the scenes. In reality, every member of the council theoretically has a conflict of interest in this case. Theoretically, each has an interest in seeing the campaign limitations overturned. While I would not expect anyone on the council to necessarily publicly support the Zimmerman position, there is the unfortunate possibility of influence on the City Attorney that would be more difficult than if the council retained an independent outside counsel instructed to win the lawsuit.

“Outside counsel would be appropriate,” Bickerstaff said.

Has the city retained outside counsel? The Austin Bulldog filed a public information request August 4 for copies of any records pertaining to hiring an outside attorney or law firm to represent the City. On August 11, the city replied, “The City does not have any information that is responsive to your request.”

The Austin Bulldog, through the City’s Public Information Office, on August 12 asked for an interview with the City Attorney or an answer to the question: “Will the city hire outside counsel?”

Interim City Attorney Anne Morgan was not available. Media Relations Manager David Green said the City Council has not yet been briefed on the lawsuit. An executive session to discuss it is on the draft agenda for August 20.

“Zimmerman will not be present in the executive session” for that agenda item, Green said.

Houston decision overturned blackout period

Jerad NajvarZimmerman’s attorney, Houston-based Jerad Najvar, won a lawsuit, Gordon v. City of Houston, that allowed his client, a non-incumbent candidate, to start fundraising earlier than the Houston City Code would have otherwise allowed, in effect eliminating the blackout period.

The Houston lawsuit did not touch on other issues raised in Zimmerman’s lawsuit.

U.S. District Judge Sim Lake’s decision in Gordon concluded with a finding that the City of Houston failed to meet its burden of proof to show why the city’s blackout period on fundraising should be maintained:

“Because defendants have failed to present any evidence that the temporal ban on soliciting and receiving contributions imposed on candidates for city elective office by COH Ordinance §18-35(a) is necessary to prevent corruption or the appearance of corruption, and because Gordon has sufficiently demonstrated all the prerequisites to issuance of a preliminary injunction, Gordon’s motion for preliminary injunction will be granted.”

The preliminary injunction enjoined the City of Houston not to enforce the rule and, as long as the preliminary injunction is in place, the City of Houston cannot enforce that part of its campaign finance rules.

Can overturning Houston’s blackout period be used a precedent in Zimmerman’s attempt to squash the Austin City Charter, which only allows soliciting and accepting contributions within the 180 days preceding an election?

Jim Cousar
Jim Cousar

Austin-based James E. “Jim” Cousar, senior counsel with Thompson & Knight, shared his legal opinions about the Houston suit via e-mail while on vacation, but with a caveat.

“Although the City has not retained me to work on the defense of this lawsuit, I have had so much interaction over the years on the City’s campaign finance regulations that I may yet need to be involved in the lawsuit in some capacity. So, I can’t really comment on the merits of Mr. Zimmerman’s case.”

But as to the Houston case, Cousar noted that Judge Lake’s opinion was rendered in the Southern District of Texas, while Zimmerman’s will be decided in the Western District, in Austin.

“A decision by a district court in the Southern District of Texas is not binding on a district court in the Western District of Texas. A decision by the Fifth Circuit Court of Appeals generally would be binding, if the facts of the two cases were sufficiently similar.”

The Houston case was not appealed and therefore did not reach the Fifth Circuit’s jurisdiction.

“Whether a Western District Judge would find Judge Lake’s reasoning to be persuasive is an open question, but ultimately the Western District Judge will need to make a decision based on the facts presented in the City of Austin case and his own legal reasoning.”

A close reading of Judge Lake’s opinion in Gordon v. City of Houston showed repeated references to shortcomings in the City’s defense of the blackout period. The opinion stated:

“A candidate for city office at a city general election may neither solicit nor receive contributions except during a period commencing on the 1st day of February prior to the day of the election, and ending on the 4th day of March following the election date for the race that the candidate has entered. In the event that the candidate should be in a run-off election, the final date to receive or solicit contributions shall be the 4th day of April following the election date.”

Houston’s elections for mayor and council members are held in November (as were Austin’s beginning in 2014 when the most recent City Charter changes took effect). Houston’s rules allowed fundraising to begin nine months before the November elections; Austin rules allow six months.

Houston’s rules allowed fundraising to continue on for four months after the elections were held; Austin rules allow no fundraising after an election by the winners; losers are allowed to continue fundraising indefinitely to retire campaign debts.

Blackout periods required by state

While municipal rules governing candidate fundraising vary widely from city to city, limits are not uncommon and, in fact, are imposed by the State of Texas for non-municipal elections.

The State imposes blackout periods on certain political campaigns. Ian Steusloff, assistant general counsel for the Texas Ethics Commission, ran down the list of these restrictions for The Austin Bulldog.

Statewide officeholders, state lawmakers, legislative caucuses, and specific-purpose committees that support, oppose, or assist statewide officeholders or members of the Legislature are barred from accepting political contributions beginning 30 days before a regular session of the Legislature, during the session, and 20 days after the session. They can accept contributions during special-called sessions ordered by the governor but then have to file a special report about those contributions by 30 days after final adjournment. For details see the Commission’s 2015 Filing Schedule for Candidates and Officeholders Who File with the TEC.

Judicial offices are not covered by the same moratorium but are subject to the Judicial Campaign Fairness Act and may accept political contributions only during a limited time period. Those seeking an office to be filled at the November 8, 2016, general election may begin accepting contributions from May 18, 2015.

While the state rules do not apply to City of Austin elections, they do provide insight into an important legal principle: What all these rules have in common is that they appear to be designed to prevent an officeholder from accepting political contributions while making laws or deciding legal cases because of the potential for conflicts of interest and the appearance of corruption.

Should Zimmerman succeed in eliminating the blackout period on fundraising, he and other incumbents would be free to solicit and accept contributions at any time, even though the City Council is, in effect, in session year-round to make decisions regarding contracts, zoning, development applications, utility rates, and many other matters involving the financial interest of potential contributors.

Mike Blizzard
Mike Blizzard

Former political consultant Mike Blizzard was an expert witness for the city in Katz v. City of Austin, and lays out what could happen if contributions may be taken year-round: “Say a business person walks in the day the council is to vote and hands Zimmerman a $5,000 campaign check. That would bring up the appearance of corruption—and that’s the linchpin of campaign contribution limits and the ability to regulate them.”

Blizzard’s scenario was imaginary, but no imagination is required to understand what actually happened in 1989.

While the Texas Legislature was in session, Lonnie “Bo” Pilgrim, a millionaire East Texas chicken processor, was on the floor of the Texas Senate handing out $10,000 checks to senators. And doing so while legislation regarding workers’ compensation that could have affected his bottom line was being considered. The New York Times reported this action.

Peck Young
Peck Young

Political consultant Peck Young was present while this was happening and spotted one of his clients engaged in a discussion with Pilgrim.

“I was there,” Young said. “I sent a page running over to (my client) with an urgent message. My message was to get away from that crazy little (expletive). Later, Bo dropped a check at his office. We sent the check back.”

Limits on amount of campaign contributions

Roger Borgelt
Roger Borgelt

Attorney Roger Borgelt of Austin-based Borgelt Law, is a former vice chairman of the Travis County Republican Party who helped gain the organization’s endorsement of the 10-1 plan for electing city council members.

Borgelt said that, so far, “Courts have not overturned limits to candidates.”

Contribution limits in Austin were upheld in two City Charter elections and Zimmerman got elected under these rules. So, how can he complain now?

“I guess we have to see where that goes,” Borgelt said. “To me, regardless, it’s a First Amendment, free speech argument.”

Judicial candidates are subject to limits on the size of contributions they can accept from a person, whether monetary or in-kind: $5,000 for candidates for statewide judicial office, and certain other offices; $2,500 for courts of appeals, district courts, statutory courts or statutory probate courts if the population is between 250,000 and 1 million; and $1,000 for other courts. (For details about judicial candidates see the Commission’s Campaign Finance Guide for Judicial Candidates and Officeholders.)

Steusloff of the Texas Ethics Commission said, “There are no limitations (on the size of campaign contributions) for non-judicial elections under state law.”

Peck Young was also involved in the Marc Katz lawsuit of 2003. As an expert witness he testified on behalf of plaintiff Katz regarding his inability to raise enough money to run a viable mayoral campaign with a $100 limit on contributions.

Geographic limitations on contributions

Zimmerman’s lawsuit states that he wants to be able to solicit and accept contributions from all over the United States. That’s permissible under state law, Steusloff said, although federal laws prohibit contributions from foreign nationals.

Attorney Bickerstaff said, “A rationale for prohibiting someone from outside the city or ETJ (extraterritorial jurisdiction) doesn’t mean it stands up. Why is someone who resides or has a place of business outside the City of Austin prohibited from contributing?

Young said, as to the limit on the total amount of money that may be accepted from people who live in a zip code that is not wholly or in part in the City of Austin, “I always thought that rule was just silly. We have a metro area. A friend in West Lake Hills can’t give to me, or half the working population is outside the city. A friend in Round Rock can’t give. My mother is in Pflugerville. I think all those rules are just asinine.”

Money equated to speech

Jim Marston
Jim Marston

Attorney Jim Marston of Environmental Defense noted that U.S. Supreme Court Justice Ruth Bader Ginsburg had criticized one of the court’s most important decisions affecting campaign financing.

In a September 28, 2014, issue of The New Republic, titled “Ruth Bader Ginsburg Is an American Hero,” she said, “If there was one decision I would overrule, it would be Citizens United. I think the notion that we have all the democracy that money can buy strays so far from what our democracy is supposed to be.”

In Citizens United v. Federal Election Commission, the high court held in a 5-4 decision: “Political spending is a form of protected speech under the First Amendment, and the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections. While corporations or unions may not give money directly to campaigns, they may seek to persuade the voting public through other means, including ads, especially where these ads were not broadcast.”

Marston said, “The current process and amount of money in system is unsustainable. We can’t have a few billionaires controlling who is elected.”

But as to contribution limits in place for contributions given to candidates, the courts have not overturned those, he said. “The City has the better end of the law under existing cases.”

It is important to note that the Austin City Charter does not limit direct expenditures made by political action committees or individuals to support or oppose candidates so long as those expenditures are not coordinated with the candidates or campaigns. As reported by The Austin Bulldog March 27, 2015, independent expenditures made in the 2014 mayoral and council elections totaled $726,000.

Incumbents and well known have advantages

It is widely recognized that it is far harder to unseat an incumbent than it is to win an open seat, when the incumbent is either term-limited or chooses not to seek reelection. For example, in the City of Austin election of 2012, the incumbent mayor and three council members all won reelection without a runoff. Mayor Leffingwell had two opponents, Council Members Mike Martinez and Sheryl Cole had one each. Only Council Member Bill Spelman drew a crowd of six challengers, yet he still won with nearly 58 percent of the vote.

Contrast that puny showing to 2014, when the 10-1 system of electing council members from districts went into effect. Only District 9 had incumbents running, while the mayoral and nine other district races were wide open. That historic election drew 78 candidates whose names were on the ballot.

Looking forward to November 2016, five incumbents will be eligible to run for reelection—one of which is plaintiff Don Zimmerman—and if history is any guide there will not be many challengers waiting in the wings.

To win his lawsuit, broadly speaking, Zimmerman will have to show cause why the court should overturn the very rules under which he won election.

In addition, as an incumbent, Zimmerman will be head and shoulders above the District 6 field in terms of name recognition and will have a record to stand on. And that may work against success in this lawsuit.

Notoriety worked against Marc Katz when he challenged the $100 contribution limits in 2003. Although Katz was not an incumbent, his name recognition was off the charts because—as the longtime owner of Katz’s Deli, which was open 24 hours a day—he advertised heavily and was known far and wide for his inevitable pitch line, “I gotta tell you, Katz’s Never Kloses.”

U.S. District Judge Harry Lee Hudspeth, who rejected Katz’s plea for an injunction, wrote, in part, “The record shows that the Plaintiff is a well-known businessman and civic worker with relatively strong name identification.”

Judge Hudspeth also noted, “There is no incumbent in the Mayor’s race with the advantages that incumbency might be perceived to bring.”

In fact, Zimmerman’s attorney Jerad Najvar, in the legal memo he filed along with the pleadings, seemed to argue the point to the detriment of his own case. In addressing the limitations imposed by the blackout period he wrote:

“[S]everal courts have enjoined temporal contribution bans in part because they hobble challengers, vis-à-vis incumbents, as challengers ‘not only lack [access to the press enjoyed by incumbents],’ but the contribution ban ‘also forbids them any means of counterbalancing the decided advantage enjoyed by the incumbents.’

“The Supreme Court itself has recognized that fundraising limitations disproportionately ‘handicap a candidate who lack[s] substantial name recognition or exposure of his views before the start of a campaign,’ ” Najvar wrote.

This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit to provide investigative reporting in the public interest. You can help sustain The Austin Bulldog’s reporting by making a tax-deductible contribution.

Links:

Citizens United v. Federal Election Commission  (183 pages)

Donald Zimmerman v. City of Austin, Texas (30 pages)

Greater Austin Chamber of Commerce, et al v. The City of Austin  (11 pages, including four pages of articles from the In Fact newsletter about the case)

Katz v. City of Austin, Texas  (65 pages)

Plaintiff’s Memorandum in Support of Motion for Preliminary Injunction (40 pages)

Memorandum Opinion and Order in Gordon v. City of Houston et al (42 pages)

Related Bulldog coverage:

Council Member Zimmerman Sues City: Wants to overturn campaign finance restrictions and could gain himself a personal benefit, July 29, 2015

Zimmerman Lawsuit a Costly Boondoggle: First council candidate in decades, if ever, to sue the media in effort to suppress coverage, January 20, 2015

Zimmerman Lawsuit Dismissed and Sanctioned: The Austin Bulldog’s anti-SLAPP motion approved after second hearing, damages and cost assessed, January 7, 2015

Bulldog Defends Zimmerman Lawsuit, November 25, 2014

Zimmerman Sues Bulldog, Claims Defamation: District 6 candidate Don Zimmerman claims ‘The Austin Bulldog’ report made false accusations, October 16, 2014

Candidate Lost Custody Over Abuse: District 6 Council candidate Don Zimmerman injured, alienated daughter, court records state, October 9, 2014

Other coverage of this lawsuit (access may involve paywalls):

New CM Zimmerman Loses to Bulldog: Sanctioned for lawsuit against publication, The Austin Chronicle January 9, 2015

Zimmerman libel suit against Bulldog dismissed, Austin Monitor January 8, 2015

Judge dismisses defamation lawsuit, orders Don Zimmerman to pay up, Austin American-Statesman January 7, 2015

Zimmerman Suit Not Yet “Bygone”: Judge will hear motion that could mean sanctions, The Austin Chronicle December 26, 2014

Zimmerman drops lawsuit, but case goes forward, Austin Monitor December 19, 2014

Zimmerman v. Bulldog case going to court today, December 18, 2014

Zimmerman’s Latest Lawsuit: Is D6 candidate trying to silence coverage of custody case? The Austin Chronicle December 12, 2014

After years of fighting government, Don Zimmerman angles to join it, Austin American-Statesman November 25, 2014

Zimmerman threatens lawsuit over abuse stories, Austin Monitor October 15, 2014

 

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