|Requested by:||Representative Les Gara|
Jerry D. Anderson,
|Date Issued:||April 10, 2009|
|Subject:||Request for an advisory opinion on the legality of a legislator receiving reimbursement for legal expenses from a political party.|
|Decision:||On April 29, 2009, the Commission heard and approved this advisory opinion request by a vote of 4 to 0, with minor editorial changes that did not affect the result.|
May the Democratic Party reimburse Representative Gara for legal expenses incurred in a legislative ethics hearing regarding his fundraising on behalf of the party?
1) Can the Alaska Democratic Party raise funds and compensate me for these expenses? – The Alaska Democratic Party may not use campaign funds to compensate you for legal expenses. We are unaware of a source of unreported funds under the control of a political party, however. But even if the party could make such a gift, it would need to be examined under the laws governing the reporting and acceptance of gifts.
2) If I pay the bill, is there a time period within which the party would have to compensate me? – Because the money that you would use to pay this bill would not be campaign funds, the time limits in AS 15.13 would not apply.
3) Would it be legal to arrange for the party to pay the bill for me directly, after they are able to raise the funds? – Or do I have to pay it, and request reimbursement from the party? – Because payment of legal expenses could only occur with funds not subject to AS 15.13, the particular details of such an arrangement would not be dictated by Alaska’s campaign finance laws.
The facts, as described by Representative Gara, are as follows: In March of 2008 Representative Gara sent out a fundraising letter aimed at raising funds for the Alaska Democratic Party. In response to a complaint, the Alaska Legislative Ethics Committee held a hearing to determine if the fundraising letter was improper. Representative Gara retained legal counsel to represent him at the Ethics Committee hearing. After the hearing, the Legislative Ethics committee concluded that Representative Gara did not violate the law in sending out the fundraising letter, and dismissed the complaint. Mr. Gara would like to raise funds either with the help of the Democratic Party or on his own to defray his legal expenses.
There is no explicit prohibition in the laws administered by APOC preventing a group, such as the Alaska Democratic Party, AS 15.13.400(8), from paying legal expenses incurred by a third party. However, the law does prohibit such a group from using “campaign contributions” for this purpose. Under AS 15.13.112(a), a group may use campaign contributions “to pay the expenses of the candidate or group, and the campaign expenses incurred by the candidate or group, that reasonably relate to election activities….” Campaign contributions may not be “used to make contributions to another candidate or to a group…” AS 15.13.112(b)(7). Alaska Statute 15.13.112(b)(1) specifically prohibits a group from using campaign contributions that it holds to give a personal benefit to another person.
Payment of the legal fees of an elected official would be a direct benefit to an official. Here, the legal fees incurred by Representative Gara are not an expense of the Alaska Democratic Party. Representative Gara notes that he incurred the expenses himself, and that the decision to hire an attorney was his, not the party’s. There is no indication that the party is under any legal obligation to pay the legal expenses incurred by Representative Gara. Because Representative Gara’s legal expenses are not expenses of the ADP, the ADP may not use campaign contributions to pay them.1 Because paying the legal fees would certainly give a personal benefit to the official, the campaign contributions held by ADP may not be used to pay them.
While Alaska’s campaign finance laws in AS 15.13 prohibit the use of campaign contributions held by the ADP for the payment of another person’s legal expenses, they do not prohibit ADP from using other funds for that purpose. We do not mean to suggest that the Alaska Democratic Party has an appropriate source of funds for such a gift, but if it does, the Party would still be obligated to report such non-campaign payments under 2 AAC 50.327.
The other side of the question whether the ADP can legally make a gift of legal fees to an official is whether the official can lawfully receive such a gift. Because the official here is a legislator, the question is probably governed by AS 24.60.080, which covers gifts to legislators and which is administered by the Select Committee on Legislative Ethics. But we do not mean here to express an opinion about whether receipt of such a gift is lawful under that Act or under any other state or federal law outside of the jurisdiction of this agency.
1 It is important to note that there are also limits on a candidate or group’s use of campaign funds for its own legal fees. For example, the statute governing disbursement of campaign funds in AS 15.13.116(a)(6) limits their use to a defense fund for the payment of attorney’s fees incurred in a challenge to the election or defeat of the candidate.
A group, such as the Alaska Democratic Party, may not use campaign contributions to pay the legal fees of a third party, as this is not an expense of the group. If, however, a group such as ADP has access to funds which are not campaign contributions, Alaska’s campaign finance laws do not limit the uses of those funds. Other state and federal laws, however, may prevent the Alaska Democratic Party from paying an elected official’s legal expenses.
On April 24, 2009, the Alaska Public Offices Commission heard and approved this advisory opinion request by a vote of 4 to 0, with minor editorial changes that did not affect the result.
Sec. 15.13.110. Filing of reports.
(a) Each candidate, group, and nongroup entity shall make a full report in accordance with AS 15.13.040 for the period ending three days before the due date of the report and beginning on the last day covered by the most recent previous report. If the report is a first report, it must cover the period from the beginning of the campaign to the date three days before the due date of the report. If the report is a report due February 15, it must cover the period beginning on the last day covered by the most recent previous report or on the day that the campaign started, whichever is later, and ending on February 1 of that year. The report shall be filed
(1) 30 days before the election; however, this report is not required if the deadline for filing a nominating petition or declaration of candidacy is within 30 days of the election;
(2) one week before the election;
(3) 105 days after a special election; and
(4) February 15 for expenditures made and contributions received that were not reported previously, including, if applicable, all amounts expended from a public office expense term account established under AS 15.13.116(a)(8) and all amounts expended from a municipal office account under AS 15.13.116 (a)(9), or when expenditures were not made or contributions were not received during the previous year.
(b) Each contribution that exceeds $250 and that is made within nine days of the election shall be reported to the commission by date, amount, and contributor within 24 hours of receipt by the candidate, group, campaign treasurer, or deputy campaign treasurer. Each contribution to a nongroup entity for the purpose of influencing the outcome of an election that exceeds $250 and that is made within nine days of the election shall be reported to the commission by date, amount, and contributor within 24 hours of receipt by the nongroup entity.
(c) All reports required by this chapter shall be filed with the commission's central office and shall be kept open to public inspection. Within 30 days after each election, the commission shall prepare a summary of each report which shall be made available to the public at cost upon request. Each summary shall use uniform categories of reporting.
(d) [Repealed, Sec. 35 ch 126 SLA 1994].
(e) A group formed to sponsor an initiative, a referendum or a recall shall report 30 days after its first filing with the lieutenant governor. Thereafter each group shall report within 10 days after the end of each calendar quarter on the contributions received and expenditures made during the preceding calendar quarter until reports are due under (a) of this section.
(f) During the year in which the election is scheduled, each of the following shall file the campaign disclosure reports in the manner and at the times required by this section:
(1) a person who, under the regulations adopted by the commission to implement AS 15.13.100 , indicates an intention to become a candidate for elective state executive or legislative office;
(2) a person who has filed a nominating petition under AS 15.25.140 - 15.25.200 to become a candidate at the general election for elective state executive or legislative office;
(3) a person who campaigns as a write-in candidate for elective state executive or legislative office at the general election; and
(4) a group or nongroup entity that receives contributions or makes expenditures on behalf of or in opposition to a person described in (1) - (3) of this subsection, except as provided for certain independent expenditures by nongroup entities in AS 15.13.135 (a).
Sec. 15.13.112. Uses of campaign contributions held by candidate or group.
(a) Except as otherwise provided, campaign contributions held by a candidate or group may be used only to pay the expenses of the candidate or group, and the campaign expenses incurred by the candidate or group, that reasonably relate to election campaign activities, and in those cases only as authorized by this chapter.
(b) Campaign contributions held by a candidate or group may not be
(1) used to give a personal benefit to the candidate or to another person;
(2) converted to personal income of the candidate;
(3) loaned to a person;
(4) knowingly used to pay more than the fair market value for goods or services purchased for the campaign;
(5) used to pay a criminal fine;
(6) used to pay civil penalties; however, campaign contributions held by a candidate or group may be used to pay a civil penalty assessed under this chapter if authorized by the commission or a court after it first determines that
(A) the candidate, campaign treasurer, and deputy campaign treasurer did not cause or participate in the violation for which the civil penalty is imposed and exercised a reasonable level of oversight over the campaign; and
(B) the candidate, campaign treasurer, and deputy campaign treasurer cooperated in the revelation of the violation and in its immediate correction; or
(7) used to make contributions to another candidate or to a group; however, it is not a violation of this paragraph if, in circumstances in which a candidate or group participates in a shared campaign activity, the candidate or group participating in the activity
(A) uses campaign contributions of the candidate or group for payment of
(i) all of the shared campaign activity expense; or
(ii) more than the candidate's or group's pro rata share of the activity expense; and
(B) receives, within seven days after payment of the expense, complete reimbursement of the amount of campaign contributions used for payments made on behalf of another candidate or group participating in the activity.
(c) A candidate may use up to a total of $1,000 in campaign contributions in a year to pay the cost of
(1) attending, or paying the cost for guests of the candidate to attend, an event or other function sponsored by a political party or subordinate unit of a political party;
(2) membership in a political party, subordinate unit of a political party, or other entity within a political party, or subscription to a publication from a political party; and
(3) co-sponsorship of an event or other function sponsored by a political party or by a subordinate unit of a political party.
2 AAC 50.327. Political party reporting of donations and money spent on communications
(a) This section applies to political party reporting requirements for a donation received by a political party that does not qualify as a contribution under AS 15.13.400 and for money spent by a political party that does not qualify as an expenditure under AS 15.13.400 .
(b) A political party shall file a full report, in accordance with the contribution reporting requirements for a group in AS 15.13.040 and 15.13.110, of a donation consisting of a purchase, payment, promise or obligation to pay, loan or loan guarantee, deposit or gift of money, goods or services, other than volunteer services provided by an individual, that the political party receives from an individual or person and that does not qualify as a contribution.
(c) A political party shall file a full report, in accordance with the expenditure reporting requirements for a group in AS 15.13.040 and 15.13.110, of all money spent by a political party on a communication and all money spent that does not qualify as an expenditure.