AUSTIN — The Texas Ethics Commission on Monday took another step to regulate so-called dark money groups by passing a rule aimed at special interest-backed television ads, radio spots and mailers disseminated in the weeks before an election.

It is the state regulator’s latest attempt to adapt often outdated campaign finance rules to a changing landscape in which politically active nonprofits and their anonymous money are increasingly playing a bigger role in Texas elections.

The regulation passed Monday officially moves disclosure requirements for some third-party communications made within 30 days of election beyond an "express advocacy" precedent that relies on a "magic words" test. Previously, an ad or mailer had to include language such as "vote for," or "elect" to qualify as political activity.

Under the new rule, communications by a group such as a 501(c)4 nonprofit will trigger disclosure laws if it is made close to an election and is "susceptible to no other reasonable interpretation than to urge the passage or defeat" of a candidate or a ballot measure.

Commonly called the "functional equivalent" of express advocacy, that standard imposes a level of disclosure that remains contested but generally upheld by courts across the country.

At issue is an attempt to clarify what type of communications by an outside group is regulated as a political expenditure. It has has taken on new scope in recent years as special interest groups, mostly nonprofit 501(c)4s that are not required under federal law to disclose donors, spend money on ads that often walk a fine line between issue-based advocacy and politicking.

In the past year, while the Legislature remained at loggerheads on the issue, state regulators wrestled with ways to require more disclosure of the sources of dark money, an issue that surfaced after the U.S. Supreme Court’s 2010 decision in Citizens United vs. Federal Election Commission, which allowed for corporations and unions to spend unlimited sums on independent expenditures.

The state’s new disclosure requirement for third-party ads follows an effort earlier this year in which the commission passed a rule spelling out when a nonprofit group would be regulated like a political action committee, which is required to disclose its donors.

Taken together, the two actions form the bedrock for how independent expenditures and the groups that make them will be regulated.

“Post-Citizens United, everybody is sharpening their pencil to make sure they don’t have any arbitrary restrictions without losing the maximum transparency,” Commission Chairman Paul Hobby said. “To take Texas forward with a disclosure scheme that’s intact, that’s very important.”

Monday’s vote wrapped up more than 10 months of consideration on the third-party communications rule, an effort that has again put the commission at odds with conservative groups and their lawyers, who argue that the state agency has gone too far.

Critics of the commission’s new rule say it is broader than what courts have allowed for in a “functional equivalence” test.

In a letter to the commission, one Washington, D.C., campaign finance lawyer said groups as large as the National Rifle Association and entities as small as volunteer-run organizations will be affected. Under the express advocacy standard, those groups could “speak freely … about expressing opinion of legislators, bill and policies so long as communications did not use phrases like “vote for,” “oppose,” etc.”

“In short, there will be less genuine issue speech precisely because it is unwise for organizations to disseminate communications that so much as approach a blurry regulatory line,” wrote Cleta Mitchell, a lawyer who represents conservative groups.

Caleb Burns, a Washington, D.C., campaign finance expert who represents 501(c)4s, said the commission is likely exceeding its authority because the Legislature has never moved to change state law to make disclosure requirements apply to the “functional equivalent” of express advocacy.

“This notion that the Legislature has intended in some ways to shape or to expand regulation beyond the express advocacy magic words definition of political activity is belied by the history of what the Legislature has done,” said Burns, a partner with Wiley Rein.

Lawyers point to decades of precedent set by a 1976 Supreme Court decision that said ads can be regulated by federal campaign finance rules only if there is express advocacy, a ruling that provided the magic words test.

In Texas, a commission opinion from 1994 and a state Supreme Court decision from 2000 written by then-Justice Greg Abbott affirmed express advocacy as the state standard. Commission officials, however, maintain that the agency never adopted a rule or legal opinion preventing it from going beyond express advocacy.

Hobby, the commission’s chairman, said “part of the problem is express advocacy used to be easy to define.” A controversial portion of the commission’s new rule allows for “words, whether displayed, written or spoken … or sounds” to factor into the “reasonable interpretation” for candidate-based ads.

“You have sounds and images in a multimedia world that are effective media weapons that go beyond ‘vote for Joe,’” he said.

David Keating, president of the Center for Competitive Politics, a nonprofit based in Washington, D.C., said the commission’s new rule will help clear up what he described as a confusing area of Texas law. But he said the commission’s functional equivalence test creates a subjective playing field.

“Regulators can have unreasonable interpretations,” he said. “People need to be able to make an ad and not worry about these subjective factors.”

drauf@express-news.net