Requested by: John J. Martin, Vice President, Human Resources
Totem Ocean Trailer Express, Inc.
Prepared by: Christina L. Ellingson, Assistant Director
Date issued: May 24, 2002
Subject: Soliciting Contributions from employees for TOTE Alaska PAC by offering an incentive.
This Advisory Opinion responds to your May 6, 2002 letter asking for an opinion regarding activity that Totem Ocean Trailer Express, Inc. has proposed to undertake with your Federal Pac. (SaltChuk PAC). Your letter states that Totem Ocean Trailer Express, Inc. would like to undertake this same action for the TOTE Alaska PAC. Based on the information you have provided, staff understands that Totem Ocean Trailer Express, Inc. wishes to solicit contributions from their employees to the Alaska TOTE PAC. Totem Ocean Trailer Express, Inc. proposes to do this by offering to match the employees PAC contributions up to the maximum allowable contribution of $500 to a charity of the employee's choice. You have stated that the charity must be a qualified tax-exempt, not for profit 501(c)(3) charity and that they must meet one of the seven criteria as defined by TOTE.
Totem Ocean Trailer Express, Inc. may not undertake this type of activity with regards to the TOTE Alaska PAC.
The Alaska Campaign Disclosure Law states that all monies or other things of value that are solicited by the PAC and used for support and/or opposition of candidates must come from individuals. The regulations further state that the law recognizes there are some things that a parent Corporation should reasonably be permitted to have the ability to provide, such as limited necessary administrative services, without those services being considered a contribution to the PAC.
Campaign Disclosure Law
Individuals, groups, nongroup entity, and political parties may make contributions to a candidate. An individual, group, or nongroup entity may make a contribution to a group, to a nongroup entity, or to a political party. AS 15.13.065(a).
Only an individual or group may make contributions. An individual may not contribute more than $500 per year to a group that is not a political party. AS 15.13.070(a),(b)(1).
A Corporation, company, partnership, firm or association…that does not satisfy the definition of group or nogroup entity…may not make a contribution to a candidate, group or nongroup entity. AS 15.13.074(f).
A group is any combination of two or more individuals acting jointly who organize for the principal purpose to influence the outcome of one or more elections and who take action the major purpose of which is to influence the outcome of an election. AS 15.13.400(5)(B).
An employer may not lend, pay, advance or reimburse employees for contributions to a candidate or group. (Emphasis added) 2 AAC 50.258.
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).
A contribution does not include costs incurred to provide necessary administrative services associated with a payroll withholding plan; these costs may not include expenses associated with soliciting contributions. (Emphasis added) 2 AAC 50.250(a)(3)(F).
Totem Ocean Trailer Express, Inc. established a federal PAC in 1983. This PAC is named SaltChuk PAC.
Approximately four years ago Totem Ocean Trailer Express, Inc. established the Alaska Employees Political Action Committee that supports non-federal candidates and issues in Alaska.
Totem Ocean Trailer Express, Inc. recently proposed a modification to the federal SaltChuk PAC, allowing Totem Ocean Trailer Express, Inc. to match an employee contribution to the federal PAC with one to a charity of the employees' choice. You are proposing the same activity for TOTE Alaska PAC.
The Alaska Campaign Disclosure Law AS 15.13, prohibits contributions by a corporation or association to candidates or groups. The only exception to that prohibition is for the purposes of performing administrative duties, such as handling the payroll deduction associated with most employee PACS. Corporations and associations may also help with the preparation of the required disclosure reports necessary to comply with AS 15.13. Other types of services or payments, such as the charitable contribution incentive program you have proposed, would be prohibited under AS 15.13.074(f) as a contribution from a corporation.
The prohibition in AS 15.13.074(f) would extend to all costs associated with soliciting contributions, including, such administrative costs as record keeping.
Corporations are prohibited from contributing to candidates or groups. In addition, it is a violation of the Alaska Campaign Disclosure law to reimburse contributors for their contributions. By regulation, a person or employer may not "lend, pay, advance, or reimburse employees for contributions." When Totem Ocean Trailer Express, Inc., promises to make a donation using its corporate monies, it is in fact making a contribution to the PAC. The fact that the corporation is making the contribution indirectly or through an intermediary does not remove the contribution from the prohibition.
The 1997 Campaign Finance Reform Law envisioned that corporations and political action committees would maintain an "arm's length" relationship and employees or members of the PACs would be independent from the corporation. For this reason corporations are prohibited from soliciting contributions or undertaking other activities that connect with or support the activities of the employee political action committees.
The charitable contribution incentive program as you describe it, would constitute a corporate solicitation for employee participation in TOTE Alaska PAC and thus, is not permissible. Because corporations are prohibited from contributing to candidates or groups, Totem Ocean Trailer Express, Inc., would not be able to solicit contributions on behalf of TOTE Alaska PAC, nor would they be able to perform the necessary administrative duties associated with completing the matching donation to the charity of choice. The activities you have described in your charitable contribution incentive program would, under AS 15.13 Alaska Campaign Disclosure Law, constitute prohibited contributions.
The Commission approved the advice in this letter by an affirmative vote of 4-0 on June 21, 2002. 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.