Inside the Kansas court case that could cripple a sweeping campaign finance investigation

Kansas law for decades has prohibited political contributions given “in the name of another person.”

The classic example is a boss who gives employees money to donate in their own names, then reimburses them.

But does that same law also make it illegal for political groups to shift funds among themselves until the dollars arrive at a desired destination?

Over two years, $54,000 in contributions moved through a series of political committees before ending up in the accounts of the Kansas Republican Party. Why those transfers happened in 2020 and 2021 is the subject of a lengthy, ongoing investigation.

The investigation – by the Kansas Governmental Ethics Commission, the state’s official campaign finance watchdog – is looking to determine whether the committees and individuals associated with them broke the state’s campaign finance laws, including the prohibition against making contributions in the name of another.

That effort has touched on a wide array of political groups in the state, including the Johnson County, Shawnee County and Sedgwick County Republican central committees.

If the investigation eventually leads to fines, it could upend how political operatives in Kansas move money around, with PACS and other committees becoming more hesitant to frequently transfer funds. Critics of money in politics would potentially cheer the shift while some Republicans warn it would have a chilling effect in an era where money is seen as central to political speech.

But a recent court decision threatens to severely restrict the investigation more than two and a half years after its existence became public.

Shawnee County District Court Judge Teresa Watson in August blocked the Ethics Commission from enforcing a subpoena against David Matthew Billingsley, the treasurer of the Lift Up PAC, a well-funded group that tries to elect candidates who support limited government. The bipartisan Ethics Commission suspects Lift Up played a role in funneling contributions toward the Kansas Republican Party.

Court documents indicate the Ethics Commission suspects contributions were made on the condition that the funds ended up in the hands of the Kansas Republican Party, and has called the movements a suspected illegal pass-through scheme. The Ethics Commission hasn’t formally accused any individual or organization of wrongdoing.

If the Ethics Commission does find groups or individuals broke the law, it could level civil penalties against them.

The subpoena to Billingsley, a former chief of staff to former Kansas Department of Revenue Secretary Sam Williams, who served under Gov. Sam Brownback, sought several years of records related to Lift Up and Republican committees and contributions. While the documents themselves may or may not prove crucial to the investigation, Watson’s reasoning in denying the subpoena risks derailing the legal theory underlying the inquiry.

Kansas law – K.S.A. 25-4154(a) – prohibits political contributions by one person “in the name of another person.” The Ethics Commission is relying in part on the law to investigate the movement of the contributions, arguing these transfers potentially amounted to making contributions in the name of another.

However, Watson, a Brownback appointee, ruled the law was too vague for the purposes of justifying the subpoena. She found it contains little explanation of what the words in the statute mean.

The phrase “in the name of another” hasn’t been defined by Kansas courts and has no settled meaning in state law, she wrote, calling it “the sticking point.”

“The statute does not give fair warning to those who may be subject to it, notably for the alleged violations of K.S.A. 25-4154(a) used here as the basis for the proposed subpoena to Billingsley. Further, there is not precision or guidance in the statute sufficient to prevent arbitrary or discriminatory enforcement,” Watson wrote in a 29-page decision issued Aug. 19.

For those reasons, Watson wrote, the law is “unconstitutionally vague as applied” and can’t support the subpoena.

Judge Teresa Watson decision and order by jshorman on Scribd

The Ethics Commission is appealing the decision, asking the Kansas Supreme Court to take the case. While Watson’s decision applies only to the subpoena of Billingsley, an opinion by the state’s high court agreeing with her could significantly narrow the law or render it effectively unenforceable, possibly paving the way for contributions by straw donors.

Watson’s reasoning – if upheld – undercuts the Ethics Commission’s entire theory of the case, indicated Mark Johnson, a Kansas City-based attorney with experience in campaign finance law.

“As written, it raises the possibility of kind of unbridled pass-throughs,” Johnson said.

On the other hand, a Kansas Supreme Court decision reversing Watson and upholding the constitutionality of the law could breathe fresh life into the investigation. It could potentially make it easier for the Ethics Commission to eventually seek fines against the committees or individuals involved in the alleged passthrough scheme.

Kansas lawmakers – including Republicans fed up with the Ethics Commission investigation – don’t plan to wait for the state Supreme Court.

They are already signaling they want to take action during the 2025 legislative session to change the law. Rep. Pat Proctor, a Leavenworth Republican who chairs the House Elections Committee, said he wants the prohibition clarified.

“It is clearly too vague,” Proctor said, adding that “we’re getting to the point now where, if we don’t provide some clarity, we’re just not going to have any laws.”

“And I don’t think anybody wants that,” he said. “We want transparency, we want the public to know that their elected representatives are not bought and paid for.”

Clarifications uncertain

Bipartisan agreement exists that the state’s campaign finance law is unnecessarily vague in some areas. A 2023 legislative special committee led by Proctor that studied the law recommended clarifying the definition of giving “in the name of another” and other terms.

Democratic Gov. Laura Kelly has also signaled openness in the past to adjusting the law. Her chief of staff, Will Lawrence, emphasized to the special committee last October the importance of providing “clear language for those to follow and the Ethics Commission to enforce in instances where individuals engage in inappropriate conduct.”

Sen. Ethan Corson, a Fairway Democrat who sat on the committee, said everyone agreed the law must be clear. Lawmakers want a system where individuals won’t unintentionally find themselves in gray areas legally.

But what exactly any clarifications should say is less certain. Wording changes will go a long way in either bolstering the Ethics Commission’s interpretation of the law or ensuring PACs and committees have wide latitude to move funds around.

“We didn’t really get a chance to kind of get into what those changes would look like or what the language would be,” Corson said, noting the committee only met twice. “My sense is that would be a little bit tricky – it’s not necessarily readily apparent exactly what the changes would be.”

Reached by phone, Skoglund declined to comment for this story.

In previous court filings, Ethics Commission general counsel Kaitlyn Bull-Stewart has argued the law provides the public with sufficient notice of what conduct is prohibited and that federal law contains a nearly identical phrase about making contributions in the name of another person.

“Without such a prohibition, campaign contribution limits would be meaningless as any entity could pass their funds through intermediaries to reach a predetermined destination,” Bull-Stewart wrote in a January 2024 filing opposing Billingsley’s effort to block the subpoena.

Ryan Kriegshauser and Josh Ney, attorneys for Billingsley, in a joint interview, welcomed Watson’s decision.

“We feel vindicated because this is the exact set of arguments that we brought to the commission earlier and told them the way they’re interpreting this law is not only novel but there’s been simply no fair notice to both Democrats and Republicans alike of what this law requires,” Ney said of Watson’s decision.

‘Fishing expedition’ fears

The House Elections Committee in 2023 advanced a bill that would have set a new definition for contributions made in the name of another. Under the legislation, which never received a vote in the House, the term would have been defined to mean contributions made for the purpose of concealing the original source of the funds. It wouldn’t have applied to contributions and transfers otherwise disclosed on campaign finance reports.

Proctor said this past session he attempted to work out a solution between Skoglund and others over proposed changes to the campaign finance law but discussions reached an impasse.

“Right now, it’s so broad and so vague that frankly, it allows the commission on ethics to go on a fishing expedition to decide for themselves on a case by case what the law means,” Proctor said.

“I think what we heard loud and clear in this court decision is everybody deserves equal protection under the law and the way you do that is you’re specific and clear in the language of the law.”

Watson’s August decision contains the most detail to date of the scope of the investigation. Her written order reproduces the Ethics Commission’s “findings of fact” to support a subpoena – effectively a roadmap of the agency’s investigation.

As evidence of an alleged pass-through scheme, the agency says $39,000 in contributions to the Kansas Republican Party in 2020 originated with the Republican State Leadership Committee, a Washington-based group that works to elect Republicans to state-level offices. The agency says this happened both through direct donations and donations passed through PACs and other committees.

The agency says in 2021, $15,000 in contributions to the Republican House Campaign Committee originated from the Republican State Leadership Committee both from direct donations and pass-through donations.

The PACs and committees involved in passing through contributions included Right Way Kansas PAC for Economic Growth, Lift Up Kansas, and the local Republican Party committees in Johnson, Sedgwick and Shawnee counties, according to the Ethics Commission.

Will lawmakers ‘fix’?

The Legislature has already rewritten the state’s ethics laws once amid the Ethics Commission investigation. In 2023, lawmakers passed a bill requiring the agency to earn the permission of a judge before filing a subpoena. Kelly signed the measure into law.

The investigation became public in dramatic fashion in April 2022. After word began circulating in Topeka that the Ethics Commission had issued an array of subpoenas, GOP lawmakers proposed legislation that would have effectively removed Skoglund .

They sought to require the Ethics Commission director to have been an attorney in good standing for the past three years. Skoglund is an attorney, but his law license at the time was suspended. Directors of the Ethics Commission are not required to hold law licenses and historically have not.

Republicans quickly backed off the idea that year, but returned to the Capitol the following year with a sweeping proposal that would have substantially softened the subpoena power of the Kansas Governmental Ethics Commission and legalized some of the conduct under investigation.

Lawmakers and Kelly eventually reached a compromise that fell well short of the overhaul Republicans had wanted. In addition to requiring a judge to approve subpoenas, the agreement requires a notice of witness rights to be provided with any subpoena as well as a right to an attorney.

When the Ethics Commission is determining whether to file a complaint, the measure allows the respondent to a complaint to request an independent body, the Kansas Office of Administrative Hearings, conduct hearings to find probable cause rather than the Ethics Commission. And it places caps on how the commission can fine individuals, prohibiting the commission from fining an individual for more than three counts of the same violation in one case.

Watson’s order blocking the Billingsley subpoena appears to be one of the first tests of the new requirement that the Ethics Commission get a judge to sign off on subpoenas.

Kriegshauser and Ney, the attorneys, are still hoping for more changes.

“This is just one further voice being added to the choir that the Legislature needs to fix this,” Kriegshauser said.