Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
®, the DeskTop In-and-Out Board makes your office run smoother.

 

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Republican Governors Association v. Alaska Public Offices Commission and Walker Mallot for Alaska (4/30/2021) sp-7522

Republican Governors Association v. Alaska Public Offices Commission and Walker Mallot for Alaska (4/30/2021) sp-7522

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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, email  

                                                                                                                           

           corrections@akcourts.us.  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                       



REPUBLICAN  GOVERNORS                                            )  

ASSOCIATION,                                                     )     Supreme  Court  No.  S-17768  

                                                                 )  

                                Appellant,                                                                                        

                                                                 )     Superior Court No. 3AN-18-10129 CI  

                                                                 )  

           v.                                                                              

                                                                 )     O P I N I O N  

                                                                 )  

                                  

ALASKA PUBLIC OFFICES                                                                                     

                                                                 )    No. 7522 - April 30, 2021  

                                   

COMMISSION and WALKER                                            )  

                              

MALLOTT FOR ALASKA,                                              )  

                                                                 )  

                                Appellees.                       )  

                                                                 )  



                                                                                                               

                                            

                      Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                   

                      Judicial District, Anchorage, Erin B. Marston, Judge.  



                                                                                                          

                      Appearances:  Stacey C. Stone, Holmes Weddle & Barcott,  

                                                                                                        

                      P.C., Anchorage, for Appellant.  Laura E. Wolff, Assistant  

                                                                                                                  

                      Attorney General, Anchorage, and Clyde "Ed" Sniffen, Jr.,  

                                                                                                             

                      Acting AttorneyGeneral,Juneau, for Appellee Alaska Public  

                                                                                                           

                      Offices Commission.   No appearance by Appellee Walker  

                                         

                      Mallott for Alaska.  



                                                                                                                

                      Before:         Bolger,  Chief  Justice,  Winfree,  Maassen,  and  

                                                                                            

                      Carney, Justices.  [Borghesan, Justice, not participating.]  



                                                   

                      BOLGER, Chief Justice.  


----------------------- Page 2-----------------------

I.          INTRODUCTION
  



                        A national political organization engaged an Alaska media consultant to  

                                                                                                                                                       



reserve  over  $1  million  worth  of  television  advertising  time  prior  to  the  2018  

                                                                                                                                                



gubernatorial primary race.  The national organization did not register with the Alaska  

                                                                                                                                              



Public Office Commission, which administers the state's campaign financelaws, and did  

                                                                                                                                                     



not report the reservations to the agency.  The Commission concluded that this conduct  

                                                                                                                                            



violated a statute requiring all entities to register before making any "expenditures,"  

                                                                                                       



includingpromises or agreements to transfer something ofvalue, to influenceanelection.  

                                                                                                                                                            



                        The superior court affirmed the Commission's decision on appeal.  The  

                                                                                                                                                   



national  organization  now  appeals  to  us,  arguing  that  the  Commission  defined  

                                                                                                                                           



"expenditures"  too  broadly.                            But  we  conclude  that  the  Commission  reasonably  

                                                                                                                                      



interpreted the campaign finance statute to include agreements to purchase television  

                                                                                                                                         



advertising, even when these agreements are not legally binding.  We therefore affirm  

                                                                                 



the superior court's decision affirming the Commission's order.  

                                                                                                        



II.         FACTS AND PROCEDURAL HISTORY  

                                                                        



            A.          Facts  

                  



                        TheAlaskaPublicOffices Commissionisanonpartisan agency responsible  

                                                                                                                                      



for  implementing  and  enforcing  Alaska's  campaign  finance  laws,  including  those  

                                                                                                                                                

mandatingdisclosureofcontributions and expenditures.1  An"expenditure"is statutorily  

                                                                                                                                         



defined as "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 . . . influencing the . . . election of a candidate."2  

                                                                                                           All entities are required to  

                                                                                                                                                       



            1           See  AS 15.13.020 (establishing Commission); AS 15.13.030 (setting out                                                      



duties of Commission); AS 15.13.380 (authorizing enforcement by Commission).                                             



            2           AS 15.13.400(6)(A).  

                               



                                                                          -2-                                                                    7522
  


----------------------- Page 3-----------------------

register with the Commission prior to making such an expenditure, and an expenditure                                                                       



                                                                                                                                                                       3  

must be reported; if the expenditure changes, the report must be promptly updated.                                                                                         The  



                                                                                                                                                                            

Commission uses these reports to monitor for potential campaign finance violations and  



                                                                                                                                                                      

makes the information publicly available to help the electorate make informed voting  

choices.4  



                            The  Republican  Governors  Association  (RGA)  is  a  national  political  

                                                                                                                                                                 



organization that seeks to elect and support Republican governors across the United  

                                                                                                                                                                     



States. In April 2018 RGA announced in a press release that it had reserved $1.5 million  

                                                                                                                                                                     



worth of television advertising time for Alaska's upcoming gubernatorial election.  It  

                                                                                                                                                                                



explained that "[b]y booking these ad reservations ahead of other campaigns and groups,  

                                                                                                                                                                    



the RGA will save considerable resources" and "ensur[e] [RGA's] resources will be the  

                                                                                                                                                                             



most efficient on the field." RGA never registered with the Commission or reported the  

                                                                                                                                                                             



television advertising reservations.  

                                                                          



                            Many of RGA's media reservations specifically identified the date and  

                                                                                                                                                                            



shows during which the advertisements were scheduled to run, although others listed  

                                                                                                                                                                        



only a date range and number of spots reserved.  The reservations were documented on  

                                                                                                                                                                               



forms labeled as "[c]ontract[s]," although RGA did not pay for the reservations and the  

                                                                                                                                                                             



forms were not signed.  

                                                  



                            RGA engaged Pinpoint Media, Inc. (Pinpoint), a media consulting agency  

                                                                                                                                                                     



working  with  RGA  in  several  states  during  the  2018  elections,  to  make  these  

                                                                                                                                                                       



reservations.   Pinpoint "assisted RGA with reserving placement of advertising with  

                                                                                                                                                                          



              3             See  AS 15.13.050(a) (requiring "each person other than an individual" to                                                                           



register  before   making   expenditures);   AS   15.13.040   (requiring   expenditures   to   be  

reported); 2 Alaska Administrative Code (AAC) 50.321(g) (2021) (requiring changes to                                                                                            

be reported).   



              4             AS 15.13.030(5) and (7).  

                                                                         



                                                                                       -3-                                                                               7522
  


----------------------- Page 4-----------------------

Alaska   television   stations"   and   filed   documents   with   the   Federal   Communications  



Commission (FCC) stating that it had reserved media time on RGA's behalf. In keeping                                                                                                                                                                                                                                                                    



with industry practice, RGA did not pay Pinpoint for its work in Alaska, although several                                                                                                                                                                                                                                                                   



reservations note Pinpoint's expected commission. RGA did not report Pinpoint's work                                                                                                                                                                                                                                                                                



to the Commission.                                                                      



                                                           Shortly after Mike Dunleavy won the Alaska Republican gubernatorial                                                                                                                                                                                                 



primary,   RGA transferred                                                                                             its media reservations to                                                                                            Families for                                               Alaska's Future -                                                           



Dunleavy (FFAF), an Alaska-based group formed to support Dunleavy's campaign. The    



transfer was done by Pinpoint, which asked stations to "change the advertiser name to   



 [FFAF] on all RGA orders that we booked a few months ago."                                                                                                                                                                                                                                     The next day RGA                                                  



contributed   $400,000   to   FFAF,   and   FFAF   paid   Pinpoint  $380,900   for   "[m]edia  



 [p]lacement in [the] Anchorage [m]arket." All four television stations listed in the FFAF                                                                                                                                                                                                                                                                       



payment to Pinpoint were named in the reservations originally made by Pinpoint for                                                                                                                                                                                                                                                                                           



RGA.    



                                                           The   day   after   the   transfer,  the   treasurer   of   incumbent   governor   Bill  



Walker's reelection campaign (Walker-Mallott) noticed a local article reporting that                                                                                                                                                                                                                                                                                     



FFAF,   backed   by   RGA,   had   spent   over  $1.1   million   on   advertising   in   support   of  



Dunleavy.   After sifting through FCC files, the treasurer discovered multiple contracts                                                                                                                                                                                                                                                          



for advertising time in RGA's name.                                                                                                                              Walker-Mallott then filed an expedited complaint                                                                                                                              

                                                                                                                                                        5 alleging RGA's earlymediareservations constituted  

againstRGAwith theCommission,                                                                                                                                                                                                                                                                                                               



expenditures and RGAshouldhaveregistered withtheCommission beforemakingthem.  

                                                                                                                                                                                                                                                                                                                                                                   



                             5                             Walker-Mallot also filed an expedited complaint against FFAF.                                                                                                                                                                                                                           Because  



FFAF never reported the transfer of RGA's reservations, the Commission imposed a fine                                                                                                                                                                                                                                                                                 

against FFAF; FFAF did not appeal.                                                                                                                                



                                                                                                                                                                                        -4-                                                                                                                                                                           7522
  


----------------------- Page 5-----------------------

                                        

          B.        Procedural History  



                                                                                                                             

                    At an initial hearing on October 2, 2018, the Commission concluded there  



                                                                                                                       

were sufficient grounds to grant expedited review.  RGA and Walker-Mallott appeared  



                                                                                                                              

at the expedited hearing two days later. The Commission considered exhibits from both  



                                                                                                                  

parties. Walker-Mallotsubmitted RGA'sAprilpressrelease, RGA's mediareservations,  



                                                                                                              

documents transferring those reservations to FFAF, excerpts from the Commission's  



                                                                                                                                

campaign  disclosure  manual,  and  a  form filed  with  the  FCC  on  RGA's  behalf  by  



                

Pinpoint.  



                                                                                                                        

                    RGA submitted affidavits from its chief financial officer and a Pinpoint  



                                                                                                                        

media consultant stating that RGA had not paid for any media reservations. The Pinpoint  



                                                                                                                               

consultant added that the reservations she had placed were non-binding and that one  



                                                                                                                            

media company had cancelled some of its reservations.  RGA also submitted two letters  



                                                                                                                              

from media companies explaining that media reservations were "not guaranteed until  



                                                                                                                 

payment is received" and could be cancelled or revised by the advertiser.  



                                                                                                                       

                    Walker-Mallott  called  a  media  marketing  consultant  and  a  political  



                                                                                                                  

campaign manager as witnesses.  They testified that television advertising reservations  



                                                                                                                               

are taken very seriously by media entities, as they remove airtime from the market and  



                                                                                                                                

are rarely cancelled.  As one said, "[I]f you expect to do business with that station in the  



                                                                                                                   

future, you have to pay the bill."  The witnesses also explained why media consultants  



                                                                                                                               

provide a valuable service to advertisers: they can place reservations at lower prices and  



                                                                                                                              

more advantageous times, and deny their clients' competitors access to preferred time  



                                                                                                                  

slots.  They agreed that it is industry practice for consultants to receive a commission  



                                                                                                                              

when the reservations are paid for, rather than being paid directly by their clients.  And  



                                                                                                                               

they  said  that  however  the  consultants  are  paid,  the  consultants  work  for  the  



                                                                                                                  

organizations seeking to place reservations, not for the media companies.  



                                                                -5-                                                         7522
  


----------------------- Page 6-----------------------

                                    The Commission determined that both reserving television air time and                                                                                                                     



hiring Pinpoint to do so constituted expenditures and that RGA had violated Alaska                                                                                                                                   



election law by making these expenditures before registration. The Commission ordered                                                                                                                               

                                                                                                                                    6   RGA appealed to the superior court.  

RGA to register and pay a civil penalty of $4,500.                                                                                                                                                                                         



                                    The superior court affirmed the Commission's decision.  It concluded that  

                                                                                                                                                                                                                              



the Commission's definition of "expenditure" was "the most reasonable interpretation"  

                                                                                                                                                                                                 



of the term and that substantial evidence supported its determination that both RGA's  

                                                                                                                                                                                                                     



media reservations and its engagement of Pinpoint constituted expenditures.  The court  

                                                                                                                                                                                                                           



thus affirmed the civil penalty assessed against RGA and awarded the State 20% of its  

                                                                                                                                                                                                                                  



attorney's fees as the prevailing party.  

                                                                                                         



                                    RGA now appeals to us.  

                                                                                                       



III.              STANDARD OF REVIEW  

                                                                    



                                    When the superior court has acted as an intermediate court of appeal, we  

                                                                                                                                                                                                    

review the administrative decision directly.7  We apply the substantial evidence standard  

                                                                                                                                                                                                                  



to  questions  of  fact,  affirming  the  agency's  findings  where  there  is  "such  relevant  

                                                                                                                                                                                                                 

evidence as a reasonable mind might accept as adequate to support a conclusion."8  

                                                                                                                                                                                        



                  6                 Citing a violation of AS 15.13.050(a), the Commission calculated RGA's                                                                                                           



maximum fine as $8,900 under AS 15.13.380(d) (providing for civil penalties) and                                                                                                                                              

AS 15.13.390(a) (providing penalty amount).                                                                                It reduced the penalty because of RGA's                                                   

status as an "inexperienced filer[ ]."                                                            



                  7                 Studley v. Alaska Pub. Offices Comm'n, 389 P.3d 18, 22 (Alaska 2017).  

                                                                                                                                                                                                                    



                  8                Alyeska Pipeline Serv. Co. v. DeShong , 77 P.3d 1227, 1231 (Alaska 2003)  

                                                                                                                                                                                                                         

(quoting Grove v. Alaska Constr. & Erectors, 948 P.2d 454, 456 (Alaska 1997)).  

                                                                                                                                                                                                      



                                                                                                                -6-                                                                                                        7522
  


----------------------- Page 7-----------------------

                                                                                                                                                    9  

                       We review agency interpretations of statutes under one of two standards.                                                         



                                                                                                                              

The reasonable basis standard, under which we defer to the agency's interpretation  



                                                                                                                                           

unless  it  is  unreasonable,  applies  "when  the  question  involves  fundamental  policy  

                                                                   10   In contrast, we substitute our own judgment  

                                                                                                                                      

                                                 

decisions or administrative expertise." 



"where the agency's specialized knowledge and experience would not be particularly  

                                                                                                                                  

                                                                      11   We need not resolve which standard applies  

probative on the meaning of the statute."                                                                                                 

                                                        



in  this case,  as the Commission's interpretation  is "the most persuasive in light of  

                                                                                                                                                  

precedent, reason, and policy"12  and thus passes under either standard of review.  

                                                                                                                               



IV.         DISCUSSION  



            A.         The Commission's Interpretation Of "Expenditure" Is Reasonable.  

                                                                                                                              



                       Under Alaska law, "each person other than an individual" must register  

                                                                                                                                         

with the Commission "[b]efore making an expenditure in support of . . . a candidate."13  

                                                                                                                                                        



                                                                                                                                                  

An expenditure includes a "promise or agreement to purchase or transfer money or  



            9          Alaskan Crude Corp. v. State, Dep't of Nat. Res., Div. of Oil & Gas                                                   , 261  



P.3d 412, 419 (Alaska 2011).             



            10         Eberhart v. Alaska Pub. Offices Comm'n, 426 P.3d 890, 896 (Alaska 2018)  

                                                                                                                                             

(quoting Alaska Pub. Interest Research Grp. v. State, 167 P.3d 27, 42 (Alaska 2007)).  

                                                                                                                                         



            11         Marathon Oil Co. v. State, Dep't of Nat. Res ., 254 P.3d 1078, 1082 (Alaska  

                                                                                                                                         

2011) (quoting Matanuska-Susitna Borough v. Hammond, 726 P.2d 166, 175 (Alaska  

                                                                                                                        

 1986)).  



            12         Alyeska Pipeline Serv. Co., 77 P.3d at 1231 (quoting Guin v. Ha, 591 P.2d  

                                                                                                                                               

 1281, 1284 n.6 (Alaska 1979)) (applying the independent judgment standard); see also  

                                                                                                                                               

Eberhart, 426 P.3d at 896 ("We do not need to resolve which standard applies in this  

                                                                                                                                                

case  because  [the  Commission's]  interpretation  is  the  most  logical  and  reasonable  

                                                                                                                                   

interpretation of the statute.").  

                                                      



            13         AS 15.13.050(a).  

                               



                                                                        -7-                                                                  7522
  


----------------------- Page 8-----------------------

                                                  14  

anything of value."                                     Because neither "promise" nor "agreement" is statutorily defined,                                                                                      



the Commission argues that the terms should be interpreted according to their common                                                                                                                         



usage and given a broader meaning than "contract."                                                                                          



                                   An agreement is "an expression of greater breadth of meaning and less                                                                                                                  



technicality [than a contract].                                                Every contract is an agreement; but not every agreement                                                                   

                                     15     The term can include "any arrangement between two or more persons  

is a contract."                                                                                                                                                                                                 

intended to affect their relations (whether legal or otherwise) to each other."16   Similarly,  

                                                                                                                                                                                                          



"a promise is an expression leading another person justifiably to expect certain conduct  

                                                                                                                                                                                                                

on the part of the promisor."17  Only if "by reason of other operative facts the promise  

         

is recognized as creating a legal duty" is it a contract.18                                                                                                Therefore, the Commission  

                                                                                                                                                                                                  



argues, the statute cannot be limited to valid contracts.  

                                                                                                                                                  



                                   RGA objects that this interpretation is overbroad, arguing that a "promise  

                                                                                                                                                                                                           



or agreement" requires all the elements of a valid contract:  "an offer encompassing all  

                                                                                                                                                                                                                              



essential terms, unequivocal acceptance by the offeree, consideration, and an intent to  

                                                                                                                                                                                                                               



                  14               AS 15.13.400(6)(A).   



                  15  

                                                                   

                                   Agreement ,   BLACK 'S                                         LAW               DICTIONARY                            (11th    ed.    2019)   (quoting  

2 S   TEPHEN'S  COMMENTARIES ON THE                                                               LAWS OF                 ENGLAND  5 (L. Crispin Warmington ed.,                                                           

21st ed. 1950)).       



                  16               Id.  



                  17               Promise, BLACK'S LAW  DICTIONARY  (11th ed. 2019) (quoting                                                                                                        WILLIAM  R.  

                                                             

     NSON, PRINCIPLES OF THE LAW OF CONTRACT 6 n.3 (Arthur L. Corbin ed., 3d Am. ed.                                                                                                                                         

A                                                                                                                             

 1919)).  



                  18               Id. (quoting SAMUEL  WILLISTON, A T                                                              REATISE ON THE                             LAW OF               CONTRACTS  

                                                                    

 § 1A, at 4 (Walter H.E. Jaeger ed., 3d ed. 1957)).                                                            



                                                                                                              -8-                                                                                                      7522
  


----------------------- Page 9-----------------------

                           19  

be bound."                      Even though the statute does not expressly require a contract, RGA claims                                                                                         



no agreement could be enforceable without "a meeting of the minds on material terms."                                                                                                                              



RGA therefore claims that because its reservations were not legally binding contracts,                                                                               



they cannot have been expenditures.                                                       



                                Butthisappealdoesnot                                    concerncontract                         enforcement. Thequestion                                         before  



us is whether RGA's actions constituted expenditures for the purposes of the campaign                                                                                                     

                                                                 20  And we see no indication that the drafters intended to limit  

finance registration statute.                                                                                                                                                                         



this statute's applicability to contracts.  

                                                                      



                                When interpreting a statute, we "presume that no words or provisions are  

                                                                                                                                                                                                          



superfluous and that the legislature intended 'every word, sentence, or provision of a  

                                                                                                                                                                                                              

statute to have some purpose, force, and effect.' "21                                                                          The Alaska legislature could have  

                                                                                                                                                                                                     



referred specifically to "contracts" if it meant to so limit the scope of the reporting  

                                                                                                                                                                                          

requirements.  Instead, it chose the more expansive phrase "promise or agreement."22  

                                                                                                                                                                                                                   



We decline to narrow the statute's plain language without a good reason to do so.  

                                                                                                                                                                                              



                                The Commission's interpretation of "expenditure" reflects the purposes of  

                                                                                                                                                                                                            



campaign disclosure laws:  "providing for an informed electorate, deterring corruption,  

                                                                                                                                                                                      

and assisting in the detection of violations of contribution limitations."23                                                                                                              We have  

                                                                                                                                                                                                     



previously recognized theimportanceofthesepurposes in interpreting campaign finance  

                                                                                                                                                                                                



statutes.  In Libertarian Party of Alaska, Inc. v. State we upheld a regulation requiring  

                                                                                                                                                                                           



                19              Davis  v.  Dykman,  938  P.2d   1002,   1006  (Alaska   1997).  



                20              AS   15.13.050.   



                21              Adamson   v.  Municipality   of  Anchorage ,   333   P.3d   5,   16   (Alaska   2014)  



(quoting  Monzulla  v.   Voorhees  Concrete  Cutting,  254  P.3d  341,  345  (Alaska  2011)).  



                22              AS   15.13.400(7)(A).  



                23              Libertarian  Party  of  Alaska,  Inc.  v.  State, 101  P.3d  616,  621  (Alaska  2004).  



                                                                                                     -9-                                                                                             7522
  


----------------------- Page 10-----------------------

disclosure of "soft money" contributions in addition to the "hard money" contributions                                                                       



                                                                                                                                24  

expressly regulated under the campaign disclosure statutes.                                                                                                                        

                                                                                                                                      We reasoned that if the  



                                                                                                                                                             

Commission could not compel disclosure of soft money, then it could not meaningfully  



                                                                                                                                                                                      25  

                                                                                                                                                                                           

                                                                                                                                                                             

track hard money, making the regulation reasonably necessary to implement the law. 



Similarly, in Eberhart v.  Alaska Public Offices Commission  we concluded that the  

                                                                                                                                                                                  



Commission had reasonably defined government "money" to include governmental  

                                                                                                                                                           

resources and assets, namely a city government's email system.26                                                                                The Commission's  

                                                                                                                                                          



definition reflected the legislature's purpose - to prevent public funds from being used  

                                                                                                                                                                                

in a political campaign -and so was "[t]he most reasonable interpretation of the term."27  

                                                                                                                                                                         



                             In this case the Commission's interpretation of "expenditure" as broader  

                                                                                                                                                                         



than "contract" furthers the disclosure law's purpose, which is to make money in politics  

                                                                                                                                                                          

                         28     Timely registration and reporting allow the agency to correct potential  

transparent.                                                                                                                                                          



violations and the public to evaluate candidates before going to the polls. As the superior  

                                                                                                                                                                        



court  recognized:                         "If  there  was  no  requirement  to  report  debts,  parties  expending  

                                                                                                                                                                  



              24            Id.  at 617.   



              25            See id.        at 617, 622 (stating regulations are valid if they are "consistent with                                                              



and reasonably necessary to implement the statutes authorizing their adoption" and  

                                                                                                                                                                                 

upholding the soft money disclosure regulation because it "implements the act by aiding                                                                                     

in its enforcement, deterring evasions, and informing the public").                                                        



              26             426  P.3d  890,  896  (Alaska  2018)  (interpreting  "money"  as  used  in  

                                                                                                                                                                                    

AS  15.14.145,  which  prohibits  government  entities  and  personnel  from  using  

                                                                                                                                                                            

government money to influence elections of state or municipal officials).  

                                                                                                                                        



              27            Id.  



              28            See  Libertarian  Party  of  Alaska,  Inc.,  101  P.3d  at  622  (describing  

                                                                                                                                                                

"campaign finance disclosure requirements" as "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").  

                                                                                            



                                                                                        -10-                                                                                  7522
  


----------------------- Page 11-----------------------

resources on a political campaign could wait until after the election to pay expenses and                                                                                                                       



report them then. This would defeat the purpose of having campaign finance disclosure                                                                                                          



laws . . . ."                  The statute and the Commission's regulations thus require disclosure of                                                                                                             

debts, contributions, and expenditures when they are created, changed, or cancelled.                                                                                                                               29  



                                 RGAclaims that this "overbroad"reportingrequirementwouldfrustratethe  

                                                                                                                                                                                                                  



statute's purpose by "threatening to distort the public's understanding of what funds are  

                                                                                                                                                                                                                 



or  will  be  spent  and  by  whom."                                                             But  the  Commission's  regulations  anticipate  

                                                                                                                                                                                              

expenditures will change and require prompt reporting of those changes.30                                                                                                                      Had RGA  

                                                                                                                                                                                                           



registered with the Commission and reported the reservations in April, then reported the  

                                                                                                                                                                                                                 



transfer of reservations in August, it is unclear how voters would have been confused or  

                                                                                                                                                                                                                    



made less informed by access to this information. Instead, they would have learned that  

                                                                                                                                                                                                                



RGA planned to support the eventual gubernatorial candidate and had secured $1.5  

                                                                                                                                                                                                             



million in reservations for this purpose. Later voters would have learned that FFAF was  

                                                                                                                                                                                                               



the beneficiary of RGA's efforts. This is precisely the sort of transparency the disclosure  

                                                                                                                                                                                                



laws are intended to achieve.  

                                                    



                                 RGA next argues that the Commission's interpretation of "expenditure"  

                                                                                                                                                                                     



would allow it to arbitrarily and selectively investigate all private negotiations and  

                                                                                                                                                                                                               



crafting  of  political  strategy.                                                   This  concern  lacks  support  in  the  record.                                                                           The  

                                                                                                                                                                                                           



Commission's regulations and manuals clarify that expenditures include both paid and  

                                                                                                                                                                                                                



incurred expenditures; they require expenditures to be reported when thedeal in question  

                                                                                                                                                                                                    



                 29              See  AS 15.13.040 (requiring reporting of contributions and expenditures);                                                                          



2 AAC 50.321(g) (requiring prompt amendments to reports).                                                                           



                 30              2 AAC 50.321(g).  

                                                     



                                                                                                       -11-                                                                                                 7522
  


----------------------- Page 12-----------------------

is made, instead of when the expenditure is invoiced or paid.                                                                                             31  This interpretation has  



been consistent since at least 2011 when the Commission last updated its manual, and  



RGA points to no inconsistencies or abuses in its application.                                                                



                                  We conclude that the Commission's interpretation of "expenditure" to                                                                                                               



include promises or agreements that are not contractually binding is the most reasonable                                                                                                        

                                                                                                                                                         32   We therefore affirm the  

in light of our precedent, statutory text, and legislative intent.                                                                                                                                                 



 superior court's decision on this point.  

                                                                                   



                 B.               TheCommission's Findings WereSupportedBySubstantialEvidence.  

                                                                                                                                                                                                  



                                  Having accepted the Commission's interpretation of "expenditures" to be  

                                                                                                                                                                                                                     



broader than "contracts," we conclude substantial evidence supports its finding that  

                                                                                                                                                                                            



RGA's  media  reservations  and  RGA's  engagement  of  Pinpoint  both  constituted  

                                                                                                                                                                                             



expenditures.  We thus affirm the superior court's decision on this issue as well.  

                                                                                                                                                                                                            



                                  1.               The media reservations were expenditures.  

                                                                                                                                  



                                  RGA argues that the reservations did not constitute an agreement because  

                                                                                                                                                                                                       



they were preliminary in nature - more akin to a budgeting decision or an "intention to  

                                                                                                                                                                                                                      



expend."  It points to the few reservations that were cancelled, as well as the transfer of  

                                                                                                                                                                                                                     



                 31               See  ALASKA  PUB. O                              FFICES  COMM'N ., C                             ANDIDATE  CAMPAIGN  DISCLOSURE  



MANUAL 29 (2011) ("The date that an implied or express promise to pay for goods or                                                                                                                                   

                         

 services is made is the date to be used for reporting purposes."); 2 AAC 50.321(c)                                                                                                              

(requiring group entities to report as required by AS 15.13.040(b) and (c) and non-group                                                                                                        

entities to report as required                                        by AS15.13.040(j));                                 see also             AS 15.13.040(b)(3) (requiring                      

group               entities                to        report              "all          expenditures                          made,               incurred,                   or         authorized"),  

(j)(4)   (requiring   non-group   entities   to   report   "all   expenditures   made,   incurred,   or  

authorized").     



                 32               See Eberhart, 426 P.3d at 896 (citing legislative intent in determining  

                                                                                                                                                                                   

Commission's interpretation was the most reasonable); Alyeska Pipeline Serv. Co. v.  

                                                                                                                                                                                                                      

DeShong, 77 P.3d 1227, 1231 (Alaska 2003) (adopting "the rule of law that is most  

                                                                                                                                                                                                              

persuasive in light of precedent, reason, and policy" in de novo review (quoting Guin v.  

                                                                                                                                                                                                                      

Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979))).  

                                                                                                 



                                                                                                        -12-                                                                                                  7522
  


----------------------- Page 13-----------------------

the reservations to FFAF, which eventually paid the media companies, as proof that no                                                                                             



true agreement between RGA and the media companies existed.                                                                                But later changes or                    



cancellations do not negate the existence of an agreement - the Commission's rules                                                                                           



anticipate   them.     Organizations   must   report   expenditures   when   made;   if   they   are  



                                                                                                                                                                          33  

subsequently changed, the changes must be reported to the Commission as well.                                                                                                  



                             Substantial evidence shows the reservations were not simply budgeting  

                                                                                                                                                                  



decisions.  The record supports a conclusion that all parties expected the reservations to  

                                                                                                                                                                                   



be effectuated, as most of them were.  The Commission considered witness testimony  

                                                                                                                                                                  



that television stations take reservations "very, very seriously."  The media consultant  

                                                                                                                                                                  



RGA engaged to place reservations with several media companies could only expect to  

                                                                                                                                                                                    



be  paid  if  the  reservations  were  finalized.                                                The  agreements  with  media  companies  

                                                                                                                                                                



identify prices, times, and dates for the advertisements to run.  These were not internal  

                                                                                                                                                                       



budgeting decisions. They were agreements with third parties to purchase something of  

                                                                                                                                                                                   

value, even if the agreements were not yet legally binding.34  

                                                                                                           



                            And the reservations themselves had value.   RGA now claims that by  

                                                                                                                                                                                  



making the reservations it was merely "shaking a big fist" and letting it be known that  

                                                                                                                                                                



RGA had money to invest, but even this claim admits the reservations had some value.  

                                                                                                                                                                                         



Furthermore, RGA invested the time and effort to hire a media consultant and secure its  

                                                                                                                                                                                   



desired time slots.  By doing so, as RGA claimed in its press release, it "ensur[ed] [its]  

                                                                                                                                                                               



resources will be the most efficient  on  the field."   Witness testimony supports the  

                                                                                                                                                                                



Commission's argument that by removing advantageous time slots from the market,  

                                                                                                                                                                       



              33            2 AAC 50.321(g).                         



              34  

                                                                                                                                                                                   

                            See AS 15.13.400(6)(A) (defining an expenditure to include a "promise or  

                                                                                                                        

agreement to purchase or transfer money or anything of value").  



                                                                                       -13-                                                                                  7522
  


----------------------- Page 14-----------------------

RGA denied its opponents access to them.                                       RGA then transferred this valuable benefit   



to FFAF.            



                        Expendituresare"promise[s]oragreement[s]to                                           purchaseor transfer money            

                                       35   Substantial evidence supports the Commission's finding that the  

or anything of value."                                                                                                                                   



reservations were agreements or promises, that they had value, and that RGA made them  

                                                                                                                                                     



for the purposes of influencing an election.  We thus conclude that RGA's reservations  

                                                                                                                                        



constituted expenditures.  

                                                



                        2.          Engaging Pinpoint Media's services was an expenditure.  

                                                                                                                          



                        RGA claims that because it never paid Pinpoint, Pinpoint's work could not  

                                                                                                                                                         



have led to an expenditure.  This again conflicts with the Commission's interpretation  

           



of expenditures as reportable when an agreement is made, not when the debt is invoiced  

                                                                                                                                               



or paid.  And by RGA's logic, engaging a media consultant would rarely be reportable,  

                                                                                                                                           



as it is industry practice for consultants to be paid on commission.  

                                                                                                                          



                        RGA argues that "[t]here is no evidence that the RGA and [Pinpoint] had  

                                                                                                                                                        



made any promise or agreement for payment or future payment from the RGA."  But  

                                                                                                                                                       



witness testimony shows that Pinpoint performed a valuable professional service for  

                                                                                                                                                        



which it would expect a standard commission of $200 to $225,000.  Many of RGA's  

                                                                                                                                                 



reservation  sheets  expressly  calculate  a  15%  commission  for  Pinpoint  on  the  sale.  

                                                                                                                                                                



Pinpoint's work for RGA in Alaska began well before Dunleavy was identified as the  

                                                                                                                                                         



general-election candidate or the reservations were transferred to FFAF. It is reasonable  

                                                                                                                                           



                                                                                                                                              36  

to assume that Pinpoint expected something of value in return for its services.                                                                   

                                                                                                                               



            35          AS 15.13.400(6)(A).   



            36          Indeed, Pinpoint did seem to receive something of value in return for its  

                                                                                                                                                          

services.   Only one day after Pinpoint effectuated the transfer of the media reservations                                              

to FFAF, RGA contributed $400,000 to FFAF.  That same day, FFAF paid $380,900 to  

                                                                                                                                                           

                                                                                                                                     (continued...)  



                                                                           -14-                                                                     7522
  


----------------------- Page 15-----------------------

                          We conclude               that substantial evidence                      shows theexistenceofan agreement                 



between RGA and Pinpoint and that this agreement constituted an expenditure.                                                                                   We  



therefore affirm the superior court's decision on this issue.                                                      



             C.           RGA Is Not Exempt From Registration.                    



                          Finally, RGA asserts that because it is not a "group," it need not register                                                    



                                                                                                 37  

with the Commission prior to making expenditures.                                                                                                     

                                                                                                      It insists Walker-Mallott conceded  



                                                                                                     

this at a preliminary hearing.  These claims find no support in the record or the statute  



                       38  

                            

in question. 



                                                                                                                                             

                          RGAalleges Walker-Mallott "specificallyconceded that the[Commission]  



                                                                                                                                                                         

would have to set a new precedent" to find that RGA must register with the Commission.  



                                                                                                                                                                  

But Walker-Mallott only urged the Commission to "set a precedent" by granting the  



                                                                                                                                                                   

matter expedited review. Walker-Mallott also stated that "[the Commission] needs to set  



                                                                                                                                                                 

the precedent" that political organizations "should play by all the rules."  Despite this  



                                                                                                                                                                 

rhetoric, we conclude that requiring political organizations to follow the law is not  



unprecedented.  



                                                                                                                                                               

                          Under the registration statute, any "person other than an individual" must  

                                                                         39    A "person" may be a group or a "nongroup  

                                                                                                                                                  

register before making expenditures. 



             36           (...continued)  



                                                                                                                                                                         

Pinpoint for "TVMediaProduction"and "MediaPlacement in [the]AnchorageMarket."  



             37           RGA claims a recent Commission staff report supports its argument.  But  

                                                                                                                                                                 

the staff report addresses only when an entity can be required to register "as a group."  

                                                                                                                                                                         

The report actually contradicts RGA's claim, stating that "AS 15.13.050 simply requires  

                                                                                                                                                         

registration beforeexpenditure -it doesnot specifically requireregistration as agroup."  

                                                                                                                                                                         



             38           See AS 15.13.050(a) (requiring any "person other than an individual" to  

                                                                                                                                                                    

register before making expenditures).  

                                                                           



             39           AS 15.13.050(a).  RGA does not claim to be an "individual," elsewhere  

                                                                                                                                                    

                                                                                                                                             (continued...)  



                                                                                -15-                                                                          7522
  


----------------------- Page 16-----------------------

              40  

entity."             A   "person"   is   statutorily   defined   as   including   "a   corporation,   company,  



                                                                                                                   41  

partnership, firm, association, organization, . . . or society."                                                                                    

                                                                                                                        Regardless of whether  



                                                                                                                                                             

RGA is a "group," it is certainly a "person" under this definition.  Therefore, RGA was  



                                                                                                                                                      

subject to the registration statute's requirements.  We thus affirm the superior court's  



                                                                          

decision that RGA is not exempt from registration.  



       

V.           CONCLUSION  



                                                                                                                                        

                         We AFFIRM the superior court's decision affirming the Commission's  



                                                                                                            

order assessing a fine against the Republican Governors Association.  



             39          (...continued)  



                                                                  

defined as "a natural person."  AS 15.13.400(11).  



             40          AS 15.13.400(14) (defining "person" as having "the meaning given in  

                                                                                                                                                                

AS 01.10.060" and including "a labor union, nongroup entity, and a group").                                                                         



             41          AS 01.10.060(8).  

                                 



                                                                              -16-                                                                        7522
  

Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC