Requested by: William R. Satterberg, Jr.
Prepared by: Jenifer Kohout, Assistant Director
Date issued: January 21, 1999
Subject: Repayment of Candidate Money
This letter responds to your November 20, 1998 request for an advisory opinion regarding whether House Candidate Bill Lewis may repay himself for his contributions to his own campaign
Staff recommends that based on the specific facts in this case, the Commission permit an exception for Mr. Lewis to repay himself for his personal contributions to the campaign despite not filing a Candidate Reimbursement Notification. First, Mr. Lewis did not mislead contributors with his failure to file the Notification. 99% of the money in his campaign was his own. Second, he was a first time candidate. Third, he ran a small campaign.
Contributions and loans from the candidate: AS 15.13.078
(a) A candidate may give any amount of his or her own money to the campaign. The candidate must disclose the donations as contributions to the campaign.
(b) A candidate may loan any amount to the campaign. The candidate must disclose the loans as contributions to the campaign. The following restrictions apply to candidate loans:
(1) A candidate may not repay himself or herself more than a set amount depending on the office sought--$25,000 (governor/lt. governor), $10,000 (legislature/constitutional delegate/judge), $5,000 (municipal office).
(2) A candidate may not repay him/herself unless he/she notified the commission of his/her intent to repay the loan under AS 15.13.116(a)(5) within 5 days of making the loan.
(c) A candidate may not give or loan more than $5000 to his/her own campaign during the 33 days prior to the election.
(d) The provisions above apply to candidates; they do not apply to the candidates treasurers, immediate family, agents, campaign committee, or controlled groups.
Disbursing Campaign Assets: AS 15.13.116(a)
After the election or the date a candidate withdraws, a candidate must disburse any unused campaign contributions within 90 days. Disbursement is limited to the options listed including the following:
(4) the repayment of loans from the candidate to his/her own campaign under AS 15.13.078(b); and
(5) the repayment of all contributors, the most recent contributors, or the largest contributors on a pro rata basis in approximate proportion to the contributions made.
(When the 1996 Campaign Disclosure Amendments were signed into law, the options identified above were numbered (5) and (6) respectively. The original subparagraph (5) addressed repayment of loans and referenced section 078(b). Following passage of SB 105 in 1998, however, subparagraphs (1) and (2) were combined. While subsequent subparagraphs in section 116 were adjusted accordingly, section 078(b)(2) was not amended to reflect the numbering change. Thus, the reference in .078(b) to the disbursement provisions in AS 15.13.116 should be to AS 15.13.116(a)(4), not AS 15.13.116(a)(5).)
In your advisory opinion request to the Commission, you indicate that Mr. Bill Lewis ran for the State House Seat 34 in Fairbanks. Commission records indicate that Mr. Lewis was a first time candidate. You state the Mr. Lewis financed his entire campaign, with the exception of $85 which was provided by two contributors.
During the course of the campaign, Mr. Lewis disclosed that he contributed $10,000 of his own money to the campaign on October 5, 1998; and that he spent an additional $100 of his own money to the State of Alaska in July to appear in the Election Pamphlet. His reports confirm that he received only two contributions from othersone for $50 and one for $35. Mr. Lewis campaign expenditures totaled $2,972. His 10 Day Post-General Report revealed a final surplus of $7,196.90.
You state that Mr. Lewis did not file any Candidate Reimbursement Notifications disclosing that he intended to repay his contributions to the campaign. Staffs review of Commission files confirmed that no Notifications were received.
Among the changes brought about by the 1996 amendments to the campaign disclosure law, are new provisions regarding candidate contributions and loans. Those provisions, set out in AS 15.13.078, .112 and .116, work together to create a statutory framework for candidates who plan to repay themselves for their own contributions.
Consistent with judicial rulings on the subject, AS 15.13.078 permits candidates to contribute or loan any amount to their own campaigns. The provision, however, limits the amount of money the candidate may recover from the campaign. In addition, it requires that a candidate who intends to repay himself or herself at the end of the campaign, disclose that intent to the public.
To facilitate that disclosure, staff developed a one-page Candidate Reimbursement Notification form. The form describes the disclosure requirement and provides space for the candidate to enter the date and amount of each contribution to the campaign that the candidate intends to repay.
Assuming that the candidate has timely notified the Commission of his or her intent, repayment is authorized by AS 15.13.116(a)(4). That provision permits the disbursement of campaign assets to "repay loans from the candidate to the candidates own campaign under AS 15.13.078(b)."
Application to Mr. Lewis Situation
Staff has interpreted these provisions to mean that candidates who fail to timely file a Candidate Reimbursement Notification may not repay themselves. Staff believes that the intent of the statutory schemeas Mr. Satterberg correctly states in his letteris to ensure that potential contributors are put on notice of a candidates intent to repay themselves for their contributions to the campaign. Contributors are therefore made aware that the money they give to the candidate may be used to repay the candidate. Thus, in most cases failure to timely notify frustrates that intent.
In light of this intent and the specific circumstances of this case, however, staff believes that the Commission should make an exception for Mr. Lewis and permit repayment. First, because of the nature of Mr. Lewis campaign, his failure to notify the public of his intent to repay did not mislead other contributors. Besides his own contributions, the Lewis campaign identified only two contributors. It is unlikely that two individuals contributing an aggregate of less than $100 were misled by not knowing that Mr. Lewis would repay himself after the campaign. Further, the money remaining in Mr. Lewis campaign account is clearly his own rather than an untraceable mixture of personal and third party contributions.
Second, other aspects of this case warrant permitting Mr. Lewis to repay himself. Mr. Lewis was a first time candidate. The Commission routinely takes inexperience into account when resolving complaints and civil penalty assessments. In addition, Mr. Lewis ran a small campaign. For comparison, Mr. Lewis total campaign expenditures of $2,972 exceeded the $2,500 exemption limit by only $472. Finally, the notification requirement is new, in that it became effective on January 1, 1997; the 1998 campaign was the first statewide election under the new law. The Commission has indicated that it would try to use flexibility in implementing the law this first year.
Staff recommends that the Commission permit Mr. Lewis to repay himself the $7,196.90 under section 116(a)(5). The following circumstances justify an exception for Mr. Lewis: his failure to file the notification did not mislead contributors; the money remaining in his campaign account, with the exception of $85, was his own and not that of other contributors; he was a first time candidate; he ran a small campaign; and the notification requirement is new.
The Commission approved the advice in this letter by an affirmative vote of 5-0 on March 24, 1999. 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.