State of Alaska

Department of Administration

Alaska Public Offices Commission

Alaska Department of Administration, Alaska Public Offices Commission

AO97-09-CD

Number: AO97-09-CD

Requested By: Laurie H. Otto, General Counsel

On Behalf of: International Brotherhood of Electrical Workers Local 1547

Prepared By: Greg Granquist, Group Coordinator

Date Issued: July 1, 1997

Subject: Campaign disclosure limits and reporting for a labor union and its PAC

This is in response to your request for an advisory opinion of behalf of the International Brotherhood of Electrical Workers Local 1547 (IBEW), dated January 15, 1997. Your request concerns the impact of the new law on the operations of IBEW and IBEW PAC.

Because you ask a lengthy series of questions, I have used a question and answer format in this opinion, stating your questions with staff’s answer to each immediately following. Each answer contains an analysis of and reference to the applicable laws, regulations, and Commission policies. This format seemed better suited to your request than combining and summarizing its collective subject matter. Questions nine and ten, which relate to national political party committees, are currently the subject of another advisory opinion request and have been taken under advisement. The opinion should be completed in the near future.

General Overview

In 1996, the Alaska legislature enacted and the Governor signed a major program of campaign reform. The reform became law on January 1, 1997. New provisions in the law affect candidates, groups, and contributors, and regarding labor organizations, place limits and restrictions on campaign contributions by labor organizations and their political action committees (groups). Some of the changes which affect unions and their members are as follows:

Groups, including labor organization PACs, may no longer raise funds through bingo games or pull tab sales

Labor organizations may no longer contribute to candidates or groups; only individuals, groups, and political parties may contribute to candidates and groups.

Union members, individually, may not contribute more than $500 to a particular labor organization group.

A labor organization group must spend its funds only for purposes which reasonably relate to influencing the outcome of an election. In other words, labor organization groups may not make political contributions from multi-purpose voluntary funds.

A labor organization PAC may not contribute to state candidates during non-election years or to municipal candidates more than nine months before the date of the election.

A labor organization may not spend its general fund money to make independent expenditures for or against a candidate.

While these examples may not be all inclusive, they exemplify how new provisions in the campaign disclosure law have far reaching implications for the ways in which labor organizations and their affiliated PACs may participate in election campaigns. The questions which follow, taken from your letter, explain in further detail some of the new provisions.

Question 1:

The IBEW Political Action Committee (IBEW PAC) fund is a "group" within the meaning of AS 15.13.130 in that it is a combination of two or more persons or individuals acting jointly to influence the outcome of an election. May the PAC make contributions to either the Republican or Democratic Party? May the PAC make contributions to another "group" that is registered in Alaska?

Answer to Question 1:

Under AS 15.13.400 (5), IBEW PAC is a group because its membership represents a "combination of two or more individuals acting jointly who organize for the principal purpose of influencing 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 a group, IBEW PAC may contribute up to $ 1000 to another group or a political party. AS 15.13.070 (c) In making contributions to a political party, IBEW PAC must aggregate contributions made to any and all the subdivisions of the party in determining if it has reached the $1000 limit.

Please note that definition of "group" has been changed. It no longer includes the term "person," and is now found in AS 15.13.400(5).

Question 2:

In the past, IBEW, has, consistent with the APOC’s former policy, allowed candidates for state and municipal office to rent phone banks at a rate of $ 1 per phone per day. Is this permissible under the new law?

Answer to Question 2:

Your question, essentially, is whether a corporation, union or other organization may provide a service or facility to candidates if the service is one which the entity does not normally provide to the public in the course of its day-to-day operations or business.

Under current law, AS 15.13.065 does not permit unions, corporations, or organizations ("persons") to contribute to candidates. AS 15.13.400(3) defines a contribution to include "a purchase, payment, promise or obligation to pay, loan guarantee, deposit or gift of money, goods or services for which charge is ordinarily made…to influence the outcome of the election of a candidate."

The provision of services for a fee, by an entity which does not ordinarily provide such services, possesses at least one characteristic of a contribution. The provider gains influence with the candidate. However, staff believes the key issue here is whether the provision of facilities or services renders an advantage to the recipient that in turn could be used to influence the outcome of an election. Staff believes that, if certain conditions are met, no advantage would be provided.

Accordingly, staff will propose to the Commission that unions, corporations, or other organizations may provide services or facilities to a candidate so long as:

The organization is reimbursed for the service or facility at a commercially reasonable rate within a commercially reasonable period of time.

The organization makes the facilities or services available to any candidates who request them.

Although you have not specifically asked about determining a commercially reasonable rate for the provision of facilities or services, the union should include the cost of any personnel who must be present, for custodial or administrative purposes, while the facility or service is provided. Please note, however, that in the case of a phone bank, the union may not pay for the services of the persons who make the phone calls. Any union employees who participate in the phone bank must do so as volunteers, on their own time or using personal leave time, consistent with the definition of a non-contribution in 2 AAC 50.313(g).

Question 3:

IBEW PAC funds generated prior to December 31, 1996 are a mixture of proceeds comprised primarily of individual members contributions. May these funds be used to make contributions to candidates for state or municipal office under the new law?

Answer to Question 3.

Yes, funds raised prior to December 31, 1996 may be used or contributed in election campaigns occurring after that date. Section 32 of the act which amended AS 15.13 permits candidates to use funds raised under the old law in future campaigns. Staff will recommend that the Commission determine that it is appropriate for groups to do the same.

Question 4:

Most IBEW members who contribute to the PAC do so by a payroll deduction of up to $7 per weekly pay period. When the aggregate amount of the weekly contributions equals $ 250, the member has an obligation to report the contribution on an APOC form 15-5. After this initial filing, must the member file an APOC form each time a $7 contribution is made to the PAC (in other words, weekly)? Weekly filing would seem to constitute a major paperwork burden for both the member and the APOC.

Answer to Question 4:

Under current law, a contributor who has contributed more than $250 to a candidate or group in a calendar year must report each contribution thereafter to that candidate or group, within ten days of the contribution, on a Contributors Statement.

Staff doesn’t believe the strict application of this requirement to be a reasonable or appropriate with regard to a non-political party group, in the instances of employees or organization members who elect to participate in a payroll deduction plan. In an extreme scenario, an employee who contributes the $500 per year limit to a non-party group, in $10 per week increments, would, in theory, be required to file 24 contributors statements during the year.

Staff will recommend that the Commission approve a policy of not requiring contributor reports to be filed in the case of a contributor to a non-party group participating in a payroll deduction plan except with regard to the following two reporting deadlines:

The contributor must file a Contributor’s Statement within 10 days of the date when the contributor’s payroll deductions to a non-party group first exceed $ 250.

The contributor must file a Contributor’s statement within 10 days of making his or her final payroll deduction contribution to the non-party group for the year.

In the case of the report of the final payroll deduction, the report would indicate the contributor’s cumulative contributions to the group for the year. It is important to note that, for some contributors, the report would be filed well before the end of the year, because the report would be due within 10 days of the contributor reaching the $500 maximum limit that he or she may contribute to the group.

Staff believes that the policy outlined above would serve to minimize reporting that was essentially duplicative. In this regard, the policy would be consistent with a long-standing policy of the Commission that a group does not have to file Contributor Statements to report contributions if the contributions will be reported on the group’s campaign disclosure statement.

Finally, it should be noted that this policy does not address similarly periodic contributions to political parties. The Commission believes contributions to political parties differ significantly, in part because the limit that an individual may contribute to a party is $5000. The Commission intends to address this issue with regard to parties in separate advice the near future.

Question 5:

Before the new law went into effect, IBEW paid the administrative expenses of operating the PAC fund by providing basic accounting services. The services were performed exclusively by existing staff of IBEW, and the amount of time spent by staff to perform these services did not exceed 8 hours in any one month…Under the new campaign finance law, may IBEW continue to perform accounting services for the PAC?

Answer to Question 5:

AS 15.13.400(3)(B)(ii) provides that contributions do not include the legal or accounting services required to prepare the reports and statements required by the chapter. In advice to the Alaska Life Underwriters PAC on February 14, 1997, the Commission interpreted "legal and accounting services" to include "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."

Question 6:

For many years, the APOC has had a regulation that excludes from the definition of "contribution" the costs of an organization’s internal communications, where the organization is not organized primarily to influence elections and the communications have the same format and nature that the organization uses to communicate on non-political subjects. 2 AAC 50.313(l)(4). May IBEW continue to communicate its support of or opposition to a particular candidate by including this information in a newsletter that is sent regularly to IBEW members?

Answer to Question 6:

Yes, IBEW may communicate its support of or opposition to a candidate in a newsletter to its membership. 2 AAC 50.313(l)(4) is still in effect. Please note that

the communication must be in the same format and nature used by the organization when it has communicated in the past on non-political subjects and

the communication may not solicit individual contributions to candidates or groups.

Question 7:

From time to time the IBEW, for its own internal purposes, conducts public opinion polls. When it does so, may IBEW share the resulting polling information with a candidate for state or municipal office? Does the answer differ if the poll is conducted using in-house staff rather than being conducted by an independent contractor.

Answer to Question 7:

No, IBEW may not share the results of the poll, which contains information of use in a political campaign, with state or local candidates or other groups, including IBEWPAC.

This is because IBEW, as a union, may not make campaign contributions to candidates and because the sharing of the results of the poll with candidates would be a campaign contribution to those candidates. AS 15.13.074(f); AS 15.13.400(3).

Under 2 AAC 50.313(d) a contribution includes polling information. AS 15.13.074(f) specifically prohibits union contributions. In addition, AS 15.13.065(a), in establishing who may contribute to candidates and groups, does not include "persons." AS 15.13.400(9) defines "person" to include unions.

Whether the poll is conducted by IBEW staff or by an independent contractor paid by IBEW is irrelevant. It is the content of the poll which is of value to the campaign.

Question 8:

In the past, the IBEW PAC has contributed to the Alaska Democratic Party and to several subdivisions of the party, including the Greater Juneau Democratic Committee, the Governor’s Fund, the Senate Democratic Campaign Committee and the House Democratic Campaign Committee. May the PAC contribute $1000 to each of these entities, or may it only contribute an aggregate of $1000 to all entities.

Answer to Question 8:

IBEW PAC, a group, may not contribute an aggregate total of more than $1000 to the Alaska Democratic Party, including all its subdivisions. For example, if IBEW contributes $500 to the Greater Juneau Democratic Precinct Committee and $ 500 to the Senate Democratic Campaign Committee, it has contributed the maximum allowable amount that it may contribute to the Alaska Democratic Party for the year.

The law has changed significantly in this regard: AS 15.13.070(c) now states that a group, that is not a political party, may not contribute more than $1000 per year to a political party. AS15.13.400(10) defines "political party" to mean both an organized group of voters on a statewide level and subordinate units of the group. Thus, a group may not contribute more than $1000 to the statewide party unit and all of its subordinate units. The Commission confirmed this interpretation of "political party" in its January 24, 1997 advisory opinion to the Alaska Democratic Party.

Question 9:

The PAC may make contributions to the National Democratic Party or the National Republican Party. Do these contributions count toward the maximum contribution limits when considering how much the PAC may contribute to the Alaska Democratic and Republican parties? In other words, if the PAC contributes $1000 to the National Republican Party may it also contribute $1000 to the Alaska Republican Party.

Question 10:

The Democratic Governor’s Association is a separate non-profit association, and is not an arm of the National Democratic Party. The Democratic Governor’s Association uses a portion of its resources to help elect Democratic Governors. Under the new campaign law, may the PAC make contributions to the Democratic Governor’s Association? If so, are there limits on the amount that the PAC may contribute to the Democratic Governor’s Association?

Answer to Questions 9 and 10:

Staff has taken these questions under advisement and will be issuing an advisory opinion in the near future which address the subject of the campaign disclosure requirements and limitations in connection with contributions to and by national political party committees and related groups. We will send you a copy when it becomes available.

Question 11:

The International Brotherhood of Electrical Workers Committee On Political Education (IBEW-COPE) is a political action committee registered with the Federal Elections Commission. May the PAC make contributions to IBEW-COPE? If so, are there limits in the amount that the PAC may contribute to IBEW-COPE?

Answer to Question 11:

AS 15.13 does not address contributions by groups to national PACs which are active in federal campaigns and thus would not prohibit or limit IBEW PAC’s contributions to IBEW-COPE. IBEW PAC will need to consult with the Federal Elections Commission to determine if federal law limits its contribution to IBEW-COPE. Please note that, in a reciprocal scenario, AS 15.13 would address contributions by IBEW-COPE PAC to Alaska state and local candidates. Before IBEW-COPE could contribute to Alaskan state or local candidates or groups, the group would have to meet the state limitations on the size and source of its incoming contributions. See AS 15.13.070 (b)(1) ; AS 15.13.072(f).

AS 15.13.112 does require that a group’s funds be spent on activities that reasonably relate to election campaign activities. The Commission holds that this provision does not prohibit a state group from contributing to a national group or national candidate assuming that both entities would use the funds in connection with an election.

Question 12:

In the past, the PAC has contributed money to candidates for state and municipal office, and to candidates for utility elections (e.g. for the Matanuska Electric Association Board of Directors). Under the new law, may the PAC make contributions to candidates for utility elections?

Answer to Q12

No. AS 15.13.112 would preclude the PAC from making contributions or expenditures in connection with private elections. While AS 15.13 does not directly address contributions or expenditures by groups related to private elections, AS 15.13.112 , as discussed earlier, sets parameters for the acceptable use of campaign funds by candidates and groups, and requires that groups use contributions held by the group only to pay the expenses of the group that reasonably relate to election campaign activities. While staff interprets the provision to include all federal, state, and local elections, staff believes the inclusion does not extend to private elections, which could include, for example, not only utility elections but also the election of union officers or corporate officers.

The Commission approved this advisory opinion on June 19, 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.