State’s Political-Spending Rules Fail To Make The Grade — Again

New Hampshire’s campaign-finance regulations are a jumble of contradictions, a fact that people who study the issue never fail to point out.

A year ago, a consortium of good-government types awarded the Granite State a “D” for political financing, citing how easy it is for donors to get around the dollar limits on contributions.

Last week, a campaign-finance watchdog group weighed in, and once again New Hampshire found itself at the bottom of the class.

In an analysis of disclosure requirements for PACs, non-profits and outside spending groups, the National Institute on Money on State Politics gave New Hampshire an “F.”

Why? It seems we’re one of 25 states that don’t require independent political groups to report “electioneering communications” — advertising that refers to a candidate or ballot measure, but does not urge voters to cast their ballots one way or the other.

Such ads are distinct from so-called independent expenditures, which tell voters which candidate or ballot issue they should support on Election Day.

But in most cases it’s a distinction without a difference: electioneering communications are typically issue ads that give voters a not-so-subtle nudge in the direction of supporting or opposing a candidate. For instance, a group will bankroll ads in the heat of a campaign asking voters to call and thank (or spank) a candidate for supporting (or ignoring) the “hardworking taxpayers” of New Hampshire.

In the Granite State, candidates and political parties have to register with the Secretary of State’s office and file spending reports. So do political committees, which state election law defines as two or more persons organized to influence an election.

That definition has made the state’s guidelines difficult to enforce.

In 2010, for example, the Attorney General’s office investigated complaints that several tax-exempt “social welfare” organizations had funded attack ads without reporting the expenditures. The attorney general cleared the groups, ruling they were not considered political committees under state law because their “stated purposes” didn’t include telling people how to vote.

Since then, legislative attempts to close this loophole have gone nowhere. But pressured by advocates for greater transparency, lawmakers are trying again.

Bills in both the House and Senate would change the definition of a political committee to mean any group that spends $5,000 or more on independent expenditures or electioneering communications.

Both bills would stiffen the penalties for failing to comply: political committees that do not register or report their spending would be fined 25 percent of their expenditures, on top of the current penalty of $25 for each day the report is late.

What neither bill will do is require tax-exempt groups, such as 501(c) 4s, to report their donors — a concession that was necessary to gain broader support for the new rules, said Gordon Allen of the Coalition for Open Democracy, a Concord-based group that is lobbying in support of the bills.

Even so, requiring all political groups to at least report their expenditures would make New Hampshire’s rules on outside political spending as robust as federal guidelines, a standard met by only 15 states.

Both bills have been put on hold until next year. But if lawmakers can agree on the changes, New Hampshire might one day earn a gold star for transparency.

“We could go from an “F,” says Allen, “to an “A.”