September 27, 2021

Commission hears public comment as it launches review of digital ad rules

The Commission began discussing what campaigns and advertising vendors need to disclose about digital political advertising in anticipation of revising disclosure rules later this year or early next.

The Commission heard testimony and received written comments from sellers of digital advertising, trade associations representing the tech industry, campaign watchdogs, campaign participants and citizens.

Ian Goodhew, head of government relations for Google in Washington state, told the commission his company believes that campaigns should be required to identify ads as political before they run. He also said that if campaigns fail to self-identify their ad as political, ad platforms should have more than the currently required 24 hours to provide information to the public about political ads.

“Our ad space is very inexpensive, and it’s self-service, allowing for all types of ads as long as the content meets our content policies,” he said. He noted that Google self-imposed a policy prohibiting state and local political ads from Washington state due to current PDC rules. But he said some political ads still managed to slip through the company’s automated filters.

He said the high volume and self-service nature of Google ads makes it difficult for the company to decide what’s political, if ad purchasers don’t acknowledge it up front.

“We don’t think we’re the right entity to make those decisions,” he said.

He said other states do require ad purchasers to make those disclosures, and that Google provides a platform for political ads in those states.

David Edmonson of TechNet, a network of tech company executives, said updated rules that recognize the “inherent distinctions between online advertising and traditional advertising like newspapers, radio and billboards will better allow companies to comply with the law.” He said when platforms ban political ads from Washington state campaigns because they can’t comply with PDC rules, the effect is felt most heavily by campaigns with limited resources that can’t afford traditional advertising.

Rowland Thompson spoke for both state newspaper and broadcasting associations. He said broadcasters would like the PDC to adopt standards that mirror those imposed by the Federal Communications Commission.

He noted that newspapers sell online political ads, and media companies may sell ad packages that include print, online and broadcast ads. He said media outlets believe they can comply with PDC rules for ads purchased directly from them.

But he said media companies also sell space to entities that buy space broadly across the internet. The media outlets don’t always know the content of the ads that fill that space, or which viewers of their online sites see which ads. He asked the PDC to place responsibility for disclosure in those cases on the entities buying internet space, rather than on the media outlets.

Written comments from three professional campaign treasurers – Conner Edwards, Tom Perry and Jason Michaud – asked the Commission not to impose more reporting obligations on campaigns.

“We believe this burden… is more appropriately placed on the commercial advertisers who profit from the sale of political advertisements,” they said, adding that new regulations would increase their work and that would increase costs for campaigns.

Written comment from the nonprofit Campaign Legal Center said that Washington’s rules on ad disclosures are already strong, but suggested some new provisions, including a government-hosted public archive of political ads.

Such an archive would give the public access to so-called “dark” election ads – online ads microtargeted to specific segments of voters but otherwise invisible to the rest of the public and to election authorities.

 

Legislative agenda forming

Commissioners reviewed an initial draft of what the PDC could include in its request for new legislation during the 2022 legislative session.

The proposed legislation would:

  • Adjust campaign reporting schedules to reflect the state’s vote-by-mail system. The campaign finance law and filing deadlines were created at a time when there was a single election day, but voting now starts as early as 18 days before the election date. Currently, some information filed with the PDC is reported after early voters have mailed in their ballots.
  • Require weekly contribution reporting start earlier (five months before election day instead of the current four months).
  • Require weekly expenditure reports starting the month before the election month (e.g. Oct. 1 for a November general election); this would replace the current system which requires reports be filed 21 days and seven days before election day.
  • Require that campaign books of account be available for public inspection 18 days before an election, instead of the current 10 days.
  • Require weekly independent expenditure reports starting one month before the election month.
  • Expand the window in which spending on qualifying political ads must be reported within 24 hours. It would move from 21 days before an election to 60 days before.
  • Revise reporting of large last-minute contributions. Currently the reporting window opens seven days before a primary election and 21 days before a general election. This would move the reporting to one month before an election date. Also, it would require such contributions be deposited within two days during those periods.
  • Raise the threshold amount for reporting large last-minute contributions from $1,000 to more than $2,000. This would largely exclude maximum contributions from individuals.
  • Update grassroots lobbying requirements and provide a definition of grassroots lobbying.
  • Add a procedure to allow an exemption for contribution limits applied to recall committees. This is in response to federal case law striking limits as applied to recall committees that do not coordinate with potential candidates or the appointing authority.
  • Require disclaimers on political ads with endorsements, when the endorsement was for the candidate running in a different election or race than the current one.
  • Require disclaimers on political ads that encourage votes for a person who is not a candidate for office as of the date the advertisement is first presented.

 

The Commission plans to approve a final draft of proposed legislation before the beginning of the 2022 session.

 

Campaign audits show high level of filer compliance

With only a handful of exceptions, 16 legislative campaigns audited this year by PDC staff filed disclosure reports accurately and on time.

“It shows we have great customer service, so people are getting the information in right, correctly, the first time,” said Commission Vice Chair Nancy Isserlis.

But she noted that the 16 campaigns audited so far were mostly run by campaign professionals.

“We may see a shift when we look at some of the smaller, non-professionally run races,” she said. Audits from 2019 local races are next on the PDC agenda.

The eight new audits of filings in four 2020 state House races join previous audits of 2018 state Senate races.  Except for a few late-filed reports, candidates substantially complied with reporting requirements and employed sound internal control procedures.

All 16 audit reports are available on the PDC website.

The newest audits presented to the Commission in August included four Republican candidates and four Democrats: Zachary Zappone, Mike Volz, Dave Paul, William Bruch, Vicki Kraft, Tanisha Harris, Alicia Rule and Luanne Van Werven. 

Together, these eight campaigns recorded more than $2.2 million in contributions and expenditures. A total of 44.7% of cash and in-kind contributions to those campaigns came from party and caucus committees.

Auditors reviewed 250 reports filed by the eight campaigns. Of those, eight were filed a few days late.

Staff recommends that candidates work to obtain more robust invoices from vendors that provide goods and services to their campaigns. In some cases, descriptions of expenditures and order dates were not always clear.

 

ORCA changes questioned

In other public testimony, campaign treasurer Edwards presented the Commission with a critique of recent changes to the PDC’s ORCA (Online Reporting of Campaign Activity) software. He said updates in the software require treasurers to provide more information than what was previously required or what is required by law or rule, and that the changes were made without first soliciting public feedback.

The revised categorization of expenditures in ORCA is aimed at guiding filers to provide the right information. PDC Deputy Director Kim Bradford  said that while the changes may feel new, they were designed to capture what the PDC has long asked campaigns to provide.

Commission Chair Fred Jarrett suggested that some categories might be streamlined and he asked staff to respond to Edwards’ concerns.

 

To learn what else was discussed at the August meeting, see the full Commission agenda.

 

Next Commission meeting: Sept. 23, 2021