Disclosure on Electioneering Ads, Changes in State Contracting Proposed

Nebraskans could get more information on who’s behind those last-minute ads they get before elections, under a bill heard in the Legislature today/Thursday. And changes were proposed to the state’s contracting procedures.

Sen. Carol Blood is the sponsor of a bill that would require groups to disclose who they are and how much they’re spending on so-called “electioneering communication.” That’s legally different from campaign advertising according to Frank Daley, executive director of the Nebraska Accountability and Disclosure Commission, who testified in support of the bill. Daley gave this example of a hypothetical mailer.

“’Senator Jones voted to raise gasoline taxes. Call Senator Jones and tell him Nebraskans don’t need higher taxes,’” Daley said. “You receive that in the mail and you consider it to be a campaign ad. Senator Jones considers it to be a campaign ad. The sender intends that it will affect your decision as a voter. However, the U.S Supreme Court has said this is not a campaign ad, because it makes no reference to an election. It doesn’t state that Sen. Jones is a candidate. It doesn’t say vote for or vote against. The Supreme Court has said this is an issue ad.”

As such, the sender doesn’t have to report it as campaign spending under Nebraska law. However, Daley said, the Supreme Court has ruled states can require disclosure, if certain conditions are met. Blood’s bill spells out those conditions, including that the ad is distributed within 30 days of an election and clearly identifies a candidate or ballot issue. Blood said the goal is to let voters know who’s behind the ads, not to suppress free speech.

“We don’t change what communication can be sent during elections, or what messages will be utilized. All this bill does is close a long-open loophole that allows special interest groups the ability to avoid disclosure,” Blood said.

The bill would require disclosing the name, address, occupation, employer and principal place of business of each person who contributed more than $250 for a specific ad. But Daley said it would not require disclosing the names of people who contribute to the organization in general, but not for a specific ad. Sen. John McCollister asked Daley about that.

“So if we’re trying to provide disclosure on who made the contributions, and they mask themselves or hide their identity under some other name, we still haven’t fixed that, have we?” McCollister asked.

“Not completely, no,” Daley replied.

At one point, Blood compared people who contribute to shadowy organizations that run electioneering ads to cockroaches, and said her bill would allow candidates who are attacked to fight back.

“At the very least, you should be able to step on that cockroach that crawls out from under that rock. Right?” she said.

“But if it’s a shell, you’re just stepping on the shell, but the bug is gone,” said Sen. John Lowe.

“Yeah, well, unethical people are going to continue to be unethical. This is not a panacea. But it’s a start,” Blood replied.

No one testified against the proposal, but ACLU Nebraska submitted written testimony against it, saying it could limit freedom of expression.

Blood noted that in the past, similar bills have remained bottled up in the Government, Military and Veterans’ Affairs Committee, and said she didn’t have high hopes for the bill this year. But she said she hopes it could be debated by the full Legislature next year.

Also Thursday, the committee heard a proposal by Sen. Mark Kolterman to give companies that want to protest state agencies’ awards of contracts worth more than $10 million the right to go to court, rather than simply appealing to the Department of Administrative Services. Kolterman said the change is needed.

“Over half of all states and the United States federal government provides for judicial review of procurement decisions. Without an appeal process which includes judicial review, many companies would be dissuaded from investing in Nebraska,” Kolterman said.

His proposal was supported by former officials and lawyers for PromiseShip, an organization that lost a bid in 2019 to manage child welfare services in eastern Nebraska. The bid was awarded to Saint Francis Ministries, which underbid PromiseShip by more than 40 percent.

Earlier this year Saint Francis said it was running out of money, and got the state to sign a new contract at more than double the original rate. Promiseship did file a lawsuit, but a judge rejected their attempt to stop the contract, saying state agencies have wide discretion.

McCollister said the Saint Francis’s bid was accepted based on a grading system that gave more weight to the low price than to other factors.

“How would you characterize that grading system that Nebraska used?” he asked Kolterman.

“I think it failed us,” Kolterman replied.

Kolterman said while contract disputes sometimes wind up in court, the state has argued that protesting bidders do not have the right of judicial review. His proposal would send contract disputes to the state’s Administrative Procedures Act, which allows judicial review.

Jason Jackson, director of the Department of the Department of Administrative Services, opposed the bill, LB61.

“Nebraska’s state contracting process is fair, objective, transparent, and strikes the right balance between agency discretion, efficient decisionmaking, and taxpayer savings. LB61 would disrupt that balance by incentivizing litigation against the state,” Jackson said.

Jackson said problems with the Saint Francis contract stemmed from dishonesty on the part of two now-fired executives involved in the organization’s bid.

Kolterman expressed frustration at the opposition. He said he had met with Jackson about procurement reform legislation last September, and reached out again in November and December, but never heard back.

“I like to think that the executive branch ought to be partnering with the legislative branch, not throwing up roadblocks to us all the time. And that’s exactly what’s going on here. We’re getting stalled, we’re getting put on hold, because this isn’t important enough to ‘em. The reality is, it is important, because we’re watching millions of dollars go out the door on unnecessary legal fees that shouldn’t be there when all we would had to do upfront was have a way of appealing the process,” he said.

A spokesman for Jackson said Kolterman had presented no new ideas, and his bill is a repeat of proposals by trial lawyers who’ve lost lawsuits against the state. He said the state is looking at changing its procurement practices but wants to protect taxpayers and avoid “endless litigation.”