Group that backed marijuana legalization ordered to reveal donors

Posted at 1:37 PM, Dec 29, 2020

HELENA — Montana’s top political cop is ordering a national group that spent millions this year supporting the successful campaign for marijuana legalization in the state to provide more information about where that money came from.

In a decision filed Monday, Commissioner of Political Practices Jeff Mangan ruled the North Fund should have filed as an independent political committee. He gave the organization 10 days to provide his office with a list of its donors, how much they contributed and other financial disclosure information.

The decision came in response to a complaint from Steve Zabawa, treasurer of the anti-legalization committee Wrong for Montana.

The North Fund, headquartered in Washington, D.C., contributed around $5 million to New Approach Montana, the committee that backed Initiative 190 and Constitutional Initiative 118 – both approved by Montana voters in November. The fund was by far the largest contributor to the legalization effort, which raised a total of around $7 million.

In March, the North Fund registered with the Commissioner of Political Practices as an “incidental committee,” defined in state law as a group that may spend money on a campaign, but which is “not specifically organized or operating for the primary purpose of supporting or opposing candidates or ballot issues.” Incidental committees are not required to disclose their donors, unless contributions were directed specifically for a certain candidate or ballot issue.

Earlier this year, Mangan decided to reclassify the North Fund as an independent committee, which would require it to disclose its donors. The North Fund asked in September for that decision to be reconsidered. Mangan was still in the process of reconsidering when Zabawa filed his complaint in October.

The North Fund does not have a public website, and the address it provided in COPP filings is a “co-working space” in Washington, D.C. In response to an inquiry from MTN in October, a spokesperson said the group’s mission was “to carry out public education and advocacy efforts regarding progressive policies, through grassroots organizing, legislative lobbying, or ballot measures, on a wide range of issues.”

According to Mangan’s decision, the North Fund argued it should be able to file as an incidental committee because it wasn’t operating for the purpose of supporting any single political issue, and because its election activity in Montana would be only a small portion of its overall expenditures for 2020 – estimated at less than 10%.

Mangan quoted the organization’s attorneys as saying in a letter, “A political committee must have as its primary purpose influencing Montana candidates or ballot issues in order to qualify as an Independent Committee. Any activity by an organization outside the State of Montana is irrelevant for political committee status determination purposes relating to Montana elections.”

However, Mangan said state law and rules don’t exclude out-of-state operations, and the North Fund’s spending in other states’ elections should be taken into account when determining the group’s “primary purpose.”

“North Fund cannot reasonably argue both that its Montana expenditure activities represent such a small portion of the overall totals that it could never be justifiably defined as the group’s ‘primary purpose’ while at the same time arguing that non-Montana expenditure activity should not be applied towards committee classification,” he said.

In the decision, Mangan identified more than $12 million in contributions the fund had given to support and oppose a variety of ballot measures in four other states this year. He said, while the group argued 70% of its expenditures were not election-related, they had not provided any specific information about other spending in Montana or elsewhere that would allow him to establish a different primary purpose.

Mangan also noted that the North Fund paid several other organizations, for services it described as "in support of New Approach Montana." Because New Approach Montana reported those expenditures as in-kind contributions, Mangan argued the two committees had been coordinating.

A spokesperson for the North Fund declined to comment on the decision, saying the group would not speak about an ongoing legal matter.

I-190 sets up a framework for a recreational marijuana system in Montana, including a 20% tax on sales. CI-118 amends the Montana Constitution to let the state prohibit marijuana sales to people younger than 21.

Zabawa and Wrong for Montana are currently challenging I-190 in court, arguing it is unconstitutional because it appropriates state money through a ballot measure. However, the first provisions of the initiative are set to take effect on Friday.

New Approach Montana also received about $1.9 million from the national New Approach PAC. That organization is also registered with COPP as an incidental committee and does not include donor information on its forms in Montana. However, it does reveal its donors in federal filings with the IRS.