NC elections board proposes new campaign complaint rules

On Wednesday, the North Carolina State Board of Elections (NCSBE) voted unanimously to put out for public comment on a change to the campaign finance complaint policy.

The change would involve replacing the policy that directs the administration and investigation of complaints, adopted in December 2019, with a set of proposed rules.

Lindsey Wakely, director of campaign finance, told the board that it has been the agency’s goal to move in that direction for a while, especially after receiving comments when the policy was first adopted that some components would be better set as rules.

She said part of the policy that deals with disclaimers and disclosure legends for print media, television, and radio ads was left outside the scope of the rules, as they already have different treatment under the policy, as alleged violations are expedited as much as possible.

Additionally, most disclosure lodging complaints received are handled as compliance matters, not as enforcement matters, because someone may be unfamiliar with the disclosure legend requirements in general, or, more likely, with some of the nuances of the law. An example of this is a candidate who is distributing door hangers as part of the canvassing effort. The door hangers may include the candidate’s name, but they lack the disclosure legend that clearly states, “paid for by.”

Wakely said that currently, upon receipt of a complaint, an initial review is made, and then a determination is made of a compliance track or an enforcement track. So only priority matters are designated as enforcement actions and will include things like intentional prohibited transactions or potential intentional prohibited transactions, willful attempts to conceal contributions and expenditures and other matters that could result in a civil penalty or criminal penalty. Compliance matters are handled a little differently. If a complaint ends up on a compliance track, they will typically be working with the respondent to obtain amended disclosure reports to correct the error.

Under the proposed rules, that structure largely stays the same. Staff will conduct a preliminary investigation, then determine whether or not to open a case and initiate a formal investigation. A case will be opened only if there’s reason to believe that the respondent may have engaged in conduct that could result in a civil penalty or a criminal penalty, and if a case is not opened, staff still have the discretion to work with the respondent to obtain amended disclosure reports, issue guidance letters, and take other similar corrective actions.

“So, while we’re using some different language, the overarching structure here is largely the same between how we handle these under the complaint policy and how we’ll handle them under the proposed public rules if they are ultimately adopted by the state board,” she said.

Wakely went over three of the seven rules for adoption.

• Rule .0905 requires the state board to provide notice of complaints involving inaccurate or missing disclosure reports to the respondent within 15 calendar days, unlike the complaint policy proposed rule. It does not necessarily require immediate notice and a copy of the complaint for all alleged violations, only those involving inaccurate or missing disclosure reports. It also creates a new exception that permits the state board to withhold the notice if doing so would materially compromise a criminal investigation.

• Rule .0906 requires state board staff to complete a preliminary investigation of a complaint within 120 days of receipt, which is new, as there is no timeline under the current complaint policy. It also requires state board staff to open a case and initiate a formal investigation if the preliminary investigation establishes a reason to believe there could be a potential penalty or criminal penalty. Wakely stressed that the rule does not specify that state board staff members are responsible for making the determination, but the current policy does. The change was due to staffing changes and restructuring, as some of the positions that made those types of determinations no longer exist. They also want to ensure that the Division of Election Security Enforcement will have greater involvement.

• Rule .0907 says that any staff decisions to close a formal investigation must be shared with state board members, and they will have the opportunity to request a full state board briefing. If there is sufficient evidence during an investigation, the matter will be brought before the board for a civil penalty hearing or for consideration of a criminal referral.

Due to media attention on the discussion of adopting the rules, Wakely wanted to stress that Rule .0904, which concerns the confidentiality of complaints and investigations, specifically states that the agency cannot make complaints or other documents gathered in an investigation public.

“It does not in any way restrict the complainant or the respondent from making documents they provide to us public,” she said. “So, this is a restriction on the agency’s release of information. It is not a restriction on the complainant or the respondent’s release of information. That sort of restriction really would need to come from the General Assembly. The statutory language we have in place today that says campaign finance investigations are confidential, and they have interpreted that solely as a restriction on us as an agency.”

A public comment period and public comment hearing will be set by the rulemaking coordinator in the near future.

“NC elections board proposes new campaign complaint rules” was originally published on www.carolinajournal.com.