Requested by: Len Karpinski
On Behalf of: Alaska Libertarian Party
Prepared by: Jenifer Kohout, Assistant Director
Date issued: April 30, 1998
Subject: Application of the campaign disclosure law to the payment of state dues
This letter responds to your January 22, 1998 request for an advisory opinion regarding payment of state dues.
The Alaska Libertarian Party (ALP) may participate in a unified membership plan ("the plan") with the Libertarian National Committee (LNC) provided that the ALP ensures that all transfers from the LNC satisfy the Alaska campaign disclosure law.
The ALP should disclose each membership transfer from the LNC along with a brief description. In addition, the ALP should disclose all required information about specific Alaska member contributions based on the amount of their contributions.
Definition of Group - AS 15.13.400(5) "group" means
(A) every state and regional executive committee of political party; and
(B) any combination of two or more individuals acting jointly who organize for the principal purpose to influence the outcome of one or more elections . . . .
Restrictions on Groups
AS 15.13.072(f). A group or political party may solicit or accept contributions from an individual who is not a resident of the state at the time the contribution is made, but the amounts accepted from individuals who are not residents may not exceed 10 percent of total contributions made to the group or political party during the calendar or group year in which the contributions are received.
The ALP has recently entered into a unified membership plan with the LNC. The plan is an initiative of the LNC to coordinate membership activities with state Libertarian parties who choose to participate. Among other things, the plan states that the payment of membership dues to the LNC qualifies an individual as a member of the national and the state party.
The plan designates the LNC as the central repository for all membership transactions. All membership dues are paid to the LNC. Each month the LNC transfers to the ALP the state partys share of those membership dues. The state partys share is calculated by multiplying the number of Alaskan members1 times a set amount based on the individuals membership status. Membership categories and corresponding state share are as follows:
- Basic member ($10-99.99/yr) ALP receives $1/mon.
- Sustaining member ($100-249.99) ALP receives $2/mon.
- Sponsor ($250-499.99) ALP receives $3/mon.
- Patron ($500-999.99) ALP receives $4/mon.
- Life member (>$1000) ALP receives $5/mon.
1 According to the plan, a contributor is considered an "Alaska Active member" if the LNC has recorded a present postal mailing address in Alaska.
In addition, the ALP may receive $1/mon. for non-paying members of the party.
Accompanying each transfer check, the LNC sends an itemized list of the Alaskan members and the amounts attributed to them.
Although the plan provides for contributions from persons or organizations, you indicate that the transfer check from the LNC contains only a portion of the dues paid by Alaskan individuals.
While the plan permits the ALP to solicit membership dues, party leaders envision that the LNC will take the primary role in recruiting new and renewing old members. According to a letter from Perry Willis, the National Director of the Libertarian Party, "most of the costs of this plan (renewals, membership cards, new member packages) will be borne by national." Both state and national parties will have marginal costs sending out newsletters
You add that the plan is the reverse of what you did last year. In the past, the state party sent out renewal notices, collected dues, and sent the national party its proportionate share.
As you are aware, the LNC is prohibited from contributing general party funds to the ALP unless it satisfies the requirements for group activity under AS 15.13. In an advisory opinion to the Republican Party of Alaska (RPA) and the Democratic National Committee (DNC), approved on February 26, 1998, the Commission identified two mechanisms through which state parties may receive contributions through their national parties.2 The first mechanism required that the national party create an Alaska subgroup which would register and report. The second mechanism permitted the national party to "assign" individual contributions to the state party if those contributions complied with state law. Neither mechanism, however, addressed a situation similar to the one you describe where the national party takes primary responsibility for the state party membership dues and regularly forwards a portion of the collected dues back to the state.
2 In an advisory opinion to the ALP also approved on February 26, 1998, the Commission permitted a non-resident group like the LNC to contribute to a group whose sole function is to qualify for party status with the Division of Elections. Staff understands that your question does not refer to the activities of a voter registration group.
The LNC-ALP unified membership plan resembles the mechanism employed by the Alaska Life Underwriters PAC (ALUPAC). In an advisory opinion to ALUPAC on February 14, 1997, the Commission confirmed that an Alaska group could accept contributions that were routed through a national parent organization as long as certain conditions existed.
Those conditions would also apply as follows to the dues arrangement you describe:
- First, the contributions must originate with Alaskan individuals and must in all other ways comply with Alaska campaign disclosure law. For example, all of the money must be from individuals or registered Alaskan groups. While the ALP may accept some money from nonresident individuals, it is subject to a statutory maximum which states that an Alaskan group or party may not accept more than 10% of its money from nonresident individuals. Based on the plan and your comments, this is true.
- Second, the amount of monthly funds transferred from the LNC to the ALP should represent a predetermined portion of the funds received from Alaska contributors. By having a formula in advance that determines the share of dues transferred from the LNC to the ALP, the ALP will ensure that it does not inadvertently receive a prohibited contribution from the LNC. Because the plan sets out how dues will be apportioned, this safeguard is in place.
- Third, the costs of membership drives should be shared. The ALP may not permit the LNC to bear all costs associated with soliciting dues payments from Alaskan members. If this were the case, the ALP would receive a prohibited non-monetary contribution from the LNC.
- In this case, the portion of dues transferred to the ALP may already account for the fact that the LNC will bear most of the costs of conducting membership drives. To clarify this point, the ALP might request that the plan be amended to state that the share transferred to the parties takes into account the cost of membership drives.
- Fourth, administrative costs must be also shared. As with membership costs, if the LNC pays all the administrative expenses associated with processing Alaskan contributions, then the ALP will receive a prohibited non-monetary contribution from the LNC for the proportion of the administrative costs which should be apportioned to the ALP. The only exception is that the administrative assistance the LNC provides to the ALP while processing Alaskan contributions is not a contribution and need not be reimbursed if that assistance involves bookkeeping services and legal advice related to satisfying the reporting requirements.
The portion of dues transferred to the ALP may already account for any administrative costs. Again, to clarify this point, the ALP might request that the plan be amended to specifically state that the share transferred to the parties takes into account the administrative costs of the plan.
Your letter to the Commission also asks how to report dues received through the LNC. As you have explained, the plan directs that Alaskan members pay their dues directly to the LNC. The LNC subsequently sends a monthly check to the ALP which represents the ALPs predetermined share of the membership dues. The check represents the total of the dues owed to the ALP for each Alaskan member. In many cases, however, individual member dues will not exceed $100 and thus it will be difficult for the public to determine the origins of the money if more information is not provided. As a result, the ALP reports should disclose both the transfer check from the LNC and the series of distinct contributions from the Alaskan members.
The check from the LNC should be disclosed on the ALPs Income schedule. The ALP should disclose the total amount and date of each monthly transfer along with a brief description explaining that the deposit represents the states portion of Alaskan membership dues. To avoid double counting, the ALP should not include the amount of the check when adding all income received during the reporting period.
For individuals who contribute over $100 during the year, the ALP should disclose the name, address, occupation and employer, and amount of the contribution. In addition, the ALP should disclose the date the individual made the contribution to the LNC.
For contributors under $100, the ALP must disclose the number of individuals who gave less than $100 during the reporting period and the total amount of their contributions. While the ALP need not disclose the names of contributors under $100, it should maintain records to ensure that the appropriate information is disclosed once the contributor gives more than $100 over the course of the calendar year.
The ALP may receive dues via the plan provided it satisfies the conditions described above. On its campaign disclosure reports, the ALP should disclose the receipt of the transfer check from the LNC and the names of the individual dues-paying members once they exceed $100.
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.