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Libertarian Party of Alaska, Inc. v. State (11/19/2004) sp-5844
Libertarian Party of Alaska, Inc. v. State (11/19/2004) sp-5844
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
LIBERTARIAN PARTY OF ALASKA, )
INC., KENNETH P. JACOBUS, and ) Supreme Court No. S-
11012
KENNETH P. JACOBUS, P.C., )
)
Appellants, )
) Superior Court No.
v. ) 3AN-02-14010 CI
)
STATE OF ALASKA and ALASKA ) O P I N I O N
PUBLIC OFFICES COMMISSION, )
)
Appellees. ) [No. 5844 - November
19, 2004]
)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Mark Rindner, Judge.
Appearances: Kenneth P. Jacobus, P.C.,
Anchorage, for Appellants. James L. Baldwin,
Assistant Attorney General, Gregg D. Renkes,
Attorney General, Juneau, for Appellees.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
MATTHEWS, Justice.
The Alaska Campaign Disclosure Act expressly regulates
only hard money. The question presented is whether an Alaska
Public Offices Commission regulation requiring the disclosure by
political parties of soft money contributions and expenditures is
authorized by the act. We give an affirmative answer. Soft
money can be used in numerous ways to evade hard money
restrictions. Requiring the disclosure of soft money
contributions and expenditures implements the act by aiding in
its enforcement, deterring evasions, and informing the public.
We therefore affirm the superior courts decision upholding 2
Alaska Administrative Code (AAC) 50.327.
BACKGROUND AND PROCEEDINGS
This case involves a regulation of the Alaska Public
Offices Commission (APOC) that requires political parties to
report donations and expenditures of soft money. Soft money and
hard money are exclusive categories. Hard money refers to
donations made for the purpose of influencing the nomination or
election of a candidate.1 Soft money is most easily defined
negatively as donations to political parties that are not hard
money, thus not made directly for the purpose of influencing the
nomination or election of a candidate.
The Campaign Disclosure Act limits the amount of
contributions that may be made to political parties and
candidates and limits contributions that political parties may
make to candidates.2 The act also requires that candidates and
political parties report individual contributions larger than
$100 and all expenditures made.3 The word contribution is
defined as a donation of hard money. Contribution means a . . .
gift . . . made for the purpose of influencing the nomination or
election of a candidate . . . .4 The word expenditure is defined
in broader terms, in part, as a transfer of money . . . made for
the purpose of influencing the nomination or election of a
candidate . . . [or] use by a political party . . . .5
Prior to the 2002 legislative amendment that we
describe below, APOC had considered that all donations to
political parties were for the purpose of influencing the
election of candidates and thus were hard money.6 Under this
interpretation all donations to political parties were subject to
the $5,000 annual limit of subsection .070(b)(2) and all
donations in excess of $100 had to be reported under subsection
.040(b)(2).
In Jacobus v. Alaska, the United States District Court
for the District of Alaska ruled that donations to political
parties for purposes other than the nomination or election of a
candidate could not constitutionally be limited.7 This holding
necessarily rejected APOCs view that all donations to political
parties are ultimately for the purpose of influencing the
election of a candidate.
In 2002, while the district court decision in Jacobus
was on appeal to the Ninth Circuit, the legislature amended
subsection .070(b)(2).8 Before the amendment the statute
provided that An individual may contribute not more than . . .
$5,000 per year to a political party. The amendment added the
following language: for the purpose of influencing the
nomination or election of a candidate or candidates.9 Literally,
the new language seems merely redundant since any donation to a
political party would not be a contribution under subsection
.400(4)(A) unless it were for the purpose of influencing the
nomination or election of a candidate.10 But the use of the for
the purpose clause specifically in the context of political party
donations may imply that donations to political parties for other
purposes are possible. The State observes in its brief that the
amendment reflects an intent to codify part of the federal
district courts decision in Jacobus. The appellants do not take
issue with this. We can accept, at least for the purposes of
this case, that the amendment is the product of a legislative
purpose to reject APOCs view that all donations to political
parties are intended to influence elections. Some donations to
political parties may be, in other words, soft money.11
Subsequent to the adoption of the 2002 amendments, APOC
received a petition urging the adoption of a regulation governing
the reporting of soft money received and expended by political
parties. According to the petition, at least hundreds of
thousands, and perhaps millions, of dollars of soft money had
been donated to Alaskas major political parties since the
district court decision. The petitioners argued that
[g]iven the lack of reporting to APOC, it is
not possible for the public to determine if
the soft money has been given to political
parties and/or spent in compliance with
Alaska law . . . . This thwarts a
fundamental goal of AS 15.13, which is to
require full public disclosure of campaign
contributions and expenditures prior to
elections so that the voting public can make
an informed choice between candidates.
. . . .
. . . . Without immediate disclosure of
this information, the voting public in the
primary will not have complete information on
which to base an informed choice of which
partys ballot to choose (in the upcoming
closed primary), or which candidates to vote
for.
In November 2002 the commission voted to adopt 2 AAC
50.327. The regulation requires political parties to report all
money received or spent that does not qualify as a contribution
or expenditure as those terms are defined in AS 15.13.400.12
The Libertarian Party and Kenneth Jacobus (the Party)
filed suit in the superior court, challenging the legality of 2
AAC 50.327. The Party then filed a motion for a preliminary
injunction on the basis that the APOC lacked the authority to
promulgate the regulation. Superior Court Judge Mark Rindner
ruled that 2 AAC 50.327 was legally promulgated, and denied the
Partys motion for injunctive relief. Subsequently a final
judgment declaring that APOC had authority to promulgate the
regulation was entered under Alaska Civil Rule 54(b). The Party
appeals.
The Decision of the Superior Court
The superior court concluded that APOC had the
authority to promulgate the regulation. We set out a portion of
the superior courts opinion:
Administrative regulations are
presumptively valid and the challenger bears
the burden of proving such regulations to be
invalid. OCallaghan v. Rue, 996 P.2d 88, 95
(Alaska 2000). Under Alaskas Administrative
Procedures Act, either expressed or implied
statutory authority is sufficient to support
an agenc[ys] adoption of a regulation. Kelly
v. Zamarello, 486 P.2d 906, 911 (Alaska
1971).
As previously noted certain provisions
of the underlying Act were declared
unconstitutional by the United States
District Court for the District of Alaska in
Jacobus v. State, 182 F. Supp. 2d 881 (D.
Alaska 2001). Prior to that other provisions
of the Act were also reviewed by the Alaska
Supreme Court. See State v. Alaska Civil
Liberties Union, 978 P.2d 597 (Alaska 1999).
There, the Alaska Supreme Court noted that it
is the purpose of this Act to substantially
revise Alaskas election campaign finance laws
in order to restore the publics trust in the
electoral process and to foster good
government. Id. at 601; see also Ch. 48 1,
SLA 1996.
The Plaintiffs concede that the
authority of an administrative agency
ordinarily includes the power to adopt
regulations with regard to matters within the
jurisdiction of the agency, provided that the
regulations are not inconsistent with law. A
regulation is consistent with law if it bears
a reasonable relationship to the statutory
objective. Vail v. Coffman Engineers, Inc.,
778 P.2d 211, 214 (Alaska 1989); see also,
Kalmakof v. State, Commercial Fisheries Entry
Commission, 693 P.2d 844, 853 (Alaska 1985).
The Alaska Supreme Court has also
recognized that an agency may adopt a
regulation based on implied statutory
authority, where the Legislature has given an
agency authority to promulgate regulations,
and the regulation is reasonably necessary to
carry out the provisions of the agenc[ys]
enabling charter. See Chevron U.S.A., Inc.
v. LeResche, 663 P.2d 923 (Alaska 1983);
Boehl v. Sabre Jet Room, Inc., 349 P.2d 585,
587-88 (Alaska 1960).
While the parties vigorously dispute
whether the APOC has the express authority to
promulgate the regulation, there can be
little doubt that the agency has the implied
authority to require the disclosure of soft
money contributions in light of the purpose
of the Act. Indeed, the Alaska Supreme Court
has previously noted that disclosure
requirements, such as the one at issue in
this case, serve various purposes including
providing for an informed electorate,
deterring corruption, and assisting in the
detection of violations of contribution
limitations. See Veco International, Inc. v.
APOC, 753 P.2d 703, 711 (Alaska 1988). In
Veco, the Alaska Supreme Court reiterated its
own observation in Messerli v. State, 626
P.2d 81, 85 (Alaska 1981), and that of the
United States Supreme Court in Buckley v.
Valeo, 424 U.S. 1, 67-68 (1976), as follows:
[D]isclosure requirements
deter actual corruption
and avoid the appearance
of corruption by exposing
large contributions and
expenditures to the light
of publicity. This
exposure may discourage
those who would use money
for improper purposes
either before or after
the election. A public
armed with information
about a candidates most
generous supporters is
better able to detect any
post election special
favors that may be given
in return.
. . .
[N]ot least significant,
record keeping,
reporting, and disclosure
requirements are an
essential means of
gathering the data
necessary to detect
violations of the
contributions
limitations. . . .
Veco, supra 753 P.2d at 712.
A similar observation was made in United
States v. Kanchanalak, 192 F.3d 1037 (D.C.
Cir. 1999). There, the D.C. Circuit in dicta
noted that the Federal Election Commission,
the federal equivalent of the APOC, has for
some time required by regulation the
disclosure of soft money contributions
received by political parties at the federal
level under 11 C.F.R. 104.8(e). This
ability to require soft money disclosure
enhances the agencys ability to prohibit the
illegal commingling of hard and soft money
receipts. While plaintiffs argue that the
APOC has less authority to promulgate
regulations than does the Federal Election
Commission, the regulation at issue in this
case similarly allows the APOC to enforce
hard money limits and other provisions of the
Campaign Finance Law.
Given the stated purpose of the Act
there can be little doubt that the soft money
disclosure requirement falls within, at the
very least, the implied authority of the
APOC. As previously indicated such
disclosures inform the electorate, aid in the
deterrence of corruption, and the detection
of violations of contribution limitations.
Such requirements serve the expressed
legislative purpose of the Campaign Finance
Statutes from which the APOC derives its
authority to restore the publics trust in the
electoral process and to foster good
government.
Contentions on Appeal
The Party contends that the regulation exceeds the
authority of the commission because the act only regulates hard
money donations and expenditures. Alaska Statute 15.13.010(b)
provides:
Except as otherwise provided, this
chapter applies to contributions,
expenditures and communications made by a
candidate, group, nongroup entity,
municipality or individual for the purpose of
influencing the outcome of a ballot
proposition or question as well as those made
to influence the nomination or election of a
candidate.
The Party argues that since the act does not apply to soft money,
APOC cannot require the disclosure of soft money donations or
expenditures.
The State contends that the regulation is within both
the express and the implied authority of the commission. The
State notes that APOC has the express authority to develop and
provide forms for reports required under the act, to audit such
reports, and to adopt regulations necessary to implement and
clarify the provisions of the act.13 Based on this authority, the
State contends that the soft money disclosure regulation is
necessary to allow APOC to make sure that soft money is not spent
on election activities; without such a regulation it will be
unable to do so.
STANDARD OF REVIEW
In this case we are asked to decide whether a
regulation is within the authority of the agency that promulgated
it. The principles applicable to appellate review of such
questions are as follows:
Regulations are presumptively valid and will
be upheld as long as they are consistent with
and reasonably necessary to implement the
statutes authorizing their adoption. But
reasonable necessity is not a requirement
separate from consistency. If it were,
courts would be required to judge whether a
particular administrative regulation is
desirable as a matter of policy. Thus where
a regulation is adopted in accordance with
the Administrative Procedures Act, and the
legislature intended to give the agency
discretion, we review the regulation first by
ascertaining whether the regulation is
consistent with the statutory provisions
which authorize it and second by determining
whether the regulation is reasonable and not
arbitrary.
In determining whether a regulation is
reasonable and not arbitrary courts are not
to substitute their judgment for the judgment
of the agency. Therefore review consists
primarily of ensuring that the agency has
taken a hard look at the salient problems and
has genuinely engaged in reasoned decision
making.[14]
DISCUSSION
We conclude that 2 AAC 50.327 is consistent with the
Campaign Disclosure Act and that its provisions are reasonable
and not arbitrary. We do so largely for the reasons expressed by
Judge Rindner, as expanded in the paragraphs that follow.
The purposes of campaign contribution and expenditure
limits are to prevent corruption and the appearance of corruption
spawned by the real or imagined coercive influence of large
financial contributions on candidates positions and on their
actions if elected to office.15 The purposes of campaign finance
disclosure requirements are closely related. Disclosure is
intended to inform the electorate, deter actual corruption and
avoid the appearance of corruption, and aid in the detection of
violations of contribution and expenditure limits. In Messerli
v. State we quoted with approval the following language from
Buckley v. Valeo concerning the function of campaign finance
disclosure requirements:
First, disclosure provides the electorate
with information as to where political
campaign money comes from and how it is spent
by the candidate in order to aid the voters
in evaluating those who seek federal office.
It allows voters to place each candidate in
the political spectrum more precisely than is
often possible solely on the basis of party
labels and campaign speeches. The sources of
a candidates financial support also alert the
voter to the interests to which a candidate
is most likely to be responsive and thus
facilitate predictions of future performance
in office.
Second, disclosure requirements deter
actual corruption and avoid the appearance of
corruption by exposing large contributions
and expenditures to the light of publicity.
This exposure may discourage those who would
use money for improper purposes either before
or after the election. A public armed with
information about a candidates most generous
supporters is better able to detect any
post-election special favors that may be
given in return. And, as we recognized in
Burroughs v. United States, [290 U.S. 534,
548 (1934),] Congress could reasonably
conclude that full disclosure during an
election campaign tends to prevent the
corrupt use of money to affect elections. In
enacting these requirements it may have been
mindful of Mr. Justice Brandeis advice:
Publicity is justly
commended as a remedy for
social and industrial
diseases. Sunlight is
said to be the best of
disinfectants; electric
light the most efficient
policeman.
Third, and not least significant,
recordkeeping, reporting, and disclosure
requirements are an essential means of
gathering the data necessary to detect
violations of the contribution limitations
. . . .[16]
We conclude that all three of these reasons are served
by the regulation in question. Soft money disclosure implements
the act because it informs the electorate as to the sources of
political party money. It aids in the deterrence of corruption
by exposing large contributions and expenditures to the light of
publicity. And it provides information that aids the commission
in enforcing the hard money contribution and expenditure limits
that the act imposes.
The nexus between soft money and the recognized
purposes of the act was recognized by the Ninth Circuit in
Jacobus v. Alaska.17 The Ninth Circuit stated:
[S]oft money presents a danger of corruption
and the appearance of corruption because
political parties trade influence and access
to candidates for soft money dollars, and
candidates trade influence and access for the
indirect benefits that they receive from soft
money contributions to their party. In
addition, candidates heavy involvement in
soft money fundraising and the creation of
tallying and other methods for tracking soft
money contributions secured by particular
candidates indicate that soft money is indeed
used to circumvent hard money contribution
limits.[18]
Concerning the goals of preventing corruption and the appearance
of corruption, the court expanded on these observations as
follows:
In light of modern campaign practices,
it is not necessary that money funneled
through political parties be specifically
designated for the election or nomination of
a candidate to have a corrupting influence.
Colorado Republican II offers a compelling
account of the danger of corruption inherent
in unlimited soft money contributions to
parties, one that accounts for how the power
of money actually works in the political
structure. 533 U.S. at 450, 121 S. Ct. 2351.
Parties centralize fundraising for a broad
set of candidates and programs, and therefore
act as magnets for special interest groups
who are looking for the most efficient ways
to advanc[e] their narrow interests. Id. at
451, 121 S. Ct. 2351 (alteration marks
omitted).
[M]any PACs . . .
contribut[e] to both
parties during the same
electoral cycle, and
sometimes even directly
to two competing
candidates in the same
election. Parties are
thus necessarily the
instruments of some
contributors whose object
is not to support the
partys message or to
elect party candidates
across the board, but
rather to support a
specific candidate for
the sake of a position on
one narrow issue, or even
to support any candidate
who will be obliged to
the contributors.
Id. at 451-52, 121 S. Ct. 2351 (footnotes and
citation omitted). Such practices lead to
two types of inappropriate influence by large
soft money contributors.
First, such contributions create the
danger that the parties themselves will
become beholden to special interests. As the
Supreme Court noted in Colorado Republican
II, these obligations are of concern because
of the parties unique ability to reward major
benefactors with access to lawmakers and
candidates: the record shows that even under
present law substantial donations turn the
parties into matchmakers whose special
meetings and receptions give the donors the
chance to get their points across to the
candidates. 533 U.S. at 461, 121 S. Ct.
2351; see also id. at 461 n.25, 121 S. Ct.
2351; Mariani v. United States, 212 F.3d 761,
768 (3d Cir. 2000) (en banc) (Large and
repeat donors sometime [sic] get more access
than other donors, and donating soft money
can be a more effective means for getting
access than hard money.). Like direct
influence-peddling by candidates, this kind
of access-peddling creates a danger of
corruption and the appearance of corruption.
Second, candidates and officeholders who
are party members may become directly
beholden to the partys donors, even if the
benefit that they receive from a large
donation to the party is indirect.
Contributing to parties is an extremely
efficient way for a special interest group to
produce obligated officeholders, because it
allows such a group to obligate anyone and
everyone in a political party, rather than
limiting its influence to specific
candidates. Colorado Republican II, 533 U.S.
at 452, 121 S. Ct. 2351. Candidates and
officeholders are likely to feel obligated to
major party donors because they are already
beholden to the party as a result of the
benefits that flow from party membership.
See Colorado Republican I, 518 U.S. at 648,
116 S. Ct. 2309 (Stevens, J., dissenting) (A
party shares a unique relationship with the
candidate it sponsors because their political
fates are inextricably linked. That interde
pendency creates a special danger that the
party or the persons that control the party
will abuse the influence it has over the
candidate by virtue of its power to spend.).
The Court in Colorado Republican II even
noted that influence within the party itself
was a significant benefit for which
candidates and officeholders might be willing
to trade influence over the legislative
process. See 533 U.S. at 460 n.23, 121 S.
Ct. 2351.
As Colorado Republican II recognized,
special interests contribute to candidates
competing against each other in the same
election because they want favors from
whomever is elected. 533 U.S. at 451 n.12,
121 S. Ct. 2351; see also id. at 451-52 &
nn.13, 14, 121 S. Ct. 2351. Because a modern
election campaign simply cannot be conducted
without significant sums of money, candidates
become beholden to the sources of any
contributions that aid their campaign,
whether given directly or indirectly. See
Buckley, 424 U.S. at 26, 96 S. Ct. 612 (The
increasing importance of the communications
media and sophisticated mass-mailing and
polling operations to effective campaigning
make the raising of large sums of money an
ever more essential ingredient of an
effective candidacy.). The Alaska
Legislature focused on this issue in passing
the Act, finding that organized special
interests are responsible for raising a
significant portion of all election campaign
funds and may thereby gain an undue influence
over election campaigns and elected
officials. 1996 Alaska Sess. Laws 48
1(a)(3).
Amicus curiae Republican National
Committee notes that some political parties
have functions other than simply electing
candidates to office. Although this position
is contrary to that taken by its state
affiliates in previous litigation, see, e.g.,
Colorado Republican I & II, it may well be
accurate. However, even where contributions
to a political party are expressly earmarked
for the purpose of administrative costs or
off-year issue advocacy, and even if
political parties do not use donations for
these purposes to shift funds into election
campaigns, the perception of corruption
decried by the Supreme Court may still
persist when contributors provide large sums
of money to political parties, regardless of
the purpose and ultimate use of the funds.
As noted above, this perception of corruption
was a matter of particular concern to Alaska
legislators in enacting the Act. 1996 Alaska
Sess. Laws 48 1(b).[19]
As to the objective of preventing circumvention of hard money
limits, the Ninth Circuit stated:
In Colorado Republican II, the Supreme
Court recognized a closely-related additional
governmental interest that might justify
contribution limits the interest in
preventing circumvention of contribution
limits designed to combat the corrupting
influence of large contributions to
candidates. 533 U.S. at 456 n.18, 121 S. Ct.
2351; see also id. at 456, 121 S. Ct. 2351;
Beaumont, --- U.S. at ----, 123 S. Ct. at
2207 ([R]ecent cases have recognized that
restricting contributions by various
organizations hedges against their use as
conduits for circumvention of [valid]
contribution limits. (quoting Colorado
Republican II, 533 U.S. at 456 & n.18, 121 S.
Ct. 2351) (second alteration in original));
Cal. Med. Assn, 453 U.S. at 197-99, 101 S.
Ct. 2712 (holding that limits on
contributions to multicandidate committees
are an appropriate means by which Congress
could seek to protect the integrity of the
contribution restrictions upheld by this
Court in Buckley); Buckley, 424 U.S. at 35-
36, 38, 96 S. Ct. 612.
As the Supreme Court found in Colorado
Republican II, faced with federal limits on
direct contributions to candidates, powerful
donors have used contributions to a party
. . . as a funnel from donors to candidates.
533 U.S. at 461, 121 S. Ct. 2351. This
response shows how soft money contributions
are used to circumvent contribution limits.
Under [FECA], a
donor is limited to
$2,000 in contributions
to one candidate in a
given election cycle.
The same donor may give
as much as another
$20,000 each year to a
national party committee
supporting the candidate.
What a realist would
expect to occur has
occurred. Donors give to
the party with the tacit
understanding that the
favored candidate will
benefit.
Id. at 458, 121 S. Ct. 2351. This practice
is so common, the Court went on to note, that
[a]lthough the understanding between donor
and party may involve no definite commitment
and may be tacit on the donors part, the
National Democratic Party has developed a
manner of informal bookkeeping known as
tallying to ensure that the amount of money
that a candidate receives from the party
corresponds to the amount that the candidate
raised for the party. Id. at 459, 121 S. Ct.
2351. The theory that soft money
contributions are a means of circumventing
limits on contributions to candidates is
bolstered by the extensive role that
candidates play in party fundraising.
Many of the party-building activities
claimed by Jacobus to be unrelated to
electing candidates are easily targeted to a
particular candidate, such as the promotion
of a Get Out the Vote initiative in a
candidates district, or sponsorship of a
legislative initiative that a candidate has
made part of his or her campaign platform.
Thus, these activities provide a low effort,
low-risk way to circumvent contribution
limits. See Republican Party v. Pauly, 63 F.
Supp. 2d at 1016 (The [Republican Party of
Minnesota] often provided administrative and
strategic support to the candidates. The
party coordinated candidate appearances and
voter registration drives, and helped to
recruit volunteer assistance.).
In sum, parties . . . function for the
benefit of donors whose object is to place
candidates under obligation. Colorado
Republican II, 533 U.S. at 455, 121 S. Ct.
2351. Prevention of the corruption and
appearance of corruption that result from
this inescapable reality is a sufficiently
important governmental interest to support
limiting soft money contributions.[20]
The relevance of unregulated soft money to regulated
hard money has also been recognized by the federal counterpart to
APOC, the Federal Election Commission. The FEC requires
political committees to report the sources of their soft money
donations even though the Federal Election Campaign Act only
prohibits transfers of hard money.21 The Court of Appeals for the
District of Columbia Circuit has observed that the FEC requires
the disclosure of soft money donations in order to enhance its
ability to prohibit the illegal commingling of hard and soft
money receipts . . . to assist it in tracking the flow of funds
between the two.22
In committee hearings that led to the enactment of the
2002 amendment to AS 15.13.070(b)(2) concern was also expressed
about the potential enforcement difficulties that might result
from exempting soft money from contribution and expenditure
limits. These concerns were answered by assurances that APOCs
regulatory powers could be used to address the problem. Thus,
when the proposed amendment came before the House Rules
Committee, Mr. Balash of the staff of the Senate State Affairs
Committee testified on behalf of the sponsoring Senate committee.
Representative Berkowitz expressed concern about commingling.
According to the official minutes:
REPRESENTATIVE BERKOWITZ said that his
biggest concern with the Singleton ruling and
version Q is the $5,000 allowance for the
purpose of influencing the nomination or
election of a candidate. Although he
understood the courts ruling, he expressed
concern with how large gifts could be
cordoned off and how one could account for
what works towards influencing the nomination
or election of a candidate. For example, the
Democratic Party has an executive director
who isnt always working on campaigns and thus
he inquired as to how one segregates the
value of something generic from something
that benefits a campaign.[23]
Balash responded that APOCs regulatory powers would supply the
answer:
MR. BALASH surmised that under APOCs
regulatory powers, certain instances and
forms would be established in order to
determine what contributions are for what.[24]
Based on this exchange, it is apparent that in the process of
enacting the 2002 amendment the legislature recognized that the
commission would be able to provide at least a partial regulatory
solution to the problem of commingling soft and hard money.
In sum, as the authorities cited above recognize, soft
and hard money contributions to and expenditures by political
parties are closely related. The regulation at issue, requiring
that political parties report soft money contributions and
expenditures, implements the Campaign Disclosure Act by
facilitating the enforcement of hard money limits. It also
deters practices that can reasonably be regarded as efforts to
evade those limits, and advances the public informational goals
of the act. For these reasons, we conclude that the regulation
is consistent with the Campaign Disclosure Act.
The Party makes no separate challenge that the
regulation is unreasonable and arbitrary. We have noted that in
reviewing the reasonableness of a regulation we will not question
its wisdom, but rather will consider whether the agency has taken
a hard look at the salient problems and has genuinely engaged in
reasoned decision making.25 This regulation was promulgated
following the district courts decision in Jacobus and the
subsequent petition by a group of citizens concerned that
political parties would attempt to bypass contribution and
expenditure limits through the use of soft money. The Party does
not contend that the regulation was the product of capricious or
insufficiently deliberative decision making and thus, under the
presumption of administrative regularity,26 the regulation readily
passes this aspect of appellate review.
CONCLUSION
For these reasons we conclude that the Alaska Public
Offices Commission was authorized to promulgate 2 AAC 50.327.
The judgment of the superior court is therefore AFFIRMED.
_______________________________
1 Jacobus v. Alaska, 338 F.3d 1095, 1098 n.1 (9th Cir.
2003).
2 AS 15.13.070 provides:
(a) An individual or group may make
contributions, subject only to the
limitations of this chapter and AS 24.45,
including the limitations on the maximum
amounts set out in this section.
(b) An individual may contribute not
more than
(1) $1,000 per year to a nongroup entity
for the purpose of influencing the nomination
or election of a candidate, to a candidate,
to an individual who conducts a write-in
campaign as a candidate, or to a group that
is not a political party;
(2) $10,000 per year to a political
party for the purpose of influencing the
nomination or election of a candidate or
candidates.
(c) A group that is not a political
party may contribute not more than
(1) $2,000 per year to a candidate, or
to an individual who conducts a write-in
campaign as a candidate;
(2) $2,000 per year to another group or
a nongroup entity; or
(3) $4,000 per year to a political
party.
(d) A political party may contribute to
a candidate, or to an individual who conducts
a write-in campaign, for the following
offices an amount not to exceed
(1) $100,000 per year, if the election
is for governor or lieutenant governor;
(2) $15,000 per year, if the election is
for the state senate;
(3) $10,000 per year, if the election is
for the state house of representatives; and
(4) $5,000 per year, if the election is
for
(A) delegate to a constitutional
convention;
(B) judge seeking retention; or
(C) municipal office.
(e) This section does not prohibit a
candidate from using up to a total of $1,000
from campaign contributions in a year to pay
the cost of
(1) attendance by a candidate or guests
of the candidate at an event or other
function sponsored by a political party or by
a subordinate unit of a political party;
(2) membership in a political party,
subordinate unit of a political party, or
other entity within a political party, or
subscription to a publication from a
political party; or
(3) co-sponsorship of an event or other
function sponsored by a political party or by
a subordinate unit of a political party.
(f) A nongroup entity may contribute not
more than $1,000 a year to another nongroup
entity for the purpose of influencing the
nomination or election of a candidate, to a
candidate, to an individual who conducts a
write-in campaign as a candidate, to a group,
or to a political party.
3 AS 15.13.040(a) and (b) provide:
(a) Except as provided in (g) and (l) of
this section, each candidate shall make a
full report, upon a form prescribed by the
commission,
(1) listing
(A) the date and amount of all
expenditures made by the candidate;
(B) the total amount of all
contributions, including all funds
contributed by the candidate;
(C) the name, address, date, and amount
contributed by each contributor; and
(D) for contributions in excess of $250
in the aggregate during a calendar year, the
principal occupation and employer of the
contributor; and
(2) filed in accordance with AS
15.13.110 and certified correct by the
candidate or campaign treasurer.
(b) Except as provided in (l) of this
section, each group shall make a full report
upon a form prescribed by the commission,
listing
(1) the name and address of each officer
and director;
(2) the aggregate amount of all
contributions made to it;
(3) the name, address, date, and amount
contributed by each contributor and, for
contributions in excess of $250 in the
aggregate during a calendar year, the
principal occupation and employer of the
contributor; and
(4) the date and amount of all
contributions made by it and all expenditures
made, incurred, or authorized by it.
4 AS 15.13.400(4)(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, 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[.]
5 AS 15.13.400(6)(A). expenditure
means a purchase or a transfer of money or
anything of value, or promise or agreement to
purchase or transfer money or anything of
value, incurred or made for the purpose of
(i) influencing the nomination or
election of a candidate or of any individual
who files for nomination at a later date and
becomes a candidate;
(ii) use by a political party;
(iii) the payment by a person other than
a candidate or political party of
compensation for the personal services of
another person that are rendered to a
candidate or political party; or
(iv) influencing the outcome of a ballot
proposition or question[.]
6 See Greg Granquist, APOC Advisory Opinion AO97-08-CD
(issued Feb. 27, 1997).
7 182 F. Supp. 2d 881, 892 (D. Alaska 2001), revd in
part, 338 F.3d 1095 (9th Cir. 2003).
8 Ch. 3, 2, SLA 2002.
9 AS 15.13.070(b)(2) now provides:
An individual may contribute not more
than
. . .
(2) $10,000 per year to a political
party for the purpose of influencing the
nomination or election of a candidate or
candidates.
10 Substituting the definition of contribution for
contribute in the amended subsection, the amended sentence states
that an individual may [donate for the purpose of influencing the
nomination or election of a candidate] not more than $5,000 per
year to a political party for the purpose of influencing the
nomination or election of a candidate or candidates.
11 After the 2002 amendment was adopted the Ninth Circuit
reversed much of the district courts ruling in Jacobus, 338 F.3d
1095. Aided by an intervening United States Supreme Court
decision, Federal Election Commission v. Colorado Republican
Federal Campaign Committee, 533 U.S. 431 (2001), the court held
that the $5,000 limit on contributions to political parties in
subsection .070(b), before it was amended, could constitutionally
be applied to soft as well as hard money donations. No
legislative change was made in reaction to this decision.
12 2 AAC 50.327 provides:
(a) This section applies to political
party reporting requirements for a donation
received by a political party that does not
qualify as a contribution under AS 15.13.400
and for money spent by a political party that
does not qualify as an expenditure under AS
15.13.400.
(b) A political party shall file a full
report, in accordance with the contribution
reporting requirements for a group in AS
15.13.040 and 15.13.110, of a donation
consisting of a purchase, payment, promise or
obligation to pay, loan or loan guarantee,
deposit or gift of money, goods or services,
other than volunteer services provided by an
individual, that the political party receives
from an individual or person and that does
not qualify as a contribution.
(c) A political party shall file a full
report, in accordance with the expenditure
reporting requirements for a group in AS
15.13.040 and 15.13.110, of all money spent
by a political party on a communication and
all money spent that does not qualify as an
expenditure.
13 AS 15.13.030(1), (7), and (9).
14 Interior Alaska Airboat Assn v. State, Bd. of Game, 18
P.3d 686, 689-90 (Alaska 2001) (citations omitted).
15 State v. Alaska Civil Liberties Union, 978 P.2d 597,
605 (Alaska 1999) (quoting Buckley v. Valeo, 424 U.S. 1, 25
(1976)):
To the extent that large contributions are
given to secure a political quid pro quo from
current and potential office holders, the
integrity of our system of representative
democracy is undermined. . . .
Of almost equal concern as the danger of
actual quid pro quo arrangements is the
impact of the appearance of corruption
stemming from public awareness of the
opportunities for abuse inherent in a regime
of large individual financial
contributions. . . . Here . . . Congress
could legitimately conclude that the
avoidance of the appearance of improper
influence is also critical . . . if
confidence in the system of representative
Government is not to be eroded to a
disastrous extent.
16 626 P.2d 81, 84-85 (Alaska 1980) (quoting Buckley, 424
U.S. at 66-68) (emphasis added) (citations omitted). We also
acknowledged these purposes in Veco Intl, Inc. v. Alaska Pub.
Offices Commn, 753 P.2d 703, 711-12 (Alaska 1988).
17 338 F.3d 1095 (9th Cir. 2003).
18 Id. at 1099.
19 Id. at 1112-14 (footnotes omitted).
20 Id. at 1114-15 (footnote omitted).
21 See United States v. Kanchanalak, 192 F.3d 1037, 1042
(D.C. Cir. 1999).
22 Id. at 1046. The Party argues that the federal example
is inapposite because the FEC has been delegated broader powers
than APOC. But we refer to the federal example to illustrate
that there is a logical nexus between the disclosure of soft
money contributions and the enforcement of limits on
contributions and expenditures of hard money. This nexus is
factual and is independent of the differences in delegated
authority between the federal and state agencies.
23 Committee Minutes, House Rules Committee Hearing on
S.B. 103 (April 19, 2001) at 130.
24 Id.
25 O'Callaghan v. Rue, 996 P.2d 88, 98 (Alaska 2000)
(quotations omitted); Rutter v. State, 963 P.2d 1007, 1009
(Alaska 1998).
26 OCallaghan, 996 P.2d at 95.
