Requested by: Richard Cattanach, Associated General Contractors of Alaska
Prepared by: Christina L. Ellingson, Assistant Director
Date issued: July 19, 2001
Subject: On line fundraising for an association PAC raffle
On June 18, 2001, Richard Cattanach asked the Alaska Public Offices Commission (Commission) for an advisory opinion on behalf of the Associated General Contractors PAC (AGC PAC) regarding its reporting requirements and contribution limitations under the Alaska Campaign Disclosure Law, AS 15.13. Specifically, you asked for advice regarding a political fundraising event (a raffle) for which the AGC PAC plans to solicit ticket sales using both E-mail and assistance from the staff of the Associated General Contractors (AGC).
The AGC PAC possesses a gaming permit, which it has used in the past to conduct raffles to raise funds for its political campaign contributions. This year, the group proposes to expand the manner in which it solicits contributions to include the use of E-mail. In so doing, it anticipates it will require the assistance of AGC and its staff both in developing a database and in processing, recording and reporting ticket sales.
The Alaska Campaign Disclosure law (AS 15.13) does not prohibit the use of E-mail in campaign activity, but does limit the manner and degree in which AGC may provide assistance to the AGC PAC. However, as long as the AGC PAC observes the contribution limitations and implements the safeguards outlined below, it may undertake the activity it proposes and still be in compliance with the law.
In your letter to staff, and follow-up conversations, you have stated the following facts.
- AGC PAC is the political action committee of the AGC, and has been in existence for many years. AGC PAC raises funds in order to make contributions to candidates for state and municipal offices in Alaska and thus meets the definition of "group" under AS 15.13, the Alaska Campaign Disclosure law. As such, it has registered and reported its financial activities to the Commission for several years.
- AGC PAC possesses a gaming permit, which entitles it to conduct raffles as a fundraising activity. AGC PAC's annual raffle is its principal source of income. The Alaska Department of Revenue issues the permit, and activities conducted using the permit are also regulated by that department as provided by AS 05.15. Staff notes that Alaska gaming laws impose additional reporting requirements on certain types of events, such as recording the social security numbers of participants for tax purposes.
- This year, the AGC PAC plans to augment raffle ticket sales by using E-mail messages to solicit ticket purchases. The group plans to develop a database of E-mail names and addresses by using a membership list provided by the AGC as well as its own records.
- Alaska's Campaign Disclosure Law prohibits contributions from businesses to groups, and so, AGC PAC plans to monitor contributions in response to its E-mail solicitations to ensure that only personal credit cards are used. As a further safeguard, the following disclaimer will appear on the e-mail "I understand that I cannot use business funds to purchase a PAC ticket. By submitting this credit card authorization, I hereby assure AGC PAC that I am using my personal credit card and am purchasing the ticket for my personal benefit." We request that you change the wording on this to read "I understand under Alaska State Law that I cannot use corporate or business funds…."
- AGC staff will assist the AGC PAC in checking responses to E-mail solicitations to insure that the information was complete, in recording the date of the contribution, and in assigning a ticket number.
Campaign Disclosure Law
The Alaska campaign disclosure law prohibits contributions and expenditures by a corporation, company, partnership, firm association, organization, business trust or surety, labor union, or publicly funded entity that does not satisfy the definition of group in AS 15.13.400. AS 15.13.074(f); 15.13.135.
Contribution is defined broadly to mean a payment, gift, subscription, loan, advance transfer, deposit of money, services, or anything of value made by a person or group for the purpose of influencing an election. AS 15.13.400(3); 2 AAC 50.250.
The provision of goods or services without charge, or at a charge that is less than the normal charge for the goods and services in the market, is a contribution. 2 AAC 50.250(c).
Services provided by an accountant or other person to prepare reports and statements required by this chapter is not a contribution. AS 15.13.400(3)(B)(ii).
The provision of an organization's membership or mailing list to a group affiliated with the organization is not a contribution.
2 AAC 50.250(H) In addition, costs incurred to provide necessary administrative services associated with a payroll withholding plan are not considered a contribution, however, these costs may not include expenses associated with soliciting contributions. 2 AAC 50.250(F).
Over the course of the election, each group must make a full report listing the date and amount of all contributions made to it and for all contributions in excess of $100 in the aggregate a year, the name, address, principal occupation, and employer of the contributor. In addition, groups must list the date and amount of all expenditures made, incurred or authorized during each reporting period. The report shall be filed in accordance with AS 15.13.110 and must be certified correct by the group's treasurer. AS 15.13.040(b),(1)(2)(3) and (c).
Under the law, only the group's treasurer or deputy treasurer may receive campaign contributions. AS 15.13.076(2). The only exception is that a treasurer may authorize an individual who is not registered as a deputy treasurer to receive campaign contributions on a group's behalf at any single event as long as the contributions are turned over to the group's treasurer within 72 hours. The campaign treasurer is responsible for receiving, holding, and disbursing all contributions and expenditures, and for filing all reports and statements required by law. AS 15.13.060(a).
In an opinion to the AFL-CIO in 1998, the Commission determined that e-mail was comparable to other forms of communication and would be evaluated by similar standards. AO97-20-CD, enclosed.
In 1999, the Commission approved an opinion to Patrick Flynn (AO99-10-CD, enclosed). Mr. Flynn was asking on behalf of a company that he was planning to initiate. The activity that Mr. Flynn's company was undertaking involved providing a service for sale to candidates and groups to garner contributions via the Internet. The pertinent facts in the Flynn advisory opinion regard the screening and processing of on-line contributions. The Commission opined that if the company implemented the procedural recommendations set forth in the opinion, electronic fundraising was permissible.
A facet of your request has not been addressed in prior Commission advice. You have said that AGC will provide AGC PAC with list of E-mail addresses of its membership. Under 2 AAC 50.250(H) an organization's membership or mailing list provided to a group affiliated with the organization is not a contribution. While the regulation does not specifically mention E-mail, staff believes that the regulation should be interpreted to include providing E-mail addresses.
It appears from your description that you have designed an application for the contributor to complete that should comply with the reporting requirements of APOC. Staff encourages you to inform your contributors that they must provide the information required by the campaign disclosure law including their name, address, occupation and employer. If the required information is not entered, the application should include a self-checking mechanism so that it does not accept the contribution.
In order that contributors not exceed the contribution limit, staff advises you to organize the form so that contributors are made aware of the $500 limit, and that raffle ticket contributions are added to prior PAC contributions to determine when the limit is met.
You should know that even with all of the checks and balances you have stated you will incorporate, the group is ultimately responsible for determining if a contribution is legal under administrative regulation 2 AAC 50.266
The potentially most problematic aspect of your request is the acceptance of credit card contributions. You have not said how you would safeguard against an individual using a business or corporate credit card to make a contribution. It is our understanding that when you receive authorization from a credit card company, it is based on the account number, not the name. Staff advises a statement that says "Alaska State Law Prohibits contributions from Corporations and businesses that are not sole proprietorships." You should require the contributor to certify or attest that the credit card is the contributor's personal credit card and that the contribution is from personal funds and was not supplied by another individual person, or group. If the contributor fails to indicate that the source of the funds were personal, the donation is void. Once again, the group is ultimately responsible for determining if the contribution is legally acceptable.
Because groups may receive no more than 10% of their contributions from out of state residents, you should include on the form a place for the contributor to indicate whether s/he is an Alaskan resident. Including a residency field on your screen will facilitate tracking and ensure compliance with the campaign disclosure law.
The above guidelines adequately cover statutory provisions on the amount and source of the on-line contributions.
You have stated an employee of AGC will be reviewing the information to insure that it is complete, date stamp the contribution submittal and assign a ticket number. You have not said if this same AGC employee will be working on the solicitation of these contributions. If an employee of AGC will be doing the soliciting, the employee's time must be tracked and AGC PAC must reimburse AGC or pay the AGC employee directly for the service. Under administrative regulation 2 AAC 250(F). the costs associated with soliciting contributions are considered a contribution, therefore the PAC must pay for this service.
You have not said how you will report the date of each contribution. A contribution is reportable when the treasurer or deputy treasurer of a group receives it. Staff suggests you use the date the E-mail is received and date stamped by the AGC employee, who must be an AGC PAC treasurer or deputy treasurer, as the contribution-received date. If a contribution cannot be determined to be legal, the treasurer must record the contribution, report its receipt and resolution, and return it to the contributor. AS 15.13.114.
Staff would also recommend that to streamline the contribution and disclosure process for contributors, AGC PAC should place a link on your on-line contribution form to the APOC electronic 15-5 form. Contributors must file this report within 30 days after contributing a total of $500 to a group. The link would assist contributors by streamlining the disclosure process.
After incorporating the suggestions recommended above, The Commission believes that the on-line E-mail fundraising activity that you have described will comply with the campaign disclosure law and regulations.
The Commission approved the advice in this letter by an affirmative vote of 4-0 on November 1, 2001 with minor typographical changes. The advice in this opinion applies only to the specific activity for which the advice was requested.
A copy of the original letter requesting the above advisory opinion is available upon request at the Alaska Public Offices Commission. 907/276-4176.