State of Alaska

Department of Administration

Alaska Public Offices Commission

Alaska Department of Administration, Alaska Public Offices Commission

A097-08-CD

Number: A097-08-CD

Requested by: Kenneth P. Jacobus, P.C.

On Behalf of: Republican Party of Alaska

Prepared by: Jenifer Kohout, Assistant Director

Date issued: March 2, 1998

Subject: The compliance requirements of national political party committees under Alaska’s campaign disclosure law.

 

This letter responds to the sixth question of Mr. Jacobus’ advisory opinion request dated January 8, 1997. Mr. Jacobus inquired about the applicability of the Alaska Campaign Disclosure Act to the Republican National Committee’s (RNC) contributions to the Republican Party of Alaska (RPA). He asked if the law limits in any way the RNC’s contributions to the RPA, including the time, purpose or amount of the funding.

The letter also responds to correspondence from Mr. Reiff of the Democratic National Committee (DNC) proposing certain conditions for the DNC’s compliance with Alaska law in the event that it wishes to transfer non-federal funds to Democratic Party affiliates in Alaska.

Summary

Alaska campaign disclosure law applies to all funds contributed by a national political party committee to a state political party for use in state and local campaigns. The RPA and the Alaska Democratic Party (ADP) are political party groups under the Alaska campaign disclosure law. Thus, when a national political party committee contributes funds to the RPA or ADP for use in state and local campaigns, such contributions are regulated by Alaska law.

A national political party committee which plans to participate in Alaska elections, must comply with the requirements of Alaska campaign disclosure law. The two alternatives described below provide a mechanism to do so. Other alternatives may exist. Before undertaking a different alternative, you should first consult with the Alaska Public Offices Commission (APOC) as to its legality.

In the first alternative, the RNC may establish an Alaska group to hold funds it plans to contribute to the RPA for use in Alaska elections. As long as the Alaska group meets the reporting requirements and limitations placed on Alaska political party groups and is recognized as a subdivision by an Alaskan political party, it may transfer qualifying funds to the RPA in unlimited amounts.

In the second alternative, as the DNC has inquired, the national political party committee may "assign" contributions to the ADP, if those assignments are consistent with the limitations and disclosure requirements of Alaska law. All contributions assigned by the DNC must satisfy state law with regard to type and amount. Contributions must be from individuals and they must not exceed $5000 when added to the amount that an individual has contributed directly to any other group within the ADP. In addition, the ADP must be careful not to exceed the ten percent cap on non-resident contributions. All assignments under this second alternative must be specifically disclosed on state party reports as transfers from the national political party account.

The Law

Definitions:

  • AS 15.13.400(5) defines "group" as

every state and regional executive committee of political party; and

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(10) defines "political party" to mean:

(A) an organized group of voters that represents a political program and that nominated a candidate for governor who received at least three percent of the total votes cast at any one of the last five preceding general elections for governor, and

(B) a subordinate unit of the organized group of voters qualifying as a political party under (A) of this paragraph if, consistent with the rules or bylaws of the political party, the unit conducts or supports campaign operations in a municipality, neighborhood, election district, or precinct.

Contributions Limitations:

  • AS 15.13.070(b)(1)

An individual may contribute not more than $ 500 per year . . . to a group that is not a political party.

  • AS 15.13.070(b)(2)

An individual may contribute not more than $5000 per year to a political party.

  • AS 15.13.065(a)

Individuals, groups, and political parties may make contributions to a candidate.

  • AS 15.13.070(c)(2)

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

  • AS 15.13.072 (a)(3)

This provision prohibits candidates from accepting or soliciting contributions from a non-resident group. A non-resident group is one which is "organized under the laws of another state, resident in another state, or whose participants are not residents of [Alaska] at the time the contribution is made."

  • AS 15.13.072(f)

This provision applies to any group or political party active in Alaska (including non-resident groups and national political party committees). It provides that a group or political party may not accept more than 10% of its total contributions during the calendar year from non-resident individuals.

Background

Each year, approximately 225 groups register with the Alaska Public Offices Commission. Registration is required before a group may make expenditures. Generally, about 10% of all registered groups were non-resident; about 2% were national political party groups.

In the 1993-94 election cycle, for example, 17 non-resident non-political party groups were active in Alaska. They collectively contributed $62,000 to Alaska candidates. This represented less than 5% of the $1,242,807 contributed to candidates by all non-party groups during this period.

In the 1993-1994 election cycle, four national political party groups were active in Alaska. They collectively contributed $143, 000 to their Alaska subsidiaries. While not all of this money was used to fund direct contributions to candidates, it represents about 14% of the total amount contributed by Alaskan political party groups to candidates in 1994.

Reporting Requirements and Political Party Status
For National Party Groups Under the Old Law.

Alaska’s new campaign disclosure law took effect January 1, 1997. Prior to that date, national political party committees and non-resident groups were free to conduct activity in Alaska. The Commission, under the old law, adopted a set of reporting guidelines and procedures which reflect the unique elements of non-resident group disclosure.

Non-resident groups, by definition, are principally active outside Alaska. They differ from Alaska based groups in several ways:

  • Most non-resident groups became active nationally prior to undertaking activity in Alaska.
  • Most non-resident groups, prior to engaging in Alaskan campaign activity, have collected funds in accordance with Federal Election Commission (FEC) guidelines or guidelines in other states - which differ from Alaska requirements.
  • Most non-resident groups raise and spend only a fraction of their funds in Alaska.
  • Most non-resident groups are established so that their accounting procedures meet filing deadlines in jurisdictions which do not usually correspond to Alaska’s due dates (most, for example, file according to FEC deadlines).
  • Most contributors to non-resident groups are not aware of the requirement to file a Contributors Statement upon contributing more than $ 250.

In the past, the Commission, in recognition of these differences, administered the provisions of AS 15.13 in a manner that permitted non-resident groups to report using the formats and schedules most convenient to them. For example:

  • The Commission interpreted the registration requirement for non-resident groups to mean that a group was required to register before making a contribution in Alaska rather than before undertaking any activity .
  • The Commission permitted a non-resident group to satisfy Alaska reporting requirements by submitting reports using the reporting forms the group had already prepared for other states or the Federal Election Commission (FEC).
  • The Commission permitted a non-resident group to meet Alaska filing deadlines by filing a copy of its reports with APOC at the time the reports were filed with other states or the FEC.
  • Due to limited resources, generally, the Commission did not monitor non-resident group filings for lateness, and thus did not penalize non-resident groups for late reports.
  • Generally, the Commission did not request that contributors to non-resident groups file Contributor Statements, except in connection with matters involving a complaint.

In at least one instance, however, the Commission treated national political party committees in the same manner as Alaskan political party groups - the political party exemption from the $1000 contribution limit. The Commission granted national political party committees, where appropriate, political party exemption status.

Briefly, the political party exemption was a provision in the old law which permitted a qualifying political party, and its official subdivisions, to contribute more than $1000 to a candidate. In order to qualify for exemption status, an Alaskan political party group had to field a candidate for governor who received at least three percent of the vote at a general election.

The Commission interpreted the party exemption to extend to a national political party committee so long as the committee was a part of the hierarchy of a political party qualifying for exemption status in Alaska.

The law contains new compliance requirements for non-resident groups generally and for national political party groups.

One of the purposes of the new campaign disclosure law is to limit the influence of campaign contributions which originate outside Alaska. Thus, the law includes reporting requirements, contribution limitations, and campaign finance prohibitions which - both directly and indirectly - restrict the ability of non-resident groups to participate in Alaskan campaigns.

First, the new law includes two provisions which directly limit the campaign activities of all groups, including those based outside Alaska:

  • AS 15.13.072 (a)(3) prohibits candidates from accepting or soliciting contributions from a non-resident group. A non-resident group is one which is "organized under the laws of another state, resident in another state, or whose participants are not residents of [Alaska] at the time a contribution is made."
  • AS 15.13.072(f) applies to any group or political party active in Alaska (including non-resident groups and national political party committees) and states that a group or political party may not accept more than 10% of its total contributions from non-resident individuals.

Secondly, the new law contains limits and prohibitions which are difficult for non-resident groups to meet, particularly if they are organized as federal committees. Alaska’s restrictions are more severe than federal law and, in some cases, other states, particularly in the following areas:

  • An individual may not contribute more than $500 per year to a group that is not a political party. AS 15.13.070(b)(1)
  • An individual may not contribute more than $5000 per year to a political party. AS 15.13.070(b)(2)
  • Corporations may not contribute to groups or political parties. Only "individuals, groups, and political parties may make contributions to a candidate." AS 15.13.074(f) and AS 15.13.065(a).
  • A group that is not a political party may contribute not more than $ 1000 to another group or a political party. AS 15.13.070( c).
  • A group may not use campaign funds except for purposes that "reasonably relate" to election campaign activities. AS 15.13.112(a).

Thus, the statute contains unique limitations for groups organized under federal law, or the laws of other states, if those groups wish to use their funds in Alaska, or raise future funds for use in Alaska. In most instances, federal groups raise, or have already raised, money according to limits higher than those allowed under AS 15.13. For example, under federal law, national political party committees can accept individual contributions of up to $20,000 per year. Under federal law, non-resident non-party groups, such as corporate PACs, can accept contributions of up to $ 5000 per year from individuals. Thus, a group organized under federal law would need to self-impose new fundraising constraints in order to raise funds for use in Alaska, and would not be able to use "contaminated" funds.

A third consideration is that the new law underscores the importance of timely and complete disclosure compliance through providing for civil penalties for certain reports for which no penalties were provided in the past. Maximum penalties for group campaign disclosure reports were increased from $10 and $50 per day to $50 and $500 per day respectively.

Fourth, Alaska’s new campaign disclosure law now includes a definition of "political party," which, in turn, focuses on actions which occur at the state level rather than the national level.

AS 15.13.400(5) defines "political party" to mean:

(A) an organized group of voters that represents a political program and that nominated a candidate for governor who received at least three percent of the total votes cast at any of the last five preceding general elections for governor, and

(B) a subordinate unit of the organized group of voters qualifying as a political party under (A) of this paragraph if, consistent with the rules or bylaws of the political party, the unit conducts or supports campaign operations in a municipality, neighborhood, election district, or precinct.

One could argue that this focus meant that the new law does not intend for national political party committees to be included where the term "political party" is used in the new statute. However, this would be problematic for national political party committees. It would mean that national political party committees are simply non-resident groups, and thus could not contribute to any candidate for state or local office in Alaska, and could contribute only $1000 to a political party in Alaska.

Staff believes that the Commission should view a national political party committee as a part of the same organization as its state and local affiliated committees if certain conditions are met.

Analysis

Overview

Political parties are organized to elect federal, state, and local candidates. For example, the RNC, as the national organizing unit of the Republican Party, cooperates with state and local party organizations to help recruit, advise and elect Republican candidates. And conversely, the RPA, as the statewide organizing unit of the Republican Party in Alaska, cooperates with both national and local party organizations to help elect federal, state and local candidates.

Contributions and expenditures by both the RNC and the RPA, when made in connection with federal campaigns, are regulated by the Federal Election Campaign Act (FECA), which is administered by the Federal Elections Commission (FEC). FEC regulations include provisions for prorating and reporting contributions and expenses when the money is for goods or services which benefit both federal campaigns and state or local campaigns.

Contributions and expenditures by both the RNC and the RPA, when made in connection with state or local campaigns are regulated by the Alaska Campaign Disclosure Act, which is administered by the Alaska Public Offices Commission. In this regard, national political party committees, when they participate in state and local elections, are allowed to do so because of their affiliation with a state political party.

Campaign Disclosure Limitations on Political Parties

Alaska’s campaign disclosure law went into effect on January 1, 1997. The new law restricts political parties in several ways:

  • The law now limits contributions to a political party with regard to the residency of the contributor; no more than ten percent of contributions to a political party may come from individuals who reside outside Alaska.
  • The law now limits to $5000 the amount an individual may contribute annually to a political party.
  • The law now limits to $1000 the amount that a non-party group may contribute annually to a party; however, party groups may make unlimited intra-party transfers of funds.
  • The law now limits the amount that a political party may contribute annually to a candidate according to the office which the candidate seeks; the amount varies from $5000 for a municipal candidate to $100,000 for a gubernatorial candidate.

The RNC becomes subject to the limitations outlined above when it contributes funds to the RPA for use in state or local campaigns in Alaska.

Options for National Party Participation

Viewing the national political party committee as part of the same organization as its state and local affiliated committees is consistent with how national parties have operated in Alaska in prior years. While the new law did not significantly change the Commission’s definition of a political party, it did place additional limitations on political parties and out-of-state individuals and groups. As a result, national parties that participate in Alaska elections must comply with those limitations. The alternatives below provide two mechanisms to do so.

Alternative 1. State Political Party Subdivision

A national political party committee may create a group which qualifies as a subdivision of a state political party under AS 15.13, if it is recognized as such by the Alaska state party central committee and if it complies with the requirements of the Alaska campaign disclosure law.

Because the RNC raises most of its money outside Alaska, it may not make contributions from its general fund to the RPA for use in state and local campaigns. Presumably, more than ten percent of the RNC’s funds are contributed by individuals who reside outside Alaska.

However, if the national political party committee establishes a group that observes Alaska’s limits and requirements, it can participate in Alaska elections. To form a group, the national political party committee must segregate the money it intends to contribute to Alaska elections. For the purpose of this discussion only, the transfer of RNC contributions to an Alaska group account is referred to as an "assignment." As an out-of-state group, the national party Alaska group could participate in Alaska elections to a limited extent. For example, it could contribute up to $1000 to the state political party or to another Alaska group. It could not contribute directly to Alaska candidates. However, if the group is recognized as a subdivision of the state party, it receives the benefits of party status. To be recognized as an official political party subdivision, the RNC Alaska account must do the following:

register as a group with the Commission; and

submit a letter from the chair of the RPA acknowledging that the RNC Alaska account is an official subdivision of the RPA.

Reporting

As described above, the RNC must first register its Alaska account as a group. Once registered, the RNC Alaska group would file Alaska group reports disclosing all activity by the group. Those reports would be due according to Alaska deadlines.

Contributions and Expenditures

The national party committee Alaska group would share in the collective limit on contributions to and by the Alaskan party which recognized it as an affiliated party group. According to the campaign disclosure contribution limitations, an individual may give no more than $5000 to a state political party. Contributions assigned to the Alaska group account by the national party committee would count towards the limit of the affiliated state party. As a result, the RNC Alaska group would be responsible for advising the candidates to whom it makes contributions that those contributions count towards the annual limit the candidate may receive from all units of the state political party.

A political party may accept no more than ten percent of its contributions from non-resident individuals. In this scenario, contributions to the national party committee Alaska group account by non-resident individuals would count towards the state political party’s ten percent limit. This arrangement would honor the limitation on outside influence by placing a ceiling on non-resident contributions accepted by the state party. For this reason, the RNC Alaska group must work with the RPA to monitor the funds it receives from non-resident individuals so that the RPA does not accept more than ten percent of its contributions from non-resident individuals.

A national political party committee, which registers an Alaska account as an Alaska political party group, may "assign" to the Alaska group account any contributions made to the national committee which satisfy Alaska campaign disclosure law. If the national political party committee makes an assignment, however, it has a responsibility to notify contributors that all or a portion of a contribution has been assigned to an Alaska state party subdivision and counts towards the aggregate amount that may be contributed to the state party.

Alternative #2. Assign a subset of contributors to the state party

Rather than create a segregated Alaska group, the national political party committee may accept contributions and direct them to the state party if those contributions satisfy state law. For the purposes of this discussion only, that direction is referred to as an "assignment." This approach permits participation by the national political party committee by placing the filter of state campaign disclosure law at the point at which the money reaches the state party.

As a result, the national political party committee may assign to the state party contributions from its general account, even though that general account contains more than ten percent of its money from outside Alaska; also, individual contributors to the national party general account may have exceeded the $5000 state limit. So long as the contributions assigned to the state political party satisfy state law—for example, they do not exceed $5000 per individual--they will be permitted, provided all other legal and procedural requirements are met.

In this alternative, the national political party committee acts as a conduit, reallocating contributions from the national to the state level. Permitting the political parties to take advantage of this arrangement is appropriate because of their unique status in the political process—a status explicitly recognized in state law. In addition, national political parties are organically linked with their state and local committees, having complex interlocking finances which provide for staffing, administrative resources, and the like. These arrangements are the economic manifestation of political parties’ fundamental need to associate. This constitutional tie between national and state parties permits this arrangement and distinguishes this situation from that of a corporate or union PAC with national and state affiliates.

Reporting

The national political party committee would not have to register or file separate reports. Instead, the state political party would disclose on its reports the names of all individuals whose contributions are assigned by the national party committee to the state party. To facilitate complete disclosure, staff also recommends that the Commission require that contributions assigned under this scenario be specifically designated as being transferred from the national political party committee. In addition, the names of all contributors should be grouped together on the state reports. This will ensure that the public is notified of the origin of these particular contributions.

Contributions and Expenditures

As with the separate Alaska group account, contributions to the national party committee would count towards the state party limit for each individual’s contribution if assigned to the state party. Again both the RNC and the RPA would share in the obligation of advising contributors that a contribution to the RNC counted towards their $5000 limitation to the RPA if it were assigned to the state party. The national party committee would be able to assign an unlimited amount to the state party as long as the percentage of non-resident contributions did not exceed ten percent of total contributions made by all contributors to the state party in that calendar year. This limitation is consistent with the language and intent of the campaign disclosure law to restrict the outside influence on Alaskan elections.

Conclusion

National political parties who wish to participate in Alaska elections may take advantage of the two alternatives described above. Other alternatives may exist. Before undertaking a different alternative, you should consult with the APOC.

First, a national political party committee may establish an Alaska group. Once registered and recognized as a subdivision by the state political party, the group may function as part of the state party.

Second, a national political party committee may assign to its affiliated state party specific contributions which satisfy state law. Those contributions must meet the limitations of the campaign disclosure law with regard to type and amount and they must be fully disclosed.

The Commission approved this advisory opinion on February 26, 1998.. 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.