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Group that ran ads about Medicaid expansion say it doesn’t have to file election reports

November 17, 2018

The deadline for corporations, unions and limited-liability companies spending money in Nebraska’s 2018 midterm election has come and gone.

But as of Friday, the nonprofit airing television and radio ads painting Medicaid expansion as harmful to the state’s finances had not registered with the Nebraska Accountability and Disclosure Commission, leaving unanswered questions of how much was spent and who financed the effort.

Alliance for Taxpayers may not have to file reports with the state, as the election communications it sent out over the airwaves and into voters’ mailboxes did not explicitly urge voters to support or oppose Initiative 427, according to its attorney.

Despite the group’s grim warnings that expanding Medicaid would hamper funding for K-12 and higher education, infrastructure projects and property tax relief, Nebraskans approved Medicaid expansion Nov. 6 with more than 53 percent in favor.

State statute requires companies operating in Nebraska to report election expenses over $5,000 within 10 days of the end of the month in which the spending happened.

But Frank Daley, executive director of the state’s accountability and disclosure commission, said most of that activity is centered on candidate campaigns.

“This is unique, because it involves a ballot question,” Daley said.

On Oct. 24, Daley wrote to Marc Kaschke, one of the three people listed on Alliance for Taxpayers’ filings with the Federal Communications Commission, advising him of the state’s reporting requirements.

“It is my understanding that you are associated with Alliance for Taxpayers which has been airing ads opposing a statewide ballot question which will appear on the November 6, 2018, ballot,” Daley wrote to Kaschke, a former mayor of North Platte.

Kaschke didn’t respond, Daley said, and apparently forwarded the letter to Alliance for Taxpayers’ legal counsel, Texas attorney Chris Gober, who represents Republican-backed causes across the U.S. and worked as the campaign lawyer for Sen. Ted Cruz’s 2016 presidential run.

In a Nov. 13 email, Gober challenged Daley’s claim that Alliance for Taxpayers opposed the Medicaid expansion in Nebraska.

“(T)o the best of my knowledge, I am not aware of this organization airing any ads opposing a statewide ballot question,” Gober wrote, adding “none of the organization’s communications or advertising has expressly advocated in support of, or in opposition to, any candidate for public office and/or ballot measure.”

Gober, who did not return a phone call from the Journal Star seeking comment, also said Alliance for Taxpayers has disseminated identical advertising in other states, where there was no ballot measures related to Medicaid expansion.

There is no evidence Alliance for Taxpayers ran television or radio advertising in Idaho or Utah, both states where Medicaid expansion was approved by voters, according to FCC records.

“Alliance for Taxpayers intends to be an ongoing concern, which is contrary to the claims that the organization was formed for the purpose of opposing Initiative 427,” Gober wrote.

On the organization’s website — which it created Oct. 8, according to available records, a few days before it registered as an LLC with the Nebraska secretary of state — Alliance for Taxpayers indicates its mission is to “educate and equip taxpayers with the tools and information” to spread its message.

That message, according to its website, as well as documents filed with the secretary of state, is fiscally-responsible government, balanced budgets, a simplified tax code, lower taxes and other traditionally conservative positions.

Daley said the Nebraska Accountability and Disclosure Commission will evaluate Alliance for Taxpayers “in light of what it produced and distributed ahead of Election Day,” and consult with its own attorneys on how federal court cases apply to this particular situation.

The U.S. Supreme Court in 2004 upheld the government’s ability to impose some restrictions on broadcast advertisements distributed to voters in the weeks leading up to an election.

Electioneering materials that do not reference a specific election, that clearly identify an officeholder or person seeking office without explicitly identifying them as a candidate, or that direct voters how to cast their ballots are generally known as “issue advocacy,” as opposed to “express advocacy” of candidates or issues.

Alliance for Taxpayers’ recent electioneering materials appear to have followed the template for issue advocacy typically aimed toward people, but wielded it instead against an actual issue, Daley added.

“We have a good handle when a situation involves candidates, but we haven’t seen it where it involves a ballot question,” he added.

State Sen. Sue Crawford has introduced bills in each of the last two years requiring more reporting for individuals and organizations taking part in “issue advocacy,” even if those advertisements or campaign mailers don’t specify that a person is a candidate for office.

Crawford said Friday she plans to introduce another measure in the legislative session beginning in January, and said she’s open to expanding the bill to include ballot initiatives, calling Alliance for Taxpayers’ recent campaign as “a fascinating twist” on an old tactic.

“I’m going to continue working on electioneering, where we need more transparency,” the Bellevue senator said.

Daley said while his office has explained its position to Alliance for Taxpayers and will review the facts of the case before issuing a finding, he noted that his office is charged with enforcing the Nebraska Accountability and Disclosure Act.

Any more-rigid reporting requirements would have to pass through the unicameral and receive the signature of the governor.

“This can be regulated, at least to a limited extent, but so far, the Nebraska Legislature has not acted on proposals in this area,” he said.

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