Department of Administration

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1 Department of Administration ALASKA PUBLIC OFFICES COMMISSION 2221 E. Northern Lights Blvd., Rm. 128 Anchorage, AK Main: Fax: TO: APOC Commissioners DATE: September 30, 2016 FROM: Heather R. Hebdon, Campaign Disclosure Coordinator SUBJECT: Staff Report CD Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux SUMMARY OF COMPLAINT On August 30, 2016, the Alaska Democratic Party filed an expedited complaint against Gabby s Tuesday PAC ( thepac ) and Gabrielle LeDoux, a candidate for State House District The complaint alleges respondents, as a single entity: (1) accepted prohibited contributions from lobbyists; (2) accepted contributions in excess of prescribed limits; and (3) made prohibited contributions to other candidates. On September 1, 2016, the Commission held a special hearing to consider whether the complaint set forth sufficient grounds to merit consideration on an expedited basis. After consideration of the arguments presented by complainant and respondent, the Commission found that the complaint set forth sufficient grounds for expedited consideration, but that the need for expedited consideration could be alleviated if the respondents refrained from the activities cited in the complaint. Based on the proposal of respondents, the Commission ordered respondents to refrain from engaging in the activities that were the subject of the complaint, until a hearing on the merits could be held Exhibit 1, Complaint CD. Exhibit 2, Order on Expedited Consideration.

2 BACKGROUND On or around July 20, 2016, Rep. LeDoux contacted APOC staff with questions regarding the organization of a group. After discussing basic distinctions and requirements for groups and independent expenditure groups, her primary question was whether she, as a legislator, was prohibited from forming and directing the activities of a group. Through further conversations she also inquired about a group s ability to accept contributions from lobbyists. Staff provided responses to her questions and the general conclusion that campaign disclosure law did not preclude her contemplated activities. 3 ISSUES The complaint alleges three violations. Complainant contends that Respondents have accepted illegal contributions from lobbyists; have accepted contributions in excess of contribution limits; and have made illegal contributions to other candidates. However, the underlying premise of each of those allegations and the primary question presented herein is whether Gabby s Tuesday PAC is an extension of Rep. LeDoux s campaign for purposes of contribution limits and restrictions. FACTS On or before July 22, 2016, Rep. LeDoux corresponded with APOC staff regarding establishing a regulated group. Staff advised that her contemplated activities were permissible. 4 On July 22, 2016, Rep. LeDoux filed a Group Registration for Gabby s Tuesday PAC whose stated purpose is to raise money for common sense conservative candidates. 5 On August 9, 2016, the PAC filed its 7 Day Campaign Disclosure Report for the Primary Election Exhibit 3, Answer to Complaint at pp Id. Ex.1 at pp Ex.1 at pp Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 2

3 The PAC s 7 Day Report disclosed contributions received from ten registered lobbyists residing outside of House District The PAC s 7 Day Report disclosed contributions made to ten legislative candidates. 8 The PAC s 7 Day Report disclosed no contributions made to Rep. LeDoux s campaign for re-election. 9 LAW AND ANALYSIS Each allegation in the complaint is based on Complainant s misinterpretation of statute. Complainant alleges that because Rep. LeDoux is a candidate and because she directly controls the activities of Gabby s Tuesday PAC, then the activities of the two are automatically synonymous for purposes of contribution limits and restrictions. However, as echoed throughout statute and regulation, and as consistently interpreted by the Commission, this is simply incorrect. THE PAC IS NOT AN EXTENSION OF REP. LEDOUX S CAMPAIGN The Commission has historically interpreted a controlled group as two or more people acting jointly whose major purpose is to further the nomination or election of a particular candidate. The underlying intent of the controlled group concept is to prevent circumvention of the contribution limits to a candidate not to preclude any individual from forming a group for other legitimate purposes simply because that individual happens to also be a candidate. For purposes of determining whether a group s contributions must be restricted, campaign disclosure law first considers the group s intended purpose. If the group intends to support a single candidate or if it intends to spend more than one third of its money in furtherance of a single candidate, the candidate s name must be used as part of Id. Id. Id. Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 3

4 the group s registered name. 10 The group is also required to designate its group type and its purpose on its group registration. 11 In this case, Gabby s Tuesday PAC registered as a special interest group. 12 And although the PAC used the name Gabby in its name, it is not the name of the candidate, Gabrielle LeDoux, but rather a nickname of the individual who formed the PAC. Moreover, the PAC has not expended any funds in support of Rep. LeDoux s campaign, and Rep. LeDoux has made it clear that the purpose of the PAC is to support other candidates for office and not her own campaign. Next, campaign disclosure law considers a group s actual activity. If the group spends more than half of its money on only one candidate, the group would be considered to be controlled by that candidate. 13 As stated on its group registration and through conversations with Rep. LeDoux, the PAC is organized to support multiple conservative candidates. 14 The PAC s reported activity mirrors this stated purpose. As demonstrated by its 7 Day Report, leading into the Primary Election the PAC supported ten candidates for statewide office, but none within House District 15, and none that could affect Rep. LeDoux s own campaign. 15 COMMISSION HISTORY Since 1974, campaign disclosure law has used the term controlled group, or some derivative thereof, to distinguish groups which operate under a candidate s control in furtherance of the candidate s personal campaign. The intent in categorizing them as controlled was to prevent circumvention of campaign limits. It is clear, even in the early years, that the Commission found a distinction between a group that supports multiple candidates, and a group whose primary purpose was to benefit a single candidate, which was thereby deemed to be an extension of the candidate s personal campaign AS (b). 2 AAC (a). Ex.1 at p.7. AS (8)(B). Ex.1 at p.7. Ex. 1 at pp Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 4

5 In its June 1976 meeting the Commission adopted a policy decision regarding contributions and expenditures by groups. 16 At item #2 the Commission took the position that there was no limit on contributions from a single source to a group that supported more than one candidate, provided the group did not spend more than 50% of its money on a single candidate. Item #5 of the policy further clarified that groups controlled by a candidate, in some instances, would be subject to contribution limits, but not in all instances. Specifically, if the group supported only one candidate, or if the group spent more than 50% of their money on one candidate, the group would be subject to the $1,000 contribution limit, and contributions would be aggregated with those made directly to the candidate. Conversely, if the group supported multiple candidates and did not spend more than 50% of its money on a single candidate, it would not be subject to any contribution limit. This same interpretation is reiterated in a 1979 staff Memo to All Commissioners noting a group is considered to be controlled by a candidate and subject to the $1,000 contribution limitation only if it intends to support or spend more than 50 percent of its funds on behalf of only one candidate. 17 In 1981 Staff drafted a recommendation for statute revision for consideration by APOC Members. 18 It suggested a complete rewrite of AS and includes a draft definition that again notes, specifically at page 10 (8) controlled group means a group which is considered to support only one candidate and to act with his knowledge and consent and, for purposes of.070 of this chapter contributions to the group shall be joined with contributions to the candidate; In 1991, in a memo to the Commission, staff explains that groups and fundraisers are categorized as controlled to strengthen the contribution limit of $1,000 per year Exhibit 4, 6/19-20/76 Commission Meeting Minutes. Exhibit 5, 1979 Memo to Commissioners. Exhibit 6, 1981 Excerpt of Draft Recommendations. Exhibit 7, 1991 Staff Memo to Commissioners. Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 5

6 Contributions to groups controlled by a candidate count toward the $1,000 limit that the contributor can give to that candidate. A 1994 Advisory Opinion issued to Rep. Pat Carney surmises it is permissible for a candidate to also serve as chair for a ballot proposition group. 20 The opinion determined that as a group controlled by a candidate, costs of any expressed advocacy that jointly advocated for both the ballot proposition and the candidate s campaign would have to be shared by both campaigns or a share of the costs would be reportable as a nonmonetary contribution from the ballot group to the campaign. But, the opinion acknowledges the reality that a candidate could wear two hats with two distinct missions, one as the chair of a group and the other as a candidate for re-election. The Opinion recognized that the mere fact that a candidate served as the chair and spokesperson for a group did not automatically marry the two campaigns. Rather, the activities that the group and candidate engaged in determined their contribution and expenditure restrictions, if any. Similarly, in a 1994 Advisory Opinion to Douglas Rickey, treasurer for the Greater Juneau Democratic Precinct Committee, staff noted the intent in defining controll ed groups is to prevent groups from becoming conduits for contributors wishing to contribute more than the limit to a specific candidate and to prevent candidates from using groups to solicit additional funds from contributors who have already given up their limit to the candidate. 21 It further notes that in observing the $1000 contribution limit, [the contributor] must cumulate the contribution to the controlling candidate in order to determine when he or she has reached the annual $1000 limit on contributions to that candidate. Prior to the 1996 campaign finance reforms, the definition of candidate did not include a group controlled by the candidate, but that language already existed elsewhere in statute. Placing it within the meaning of candidate did not change the meaning of a controlled group; it only clarified that the same limits and restrictions which apply to the Exhibit 8, Carney Advisory Opinion (Approved by the Commission June 30, 1994). Exhibit 9, Rickey Advisory Opinion (Approved by the Commission December 1, 1994). Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 6

7 candidate s campaign apply collectively to a group whose activities are conducted for purposes of that candidate s campaign. Interpreting it as a blanket prohibition, as the complaint suggests, which would preclude Gabrielle LeDoux from engaging in political speech and association, other than for purposes of her own campaign, raises serious constitutional questions. LOBBYIST CONTRIBUTIONS TO THE PAC ARE NOT PROHIBITED Complainant contends that Gabby s Tuesday PAC is an extension of Rep. LeDoux s campaign for re-election, and thereby contributions from lobbyists residing outside of House District 15 are prohibited. 22 As explained above, however, this is not correct. Under campaign disclosure law, a lobbyist is prohibited from contributing to legislative candidates outside of the district in which the lobbyist is eligible to vote. 23 This narrowly tailored exclusion, however, does not wholly preclude a lobbyist from making any contribution in an Alaska election. A lobbyist, as an individual, may permissibly contribute to municipal candidates and gubernatorial candidates. 24 A lobbyist may also contribute to groups and political parties, both of which, like Gabby s Tuesday PAC, make direct contributions to legislative candidates. In fact, a simple search of contributions shows that it is not uncommon for lobbyists to contribute to various industry and labor groups, though more common, are their contributions to political parties. 25 It is clear that a lobbyist residing outside of Rep. LeDoux s district cannot contribute to her legislative candidate campaign. However, the contributions in question were not made to her legislative candidate campaign; they were made to a group. Further, because candidate campaigns cannot use their own contributions to make contributions to other groups or candidates, the contributions in question cannot be funneled back to Ex. 1 at p.3. AS (g). AS (b). Exhibit 10, (non-exhaustive) examples of lobbyist contributions to groups/parties for CY Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 7

8 Rep. LeDoux s legislative candidate campaign. 26 The lobbyists contributions were not prohibited contributions to a legislative candidate; they were permissible contributions to a group that supports various candidates, not including Rep. LeDoux. CONTRIBUTIONS WERE WITHIN THE PRESCRIBED LIMITS Next, the complaint alleges that at least one individual exceeded his $500 annual contribution limit when he contributed to both Rep. LeDoux s candidate campaign and Gabby s Tuesday PAC. 27 Again however, this is based on the assumption that Gabby s Tuesday PAC is an extension of Rep. LeDoux s campaign for re-election. Campaign disclosure law prescribes a contributor s annual contribution limits. 28 Specifically, an individual can give $500 per year to both a candidate and to a group that is not a political party. 29 Here, a contributor contributed his annual limit of $500 to two distinct campaigns Rep. LeDoux s candidate campaign and Gabby s Tuesday PAC group campaign. Neither contribution exceeded the contributor s annual limit. THE PAC S CONTRIBUTIONS TO CANDIDATES WERE PERMISSIBLE Finally, the complaint alleges that Gabby s Tuesday PAC made prohibited contributions to ten other candidates. 30 This again, however, is based on the assumption that the PAC is an extension of Rep. LeDoux s candidate campaign. In general, a candidate s use of campaign contributions is limited by statute. The law requires that candidate contributions be used for expenses reasonably related to the candidate s campaign. 31 Although written fairly broadly, the statute clearly prohibits the use of a candidate s campaign contributions to make direct contributions to other candidates or groups. 32 Here, Rep. LeDoux s candidate campaign did not use its contributions to make AS (b)(7). Ex. 1 at p.5. AS (b). AS (b)(1). Ex. 1 at p.5. AS (a). AS (b)(7). Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 8

9 contributions to other candidates. Rather, a separate group Gabby s Tuesday PAC collected contributions for purposes of supporting conservative candidates. The group made permissible contributions within the prescribed limits to other candidates. CONCLUSION Gabby s Tuesday PAC is not automatically an extension of Rep LeDoux s campaign simply because she happens to be a candidate. Rather, to determine whether (1) contributions to the PAC are contributions to the LeDoux campaign; (2) contributions to the PAC from lobbyists are contributions to the Ledoux campaign; (3) or contributions from the PAC to other candidates are contributions from the Ledoux campaign; the purpose of the PAC and the actual activity of the PAC must be examined. Here, the purpose of the PAC is to make contributions to candidates other than Rep. LeDoux; and the PAC s activity reflects exactly that purpose. Given the purpose and activity, the PAC is not an extension of Rep. LeDoux s campaign for purposes of contribution limits and restrictions. RECOMMENDATION Based on the foregoing, and the arguments made by Respondents, staff recommends the complaint in this matter be dismissed in its entirety. I hereby certify that on this date, I caused a true and correct copy of the foregoing to be delivered as indicated to the following: Joe McKinnon 1434 Kinnikinnik Street Anchorage, AK jmckinn@gci.net U.S Mail Timothy McKeever Stacey Stone 701 W. 8 th Avenue, Suite 700 Anchorage, AK tmckeever@hwb-law.com sstone@hwb-law.com U.S. Mail Law Office Assistant Date Staff Report CD, Alaska Democratic Party v. Gabby s Tuesday PAC and Gabrielle LeDoux P a g e 9

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27 BEFORE THE ALASKA PUBLIC OFFICES COMMISSION ) ALASKA DEMOCRATIC PARTY ) ) v. ) ) Case No CD GABBY S TUESDAY PAC and ) GABRIELLE LEDOUX 1 ) ) ORDER ON EXPEDITED CONSIDERATION On August 30, 2016, the Alaska Democratic Party filed an Expedited Complaint against Gabby s Tuesday PAC as well as the PAC s chair and treasurer, Rep. Gabrielle LeDoux. That Complaint alleges that Rep. LeDoux is a candidate under AS (1)(A). The Complaint also alleges that Gabby s Tuesday PAC is a group that makes expenditures or receives contributions with the authorization or consent, express or implied, or under the control, direct or indirect, of Rep. LeDoux, and that pursuant to AS (1)(B)(v), Gabby s Tuesday PAC is included with Rep. LeDoux in the definition of candidate for purposes of provisions that limit or prohibit the donation, solicitation, or acceptance of campaign contributions, or limit or prohibit expenditures. On August 31, 2066, the Commission scheduled a special hearing for the following day to consider whether the Complaint meets the criteria set forth in Alaska Statute (c) for expedited consideration. 1 The Expedited Complaint names Gaby s Tuesday PAC as a respondent. The name of the group as filed with the Commission is Gabby s Tuesday PAC. Therefore, the Commission will refer to the group as Gabby s Tuesday PAC and will use that name in the caption of this matter. Exhibit 2 Page 1 of 5

28 On September 1, 2016, the Commission held a special meeting in this case. Present for the hearing were representatives for complainant and respondents. Complainant argued to the Commission that there is reasonable cause to believe that a violation has and will occur, that the alleged violation, if not immediately restrained, could materially affect the outcome of an election, and that the alleged violation could cause irreparable harm that penalties could not adequately remedy. Respondents argued that there is not reasonable cause to believe that a violation occurred. Additionally, respondents asserted that a case of this nature requires substantial briefing and preparation, and that additional time was needed to adequately present the issues to the Commission. Therefore, respondents offered to refrain from the activities cited in the Complaint until the Commission could consider the matter in a more deliberative fashion. This offer, respondents proposed, would alleviate the need, if any, for expedited review. Having considered the Expedited Complaint with attachments as well as the arguments of the parties, the Commission finds as follows: 1. The Expedited Complaint sets forth sufficient grounds under AS (c) for expedited consideration. The Commission finds that there is reasonable cause to believe that a violation has occurred or will occur. 2 The Commission further finds that the alleged violation, if not immediately restrained, could materially affect the 2 The Commission makes no finding whether a violation has occurred or will occur. The Commission finds only that there is a reasonable basis to believe that a violation has occurred or will occur. Exhibit 2 Page 2 of 5

29 outcome of an election. Finally, the Commission finds that the alleged violation could cause irreparable harm that penalties could not adequately remedy. 2. However, the Commission further finds that the need for expedited review can be alleviated if the respondents refrain from the activities cited in the Complaint. Therefore, upon the proposal of the respondents, the Commission orders that Rep. LeDoux and Gabby s Tuesday PAC will refrain from the following: a) accepting contributions from lobbyists who live outside Rep. LeDoux s district; b) accepting contributions that, in the aggregate, exceed campaign contribution limits; and c) making donations or contributions to other candidates. These limitations will remain in place until the Commission has the opportunity to hold a hearing on the merits of the Complaint. The Commission agrees that this Complaint raises important and complex issues that warrant deliberative review. The Commission also agrees that in light of the November 8 election, these issues need to be resolved promptly. Therefore, it is the intention of the Commission to schedule a hearing on this matter sometime in mid- September. A notice of that meeting will be issued at a later date. Dated: September 2, 2016 BY ORDER OF THE ALASKA PUBLIC OFFICES COMMISSION 3 3 Commissioners Irene Catalone, Mark Fish, Ronald King, and Tom Temple participated in this matter. The decision was made on a 4-0 vote. Exhibit 2 Page 3 of 5

30 BEFORE THE ALASKA PUBLIC OFFICES COMMISSION Alaska Democratic Party, Complainant vs. Gabby s Tuesday PAC, Respondent ) ) ) ) ) ) ) ) ) ) ) Case No CD CERTIFICATE OF SERVICE I hereby certify that on this date, I caused a true and correct copy of the Order on Expedited Consideration to be delivered as indicated to the following: Timothy McKeever Stacey C. Stone 701 W. 8 th Ave, Suite 700 Anchorage, AK sstone@hwb-law.com Certified Mail Joe McKinnon 1434 Kinnikinnick St Anchorage, AK jmckinn@gci.net Certified Mail Signed Date Alaska Public Offices Commission Certificate of Service Alaska Democratic Party v. Gabby s Tuesday PAC Page CD Exhibit 2 Page 4 of 5

31 Schwahn, Michael F (DOA) From: To: Sent: Subject: Microsoft Outlook jmckinn@gci.net; SStone@hwb-law.com Friday, September 02, :58 PM Relayed: CD Alaska Democratic Party v. Gabby's Tuesday PAC - Order on Expedited Consideration Delivery to these recipients or groups is complete, but no delivery notification was sent by the destination server: jmckinn@gci.net (jmckinn@gci.net) SStone@hwb-law.com (SStone@hwb-law.com) Subject: CD Alaska Democratic Party v. Gabby's Tuesday PAC - Order on Expedited Consideration 1 Exhibit 2 Page 5 of 5

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44 MINUTES - 6-6/19-20/76 3b. ALASKA SALARY COMMISSION Mrs. HUDSON reported that the Alaska Salary Commission was included under AS (9) as one of the state boards and commissions whose members are subject to the conflict of interest law. 3d. REJECTION OF CANDIDATES FROM THE BALLOT For Governor, file their ap, o~ law. The pa ket been accept d for and the re sons f telegrams nd lett copy of m morandurn 3e(1). POLICY DECISION - CONTRIBUTIONS AND EXPENDITURES BY GROUPS Mrs. HUDSON presented a list of questions concerning groups which required policy decisions by the Commission. She pointed out that some of these had been addressed by the Commission before and were being included here to bring the whole picture of the applicability of the law to groups into focus. The action of the Commission was as noted below. The position of the Commission, as pertains to groups, will be developed in policy form in writing by staff and brought back to the Commission for approval at a later meeting. It is the position of the Commission that: 1. There is no limit to contributions to or expenditures by a group supporting or opposing a ballot issue or question. 2. There is no limit on contributions from anyone source to a group that supports more than one candidate and 50% or more of its funds are not spent on anyone candidate. 3. There is no limit on contributions from anyone source to a group that supports more than one candidate even if 50% or more of its funds are spent on one candidate so long as the group is not controlled by the candidate on which it spends more than 50%. However, a disclaimer of control would be necessary from the candidate who received more than 50% of the group's support. 4. There is no limit on contributions from anyone source to a group that supports only one candidate so long as a disclsimer of control has been filed by the candidate. Exhibit 4 Page 1 of 2

45 MINUTES - 7-6/19-20/76 5. For those groups controlled by a candidate, there is a limit on contributions from anyone source to such a group. (a) If the group supports only one candidate, the limit on contributions from anyone source is $1000, including the contribution made directly to the candidate. (b) If the group supports more than one candidate and spends more than 50% of its funds on one of the candidates, the limit on contributions from any one source is $1000, including the contributions made directly to the candidates. 6. Except for political parties, there is a limit of $1000 that a group may may contribute to a candidate. 7. There is no limit on how much a group may spend on behalf of anyone candidate or group of candidates. 8. One group supporting candidates may contribute to another group supporting candidatecs),even if the two groups may be supporting some of the same candidates. 3e(2). POLICY DECISION - REPORTING OF PER DIEM AS SOURCE OF INCOME UNDER THE FINANCIAL DISCLOSURE LAW Mrs. HUDSON explained that this policy question was before the Commission because inquiry had been made by a reporter whether or not per diem was a reportable item, since Bill Weimar had received per diem in excess of $100 in connection with his work on Eben Hopson's campaign and had not shown this on his financial disclosure report. Question posed: Is per diem, which basically covers expenses only and which is not meant to compensate for services rendered, considered as income and should it be reported under the financial disclosure law? The decision of the Commission was that per diem is not a reportable item on a financial disclosure statement as long as it is not excessive to the recommended per diem schedule for the area in which the person is traveling and if the per diem from a single source for the same day. If per diem is excessive or if it is collected from more than one source and is in excess of $100, then is must be reported. 3e(3). POLICY DECISION - REPORTING OF CAMPAIGN CONTRIBUTIONS IN EXCESS OF $100 ON FINANCIAL DISCLOSURE STATEI1ENT Question posed: Should campaign contributions in excess of $100 to a candidate be reported as source of income under the financial disclosure law? What about any excess funds that a candidate might convert to their personal account and which must be declared on their income tax return? The decision of the Commission was that political campaign contributions received by a candidate are not a reportable source of income under the financial disclosure (conflict of interest) law. However, campaign contributions which are converted to personal use are a reportable source of income under the law. Exhibit 4 Page 2 of 2

46 STATE of ALASKA fela 4 sr ri Ata ALASKA PUBLIC OFFICES COMMISSION All Commissioners DATE: FILE NO TELEPHONE NO Canission Meeting October 22-24, 1979 FROM Nancy A. Carlson Assistant Director Alaska Public Offices Commission SUBJECT: Groups Formed in Opposition to a Candidate According to AS (3), "a group whose major purpose is to further the nomination, election, or candidacy of only one person, or intends to expend more than 50 percent of its money on a single candidate, shall be considered to be controlled by that candidate...unless, within 10 days from the date the candidate learns of the existence of the group he files...an affidavit that the group is operating without his control." This same section, however, continues by saying "...a group that contributes more than 50 percent of its money to or on behalf of one candidate shall be considered to support only one candidate for the purpose of 70 of this chapter whether or not control has been disclaimed by the candidate" (emphasis added). The result of the latter part of this definition is that whether or not a candidate disclaims "control" of a group supporting him or her, that group -- if it spends more than 50 percent of its funds on a single candidate -- is still subject to the $1,000 contribution limitation. As you have no doubt noticed, a group is considered to be "controlled" by a candidate -- and subject to the $1,000 contribution limitation -- only if it intends to support or spend more than 50 percent of its funds on behalf of only one candidate. Nowhere in this definition does it speak to a group that plans to spend more than 50 percent of its funds in opposition to a candidate. Agreeably, it seems ridiculous to assume that a candidate would have, or want, control over a group which plans to oppose his or her candidacy. However, it also seems unfair that a group that plans to spend the major portion of its funds in opposition to a single candidate should be allowed to receive contributions in excess of the $1,000 limitation, while a group supporting a candidate must comply with this provision. It is staff's contention that when the designers of this statute were defining a group and what constitutes a "controlled" group -- for the purpose of subsection it was merely an oversight not to include language regarding groups that form in opposition to an individual's candidacy. Exhibit 5 Page 1 of 2

47 If\ Commission Meeting Page 2 October 22-24, 1979 We feel this position can be supported by reviewing the language found in AS , which outlines basic requirements of a group. Section 50 expressly states. that any group "before making an expenditure on behalf of, or in opposition to a candidate, shall register on forms provided by the commission. If the group intends to support or oppose only one candidate, or to expend on - behalf of, or in opposition to one candidate 50 percent or more of its funds, the name of the candidate shall be apart of the name of the group." (emphasis added). TO further substantiate staff's contention, AS (a) [which places the $1,000 limitation on contributions to candidates] states, "No person or group, including but not limited to all political committees, businesses, corporations, and labor unions, may contribute more than $1,000 a year on behalf of or in opposition to the competing candidates for each elective office" (emphasis added). It appears that throughout the Act, when outlining the general provisions, groups which form in opposition to an individual's candidacy are subject to the sane requirements as groups formed to support an individual's candidacy. The only area where an inconsistency appears is AS (3), the definition section. And, of course, the inconsistency has caused many people to ask whether or not groups formed in opposition to an individual's candidacy are subject to the contribution limitation. To add to the Commission's ability to subject groups which form and expend more than 50 percent of their funds in opposition to a single candidate, Pat Kennedy has informed us many times, that if an inconsistency exists between the statute itself and the definition section, then the statute takes precedence over the definition section. Staff is aware that this issue has been discussed briefly in the past, however, there is nothing in writing regarding this matter. And you are all aware what that means: Unless it's in writing no one believes you! Therefore, staff believes a policy decision is in order. NAC/mab Exhibit 5 Page 2 of 2

48 November 16, 1981 Draft by Staff for consideration by APOC Members Potential Recommendations re: CSSB 167(Jud) Sec. 2. Page 2, Line 10 insert underlined material in last sentence of reenactment of AS (b): The fifth member of the commission shall be appointed by the governor from a list selected, without regard to party affiliation, by a majority vote of the other four members. Comment: The continuance, albeit modified, of the mechanism wherein the four members of the Commission help select the fifth, would protect the independence and neutral status of this fifth position as well as respect the executive and legislative roles in the appointment process. (The four members presently appointed by the governor have gone through Legislative confirmation although there appears to be no requirement for such in either AS or CSSB 167(Jud). Should CSSB 167(Jud) pass, in the absence of any specific language to the contrary one.might assume that the present fifth member serves until the expiration of the current term at which time the Governor would make the new appointment.) Sec. 6. Page 3, Lines 2-11 adding new subsections to AS re: effective date of regulations: consideration should be given to deletion of this section. Comment: At its November 18-20, 1981 meeting the Commission plans to review proposed amendments to administrative regulations in hopes of accomplishing some relief provisions which were discussed at the August '81 meeting. Under the present process of regulation promulgation, the earliest effective date possible is estimated to be April 15-30th, assuming no delays caused by either the need to re-notice substantial changes or in the process of Department of Law approval for filing with the Lieutenant Governor. Any "glitch" in the process would make it impossible to satisfy the due date demanded of Section 6 of CSSB 167(Jud), even if consensus was reached by all affected parties that the relief provisions of the amendments should be in effect immediately. Exhibit 6 Page 1 of 6

49 11/16/81 APOC Staff Draft - Page 4 Sec. 13. Page 5, line 18 repealing and reenacting AS should read: (a) Each group, as defined in AS (3), shall register annually with the commission on forms provided by the commission, prior to accepting contributions or incurring, obligating or making expenditures. The following information shall be provided: (1) the name, address and specific purpose of the group; (2) the type and anticipated duration of the group including whether it is an official political party subdivision; a political action committee; a controlled group; a group formed to sponsor a state or municipal initiative, referendum or recall; or a draft group; (3) the name, address and telephone number of each principal organizer and officer, including the chairman or presiding officer, treasurer and any deputy treasurers; (4) the names, addresses and relationships of any parent organization, including the name of any labor organization, business entity, association, industrial group or occupational group represented, and any affiliated or connected committees, political parties or similar organizations; (5) the name of the candidate or candidates whom the group is supporting or opposing and the office or offices involved; and (6) the name and number of any ballot issues which the group is supporting or opposing. Comments: Recent experiences have shown that both municipal and state ballot issues as well as candidates' campaigns can generate considerable controversy and public inquiry concerning the members of a group and its purpose. Since the 7 day, reporting period ends 10 days before the election, groups do often spring up at the last minute; requiring prompt registration -- even though full reports of contributions and expenditures would not be due until 10 days after the election -- would do much to implement the intent of disclosure. Exhibit 6 Page 2 of 6

50 11/16/81 APOC Staff Draft - Page 5 (b) A group shall report any change in information previously submitted to the commission within ten days of the change. (c) If the group intends to support or oppose only one candidate, or to contribute to or expend on behalf of, or in opposition to, one candidate 50 percent or more of its funds, the name of the candidate shall be a part of the name of the group. Promptly upon receiving the registration, the commission shall notify the candidate of the group's organization and intent. (d) A group that makes expenditures or receives contributions with the express or implied authorization or consent or is under the direct or indirect control of a candidate is considered to be controlled by the candidate. Comments: The basic assumption in (d) is that the group is an "extension" of the campaign; further; contributions to the group are joined with those to the candidate for purposes of determining when a contributor has reached the $1,000 contribution limit; expenditures by the group are tantamount to expenditures by the candidate and, hence, unlimited; and contributions by the candidate to another candidate would be joined with those of the controlled group for determining when the $1,000 limit is reached. Exhibit 6 Page 3 of 6

51 11/16/81 APOC Staff Draft - Page 6 (e) A group whose major purpose is to further the nomination or election of one candidate or which intends to expend 50 percent or more of its money on one candidate is considered to be controlled by that candidate and its action considered to have been done with the knowledge and consent of the candidate unless, within 10 days from the date the candidate learns from the commission of the existence of.the group, the candidate files with the commission, or a form provided by the commission, an affidavit certifying that the group is operating without his or her control. Comments: 1) Regarding groups that are not disclaimed, same presumptions as in (d) above, that is, the group is an extension of the campaign, contributions to the group are joined with those of the controlled group for determining when the $1,000 limit is reached; 2) regarding a disclaimed group which intended to spend 50 percent or more of its money on a candidate but did not, such a group is not considered controlled; 3) regarding a disclaimed group which expended 50 percent or more of its funds on the disclaiming candidate, see (f) below. (f) A group that contributes or expends 50 percent or more of its money to or on behalf of one candidate is considered to support only that candidate for purposes of 070 of this chapter, whether or not control of the group-has been disclaimed by the candidate. Comments: Thus, disclaimed groups and newly formed groups which inadvertently (or advertently) contribute to or expend on behalf of one candidate 50 percent or more of its funds would be subject to the following: 1) contributions to the group would be joined with those to the candidate for determining when the contributor has reached the $1,000 limit; and 2) contributions from the group to the candidate Are limited to $1,000, although independent expenditures would be unlimited. Exhibit 6 Page 4 of 6

52 11/16/81 Staff Draft - Page 7 (g) A group organized for more than one year preceding an election which contributes to or expends on behalf of candidates for more than one office or candidates of more than one political party is presumed not to be controlled by one candidate. Comments: Based on previous Commission interpretation, despite (f) above, if the group financially supported the other candidates and was organized for more than one year, it could contribute to or expend on behalf of one candidate 50 percent or more of its money and still not be considered controlled. Sec. 17. Page 7, line 29, the first sentence amending AS (d) should read: (d) A [NO] contribution may not be made, and an [NO] expenditure may not be made or incurred, directly or indirectly, anonymously, in a fictitious name, or by one person or group in the name of another, to influence the election of a candidate or the outcome of a ballot issue in an election. A contribution...etc. [continues as in CSSB 167(Jud)] Comments: As in Section 13, the heat of recent ballot issues suggests that the restrictions in 070(d) be clearly stated. Sec.. New section needed amending AS (e) to read: (e) Contributions to a candidate or a [POLITICAL COMMITTEE] group may be received by, and expenditures of a candidate or [POLITICAL COMMITTEE] group may be made by, only the candidate, campaign treasurer, or deputy campaign treasurer. Comments: The phrase "political committee" is nowhere defined and appears to be an oversight caused by the fact that AS was based on other state statutes which use the term. Exhibit 6 Page 5 of 6

53 11/16/81 APOC Staff Draft - Page 10 Sec.. A new section is needed repealing AS (3) and reenacting it to read: (3) "group" means every state and regional executive committee of a political party and, in addition, means any combination of two or more persons or individuals acting jointly who take action the major purpose of which is to influence the outcome of an election. Sec.. New sections are needed amending AS by adding: (8) "controlled group" means a group which is considered to support only one candidate and to act with his knowledge and consent and, for purposes of 070 of this chapter, contributions to the group shall be joined with contributions to the candidate; however, contributions from the controlled group to the candidate or expenditures by the controlled group or on behalf of the candidate are not subject to the limitation in 070 of this chapter; or if a group contributes 50% or more of its money to or on behalf of a candidate, controlled group means for purposes of 070 of this chapter, contributions to the group shall'be joined with contributions to the candidate. (9) "political action committee" means any combination of two or more persons or individuals acting jointly who take action the major purpose of which is to influence the outcome of an election." (10) "business entity" means a sole proprietorship, partnership, corporation or professional corporation, company, firm, business trust, or any other business entity or a combination of these. (11) "draft group" means a group of two or more persons organized for the purpose of drafting one or more individuals to run for elective office by becoming a candidate under AS (1). Exhibit 6 Page 6 of 6

54 033 MEMO TO: THE ALASKA PUBLIC OFFICES COMMISSION DATE: OCTOBER 2, 1991 FROM: GREG GRANQUIST /Th SUBJECT: CONTROLLED FUNDRAISERS CONTROLLED GROUPS 1. INTRODUCTION Recently, Veco asked for compliance advice concerning contributions which it made in connection with a fundraiser the Valdez Democratic Precinct Committee held for Steve McAlpine. In researching its answer, staff found the Commission's previous advice on controlled fundraising did not completely address how candidates and groups should report cumulative contribution information or who must return excess contributions. Staff recommends the Commission provide direction in these areas by directing staff to include the attachment to this memorandum in its revision of the candidate and group manuals. 2. BACKGROUND Controlled fundraising describes the activities of controlled groups as well as controlled fundraisers held by non-controlled groups. Generally, controlled groups are rare. They tend to be narrowly targeted to solicit and underscore support for a candidate among a constituency where it might not be expected e.g. Democrats for Reagan. They play minor supporting roles in a campaign and sometimes are fully funded by a few initial contributions. The contributions they generate usually come from contributors who have not contributed directly to the candidate. Controlled fundraisers are far more common, significant, and troublesome. They usually involve a gaming activity, a political party or both. Only political parties can pass on more than $1000 in proceeds from a fundraiser and only political parties qualify for gaming permits - not candidate campaign committees. Exhibit 7 Page 1 of 7

55 3. LAW, STATUTES, AND POLICY Generally, a group which spends more than half its funds on behalf of a candidate is considered "controlled" by the candidate. In 1986, the Commission advised Mike Rink, a candidate for state house, that a fundraiser would be "controlled" if it was organized to benefit a single candidate. A controlled fundraiser is one in which a group pre-determines and/or advertises that a single candidate will receive more than one-half the proceeds. Thus a contributor may not give more than $ 1000 to any combination of: * a committee to draft the candidate * the candidate directly * the candidate's campaign committee * a group controlled by the candidate * a fundraiser controlled by the candidate Groups and fundraisers are categorized as "controlled" to strengthen the contribution limit of $ 1000 per year. Controlled groups are defined in AS and.130(4). When read in conjunction with AS , these sections of the campaign disclosure law require that contributions to groups "controlled" by a candidate count toward the $ 1000 limit that the contributor can give to the candidate. 4. DISCLOSURE AND LIMITATION REQUIREMENTS A contribution to a controlled group or fundraiser has campaign disclosure ramifications for the contributor, the recipient group, and the controlling candidate. A. Reporting Requirements If the contributor is a group, it must report the contribution on a group report at the close of the reporting period. If the contributor is an individual and the contribution causes the contributor to exceed $250 in year-to-date contributions to the candidate, the contributor must report the transaction within 10 days on a Statement of Contributor. The group receiving the contribution must record and report the contribution on a campaign disclosure statement. How and whether the Exhibit 7 Page 2 of 7

56 group reports the contributor's cumulative contribution to the candidate and/or the group will be discussed in detail below. The candidate benefitting from the fundraiser has no obligation to report the contribution from the contributor to the group running the controlled fundraiser, but must report any contributions - such as fundraiser proceeds - from the group holding the fundraiser. B. The Requirement to observe the $ 1000 Limit A contributor should know best how much he or she has contributed to a candidate, and has the primary responsibility for regulating his or her contributions in order to observe the $ 1000 limit. A controlled group or a group undertaking a controlled fundraiser shares this responsibility and needs to ascertain this information so as not to accept and thus participate in an excess contribution. The group may need to share contributor records with the controlling candidate so it does not inadvertently accept excess contributions. The controlling candidate has a responsibilty to use the information from the controlled fundraiser or group to avoid subsequently accepting an excess contribution from a contributor who has contributed the maximum through some combination of contributions to the candidate and a controlled group or controlled fundraiser. 5. AREAS WHERE THE LAW IS SILENT OR UNCLEAR. A. Cumulating Contributions Current Commission bookkeeping provisions do not specify how groups and candidates should report cumulative contributions in connection with controlled events. (1) Groups There are several possibilities because both controlled groups and noncontrolled groups can have controlled fundraising events and because 1) They might cumulate records for the controlled fundraiser separately from non-controlled fundraising. 2) They might include contribution information provided by the candidate. Exhibit 7 Page 3 of 7

57 Staff recommends that controlled groups be required to cumulate year to date totals for contributions to the group because any contribution to the group at any point during the year is a contribution to the candidate. Staff recommends that non-controlled groups be required to cumulate totals separately for controlled fundraising events because other contributions to the group are not contributions to the controlling candidate. The current version of the group manual was written to address the relatively simple case of a group reporting cumulative contributions by the contributor to the group. It did not anticipate that there might be a need - in connection with contributions to a controlled group or fundraiser - to report how much a contributor cumulatively contributed to a candidate. (2) Candidates The Candidate's Manual did not anticipate that a candidate's campaign committee might report that it received less than $ 1000 directly from a contributor yet had already exceeded the $ 1000 threshhold because of the contributor's contributions to a controlled group. Staff does not recommend that candidates or groups be required to use one another's records in completincj reports because: * the logistical hurdles of coordinating the records of a candidate's campaign committee with a group's records are formidable. * despite the best of efforts, reporting accuracy might not be possible, because of delays in receiving information from designated deputy treasurers. * errors adding to more than $ 1000 could subject the candidate or group to a civil penalty assessment. Further, the public should receive a separate accounting of the same information in instances where the contributor is a group, or contributes more than $ 250, because the contributor then has an obligation to report their contributions in a more easily cumulated format. Candidates and groups may be unable to share information by deadlines due to logistics and it may be unfair penalize them for substantial incompleteness if they fail to do so. However, this information needs to shared at some point in order for candidates, groups, and contributors to insure that none is party to an excess contribution. Failing to do so puts both the candidate and group at risk of accepting an excess contribution. Exhibit 7 Page 4 of 7

58 B. Returning Excess Contributions Because of delays in receiving and transfering information between a group holding a controlled fundraiser and a candidate, it is possible that one or both parties may receive other excess contributions in the interim. For example: Date Contribution from Jones to Candidate Contribution from Jones to controlled group Excess 1/1/92 $ 500 2/9/92 $ 500 6/1/92 $ 500 $ 500 $ 1000 In this scenario, neither the group nor the candidate has received over $ 1000 directly, but cumulatively the contributor has exceeded the limit. Staff recommends - where any portion of an excess contribution results from contributions to a controlled fundraiser or group - that the group should be required to refund its share of the excess first. This would place the burden of obtaining cumulative data about contributors squarely on the group. This is fair because: * Groups make a voluntary decision to undertake a controlled fundraiser and are under no obligation to do so. * Groups have the best opportunity when conducting controlled fundraisers to advise contributors that their participation is subject to a limit. * Groups have direct control over the accuracy and timeliness of their recordkeeping. Exhibit 7 Page 5 of 7

59 ATTACHMENT - Current and Proposed Language for Manual Part I: Current Guidelines Staff Uses to Advise Groups, Candidates and Contributors on Controlled Fundraisers Raffles and Controlled Fundraisers If a group holds a fundraiser for a single candidate, the event is a "controlled" fundraiser. A group conducting a raffle and donating the proceeds to a candidate is the most common example. Alaska's gaming statute and campaign disclosure statute both address campaign fundraisers which are gaming events. Campaign treasurers need to know the requirements of both laws. Groups must report on campaign gaming activity to both the Alaska Dept. of Commerce, Division of Occupational Licensing and the Alaska Public Offices Commission. The reports are different for each agency. A group must be licensed by the Division of Occupational Licensing to hold a gaming event. Only two types of political groups - political parties and "multi-purpose" PACs organized to make charitable contributions - qualify for gaming permits. Candidates do not qualify and must borrow a group's permit to hold a raffle. Gaming law prohibits groups from loaning their gaming permits to candidates, but allows groups to "sponsor" gaming events for candidates. The difference is that: * The group must supervise the event, and pass funds through the group's gaming account. * The group is responsible for filing the gaming and campaign reports in connection with the event. The purchase of a ticket to a controlled raffle is a contribution to the group conducting the raffle. The group must include such contributions on its campaign disclosure statements and should segregate them on a separate reporting schedule to identify that they were for a specific controlled event. The group must also report all of its expenditures in connection with the raffle on its campaign disclosure reports, including prizes, and distribution of the proceeds. Exhibit 7 Page 6 of 7

60 However, with regard to the $ 1000 limit on contributions in AS (a), the purchase of a ticket to a controlled raffle also counts as a contribution to the candidate who benefits from the raffle. The ticket purchaser must add the ticket purchase to other contributions he or she has made to the candidate to determine whether he or she has reached the $1000 contribution limitation. The responsibility for observing the limit falls equally on the ticket purchaser and the group selling the ticket. All persons handling raffle funds must be deputy treasurers of the group, or temporarily authorized to receive funds for 72 hours under 2 AAC All advertising or other communications, other than non-monetary contributions, produced in connection with the raffle and required to be identified as per 2 AAC , must be identified as paid for by the group sponsoring the raffle. The name of the group must be modified in the identification to include the name of the candidate. Part II: GUIDELINES STAFF PROPOSES ADDING. A group which holds a controlled fundraiser, but which at other times is not controlled by a candidate, shall cumulate contributions to the controlled event separately from other contributions in order to: * provide to the controlling candidate a list of contributors and the amounts the contributors cumulatively contributed to the candidate by way of contributions to the controlled fundraiser. * provide a cumulative total when disclosing contributors of over $ 100 to the controlled fundraiser. Candidates must review contributor data when accepting proceeds from a controlled event or group in order to avoid accepting excess contributions. Candidates must add this information to records they have prepared of contributors' cumulative totals to determine whether they may accept the proceeds and future contributions. Candidates will not be penalized for incomplete reports if they fail to provide this combined information when reporting contributors' cumulative totals on their campaign reports. The candidate may choose to cumulate only direct contributions to the candidate's campaign committee or may elect to also show the cumulative total contributed by a contributor to the candidate and any group controlled by the candidate. The group which holds a controlled fundraiser is responsible for returning excess contributions under 2 AAC (d). Exhibit 7 Page 7 of 7

61 WALTER J. HICKEL, GOVERNOR ALASKA PUBLIC OffiCES COMMISSiON June 29, 1994 Representative Pat Carney P.O. Box Wasilla, Alaska REPLY TO: o 2221 E. Northern Lights, Room 128 Anchorage, AK (907) [J Juneau Branch Office Box CO Juneau, AK (907) Dear Representative Carney: This is in response to your advisory opinion request. You ask if AS , the Alaska Campaign Disclosure Law, prohibits you from either serving as chair of or campaigning for the Move It Committee (MIG), a group organized to promote passage of a statewide ballot initiative. You are currently a candidate for re-election as state representative. Your name will appear on the General election ballot as will the initiative measure. The Short Answer The short answer is that it is permissible for you to serve as chair of MIC, and campaign for the group, while you are a candidate for state representative. However, you will need to be very careful to separate your re-election campaign from your campaigning on behalf of MIC. Your two roles raise concerns that MIC's expenditures, in some instances, may expressly advocate your re-election, in vvhich case a portion of those expenditures vvould be non-monetary contributions to your campaign subject to a limit of $ 1000 per year. Staff cannot anticipate all the specific circumstances which may arise in the course ofthe two campaigns and can offer only general guidance in this matter. Staff cannot anticipate the public's response; the more that MIC's campaign overlaps your re-election campaign, the more likely it is that a member of the public may file a complaint alleging that MIC's expenditures are unreported, and possibly excess, contributions to your re-election campaign. Facts You are a state representative for House District 26, a district that includes the City of Wasilla. You are a candidate for re-election and are unopposed in the 1994 Primary election. You face one opponent in the 1994 General election. You are also chair and organizer of MIC, a group which has successfully conducted a petition drive to place an initiative measure on the November 1994 ballot. The ballot initiative calls for moving the capital of Alaska from Juneau to Wasilla. MIC plans to Exhibit 8 Page 1 of 9

62 continue as a group in order to campaign for passage of the capital move ballot measure. You have not accepted, and do not plan to accept, compensation for your work as MIC's chair. However, you may seek reimbursement for future travel costs if funds are available. You have explained that, if you continue as chair of MIC, your responsibilities may include: * signing correspondence and soliciting contributions for MIC; * appearing in television and radio commercials advocating for the measure; * traveling on behalf of and at the request of MIC; and * speaking in support of the ballot measure to groups statewide. You have also explained that you may take on some of these responsibilities even if you do not serve as chair of the group. You intend to keep your campaign activity for MIC completely separate from your reelection campaign. Staff understands this to mean that: * You will not solicit or accept contributions to your re-election committee at any event where you appear as MIG spokesperson. * You will not discuss your candidacy when appearing as MiC spokesperson. Law and Statutes Express Advocacy Under AS , an individual or group is required to report its financial activity in connection with political advertising if the advertising is "intended to influence the outcome of an election." The U.S. Supreme Court, in Buckley v. Valeo, 424 U.S. 1,80 (1976), ruled that political speech is not reportabie unless it expressly advocates the election or defeat of a specific candidate. One important federal court decision, FEC v Furgatch, 807 F.2 857,864 (9th Cir. 1987) states that speech is not "express advocacy" unless "when read as a whole, and with limited reference to external events, it must be susceptible to no other reasonable interpretation but as an exhortation to vote for or against a specific candidate." 2 Exhibit 8 Page 2 of 9

63 AS $ 1000 contribution limitation A person or group may not contribute to or expend more than $ 1000 a year on behalf of a candidate. The campaign disclosure law does not prohibit individuals or groups from contributing to expending on behalf of a ballot proposition or question more than $ 1000 per year. AS "Paid for by" requirement All advertisements...handbills...and other communications intended to influence the election of a candidate...shall be clearly identified by the words "paid for by" followed by the name and address of the candidate, group or individual paying for the advertising. In addition, candidates and groups must identify the name of their campaign chairman. AS (4) Group controlled by a candidate A group that makes expenditures or receives contributions with the authorization or consent, express or implied, or under the control, direct or indirect, of a candidate shall be considered to be controlled by that candidate. 2 AAC (j) Non-monetary contributions An expenditure made by a person in cooperation, consultation, or in concert with, or at the request of or suggestion of a candidate, the candidate's campaign committee, campaign agents, or campaign consultants is a contribution to the candidate. 2 AAC (8) Shared Advertising A proportionate share of the amount of an expenditure benefitting one or more candidates, or one or more groups, of a shared campaign effort, but paid for in full by one of the candidates, or by one of the groups, will be considered a contribution by the paying candidate...or the paying group... 3 Exhibit 8 Page 3 of 9

64 Analysis The Alaska Campaign Disclosure Law does not explicitly prohibit a candidate from serving as chair of a group. However, several provisions of the law, taken in concert with court rulings concerning express advocacy, may implicitly prohibit a candidate from serving in such a role unless the candidate shares a portion of the cost of the group's campaign expenditures. The following provisions impact MIC as follows: * AS ra) prohibits a group, except for a political party, from contributing more than $ 1000 to a candidate. Thus MIC may not contribute more than $ 1000 to your campaign in monetary or non-monetary contributions, or in loans. * AS ra) (2) states the campaign disclosure law does not prohibit individuals or groups from making contributions or expenditures on behalf of a ballot proposition of more than $ Thus there is no limit on how much a contributor may give to MIC. * AS (4) provides that a group that is under the control, direct or indirect, of a candidate is considered controlled by the candidate. Thus, if you are group chair, there is a presumption that you, as a candidate, are controlling and co-ordinating the activities of the group. * 2 AAC provides that an expenditure by a group on behalf of a candidate is considered a non-monetary contribution to the candidate if it is rnade in consultation with the candidate. Thus, because you are both chair of MIC and a candidate, any expenditures which MIC makes on behalf of your candidacy would be a non-monetary contribution to your campaign. * 2 ACC provides that a candidate and a group may share expenditures but each must pay its proportion of the joint expenditure in order that neither party in the transaction make a contribution to the other party. Thus, if MIC has contributed $ 1000 to your campaign, your reelection committee would have to reimburse MIC for the share of any of its expenditures which directly advocate the outcome of your re-election. Court cases, particulariy Furgatch, have determined that a communication is considered intended to influence the outcome of an election of a candidate if it expressly advocates the election or defeat of a candidate. Express advocacy means speech ''when read as a whole, and with limited reference to external events (italics are staff's), it must be susceptible to no other reasonable interpretation but as an exhortation to vote for or against a specific candidate." 4 Exhibit 8 Page 4 of 9

65 In reviewing MIG's advertising for express advocacy, staff believes the test concerns not whether MIG's advertising advocates a capital move or some other message, such as your candidacy, but whether the advertising advocates the capital move as well as your candidacy. Where the advertising jointly advocates, staff believes you should be required to pay your proportionate share of the ad or else report the share as a non-monetary contribution to your campaign. In serving dual roles as a candidate and as a chair of MIG, you create a troublesome set of "external events." Even a limited reference to these events, may be enough to construe communications by MIG, or your campaign appearances on behalf of MIG, as a form of shared campaigning in which the message is both to vote for your candidacy and vote for the ballot issue. There are several reasons why the message may be so construed: * You are both chair of MIG and a candidate and, as a candidate, presumed to control MIG. * The appearance of your name on all MIG communications during a period when you are an active candidate has value to your campaign as "name identification" advertising; * Personal appearances and appearances in advertising which present you as supporting a ballot issue relating to your district cannot help but affect your candidacy. A capital move to Wasilla will have significant economic impact on your district and is an issue upon which you as a candidate for this district's representative are expected to make comment. * You will appear on the same ballot as the capital move issue and thus will be associated in tile rninds of the voters when they are voting. * An increasingly common form of political advertising, and advertising campaigns in general, involves "image" advertising, whose message is either understated or implicit and derived only in reference to external events. Finally, court decisions continue to address and clarify what is meant by "express advocacy" as new sets of circumstances arise. By combining your re-election campaign and the MIG campaign, through personal and media appearances on behalf of MIG, you risk generating a well-founded public complaint; your appearances on behalf of MIG, viewed in the context of the surrounding circumstances, may constitute express advocacy for your campaign. 5 Exhibit 8 Page 5 of 9

66 Conclusion Your plan to serve as chair of MIC while campaigning for re-election is permissible but practically difficult. You will need to separate your campaign efforts on behalf of MIC from your reelection campaign if you wish that MIC's ads not expressly advocate your re-election. For example, you should not juxtapose MIC ads in which you appear with ads by your reelection committee. MiC is not prohibited from contributing up to $ 1000 to your campaign, nor are you prohibited from engaging in shared expenditures with the group. However: * if your re-election committee does engage in shared activities with MIC, your re-election committee should pay its share as soon as possible, preferably no later than the close of the reporting period in which the activity occurs, in order that MIC's payment not be viewed as a loan to the re-election committee subject to a $ 1000 limit. * in the event MIC contributes $ 1000 to your campaign in monetary or non-monetary contributions or loans, you will not be allowed to accept further contributions from MIC. Any additional joint activities will need to be handled as shared campaign expenditures. You may be reimbursed for travel outside your district on behalf of MIC because travel outside your district on behalf of MIC is presumably not intended to advocate your re-election. A contrary presumption applies for travel with your district. If you are reimbursed for travel within or outside your district, a portion of that reimbursement will be a contribution to your campaign if: * you campaign while traveling on MIC business, Le. pass out campaign literature, put up signs, make campaign appearances; * you solicit or accept contributions for your campaign while traveling on MIC business or at the event to which you are traveling on behalf of MIC. These concerns apply if you are active in MIC's campaign whether or not you serve as MIC's chair. As required by 2 AAC the commission will rule on staff's proposed advice at its upcoming meeting, June 29-July 1, 1994 in Anchorage. The Commission may approve, disapprove or modify the proposed advice. An advisory opinion must be approved by affirmative vote of at least four members or it will be considered disapproved. 80th staff's proposed advice and the Commission's final advice apply only 6 Exhibit 8 Page 6 of 9

67 to the specific activity for which the advice was requested and the specific facts as set forth above. You are encourage to ask for more advice as your plans become specific. If the Committee acts on staff's proposed advisory opinion in good faith, and the Commission subsequently rejects the proposed advice, staff will take no enforcement action on the Committee's reporting activities up to that point if the Committee acted under the specific facts described. If you would like to appear before the Commission when this matter is considered, please contact me immediately so we can arrange a time. Sincerely, ALASKA PUBLIC OFFICES COMMISSION *' ~ Greg Granquist Research Analyst cc: all Commission members Karen Boorman, Executive Director Nancy Gordon, Assistant Attorney General 7 Exhibit 8 Page 7 of 9

68 JUN~23-94 THU 16:51 P,OI JUN 23 June 23, 1994 Alaska Public Offices Commission (FAX ) ATTENTION: Greg I would like to clarify my position and ask for an advisory opmlou regarding my involvement with the initiative to move the capital to Wasilla which will appear on the ballot this coming November. r ani currently listed as chairman of the Move It com.mittee to support the above mentioned initiative, but as of this date, we are m the formative stages of the organization, I am also a state n:presentative and candidate for re-election to the State House in District 26. If I were to continue as chairman of this committee, my function would be to speak in support of the initiative to various groups statewide. I could also be signing correspondence and helping to solicit contributions for the effort from the general public. It is also possible that I could appear in a television or radio commercial or in pl'inl media on behalf of this effort. If I were to travel on behalf of and at the request of the committee, it is possible I would seek reimbursement for those expenses if funds were available, but would not otherwise seek compensation of any kind. It is also my intention to keep this effort completely separate from my re-election campaign. Before pursuing any activities relating to the capital move effort, I request the Commission's advice regarding which, if any of these activities would violate any provisions of AS 15.13, Exhibit 8 Page 8 of 9

69 Thank you for your assistance in this mattel Sin~~ P. O. Box' Wasilla, Alaska q. iq <t:l JUNZ Exhibit 8 Page 9 of 9

70 ALASKA PUBLIC OFFICES COMMISSION December 15, 1994 /! TONY KNOWLES, GOVERNOR REPLY TO: :J 2221 E. NORTHERN LIGHTS, ROOM 128 ANCHORAGE. ALASKA PHONE: {90 7) :J P.o. BOX JUNEAU. ALASKA PHONE: (907) Douglas Rickey, Treasurer Greater Juneau Democratic Precinct Committee P.O. Box Douglas, Alaska Re: Advisory Opinion Request - Greater Juneau Democratic Precinct Committee Dear Mr. Rickey: At its November 30 - December 1, 1994 meeting the Alaska Public Offices Commission (Commission) considered staff's proposed advisory opinion of November 21, The Commission adopted staff's proposed advisory opinion by a vote of 5-0, after making several amendments. I enclose a copy of the opinion as amended and approved. I have shaded the amendments which consist of a paragraph on page two and several phrases on page four. Please be aware that different facts, or a change in the facts, could lead to a different Commission position. Further, you or another person cannot rely on this advisory opinion unless the specific transaction is indistinguishable in all its material aspects from the facts as set forth in this letter. Sincerely, Please contact me if you have any questions at ALASKA PUBliC OFFICES COMMISSION 9d-;~ Greg Granquist Research Analyst Enclosure cc: Karen Boorman, Executive Director Exhibit 9 Page 1 of 7

71 ALASKA PUBLIC OFFICES COMMISSION December 15, 1994 Douglas Rickey, Treasurer Greater Juneau Democratic Precinct Committee P.O. Box Douglas, Alaska 99824, I I /! I / TONY KNOWLES, GOVERNOR AE:PLYTO: :::J 2221 E. NORTHERN LIGHTS, ROOM 128 ANCHORAGE. ALASKA PHONE: (OO1) :J P.O. BOX JUNEAU, ALASKA PHONE: (907) Re: Advisory Opinion request Dear Mr. Rickey: This is in response to your advisory opinion request in which you ask if the Greater Juneau Democratic Precinct Committee (GJDPC), a subdivision ofthe Alaska Democratic Party (ADP), is considered a "controlled" group under AS (4). In discussing your request with staff, you have indicated that you wish to clarify how GJDPC should evaluate its expenditures and assets in order to determine whether it has spent more than 50% of its money on a single candidate. Specifically, you ask: * whether the Knowles/Ulmer committee, as the Democratic party's gubernatorial team in the 1994 General election, is considered a single candidate; '" what time span is to be evaluated; and * if GJDPC's cash-on-hand at the beginning of 1994, non-monetary contributions, and monetary contributions are all considered "money" in the context of AS (4) (and therefore to be evaluated). I. Short Answer Based on activity reported by GJDPC covering the period from January 1 through October , GJDPC has not spent more than 50% of its 1994 money on a single candidate, and thus, is not a controlled group. In making this interim determination, staff has: * included the group's 1994 cash on hand, monetary contributions and non-monetary contributions in its calculation of the group's "money", * regarded contributions to the Knowles for Governor committee, the Ulmer for Lt. Governor committee, and the Knowles/Ulmer committee as Exhibit 9 Page 2 of 7

72 contributions to a single candidate. * evaluated the group's activity during the period from January 1, 1994 to October 10, Staff will complete its review of GJDPC's activity and make a final determination of its "controlled" status when the group has completed its 1994 Yearend report. This will be based on all of the group's 1994 contributions and expenditures. If staff's final review indicates that the group has expended more than 50% of its funds on behalf of a single candidate in 1994, GJDPC wiii be considered controlled and may p(;j; -Jj II. Facts 1.'li;j~1ir~il~1IR~11~r~~!!8~Rf!ffijQ~!erB ~99tI9nf9~mlijY~~J9 GJDPC is a political party subdivision and has registered annually with APOC as a group since In 1994, GJDPC contributed to candidates in both the Primary and General elections. The group had $ 6, in cash on hand as of January 1, Between January 1 and October 10, the group received $ 54, in monetary contributions and $ 7,885 in non-monetary contributions. The total of this cash on hand and these contributions is $ 68, As of October 10, 1994, GJDPC spent 45.9% of its total available funds, or $ 31,650 of $68,853.03, on behalf of the Alaska Democratic Party's team for governor and lieutenant governor, Tony Knowles and Fran Ulmer. The $ 31,650 amount includes the group's contributions of $ 30,900 to the Knowles/Ulmer committee as well as its contribution of $ 750 to Ulmer's Lt. Governor campaign committee prior to the Primary. In other activity, the group contributed a total of $ 7650 to four candidates and $ 2200 to a ballot issue group. II.,...I~ III Ap...I,,...,hl.. I ~.~... LoCi... AS (a) The $ 1000 Contribution Limit A person or group may not contribute more than $ 1000 in a calendar year to a 2 Exhibit 9 Page 3 of 7