State of Alaska

Department of Administration

Alaska Public Offices Commission

Alaska Department of Administration, Alaska Public Offices Commission

AO 09-14-CD

Number: AO 09-14-CD
Requested by: Senator Frederick Dyson
Prepared by: Vullnet Greva
Campaign Disclosure, Administrator
Date Issued: November 19, 2009
Subject: Request for an Advisory Opinion on whether or not Senator Dyson can use leftover 2008 campaign funds to pay a 2008 campaign bill (debt) and how to report the activity on his APOC campaign disclosure report. AO 09-14-CD
Decision: On November 19, 2009, the Alaska Public Offices Commission heard and approved this advisory opinion request by a vote of 5 to 0, with minor editorial changes that did not affect the result.

QUESTION PRESENTED:

Senator Dyson received a bill for work done for his 2008 campaign, he has funds left over from his 2008 campaign, can he use the left over funds to satisfy the campaign bill and how does Senator Dyson amend his campaign disclosure reports?

SHORT ANSWER:

Yes, you can use 2008 leftover campaign funds to pay a 2008 campaign debt. Yes, you will have to amend your campaign disclosure reports to show the expenditure transaction in question and update your campaign money totals accordingly.

FACTS

In a follow up e-mail Senator Dyson presented the following facts.

  1. The debt was not previously reported on APOC campaign disclosure reports because Senator Dyson did not know about the bill.
  2. The contractor, Advance Design had lost track of the expense then notified Senator Dyson a couple of months ago about the bill by mail.
  3. The expense was for domain work (website).
  4. Senator Dyson has not yet paid the bill but was planning on paying with personal funds until staff issues this Advisory Opinion directing him towards appropriate action.
  5. The total is $360.00.
  6. The expense was incurred late third quarter of 2008.
  7. There is no immediate deadline for payment.

ANALYSIS

Due to the fact that the campaign debt has no immediate due date for payment, staff notified Senator Dyson to not pay the debt with personal funds and to wait until he receives staff’s opinion to avoid any further complications to this issue.
           
AS 15.13.112 directly states that 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”.  In this case, Senator Dyson had a campaign expense for campaign domain work that is reasonably related to election campaign activities, as stated in AS 15.13.112.  It is understood by the public and by those who contribute to a campaign that the money an individual or group contributes to a campaign will be used by that campaign to cover their campaign expenses, which include the costs of getting out the campaign message and the costs of professional services.

Although AS 15.13.112 does not directly address the timing of a debt to be paid 2 AAC 50.389 states that “campaign debts that exist after the campaign account is closed remain campaign debts”.  AS 15.13.116 addresses the disbursement of campaign assets after an election and in AS 15.13.116(a)(1) it states that campaign distribution of money left over may only be made to “pay the bills incurred for expenditures reasonably related to the campaign and the winding up of the affairs of the campaign, including a victory or thank you party, thank you advertisements, and thank you gifts to campaign employees and volunteers, and to pay expenditures associated with post-election fund raising that may be needed to raise funds to pay off campaign debts”.  AS 15.13.116 also continues to list other options a campaign has to distribute campaign funds after an election.

AS 15.13.116(a)(7) allows a campaign to “transfer all or a portion of the unused campaign contributions to an account for a future election campaign”.  The amount to be transferred is based on the type of office the candidate was seeking in their campaign election bid 1.  The contributions that are transferred from the ending campaign to the future campaign are all traceable and permissible under the campaign disclosure law which does not prohibit a campaign from using the same campaign funds to satisfy a previous campaign debt.

In Senator Dyson’s situation, there is no need to hold a fundraising event to raise funds to pay off any campaign debt.  Senator Dyson has sufficient funds left over in his campaign account to satisfy the debt.  Senator Dyson’s Yearend Report, filed with APOC on February 17, 2009 shows an ending balance of $3,766.25.  Senator Dyson’s campaign bill is $360.00 for campaign work done by Advance Design.  It is apparent that the purpose or the intent of AS 15.13.116 is directed to deal with the issues of a closing campaign and the debt responsibilities of that campaign that remain once the campaign has closed its doors. Therefore, it is permissible for Senator Dyson to pay the debt with 2008 campaign money. This, however is not and should not be used as a precedent by other candidates, or groups for that matter, who are required to file campaign reports with APOC, to postpone or delay the due date of a bill or debt to the campaign after an election or after a report due date.

The debt that Senator Dyson has in question in this opinion is considered to be a legitimate, reasonably related campaign activity with a marginal value and with little or no harm to the public for any omission related to this debt to previous reports.  Once the debt has been satisfied by Senator Dyson with leftover campaign funds, Senator Dyson is required to amend all previously filed APOC reports going back to the date of incurring the expenditure and amending and updating all reports up to and including the Yearend Report filed in February of 2009 with APOC.

Furthermore, when Senator Dyson files his next required APOC report, the Year Start report, due February 15, 2010 (considered timely filed the 16th due to the 15th being Presidents’ Day; State offices closed) the accounting totals should all be updated to show the expenditure in question. 

AS 15.13.116(a)(7)(A) $50,000, if the transfer is made by a candidate for governor or lieutenant governor; (B) $10,000, if the transfer is made by a candidate for the state senate; (C) $5,000, if the transfer is made by a candidate for the state house of representatives; and (D) $5,000, if the transfer is made by a candidate for an office not described in (A) – (C) of this paragraph.

 

CONCLUSION

Senator Dyson can use 2008 campaign funds to pay the debt in question and is required to amend all APOC campaign disclosure reports going back to the date of accrual of the expense up to and including the Yearend report filed February 17, 2009 with APOC.

COMMISSION DECISION

On November 19, 2009, the Alaska Public Offices Commission heard and approved this advisory opinion request by a vote of 5 to 0, with minor stylistic changes that did not affect the result.  The advice in this opinion applies only to the specific activity for which the advice was requested.

APPLICABLE LAW:

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. (§ 19 ch 48 SLA 1996; am § 7 ch 74 SLA 1998; am § 1 ch 90 SLA 2006)

Effect of amendments. – The 1998 amendment, effective June 4, 1998, added subsection (c).

The 2006 amendment, effective October 11, 2006, added language to paragraph (b)(7) beginning “however, it is not a violation” through the end of the paragraph.

NOTES TO DECISIONS

Constitutionality. – Because the State has a compelling interest in enforcing contribution limits, and because candidates still retain the right to make contributions from personal funds, the ban on inter-candidate contributions in paragraph (b)(7) is constitutional. State v. Alaska Civil Liberties Union, 978 P.2d 597 (Alaska 1999), cert. denied, 528 U.S. 1153, 120 S. Ct. 1156, 145 L. Ed. 2d 1069 (2000).

 

Sec. 15.13.116. Disbursement of campaign assets after election.  (a) A candidate who, after the date of the general, special, municipal, or municipal runoff election or after the date the candidate withdraws as a candidate, whichever comes first, holds unused campaign contributions shall distribute the amount held on February 1 for a general election or within 90 days after a special election. The distribution may only be made to

(1) pay bills incurred for expenditures reasonably related to the campaign and the winding up of the affairs of the campaign, including a victory or thank you party, thank you advertisements, and thank you gifts to campaign employees and volunteers, and to pay expenditures associated with post-election fund raising that may be needed to raise funds to pay off campaign debts;

(2) make donations, without condition, to

(A) a political party;

(B) the state's general fund;

(C) a municipality of the state; or

(D) the federal government

(3) make donations, without condition, to organizations qualified as charitable organizations under 26 U.S.C. 501(c)(3) if the organization is not controlled by the candidate or a member of the candidate's immediate family;

(4) repay loans from the candidate to the candidate's own campaign under AS 15.13.078 (b);

(5) repay contributions to contributors, but only if repayment of the contribution is made pro rata in approximate proportion to the contributions made using one of the following, as the candidate determines:

(A) to all contributors;

(B) to contributors who have contributed most recently; or

(C) to contributors who have made larger contributions;

(6) establish a fund for, and from that fund to pay, attorney fees or costs incurred in the prosecution or defense of an administrative or civil judicial action that directly concerns a challenge to the victory or defeat of the candidate in the election;

(7) transfer all or a portion of the unused campaign contributions to an account for a future election campaign; a transfer under this paragraph is limited to

(A) $50,000, if the transfer is made by a candidate for governor or lieutenant governor;

(B) $10,000, if the transfer is made by a candidate for the state senate;

(C) $5,000, if the transfer is made by a candidate for the state house of representatives; and

(D) $5,000, if the transfer is made by a candidate for an office not described in (A) - (C) of this paragraph;

(8) transfer all or a portion of the unused campaign contributions to a public office expense term account or to a public office expense term account reserve in accordance with (d) of this section; a transfer under this paragraph is subject to the following:

(A) the authority to transfer is limited to candidates who are elected to the state legislature;

(B) the public office expense term account established under this paragraph may be used only for expenses associated with the candidate's serving as a member of the legislature;

(C) all amounts expended from the public office expense term account shall be annually accounted for under AS 15.13.110 (a)(4); and

(D) a transfer under this paragraph is limited to $5,000 multiplied by the number of years in the term to which the candidate is elected plus any accumulated interest; and

(9) transfer all or a portion of the unused campaign contributions to a municipal office account; a transfer under this paragraph is subject to the following:

(A) the authority to transfer is limited to candidates who are elected to municipal office, including a municipal school board;

(B) the municipal office account established under this paragraph may be used only for expenses associated with the candidate's serving as mayor or as a member of the assembly, city council, or school board;

(C) all amounts expended from the municipal office account shall be annually accounted for under AS 15.13.110 (a)(4); and

(D) a transfer under this paragraph is limited to $5,000.

(b) After a general, special, municipal, or municipal runoff election, a candidate may retain the ownership of one computer and one printer and of personal property, except money, that was acquired by and for use in the campaign. The current fair market value of the property retained, exclusive of the computer and printer, may not exceed $5,000. All other property shall be disposed of, or sold and the sale proceeds disposed of, in accordance with (a) or (c) of this section. Notwithstanding any other provision of this chapter,

(1) a candidate may (A) retain a bulk mailing permit that was paid for with campaign funds, and (B) use personal funds, campaign funds, or unused campaign contributions transferred to a public office expense term account under (a)(8) of this section to pay the continuing charges for the permit after the election; money used to continue the life of the permit is not considered to be a contribution under this chapter; in addition to any other use permitted under this chapter, during the candidate's term of office, the candidate may use the bulk mailing permit for mailings associated with service in the office to which the candidate was elected; during the candidate's term of office, if the candidate files a declaration of candidacy or the document necessary to permit the candidate to incur election-related expenses under AS 15.13.100 for the same or a different elective office, the candidate may also use the bulk mailing permit in that election campaign;

(2) a candidate may retain campaign photographs and use the photographs for any purpose associated with service in the office to which the candidate was elected;

(3) a candidate may retain seasonal greeting cards purchased with campaign funds; and

        (4) campaign signs prepared for an election that has already taken place have no monetary value and may be retained or disposed of at the candidate's discretion.

(c) Property remaining after disbursements are made under (a) - (b) of this section is forfeited to the state. Within 30 days, the candidate shall deliver the property to the Department of Revenue. The Department of Revenue shall deposit any money received into the general fund and dispose of any other property in accordance with law.

(d) After a general or special election, a candidate for the state legislature who has been elected to the state legislature in that election may, from the amount retained in the public office expense term account reserve under this subsection, transfer to a public office expense term account not more than $5,000 each calendar year for use only for expenses associated with the candidate's serving as a member of the legislature, except that a senator serving a two-year term may transfer not more than $10,000 each calendar year. A candidate for the senate may transfer up to $20,000 from unused campaign contributions to a public office expense term account reserve. A candidate for the house of representatives may transfer up to $10,000 from unused campaign contributions to a public office expense term account reserve. The public office expense term account reserve may only be used to make transfers to the public office expense term account. At the end of the candidate's term of office, a balance in the public office expense term account reserve must be disposed of as provided in (a) of this section but may not be disposed of as provided in (a)(1), (4), or (6) - (9) of this section. All amounts expended under this subsection shall be annually accounted for under AS 15.13.110 (a)(4). (§ 19 ch 48 SLA 1996; am §§ 8, 9, 10 ch 74 SLA 1998; am §§ 4-6 ch 3 SLA 2002; am § 15 ch 108 SLA 2003)

Cross references. – For provisions relating to certain persons holding unused campaign contributions on January 1, 1997, see § 32, ch. 48, SLA 1996 in the Temporary and Special Acts.

For provisions relating to the applicability of subsection (d) to certain contributions held by certain legislators, see § 104, ch. 74, SLA 1998 in the 1998 Temporary and Special Acts.

Effect of amendments. – The 1998 amendment, effective June 4, 1998, rewrote subsection (a); added the last four sentences in subsection (b); and added subsection (d).

The 2002 amendment, effective April 16, 2002, in subsection (a) inserted ", thank you advertisements," in paragraph (1), in paragraph (8) inserted "plus any accumulated interest" in subparagraph (D); in subsection (b) substituted "$5,000" for "$2,500" in the introductory language, added the subparagraph (1) designation, in subparagraph (1) substituted "the document necessary to permit the candidate to incur election-related expenses under AS 15.13.100" for "A letter of intent to become a candidate" near the end and added subparagraphs (2)-(4); in subsection (d) added the exception at the end of the first sentence; and made stylistic changes.

The 2003 amendment, effective September 14, 2003, in subsection (a) inserted "on February 1 for a general election or" and "after a special election" in the introductory language and made a stylistic change.

Editor’s notes. – Section 106, ch. 105, SLA 1998 makes the 1998 amendments to subsections (a) and (b), the 1998 enactment of subsection (d), and the related provisions in § 104, ch. 74, SLA 1998 in the 1998 Temporary and Special Acts all retroactive to December 31, 1996.

NOTES TO DECISIONS

Constitutionality. – The State’s interest in preventing avoidance of valid contribution limits by use of carry-forwards in both compelling and served by the restriction set forth in this section, which is narrowly tailored to accomplish this interest, and justifies its burden on speech. State v. Alaska Civil Liberties Union, 978 P.2d 597 (Alaska 1999), cert. denied, 528 U.S. 1153,  120 S. Ct. 1156, 145 L. Ed. 2d 1069 (2000).

2 AAC 50.389. CAMPAIGN DEBTS.

Campaign debts that exist after the campaign account is closed remain campaign debts. (Eff. 1/1/2001, Register 156)

Authority: AS 15.13.030 AS 15.13.072 AS 15.13.074

AS 15.13.112 AS 15.13.116

2 AAC 50.905. ADVISORY OPINIONS.

(a) The commission staff shall review all requests for advisory opinions submitted under AS 15.13.374. If the commission staff determines that a request does not satisfy the requirements in AS 15.13.374, the commission staff shall reject the request and notify the person, group, or nongroup entity making the request of the deficiencies. A rejected request may be refiled.

(b) If the commission staff determines that the request satisfies the requirements in AS 15.13.374, the executive director or the executive director’s designee shall prepare a recommended advisory opinion within seven days after receipt of the opinion request for the commission to consider at its next regular meeting.

(c) The commission will approve, disapprove, or modify the recommended advisory opinion.

(d) The commission may reconsider an advisory opinion at any time upon the motion of a member who voted with the majority that originally approved the opinion, and if the commission adopts the motion to reconsider by the affirmative vote of at least four members. Adoption of a motion to reconsider vacates the advisory opinion to which it relates. Action by the requesting party in good faith reliance on the advisory opinion before the party has notice of reconsideration may not be the subject of an investigation under 2 AAC 50.460, 2 AAC 50.507, 2 AAC 50.810, or 2 AAC 50.815. (Eff. 1/4/86, Register 97; am 7/20/95, Register 135; am 1/1/200l, Register 156; am 2/20/2005, Register 173)

Authority: AS 15.13.030 AS 24.45.021 AS 39.50.050

AS 15.13.374 AS 24.60.220