A Multnomah County Circuit Court Judge has ruled that the city auditor must examine a complaint into Portland Mayor Ted Wheeler’s $150,000 loan to his own re-election campaign.

Voters approved strict campaign finance limits in 2018, including a $5,000 cap on how much candidates can loan themselves. However, City Auditor Mary Hull Caballero had decided not to enforce the self-funding portion of the charter, saying it conflicts with the U.S. Supreme Court precedent and would inevitably be struck down by the court.

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Mayor Ted Wheeler speaks at a press conference Aug. 30, 2020, in Portland, Ore. A man was shot and killed the previous night as a Trump car caravan rolled through downtown.

Mayor Ted Wheeler speaks at a press conference Aug. 30, 2020, in Portland, Ore. A man was shot and killed the previous night as a Trump car caravan rolled through downtown.

Bradley W. Parks / OPB

This decision by the auditor drew scrutiny after the mayor made a $150,000 loan to his campaign. His opponent, Sarah Iannarone, filed a lawsuit on Oct 6. asking the court to make the city auditor enforce the cap.

On Friday, Multnomah County Circuit Judge Thomas Ryan ruled that the city auditor had to follow the rules in the charter and city code and look into the complaint that alleged Wheeler violated campaign finance rules with his loan.

In a statement, Hull Caballero wrote that the decision would require the office to “notify the parties who submitted the complaints and accept additional materials” but emphasized that the office had not been ordered to fine the mayor nor had the judge ruled on the constitutionality of the self-funding limits.

“The Auditor’s Office is committed to lawfully implementing the City’s election laws," she wrote.

Attorney Alan Kessler, who represented Iannarone’s campaign committee, argued at the hearing that by refusing to open an investigation into Wheeler’s loan, the city auditor had “short-circuited” the ability of the court to weigh in on the legality of this part of the charter.

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“An elected official acting in an administerial role or acting in an executive role should follow the law as written by legislators, or in this case as written by the voters in the charter with a mandate,” he said. “And it should only be in the rare case that they use their own independent judgment to evaluate the law.”

Hull Caballero has said in the past that the city is not enforcing the limit on self-financed campaigns because the U.S. Supreme Court has “consistently and soundly” rejected limits on how much a candidate can spend to finance their campaign.

Attorney Maja Haium, representing the auditor’s office, argued that the city could not infringe on candidates' rights to put their own money into their election effort - even if language instructing them to do so had been voted into the charter.

“The city and the council also have a duty to not violate our resident’s First Amendment rights and when there’s a conflict the supremacy clause is very clear about what we must do,” she said.

The outcome of the investigation into whether Wheeler violated the charter remains with the auditor’s office. Based on the city’s arguments, it’s unlikely the investigation will find that Wheeler has violated the rules it maintains are unconstitutional.

“The investigation would essentially be ‘we’ve opened the investigation, this limit is unconstitutional. We will not enforce that limit,’” said Haium during the hearing. “That ends the investigation.”

But, Iannarone’s campaign pledges to challenge that ruling, potentially setting up a bizarre legal fight down the road should she win office in November and oversee the city attorney’s office.

“Any argument that Mayor Wheeler’s massive loan to his campaign, during this pandemic, is covered under any first amendment protections not only flies in the face of Portland voters but is also frankly ludicrous," wrote campaign manager Gregory McKelvey in a statement. "...If the auditor dismisses the complaint due to her position that all money is free speech, we will again challenge this in court because our campaign cares more about election law than any campaign for Portland Mayor.”

According to the campaign finance rules, candidates found to be in violation could be hit with a fine of “not less than two nor more than twenty times” the amount of the illegal contribution. That would be a maximum penalty of $3 million.

Wheeler’s campaign declined to comment. The campaign had previously dismissed the suit as a distraction, accusing Iannarone of abusing “the public process through complaints and litigation for political gain.”

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