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City wins lawsuit despite appearance of loss

Friday, July 22, 2016 by Jo Clifton

On Wednesday, Federal Judge Lee Yeakel invalidated the city of Austin’s prohibition on collecting campaign funds outside the six months prior to a City Council election. However, the city’s outside counsel on the matter, Renea Hicks, says the city won on the most important issue in the suit filed by Council Member Don Zimmerman.

“There’s some misimpression out there” that the city lost the lawsuit, Hicks said, but that is not the case. The ruling validated the most important part of the regulations, what Hicks called “the cornerstone of the campaign finance rules” – the $350 individual cap on donations. In addition, the judge upheld the aggregate cap on donations from persons who live outside the city.

The second part of the law that Yeakel invalidated – which requires candidates and Council members to disperse any funds above $20,000 that they still have after an election – Hicks said might have little impact. In fact, most candidates try to spend most of their funds before the end of the campaign on the theory that those funds will be of little use once the campaign is over.

The judge did not indicate in his ruling how long a Council candidate or Council member should be able to collect funds. However, Hicks pointed to a sentence in the ruling that states, “A contribution seven months before an election is more likely to be intended for use in a candidate’s campaign than an ‘off-year’ contribution more than 12 months before an election.”

So it is possible that the city could revise that part of the regulations but not open up the possibility of contributions flowing into Council members’ war chests long before or after an election.

Attorney Fred Lewis, who has worked on the city’s campaign finance rules, agreed with Hicks. He said, “The key provision is the $350 limit, and he upheld it. Maybe we need to have a longer fundraising window, but we still have a $350 limit,” which he said was the most important part of the regulations.

For Zimmerman, the ruling was “50 percent good,” he said, noting that he is an engineer and does not like to use the more imprecise “glass-half-full term.” He said he is considering whether to appeal the limit on contributions.

“We made the point that the $350 limit was arbitrarily low … and I think it’s an unfair restriction (on some of his supporters) who have astronomical tax bills, because I have supporters who are paying $20,000 a year (or more) … a lot of that going to the city,” Zimmerman said. “And so to have a rule that somebody who panhandles on the street and pays no taxes and uses public services more than the rest of us do to be able to donate $350, and then for a business owner who pays taxes to only be able to donate $350 – it’s unfair.”

Zimmerman is also considering whether to challenge the portion of the law that prohibits a mayoral or Council candidate from accepting more than $30,000 in the general election and $20,000 in the runoff election from “natural persons eligible to vote in a ZIP code completely or partially within city limits of the city of Austin,” as the law says.

In his ruling, the judge said that in order to challenge the aggregate restrictions, Zimmerman must show that he has suffered or will suffer “a concrete and particularized injury-in-fact” and that the injury is “fairly traceable” to the conduct of the city, in other words the regulation.

In the general election, the judge said, Zimmerman received less than $3,000 from noncity sources and less than $5,000 from those sources in the runoff. Therefore, Zimmerman could not show that he was injured or would be injured by the rule.

Zimmerman asserted that the lawsuit was not really about him and his political prospects. It was instead about defending the law as he sees it. He said he would wait to see what the city does before deciding whether to appeal.

A complete list of Austin Monitor donors can be found here.

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