State of Alaska

Department of Administration

Alaska Public Offices Commission

Alaska Department of Administration, Alaska Public Offices Commission

AO97-01-CD

Number: AO97-01-CD

Requested By: Michelle Tabler, Treasurer

On Behalf of: Alaska Life Underwriters PAC

Prepared By: Greg Granquist, Group Coordinator

Date Issued: February 14, 1997

Subject: Joint Fundraising by an Alaskan PAC and its National Affiliate

 

This is in response to your advisory opinion request, on behalf of the Alaska Life Underwriters PAC (ALUPAC). You ask if the provisions of Alaska's new campaign disclosure law require that ALUPAC change the method by which it collects campaign contributions. Specifically, you ask if it is acceptable for ALUPAC to continue a fund raising procedure whereby it and NALUPAC (the political action committee of the National Association of Life Underwriters) split evenly contributions received from Alaskan members of the National Association of Life Underwriters (National Association).

The Short Answer

ALUPAC may continue its current fundraising procedures. Staff recommends that the group amend its procedure to alert contributors of their individual reporting requirements.

Facts

ALUPAC is a group comprised of those members of the National Association of Life Underwriters who reside in Alaska and who elect to contribute to Alaskan candidates. Of approximately 250 agents in Alaska, about 50 participate in the group.

Agents may contribute to the group in two ways. An agent may submit a personal check (or authorized personal credit card deduction) when he or she wishes, or the agent may sign up for a monthly personal checking account deduction. In either case, fifty percent of each agent's contribution goes to ALUPAC and fifty percent goes to NALUPAC. This division is based on a long standing understanding between NALUPAC and ALUPAC. In some other states, the local LUPACs have different agreements regarding the percentage share with NALUPAC. As part of this advisory request, the agreement was put into writing, and is included as Attachment A.

Contributions are processed in the following manner. Contribution checks are sent to a central national post office box administered by the First Union Bank (Bank). The arrangement is called a lockbox. The Bank serves as an administrative agent of NALUPAC, and by inclusion, ALUPAC. The Bank screens contributions and accepts for deposit only individual contributions which meet federal and Alaska contribution limits. Unacceptable contributions, such as those from businesses, in cash over $ 100, or to third parties are forwarded to the National Association for return to the contributor. NALUPAC records all transactions, and sends ALUPAC its share of the funds received from Alaska contributors each month along with an itemized list of each contributor and the amount of their contribution. In this regard, NALUPAC serves as an administrative agent for ALUPAC. From the funds it retains, NALUPAC contributes to national candidates, and pays its administrative costs. Its operation requires that it employ three full time staff members. ALUPAC and NALUPAC will split evenly the cost of all joint fund raising efforts.

The Board of Directors of the Alaska Life Underwriters Association (Alaska Association) serves also as the governing body of ALUPAC. Decisions are made locally as to how ALUPAC will use its funds and as to which state and municipal candidates it will support. These decisions are made principally by an ALUPAC subcommittee, the Century Club (comprised of Alaskan agents who have contributed over $100 to the group). However, any Alaskan member may provide input.

The Existing Statute

AS 15.13.070 (c)
Limitations on the amount of political contributions

A group that is not a political party may contribute not more than $1000 per year to another group.

AS 15.13.072(a)(3) and (f)
Restrictions on solicitation and acceptance of contributions

A candidate may not accept a contribution from a group organized under the laws of another state, resident in another state, or whose participants are not residents of this state at the time the contribution is made.

A group may solicit contributions from non-residents but the amount received from all non-residents may not exceed 10% of the group's total contributions.

AS 15.13.400 (3)(A) and (B)(ii)
Definition of Contributions

A "contribution" means a payment… that is made for the purpose of influencing the nomination or election of a candidate.

A contribution does not include services provided by an accountant or other person to prepare reports and statements required by this chapter

AS 15.13.400 (5)
Definition of a group

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.

Analysis

Although ALUPAC's fundraising involves the interstate and inter-group transfer of funds, its practices are in compliance with the provisions of Alaska's Campaign Disclosure Law as well as with the intent of the new law.

New provisions in the law limit contributions by out-of-state individuals to Alaska candidates and groups, and ban contributions by out-of-state groups to candidates. ALUPAC's fundraising is in compliance with these provisions because its funds originate entirely from individuals within Alaska and are spent entirely according to the instructions of its Alaskan membership.

Alaska's Campaign Disclosure Law limits the amount that a group may contribute to another group. ALUPAC's transactions with NALUPAC, however, do not trigger this limitation because:

1. The monthly funds received from NALUPAC represent ALUPAC's predetermined share of jointly collected funds and do not represent a contribution from NALUPAC.

2. The costs of shared fund raising efforts are split evenly between NALUPAC and ALUPAC so that no non-monetary contribution of fund raising expense accrues to either group.

3. NALUPAC's administrative donations to ALUPAC have been minimal in the past, and are not expected to exceed $1000 in the future.

4. NALUPAC's administrative assistance in processing Alaskan contributions includes both a bookkeeping service and legal advice. Under AS 15.13.400(B)(ii) and 2 AAC 50.313(g), these kinds of services are not reportable. NALUPAC, in providing these services, exercises no control over the use of ALUPAC's funds except to reject and return illegal contributions, through its agent First Union Bank.

A new provision in the law prohibits contributions by a corporation or association to a candidate. The Alaska and National Associations, in relation to ALUPAC, are in compliance with this provision because neither entity provides monetary or non-monetary assistance to ALUPAC, except in the areas of bookkeeping, legal advice needed to comply with the group's reporting requirements, including administrative services truly necessary to provide for a payroll withholding plan.

Conclusion

ALUPAC's fundraising procedure is in compliance with AS 15.13. ALUPAC is advised to notify individuals of their individual reporting requirements under the new law, because the new law provides for civil penalties in the event contributors file late statements. Because of the time it takes to process contributions under ALUPAC's system, the notice should be made at the time the contribution is solicited.

The Commission approved this advisory opinion on February 27, 1997. 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.