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Gay Couples Could Face Different Campaign Money Rules Across States
Posted at 2:34 p.m. on July 9, 2013
In the wake of the Supreme Court’s decision to strike down the Defense of Marriage Act, gay candidates and their spouses could face different campaign finance guidelines depending on their state.
Earlier this month, the Democratic Senatorial Campaign Committee sent an advisory opinion request to the Federal Election Commission asking that married same-sex couples and candidates be given the same rights as married opposite-sex couples.
“Now that DOMA has been invalidated, the Commission must look to state law to provide the meaning of the term ‘spouse,’” wrote Marc Elias, one of the top campaign finance attorneys in country, in the request on behalf of the DSCC.
But if the FEC agrees, as at least one expert expects, the situation could get complicated.
“The FEC is likely to conclude that it’s governed by state law,” said former FEC Chairman Michael Toner. “Then you will have different fundraising rules for different states.”
For example, Democrat Sean Eldridge is expected to challenge GOP Rep. Chris Gibson in New York’s 19th District. Eldridge is married to Facebook co-founder Chris Hughes, who Forbes estimated was worth approximately $700 million in 2011.
Before the Supreme Court decision, Hughes could contribute a maximum of $2,500 per election to his husband’s campaign. If the FEC agrees with the DSCC, Eldridge could use “jointly held assets” as “personal funds” under the same guidelines as married heterosexual couples.
But if Eldridge and Hughes lived in any of the 37 states where gay marriage is not allowed, they would be subject to much stricter limits.
The new guidelines could also go beyond gay candidates and their spouses.
If the FEC defers to state law, married same-sex couples with only one income could potentially contribute more to candidates — just as married heterosexual couples can. That means a married gay couple in California could give more than a gay couple in neighboring Oregon, where gay marriage is against the law.
“FEC regulations don’t define who is and who isn’t a spouse,” Toner said.
The FEC could pass its own regulation on spouses, but Toner said that result is unlikely. “The FEC historically has not tried to reinvent the wheel on property rights,” he noted.
The DSCC asked for the opinion to be expedited, but it looks like the decision is at least a couple of weeks away.
The commission has 60 days to respond, but an advisory opinion request needs to first be taken up in an open meeting. The DSCC request is not on the July 11 meeting agenda, leaving two more opportunities this summer (July 25 and Aug. 22). The FEC could add a meeting, but it usually sticks to the previously determined scheduled, according to an FEC spokesperson.
Whenever it occurs, the FEC decision could have an immediate effect on Democratic fundraising, as well as on one of the marquee House races of 2014.
Democrats are excited about having a well-financed challenger to Gibson in a Hudson Valley district that overlaps with the expensive New York City media market. Eldridge already had more campaign cash than Gibson ($280,000 to $138,000) in the bank on March 31, and the Democrat hasn’t yet officially announced his campaign.
Hughes is worth millions and the couple has a trio of multimillion-dollar homes in New York. But Eldridge spoke with at least one Empire State insider earlier this year about his need to raise money because of DOMA and how the couple’s assets were structured.
The Supreme Court and subsequent FEC decision could eliminate one hurdle, but Eldridge may not have significant personal resources for the campaign, depending on how the couple manages its finances.
“A candidate may also use, as personal funds, his or her portion of assets owned jointly with a spouse (for example, a checking account or jointly owned stock),” according to current FEC guidelines for married couples. “If the candidate’s financial interest in an asset is not specified, then the candidate’s share is deemed to be half the value.”
Fortunately for Eldridge, even if he doesn’t jointly own some of Hughes’ biggest portfolio items, he has the ability to raise significant money. Eldridge’s work as a marriage equality activist for and with Freedom to Marry should attract donors from across the country. And he and Hughes, who coordinated online organizing for Barack Obama’s campaign in the 2008 presidential race, are ensconced in the upper echelon of the Democratic Party.
The race for New York’s 19th District is rated Tossup/Tilt Republican by Rothenberg Political Report/Roll Call.