Requested by: Joelle Hall
On Behalf of: Alaska Democratic Party
Prepared by: Jenifer Kohout, Assistant Director
Date issued: September 22, 1997
On November 5, 1997, the Commission confirmed the following Advisory Opinion regarding Individual Contributor Statements by a vote of 5-0. In addition, the Commission concurred with staffs informal advice regarding use of candidate campaign funds.
This letter responds to your recent request for an advisory opinion concerning the reporting requirements and contribution limitation provisions of the Alaska Campaign Disclosure Act with regard to persons contributing to the Alaska Democratic Party (ADP).
First, you ask if monthly contributors to the ADP, participants in a small donor fundraising program, may obtain relief from filing contributor statements in connection with each monthly contribution.
Second, you ask if Democratic candidates may contribute funds totaling up to $1,000 per year to the ADP to assist in supporting the operations of the party headquarters. Because this question turns on a purely legal interpretation of the campaign disclosure law rather than an application of the law to a specific factual scenario, it does not satisfy the requirements for advisory opinions set out in 2 AAC 50.905. Staff has answered your question in the form of informal advice.
Individual Contributor Statements
Regarding your first question, staff will recommend to the Commission that a donor, making regular periodic contributions to the party in connection with a monthly donor program, be permitted to satisfy his or her reporting requirement by filing two Individuals Contributor Statements--one within 10 days of making the contribution which exceeds $250 in the aggregate for the year and the second within 10 days of the individuals final donor program contribution for the calendar year. In addition, the ADP must file with the Commission at the beginning of the calendar year a list of contributors who plan to participate in the fundraising program along with the amount each donor has pledged to the party.
The ADP is a political party group which represents the statewide Democratic party organization in Alaska. One way in which the ADP raises funds is through a donor program wherein participants agree to permit the ADP to make monthly debits from their credit cards. Under current and past APOC reporting requirements, a contributor to a political party group is required to file a Contributor Statement with the Commission, within ten days of making a contribution, if the contributor has contributed more than $250 to the party group in the current calendar year.
Definition of a contribution
A contribution means a purchase, payment, promise or obligation to pay, loan or loan guarantee, deposit or gift of money, goods, or services for which charge is ordinarily made and that is made for the purpose of influencing the nomination or election of a candidate....
AS 15.13.040(d), (e)
Contributions to be Reported
A contributor who has cumulatively contributed more than $250 per year to a candidate or group must thereafter report each new contribution to the candidate or group no later than 10 days after it is made.
Statement by contributor.
An individual who contributes over $250 in money, goods or services must file a contributors statement on a form made available by the commission. The statement must identify the contributor and the candidate or groups receiving the contributions; itemize the contributors and the goods; and state that the contributor is not prohibited by law from contributing and that the funds or property contributed did not belong to another person or group.
Advisory Opinion to IBEW on the Contributor Statement reporting requirements of union members making periodic contributions through a payroll withholding plan
A union member making regular payroll deduction contributions to IBEW PAC may satisfy the reporting requirements of AS 15.13.040(d) by filing two reports: an initial report due within 10 days of the date the member's cumulative annual payroll deduction surpasses $250; a final report due within 10 days of the members final payroll deduction for the year.
In a recent advisory opinion, the Commission advised the IBEW that a union member making regular payroll deduction contributions to IBEW PAC could satisfy the reporting requirements of AS 15.13.040(d) by filing two reports:
an initial report - due within 10 days of the date that the member's cumulative annual payroll deduction surpasses $250; and
a final report - due within 10 days of the member's final payroll deduction for the year.
In issuing its advice, the Commission took care not to extend the advice, unconditionally, to political parties. This was because political parties may accept up to $5000 from individuals. The Commission felt that a modified reporting requirement was appropriate only with regard to non-party fundraising programs because non-party groups may accept only a maximum of $500 per year from such individuals - and thus, there was little danger that modifying the requirement would result in a significant disclosure shortfall.
The Commission recognized, however, that in some circumstances the Contributor Statement filing requirement could be equally burdensome to political parties and encouraged staff to research reporting alternatives which might be appropriate for political parties.
In the circumstances which the ADP describes, a contributor agrees to make periodic contribution payments from their credit card to the party over the course of a year. The ADP administers the donor program, debiting donor credit cards on a monthly basis and reminding contributors of their reporting requirements.
Staff proposes that a participant in a party program of regular periodic contributions be permitted to satisfy the reporting requirements of AS 15.13.040 by meeting the following requirements. First, the contributor must file the following two Individual Contributor Statements:
1) an initial report within 10 days of the date that a members contribution exceeds $250; and
2) a final report within 10 days of the date of the members final contribution to the ADP via the donor program for the calendar year.
Second, the ADP must file with the Commission a list of all donors who plan to participate in the monthly donor program. That list must contain the amount each donor has pledged to contribute each month for the remainder of the calendar year. In addition, the ADP must amend the list to reflect changes in the participants or amounts.
Such a policy would be consistent with the Commissions direction in issuing the IBEW advice. First, requiring individual contributors to file an Individual Contributors Statement as soon as they exceed $250 complies with the reporting requirement set out in AS 15.13.080 and ensures that the name of the contributor is disclosed. Second, the donor list provided by the Party provides disclosure regarding the amount anticipated to be contributed over the course of the calendar year. The list is necessary in this case where routine contributions are made to a party because parties may accept up to $5,000 per year, rather than the $500 maximum to other kinds of groups. Finally, the final contributor report discloses the amount a contributor actually contributed to the party. Overall, this approach ensures that the requisite disclosure occurs while lessening the administrative burden on routine contributors and on the party administering the donor program.
Contributions from Candidates
Regarding whether campaign funds may be donated to the ADP, staff concludes that the law specifically prohibits candidates from contributing to groups, including political parties, until after a campaign. According to AS 15.13.112(b)(7), campaign contributions held by a candidate may not be "used to make contributions to another candidate or to a group." In other words, a candidate is prohibited from making contributions to the party until after the candidates last contested election. At that point, the candidate may disburse any surplus funds to a political party group under AS 15.13.116(a)(3)(A).
In certain circumstances, however, a candidate may reimburse a political party for services which are paid for by the party and benefit the candidate without the reimbursement being considered a campaign contribution to the party. In your letter, you point out that "candidates depend on the Party to help them in their campaigns." You add that "candidates should be able to purchase materials from the Party and in addition support the state headquarters operations."
A candidate who uses his or her campaign funds to pay the party for various services the party provides to that candidate is making an expenditure, not a contribution to the party. As a result, there is no prohibition on use of campaign funds to reimburse the ADP for services or materials. The amount paid to the party must equal the commercially reasonable value for the particular service provided.
The ADP should keep in mind, however, that if it elects to "charge" candidates for materials or general support services that it provides to all candidates, then all candidates must reimburse the ADP. Candidates who do not reimburse the ADP for those materials or services receive a non-monetary contribution from the Party equal to the commercially reasonable value. In addition, the amount of the non-monetary contribution must be added to the partys aggregate contribution to the candidate when calculating whether the Party has reached its maximum contribution limitation to that candidate.
The advise 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.