Ex-Nevada lobbyist trying to postpone prison time
December 31, 2013
RENO — Lawyers appealing an ex-Nevada lobbyist's conviction for illegally contributing to Sen. Harry Reid's re-election say he should be kept out of prison while the U.S. Supreme Court ponders a forthcoming ruling on campaign finance laws that they say have been "twisted into a pretzel" through a series of recent court decisions.
Harvey Whittemore faced a Tuesday deadline to file formal briefs for his appeal, but the 9th U.S. Circuit Court of Appeals extended it until Jan. 30. That's the day before he's scheduled to begin serving a two-year prison sentence for violating campaign laws by using "straw donors" to pump more than $130,000 into the Senate majority leader's 2007 re-election committee.
Reid was never accused of any wrongdoing, although he had to amend his 2007 report to the Federal Election Commission.
Whittemore's lawyers argue in a new motion in federal court in Reno that the law the former wealthy developer was convicted of breaking "faces at least some possibility of being stricken from the rolls outright" in the high court's decision expected in the coming year in McCutcheon v. FEC — an Alabama case challenging overall limits for individuals' spending.
The government clearly has the constitutional right to regulate political speech and spending, said Dominic Gentile, Whittemore's lead lawyer from Las Vegas. But he said varying campaign finance rulings have created a hodge-podge of rules that affect donors in unfair ways and infringe upon individuals' First Amendment right to free speech.
While a candidate and political action committee can spend unlimited amounts of money and an individual can donate freely to a political action committee, individual contributions to candidates are limited to $4,600 per election cycle, Gentile said. He said the result is separate regulations for two "identical types of speech" both intended to support and elect the candidate, he said.
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"One is protected while the other is purportedly made criminal," he wrote in a Dec. 10 filing with U.S. District Judge Larry Hicks.
The McCutcheon case argued before the U.S. Supreme Court on Oct. 8 attempts to address the disparity, coming on the heels of its landmark 2010 Citizens United decision that opened the door to large amounts of independent spending.
President Barack Obama said recently that the current case has the potential to "go even further than Citizens United."
A federal jury found Whittemore guilty in May of exceeding the $4,600 contribution limit in 2007 — funneling a total of $138,000 to Reid's re-election campaign by writing $5,000 checks to family members, employees and their spouses who in turn contributed $4,600 to Reid.
"The jury did not convict Whittemore of engaging in constitutionally protected activities," Assistant U.S. Attorney Steven Myhre said, "it convicted him of knowingly and willfully making illegal straw donations by soliciting others to donate to Sen. Reid's campaign in their own names and furnishing the money for those donations."
Myhre said Whittemore was free to spend as much money as he wanted on advertising for his candidate, or in contributions to a PAC backing Reid. He said both the Supreme Court and the 9th Circuit have "consistently recognized an important distinction between direct donations to candidates and donations to organizations that make independent expenditures to support candidates."
The Supreme Court first upheld contribution limits in its 1976 Buckley v. Valeo decision, based on arguments they were necessary to fight the risk of corruption. In Citizens United, the court said spending that is independent of campaigns poses no risk of corruption, no matter how large.
But Gentile said the justices who concluded independent expenditures don't give rise to corruption "did not envision a world where those 'independent expenditures' were made by organizations that, themselves are not truly independent."
"Super PACs act as nothing more than conduits for unlimited donations in support of a candidate," he said, and in fact are less transparent because there are no reporting requirements until the PAC is required to file its federal tax forms the following year.