Calling it the worst-kept secret in Montana politics, Montana Commissioner of Political Practices Chris Gallus said that a dispute between the executive director of Montana Democratic Party and Republican Attorney General Austin Knudsen was the first time either party challenged what has been a 30-year legal “loophole,” exploited by both parties.
In a 51-page analysis, Gallus said that governors and lawmakers from both parties have had more than ample opportunity to close the loophole, but haven’t. Moreover, the commissioner, Montana’s top political cop, said that it’s not the role of his office to create new law.
To that end, he dismissed Sheila Hogan’s complaint against Knudsen and part of the complaint against Knudsen’s Republican challenger, Logan Olson, who is also the Daniels County Attorney.
Neither the Montana Democratic Party not Knudsen’s campaign responded to requests for comment prior to publication.
The complaint alleged that Knudsen had recruited Olson, who was subsequently found not to meet the requirements for candidacy of attorney general in a separate-but-related matter. Everyone, including Knudsen and Olson, seem to agree that Knudsen got Olson to run against him in the primary election only as a means of raising more money for his re-election campaign. Knudsen is seeking a second term as Montana’s attorney general.
During several public appearances Knudsen had said that he’d recruited Olson to run, and that Olson was not running a real campaign. Olson confirmed as much to the Daniels County Leader newspaper. Knudsen said he’d recruited Olson because Montana’s campaign finance laws were “silly.” However, in his position as attorney general, Montana is the chief law enforcement officer in the state.
“I am in full support of Austin Knudsen as attorney general,” Olson told the Daniels County Leader on March 28. “Unfortunately our campaign finance laws are broken. For Austin to have an adversary in the primary race is advantageous for him in his bid for re-election. As such, I made the decision to file against Austin in an effort to support him.”
In Gallus’ ruling, he found that while Knudsen’s words were “brash,” they were nonetheless a case of stating a practice that has been well documented by the very political records the Commissioner’s office maintains. In other words, Knudsen said the quiet part out loud.
“The difference between the situation here, and those using the loophole now and in previous campaigns, is that the Attorney General has rather brazenly and publicly discussed doing what others have quietly done for years. Others are quietly doing it right now,” Gallus said. “In looking at reports readily available to me, there are numerous instances where, in the words of (Hogan), this purported ‘scheme’ was employed.
“The approach is systematically and universally employed by Republicans and Democrats alike, and both Republican and Democratic legislatures have done nothing to stop it.”
Gallus, in his ruling, traces a history of Montana’s primary election fund-raising laws and determines that many candidates from both political parties have entered the race as a sort of straw candidate — meant to provide nominal opposition to allow candidates to fundraise larger amounts. Gallus buttresses his position by recounting that many primary candidates seem to have filed to run, then reported little in the way of fundraising or campaign expenditures, calling into question whether they really intended to run.
“(Knudsen and Olson) assert a rather rudimentary approach in their response that their activity is allowed because Montana laws are ridiculous and silly. This stems from their perception that this provision has never been enforced in the manner that (Hogan) asserts that it should,” Gallus said. “To avoid continued ridicule of the law or an appearance that I condone it, I must take a more scholarly approach… During the course of these proceedings and over COPP’s history of nearly 50 years, we have never directly addressed the issues presented here.”
Gallus said that for the past 30 years since the laws were first enacted, both political parties seemed to exploit what has become a loophole: If a primary candidate is challenged, they can essentially raise double the amount of money. What differentiates this particular case, Gallus said, is that one party, the Democrats, has challenged the other, Republicans, for doing so.
Gallus said that the practice, established during the course of decades, has created an amount of certainty and predictability, which all politicians need in order to conduct robust campaigns. In his ruling, Gallus said changing the rules, without any notice, would be unfair:
“How COPP employs its authority with respect to any statute creates a pattern and practice upon which a regulatory atmosphere or expectations exists. Regulated individuals, in this case, candidates, rely on these patterns and practices to govern their own behavior with respect to the statute. In essence, the manner in which a statute is enforced provides notice to candidates as to how they should conduct themselves and their affairs. Quintessentially, this is the issue the respondents highlight when they rather crassly describe the laws as ‘ridiculous’ or ‘silly.’… Admittedly, there is no actual written policy established here, but one can extrapolate that the enforcement approach allowed a continuation of known facts and circumstances that created a regulatory atmosphere that (Knudsen and Olson) were obviously aware of, and (they) are not alone in this assessment. If zero or very limited campaign activity involving contributions or expenditures is the standard, the campaign landscape over the course of the 30-year history of this particular provision is riddled with violations.”
In his ruling, Gallus presented the difficult challenge that this particular case raises, especially with limited power of enforcement his office has, and a historic pattern established by both political parties.
“I am not inclined to determine that the present situation is different merely because (Knudsen and Olson) were more open about it. In essence, that would allow the activity to continue, but only so long as it continued quietly or in secrecy. Nothing is more repugnant to the purpose of campaign finance laws than that,” Gallus wrote. “Campaign finance law operates to promote transparency over secrecy, and the only real difference here between (Knudsen and Olson) and those employing the exact same tactics, was that other candidates were much more clever and quiet regarding their affairs. I cannot ignore the fact that this is the worst kept secret in all of Montana’s campaign finance laws. It is without peers in that regard.”
However, the commissioner said that governors and legislatures from both parties have had ample opportunity to change the law, but haven’t. Furthermore, the decades-long practice has gone on, largely unchallenged, creating a certain expectation for candidates, including an acceptance of those who appear to be straw-candidates.
Gallus wrote that while some states, like New Hampshire, have laws against “straw candidates,” the term or concept is not found in Montana law.
Originally, Hogan had asked the commissioner to remove Olson from the ballot because the Democrats asserted that the Daniels County Attorney was not properly qualified to run for attorney general because he hadn’t been practicing law long enough, something that Gallus later agreed with. However, in his ruling, Gallus said that removing any candidate was not in the power of the Commissioner of Political Practices, but reserved for the judicial branch.
“This can only occur when the judge is convinced that the person seeks nomination by any political party for mercenary or venal consideration or motive, and that a person’s candidacy is not in good faith,” Gallus wrote. “The district court action must obviously occur prior to the preparation of the ballots…The complaint was never submitted to a district court, and it was not submitted to COPP until May 8.”
Gallus notes that certification for the statewide ballot occurred on March 21.
Separate penalty
While Gallus dismissed most of the complaint against Knudsen and Olson, he did find one notable violation.
Longtime conservative political operative Chuck Denowh offered to pay Olson’s $1,508.76 filing fee for attorney general. While that is not against the law, Gallus found that the expense should have been recorded as an in-kind donation or a loan, and therefore, an expense.
However, because Olson did not record it as a loan or expense, it must be treated as a donation. An individual donation, by law, is capped at $790. Therefore, the remaining balance of $718.76 must be treated as a violation.
Normally, Gallus said he’d refer such a violation to the county attorney where the resident lives, but since that would mean Olson would have to prosecute himself, Gallus took the rare action of enforcement, as allowed by Montana law.
In his ruling, Gallus said that he would negotiate a fine in the amount of the excess, or prosecute Olson under the power of Montana state law for the amount of $4,525 — triple the amount of Olson’s filing fee, which is a penalty set by Montana law.
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