Requested by: Charles Dunnagan, Esq.
On Behalf of: AFL-CIO
Prepared by: Jenifer Kohout, Assistant Director
Date issued: April 30, 1998
Subject: Application of the Campaign Disclosure Law to Union and Union PACs
This letter responds to your request for an advisory opinion regarding application of the new campaign disclosure law to labor organizations.
You have asked a series of questions related to union activities under the campaign disclosure law. Those questions are divided into two general categories. First, you ask about political communications from the union and its PAC to union members via three different means: newsletters, phone calls, and e-mail. A political communication from the union to its members is permitted if it is "of the same format and nature used by the organization when it has communicated in the past on nonpolitical subjects, does not request members or their families to do anything other than exercise the right to vote, and does not solicit individual contributions to a clearly identified candidate or group chosen by the organization." 2 AAC 50.313(l)(4). If the political communications do not satisfy 2 AAC 50.313(l)(4), they are contributions to or expenditures on behalf of the endorsed candidates and thus, are prohibited. Political communications from union PACs are permitted and the union may provide some routine administrative assistance to the PAC in producing and disseminating those communications. The PAC, however, must reimburse the union the commercially reasonably amount for that assistance within a commercially reasonable amount of time.
Second, you ask about a unions PAC funding mechanism. Based on the information you have provided to the Commission, it appears that contributions to the union PAC from members who choose to divert a portion of their industry advancement fund to the union PAC are making a voluntary and legal contribution.
Your specific questions and staffs proposed answers are set out in the analysis below.
Definition of Contribution AS 15.13.400(3) "[C]ontribution"
(A) 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, and in AS 15.13.010(b) for the purpose of influencing a ballot proposition or question, including the payment by a person other than a candidate or political party, or compensation for the personal services of another person, that are rendered to the candidate or political party;
(B) does not include
(i) services provided without compensation by individuals volunteering a portion or all of their time on behalf of a candidate or ballot proposition or question, but it does include professional services volunteered by individuals for which they ordinarily would be paid a fee or wage. . . .
AS 15.13.074(f) A labor union . . . that does not satisfy the definition of group in AS 15.13.400 may not make a contribution to a candidate or group.
2 AAC 50.313. Definition of Contribution.
(a) [C]ontribution includes a payment, gift, subscription, loan, advance, transfer, deposit of money, services or anything of value made by a person or group for the purpose of influencing an election . .
(d) "[A]nything of value" includes facilities, equipment, polling information, supplies, advertising services, membership lists, mailing lists, any item of real or personal property, and personal services of any kind, the cost or consideration for which is paid by a person other than the candidate or group for whom the services are rendered.
(l) "Contribution" does not include . . . . (4) a payment made by a business, corporation, trade association, labor organization, or other organization not organized primarily to influence elections to communicate directly with its members or employees, or their families, on any subject, if the communication is of the same format and nature used by the organization when it has communicated in the past on nonpolitical subjects, does not request members or their families to do anything other than exercise the right to vote, and does not solicit individual contributions to a clearly identified candidate or group chosen by the organization . . . .
This advisory opinion request originates from a representative of the Alaska American Federation of Labor and Congress of Industrial Organizations (AK AFL-CIO), a federation of trade unions located in the state of Alaska. The questions focus on the activities of specific unions and union PACs within the federation.
I. Political Communications
A. Communications from the Union
1. General Principles
Under the campaign disclosure law, a contribution includes "a purchase, payment . . . or gift of money, goods, or services for which charge is ordinarily made", the purpose of which is to influence the outcome of an election. AS 15.13.400(3). The statutory definition of "contribution" has not changed since 1974. However, as of January 1997, unions, corporations, and certain other organizations are now prohibited from making contributions and expenditures to influence candidate campaigns.
Commission regulations define "contribution" as "a payment, gift, subscription, loan advance, transfer, deposit of money, services or anything of value made to influence an election." 2 AAC 50.313. When the regulatory definition of "contribution" was expanded in 1986, the Commission added a provision which identifies specific "payments, services or other things of value" which are not "contributions." Included in this list are payments made by a union, corporation, or other organization to communicate with its members or employees on political subjects. 2 AAC 50.313(l)(4). According to the provision, a political communication is not a contribution (1) if it is of the same format and nature used by the organization when it has communicated on nonpolitical subjects; (2) if it does not request members or their families to do anything other than exercise the right to vote1; (3) and if it does not solicit individual contributions to a clearly identified candidate or group. Political communications may take the form of newsletters, phone calls, or e-mail.
1 The Commission has interpreted the second clause to permit a union or business to endorse candidates in communications to their members.
(a) Same Format and Nature
Your initial letter dated November 13, 1997 ("initial letter") asks whether "specialized" political communications from a union to its members violate Alaskas campaign disclosure laws if they are not of the same format and nature used by the union on other non-political communications. The answer is yes. Union communications which are intended to influence a candidate election violate the prohibition on union contributions if the communications are not of the same format and nature used by a union when it has communicated with its members on non-political subjects. This is the case even if certain unions have "routinely and historically sent special communications to their members prior to elections." Prior to 1997, those "special" communications were permitted as either non-monetary contributions to the candidate or independent expenditures on the candidates behalf.
In your supplemental letter dated January 22, 1998 ("supplemental letter"), you provide additional information and ask specific questions regarding union communications. First, you suggest that in some cases a union might normally send out communications just prior to elections. You ask whether a "union that traditionally issues a newsletter on general subjects [may] issue a newsletter devoted primarily to political subjects." Finally, you ask whether unions may continue to send members absentee ballot forms with cover letters urging the members to vote for specific candidates endorsed by the union.
All three issues raised in your supplemental letter turn on whether the communications are of "the same format and nature used by the organization when it has communicated in the past on nonpolitical subjects." To answer your questions, it is helpful to define "same format and nature." Websters dictionary defines "format" as the "shape, size, binding, typeface, paper, and general makeup or arrangement of a book, magazine, etc." "Nature" is defined as "the essential character of a thing; quality or qualities that make something what it is; essence." Both definitions provide useful clues to the meaning of the phrase. However, there is no absolute test to determine whether a political communication has the same format and nature as other nonpolitical communications by the same organization. Instead, the Commission must consider the relevant facts surrounding a particular communication.
The Commission would consider among other things, the following factors when determining whether a specific political communication was of the same format and nature as previous communications by the union:
- whether the shape, size, binding, typeface, paper, and general makeup or arrangement of the communication resembles other past nonpolitical communications by the union;
- whether the communication is essentially a union endorsement or a reprint of campaign materials produced by the candidate and distributed by the union; and
- whether the political communication is part of a series of routine correspondence with members or a single publication distributed just prior to an election.
For example, you indicate that while almost all unions send out periodic newsletters, "their history of communication on political issues may be spotty or irregular." If a union regularly sent out newsletters which occasionally contained a political communication within the text, it is likely that the political communication would have "the same format and nature." If a union regularly sent out newsletters which occasionally contained a political communication and the union distributed a newsletter devoted entirely to an upcoming election, the political communication might still be considered to have "the same format and nature." If, however, the election related newsletter were the only one the union produced during the calendar year, the political communication would probably not be of the "same format and nature."
You raise another example in your question about whether the union may continue to send absentee ballot forms with candidate endorsements to its members. Based on your letter, it does not appear that this communication would satisfy 2 AAC 50.313(l)(4). The mailing you describe does not appear to have the same format and nature of other nonpolitical communications. It is purely political; it would only be mailed prior to an election; the essential character and formatting of the ballot application and letter would be unlike other nonpolitical mailings.
In your initial letter, you ask whether a political communication from the union violates the campaign disclosure law if it provides information about where contributions may be sent and whom union members can contact if they wish to volunteer to assist the campaign. It does violate the law. If a union communication solicits individual contributions, it is a non-monetary contribution to a campaign. Because unions are prohibited from making contributions, the political communication would violate the campaign disclosure law.
Even if a political communication is of the same format and nature as other nonpolitical communications by the union, it may be a prohibited contribution if it solicits individual contributions to a clearly identified candidate or group. An explicit request is not required. By providing information about where contributions may be sent and presumably encouraging members to send contributions, the union would be "soliciting individual contributions to a clearly identified candidate or group chosen by the organization." Encouraging members to volunteer their services and notifying them who to contact to volunteer for a campaign, however, would constitute a solicitation under 2 AAC 50.313(l)(4).
3. Phone Calls
In your initial letter, you ask whether a union may use its phones to call its own members to express the unions views and recommendations about upcoming elections. The answer turns on many of the same factors described in the section on newsletters. 2 AAC 50.313(l)(4) applies to all political communications including phone calls. A union may call its members to express the unions views about upcoming elections, if phone calls are of the same format and nature used by the union in the past to communicate with its members on nonpolitical subjects; if the calls do not request members to do anything other than vote and do not solicit individual contributions to a clearly identified candidate or group. If the calls do not satisfy the criteria in 2 AAC 50.313(l)(4), they are prohibited non-monetary contributions.2
2 If the calls are made "without the direct or indirect consultation or cooperation with, or at the suggestion nor the request of, or with the prior consent of, a candidate, a candidates campaign treasurer or deputy campaign treasurer, or another person acting as a principal or agent of the campaign," they may be independent expenditures rather than contributions. However, if this is the case, the prohibition still applies. AS 15.13.135 states that only individuals and groups may make independent expenditures supporting or opposing a candidate.
Your supplemental letter sets out additional details regarding union phone calls to members. You indicate that "[t]raditionally, when a union is involved in a get out the vote effort, a group of paid union employees and volunteers will use the unions phones to call union members." You state that the union encourages the member to vote and "tells the member what candidates and issues the union supports." If the union has sent the member an absentee ballot, it will make follow-up calls to encourage the member to fill out the form and vote for the candidates and issues favored by the union.
You do not indicate whether unions traditionally contact their members by phone on other occasions unrelated to election campaigns. If the only time unions call their members is prior to elections to encourage them to vote for endorsed candidates, then the calls are considered contributions and are prohibited. If unions call their members on other non-political occasions, then the calls must be of the same format and nature. They would be permitted, assuming they do not solicit contributions.
In your initial letter you ask whether a union may use e-mail to send messages to its members endorsing candidates. You provide additional detail in your supplemental letter regarding how unions generally use e-mail. "First, a public union may routinely e-mail its members and request the members to contact legislators to ask them to vote in favor of their collective bargaining agreement. . . . Secondly, as to those legislators who voted against funding [for the agreement], I would fully expect a public union to oppose their reelection in the most vigorous ways possible." Presumably by this, you mean that the union would e-mail its members encouraging them to vote accordingly.
As with the forms of political communication discussed above, electronic correspondence falls under 2 AAC 50.313(l)(4). A union may disburse the communication if it satisfies the regulatory criteriait is of the same format and nature of other nonpolitical communications by the union; it encourages member to vote; and it does not solicit contributions to a clearly identified candidate or group.
Related to your example, e-mail correspondence with union members might be permissible if the following facts exist. First, e-mail communications urging members to vote for endorsed candidates must have the same format and nature as e-mail communications from the union to its members on other nonpolitical issues. Electronic communications urging members to contact their legislators regarding legislative activity would serve as a relevant comparison because they are not considered "political communications" under the campaign disclosure law. Second, the political e-mail communications could not solicit individual contributions. If these elements are satisfied, the union may send political communications to their members via electronic mail.
B. Communications from a Union PAC
1. Newsletters and Mailings.
In your initial letter, you ask whether a union-affiliated political action committee may use a unions mailing list. According to the regulatory definition of contribution, "anything of value" includes membership and mailing lists. Also included in the list of things of value are facilities, equipment, polling information, supplies, advertising services, items of real or personal property and personal services.
Membership and mailing lists, however, can be distinguished from other things of value. First, members of the entity who maintains the list have a proprietary interest in the information contained in the list. In many cases, the list will be readily available to members of the entity in the form of corporate phone books or union lists. Second, many organizations do not make their membership or mailing lists available for sale to the general public. As a result, it is difficult if not impossible to assign a fair market value to the lists.
For both these reasons, the Commission concludes that an entity which makes its own membership or mailing list available to the PAC specifically associated with that entity has not made a contribution. So, for example, the union PAC is permitted to accept the unions membership list without reimbursing the union. A union PAC could not accept another unions mailing list without reimbursement; nor could a union give its membership list to a union PAC associated with a different union.
2. Phone calls
In your initial letter, you ask if a union PAC may use the unions phones to call union members to notify them of the unions views and recommendations about upcoming elections. You state that the PAC will pay for the reasonable use of the phones, but that the phones are not made available to other PACs or candidates.
In its July 1997 advisory opinion to IBEW, the Commission considered whether a union could provide a service to a candidate even though the union did not normally provide that service to the public in the course of its daily operations. The Commission took into consideration both that unions may not contribute to candidates and that a contribution is widely defined as "anything of value." Rather than prohibit this kind of activity, the Commission determined that if certain conditions are met, no advantage would be provided to a candidate and the union could permit a candidate to use the union phones. Those conditions include the following:
- 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.
Similar to the IBEW question, you ask if the union may permit its phone bank to be used for political purposes. In this case, the phones will be used by the unions PAC rather than a candidate. The law, however, prohibits a union from making campaign contributions to a candidate or group.
Consistent with this prohibition and with the Commissions decision in IBEW, the union PAC must reimburse the union for the use of the phones at a commercially reasonably rate within a commercially reasonable period of time.
Unlike the IBEW opinion, however, the union need not make its phone banks available to any candidates or groups who requested them. In IBEW, the union was actively making its facilities available to political entities that were not affiliated with the union. By doing so, the union was, in effect, entering the political marketplace. Consistent with this step towards becoming a provider of a political service, the Commission required that IBEW provide the service to all candidates if it provided the service to one. This effectively eliminated an unfair advantage created by access constraints.
Here, however, the union has asked if it may permit a PAC comprised of its own members to use the unions facilities. The PAC must reimburse the union in a commercially reasonable manner.3 However, the union need not make the facilities it provides to its own PAC available to all groups or candidates. By permitting its own members to use union facilities and services, the union is not actively engaging in the business of providing campaign services.
3 The union PAC must reimburse the union for all costs associated with use of the phones. If union employees make calls on union time (as you described in your initial question), the union PAC must reimburse the union for the value of that time.
In your initial letter, you ask whether the union PAC may send an e-mail message to PAC members endorsing candidates. Specifically, you ask whether the union PAC may send these messages from the unions computer if it pays for the computer time. You state that the computer system is not available to other PACs or candidates.
As with a PACs use of union phones, a union PAC may use its unions computers to send a political communication to union members if the following condition is met. The PAC must reimburse the union for all expenses associated with the use of those computers at a commercially reasonable rate within a commercially reasonable period of time. Expenses might include a portion of the operating and maintenance cost of the computer system; the value of computer expertise the union provides to the union PAC; and any costs associated with permitting PAC officials to use the computer system after normal business hours.
Your supplemental letter also mentions that "modern unions are establishing websites and encouraging members to log-on." As staff communicated with you on March 19, 1998, the Commission has concluded that endorsements on websites are political communications and subject to the restrictions of AS 15.13. See AO 97-21-CD. If you have additional questions concerning the use of websites for political purposes, please feel free to contact Commission staff.
II. Fund Raising.
In your initial letter, you state the following: "A union contract provides that from the earnings of individual employees, 10 cents per hour is paid into industry advancement funds. The union offers to each employee a signature card which can be revoked at will under which the employee voluntarily authorizes 2 cents of his advancement fund payment to be sent to the union PAC as his contribution. For employees choosing not to participate, their entire 10 cents per hour continues to be paid to the industry advancement funds. As long as the process is voluntary, and all contributions are duly and properly reported, is there any problem with this funding mechanism for union PACs?"
Rather than ask about a specific process for transferring money from individual members to the union PAC, you ask generally whether allowing union members to designate part of their industry advancement fund to the union PAC is acceptable. To comply with the campaign disclosure law, each member must voluntarily authorize the transfer of his or her money to the union PAC.
The process you describe appears to satisfy the requirement that the contribution be voluntary. You indicate that each member fills out a signature card which authorizes that two cents of his or her advancement fund payment be sent to the union PAC. You state that each members authorization may be revoked at will. You reiterate that "the entire process is voluntary." Consistent with this, the union may not offer incentives or use other forms of persuasion to influence the members decision to contribute to the PAC. The member must make a voluntary and affirmative decision.
The Commission offers no opinion as to whether the arrangement you describe satisfies other federal, state or municipal law and statutes or complies with constitutional considerations.
In the final question in your initial letter, you ask the following: "Would any of the answers to any of the above questions be different if I were writing on behalf of non-profit religious organizations instead of unions? Specifically, does APOC interpret the new law as giving non-profit religious organizations greater rights to contact and influence their members than unions have to contact theirs?"
The Commissions general response is that AS 15.13.074(f) prohibits certain organizations, regardless of their for-profit status, from contributing to candidates or groups. Similarly, AS 15.13.135 permits only individuals and registered groups from making independent expenditures which support or oppose candidates. The Commission is unable to offer specific advise regarding "requests posing a hypothetical situation or regarding the activities of third parties." 2 AAC 50.905.
The Commission approved this advisory opinion on June 24, 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.