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A 48-page newsprint candidate-endorsement publication mailed to voters statewide is exempt from campaign finance reporting rules under Idaho law because it qualifies as a newspaper, the Idaho Attorney General’s office has ruled.

That’s because Idaho law is narrower than federal law, wrote Deputy Attorney General Brian Kane, classifying such publications as newspapers as long as they’re not owned or controlled by a candidate or political party.

“Nothing indicates such ownership and control to this office,” Kane wrote in a four-page legal opinion addressed to Idaho Secretary of State Lawerence Denney.

Under Idaho law, Kane wrote, the publication “appears to be serving a legitimate press function.”

It may not be exempt under federal law, however. “Under the federal campaign finance law, the test for ownership and control includes candidates, parties and committees,” Kane wrote.

The publication appears to be funded and controlled, at least in part, by political committees affiliated with campaign consultant Lou Esposito, Kane wrote, including Free Enterprise PAC, Gun PAC, and Land PAC.

“Although purporting to be a newspaper, The Idahoan appears to be a shill intended as cover for Mr. Esposito’s political committees and their corresponding viewpoints,” the legal opinion concluded.

But while that’s an issue under federal law, Kane found, it’s not under Idaho law.

Late on Monday afternoon, Kane revised the legal opinion to remove the “shill” sentence, saying it was a mistake to include it. “Under the Idaho definition for the press exemption, it really isn’t a close call,” he said. “They really do qualify for the exemption.”

Kane advised Denney that he might want to propose an amendment to Idaho’s law to include committees, “if he believes the activity discussed in this analysis warrants oversight.”

Denney, in a news release issued Monday, said, “It appears that The Idahoan qualifies for the press exemption in Idaho Code.”

Esposito maintained that the publication was the first issue of a new “newspaper” that would be published three times a year — once before the primary election, once before the general election, and once prior to the legislative session.

The Idaho Democratic Party filed a complaint, charging that the move was an attempt to evade the Idaho Sunshine Law’s reporting requirements.

Esposito said about a third of the cost for the publication — $100,000 — came from two Eagle high-tech executives, Matt Rissell sand Brandon Zehm, co-founder of TSheets, while the rest came from unnamed “investors.”

Betsy Z. Russell is the Boise bureau chief and state capitol reporter for the Idaho Press-Tribune and Adams Publishing Group. Follow her on Twitter at @BetsyZRussell.

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