Election board ruling reveals loophole in Illinois’ campaign finance laws

A recent decision by the Illinois State Board of Elections dismissing a complaint stemming from the 2022 governor election has revealed a potentially serious loophole in state law regarding campaign finance and a special type of political action committee.

Board members voted 7-1 earlier this week to dismiss a complaint filed by Democrats against Dan Proft, a right-wing radio talk show host and political operative who ran an independent expenditure PAC, and unsuccessful Republican governor candidate Darren Bailey.

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The Democrats alleged Proft and his PAC, named People Who Play By The Rules, coordinated with Bailey and his campaign committee to make spending decisions, in violation of campaign finance reporting rules. Under state law, independent expenditure PACs are not supposed to coordinate electioneering communications “in connection, consultation or concert with or at the request or suggestion of a public official or candidate.”

The board rejected the complaint, in part, because Illinois law does not specifically describe what activities amount to “coordination” that would make illegal the actions of an independent expenditure PAC and the candidate it supports.

“It’s a loophole in one respect for getting out of penalties for engaging in coordination. But it also makes it difficult for candidates and independent expenditure committees to know what they’re supposed to do and what they’re not supposed to do,” said veteran election law attorney Ed Mullen.

Mullen appeared at the Board of Elections meeting Tuesday, hoping board members would discuss their views on the Proft-Bailey case or provide some guidance about what they view to be prohibited coordinated activities. Mullen said he had clients seeking advice for the upcoming Nov. 5 election and he didn’t know what to tell them.

But the board had no comment on the case, even though its hearing examiner had recommended that the agency pursue rules to specify what activity was prohibited or that the board seek clarification from the legislature.

Instead, board Vice-Chair Laura Kent Donahue, who served 22 years as a Republican member of the Illinois Senate until 2003, indicated to Mullen that it was up to the legislature to clarify the law, not the board.

“Sometimes it’s a little dicey when you get to spelling it out because then you might leave something out and then you get into, it gets tricky,” she told Mullen. “So I understand. We hear you, but it’s got to come from another source and not necessarily from us.”

But Illinois lawmakers don’t return to session until after the general election and, even then, Kent Redfield, a professor emeritus of political science at the University of Illinois at Springfield, is doubtful any action will be taken.

“The legislature — they’re all candidates and they’d like to have maximum flexibility to raise money, spend money, to win elections and so there’s not an incentive,” said Redfield, a campaign finance expert who has repeatedly seen state legislative action on election cash reforms bent to benefit candidates. “If I’ve got access to more money or more supporters or whatever, then I want to be able to use that to its fullest extent.”

Independent expenditure PACs are able to raise and spend unlimited amounts of cash for candidates or causes they support.

In the case of the 2022 election, People Who Play By The Rules PAC was started by Proft after national ultraconservative mega-donor Richard Uihlein, the Lake Forest billionaire founder of the Uline office product supply firm, made known his interest in the race.

Uihlein, a longtime campaign benefactor to Proft, of Naples, Florida, ended up giving $42 million to People Who Play By The Rules. He also gave $12 million directly to Bailey’s campaign, but only $3 million for the general election.

Testimony in the case showed that the day after Bailey won the Republican primary and defeated five rivals for the GOP nomination, he and his campaign manager flew to a Chicago-area country club to meet with Proft. In a private room, Proft placed an envelope on a table and told Bailey it contained $20 million from Uihlein. If Bailey fired his staff and hired Proft, the money would go to the campaign. If Bailey refused, the money would instead go to Proft’s PAC. Bailey opted to refuse Proft’s offer and the PAC continued to run TV ads supporting Bailey’s candidacy.

Democrats had contended the meeting demonstrated that Uihlein had significant money to spend for the campaign and would follow through with more. They also cited the PAC’s TV ads that used footage from Bailey’s campaign website and that several ads addressed crime in Chicago, a topic that Bailey talked about in regular visits to Proft’s radio show.

Unlike state law, the Federal Election Commission has specific regulations regarding what constitutes prohibited PAC-candidate coordination in federal races, using a three-prong test involving the source of the payment, the content of the election materials and the interaction between the PAC and the candidate.

One example of prohibited interaction on the federal level is if a “substantial discussion” between a PAC and candidate occurs and “if information about the plans, projects, activities or needs of the candidate” that is material to the production of election materials, such as a TV ad, “is conveyed to the person paying for the communication.”

“In Illinois, there’s no regulation. The definition of coordination is very vague,” Mullen said. “I think the legislature and the state board of elections really need to clarify what it is. The result of the lack of clarification is that, because the rules aren’t clear, it’s hard to penalize someone for not following them.”

But Redfield said the lack of specificity in Illinois law may play into politicians’ hands because, “if we’re talking about trying to win an election or influence an election, then there’s incentive to push the envelope.”