SANTA FE – U.S. Rep. Steve Pearce has roughly $1 million sitting in his federal election account – enough to get his campaign for governor off to a strong start.
But whether the New Mexico Republican can tap into that massive balance is now the subject of a lawsuit, filed Thursday morning in U.S. District Court in Albuquerque.
At issue is whether a transfer of Pearce’s federal campaign cash to the state campaign is subject to the $5,500 contribution limit that governs the typical donation to a gubernatorial campaign in New Mexico. Secretary of State Maggie Toulouse Oliver has said it is – that the transfer is similar to a donation and must be limited to the cap.
Pearce, of Hobbs, is suing Toulouse Oliver, a Democrat, to ensure he can transfer his entire federal account to his state campaign – a response to a letter she issued earlier this week explaining her ruling.
Prohibiting the entire transfer would illegally discriminate against Pearce and other federal officeholders, Pearce argues, because state officials are allowed to make such transfers between races in state campaigns.
Toulouse Oliver, in turn, says state law and a 1996 court decision support her contention that donation limits apply to federal transfers. She also cites a legal analysis completed under her Republican predecessor.
Furthermore, her office says, she’s applying the same limits to one of Pearce’s Democratic rivals and colleagues in Congress, U.S. Rep. Michelle Lujan Grisham, who’s also running for governor.
The outcome of the case could reshape election law in New Mexico. Besides settling whether a U.S. senator or representative can use federal cash for a state race, the court decision would also determine whether municipal candidates – an Albuquerque mayor, for example – could use local campaign money to run for state office.
New Mexico law caps donations in next year’s statewide campaigns at $5,500 per contributor for each election cycle, or $11,000 altogether for someone who runs in both the 2018 primary and general elections.
The stakes are higher for Pearce than for Lujan Grisham.
His federal campaign account had more than $1 million in cash on hand at the end of June, according to the Federal Election Commission. Lujan Grisham, by contrast, had less than $13,000.
The Pearce campaign accused Toulouse Oliver of making a politically motivated ruling on the campaign limits.
“The Secretary of State’s Office readily admits that the law cited to reach this conclusion was deemed unconstitutional by a federal court. Yet, they did it anyway,” Pearce campaign spokesman Greg Blair said in a written statement. “Given these facts, we are only left to conclude that the Secretary of State is bending the rules to benefit candidates from her own party.”
A spokesman for Toulouse Oliver says she’s applying the law consistently. Her office gave the same interpretation of the rules several months ago when Lujan Grisham, a Democrat, asked whether she could transfer over her federal cash, Toulouse Oliver’s office said. And a legal analysis prepared last year – when Republican Brad Winter was secretary of state – also said contribution limits would apply, her office said.
“For Congressman Pearce’s team to now make any claims of partisanship is self-serving, disingenuous and flat out wrong,” Deputy Secretary of State John Blair said in a written statement to the Journal.
1996 court decision
Each side cites a 1996 court decision for support.
That decision – centering on then-U.S. Rep. Bill Richardson’s plans to run for governor – struck down a state prohibition on transferring federal funds to a state campaign. The prohibition violated the First Amendment, the judge ruled, because election spending is protected speech.
The secretary of state contends the decision didn’t address whether state contribution limits would apply – because there weren’t any at the time. A later state law imposed contribution limits, which apply to a deposit of funds like the proposed federal transfer, her office says.
The Pearce campaign, in turn, says the 1996 decision makes it perfectly clear that Pearce has a constitutional right to use his federal campaign cash.
His lawsuit asks a federal judge to bar Toulouse Oliver from applying contribution limits to the transfer of money.
The money he raised for his congressional campaigns, Pearce argues, was already subject to federal contribution limits, which are at least as stringent as the New Mexico requirements.
Pearce is the only Republican candidate in the governor’s race so far. He announced his campaign earlier this month.
Lujan Grisham, who announced in December, has raised about $893,000 for her state campaign, according to a state report she filed in April. She had $741,000 in cash in her state account at the time.
Also seeking the Democratic nomination for governor are former media executive Jeff Apodaca of Albuquerque, Sen. Joseph Cervantes of Las Cruces and Peter DeBenedittis, an anti-alcohol activist from Santa Fe.
The primary election is in June, and the general election is in November.