2008-04-21 - WRITTEN OPINIONS

2008-04-21. WRITTEN OPINIONS

GARY O. BARTLETT

Executive Director

MAILING ADDRESS:

P.O. BOX 27255

RALEIGH, NC 27611-7255

April 21, 2008

Ms. Susan Valauri, President

North Carolina Professional Lobbyists Association

Post Office Box 905

Raleigh, North Carolina 27602

Re: Advisory Opinion Concerning Lobbyist Involvement in Campaigns pursuant to N. C. Gen. Stat. § 163-278.23

Dear Ms. Valauri:

I am in receipt of your letter dated February 28, 2008, in which you request an opinion on behalf of the North Carolina Professional Lobbyists Association ("NCPLA"). As stated in your letter, the 2007 North Carolina General Assembly recodified the restrictions on lobbyist campaign contributions as N.C, Gen. Stat. § 163-278.13C. In order to provide guidance to members of your Association on the scope of these restrictions, you have posed several questions for consideration. The questions you posed and my responses to them are as follows:

1. May a lobbyist make recommendations to a third party regarding contributions to a legislative or executive branch candidate or candidate political committee? And, if "yes," may such a recommendation include a specific recommended contribution amount?N.C. Gen. Stat. § 163.278.13C provides that a lobbyist may not make contributions "to a candidate or candidate campaign committee" when the candidate is a legislator or a public servant. Additionally, it provides that a lobbyist may not collect and/or deliver multiple contributions to candidates or their committees for those candidates defined in (a)(1) and (2). There are no provisions that restrict a lobbyist from making recommendations to third parties about possible contributions and the amounts of those contributions. However, N.C. Gen. Stat. § 163-278.13B provides additional restrictions while the North Carolina General Assembly ("General Assembly") is in regular session. During regular sessions of the General Assembly, a lobbyist may not solicit a contribution from any individual or political committee on behalf of a limited contributee, which for purposes of this statute includes a member or candidate for the Council of State or a member or candidate for the General Assembly. Therefore, it is our opinion that a lobbyist could make recommendations to a third party regarding contributions including specific amounts, but the lobbyist could not solicit a third partyon behalf of the candidate during a regular session of the General Assembly. As the terms "recommend" and "solicit" are not defined by statute, in order to provide clarity, I have defined them, by drawing on dictionary definitions, as follows:

* "recommend" - Upon being asked, provide another with a suggestion about possible recipients and amounts of contributions.

* "solicit" - To request a contribution.

2. So long as a lobbyist does not physically collect contributions from multiple contributors, take possession of such contributions, or physically transfer or deliver the collected contributions, does N.C. Gen. Stat. § 163-278.13C(b) allow a lobbyist to make recommendations to multiple third parties regarding contributions to a particular legislative or executive branch candidate or candidate committee?

For the reasons outlined in question one, the answer is "yes" with the same restrictions during regular sessions of the General Assembly.

2(a). If "yes", may the lobbyist attend a fundraising event for a legislative or executive branch candidate in which more than one of the above third parties contributes to the candidate (again assuming the lobbyist does not physically collect contributions from the contributors, take physical possession of such contributions, or physically transfer or deliver such contributions)?

The lobbyist could attend a fundraising event as long as the lobbyist did not make a monetary contribution or give anything of value. This would include payment of admission to the event.

3. So long as a lobbyist does not physically collect contributions from multiple contributors, take possession of such contributions, or physically transfer or deliver the collected contributions, does N.C. Gen. Stat. § 163-278.13C(b) allow a lobbyist to solicit multiple third parties to make contributions to a particular legislative or executive branch candidate or candidate committee?

Except when the General Assembly is in regular session, a lobbyist is not prohibited from soliciting multiple third parties to make contributions to a particular legislative or executive branch candidate or candidate committee. Under the statute, the lobbyist could not collect contributions from multiple contributors and transfer or deliver the collected contributions. While the General Assembly is in regular session, lobbyists are prohibited from soliciting third parties to make contributions on behalf of legislative or executive branch candidates.

4. When a principal is associated with a PAC, may a lobbyist employed by that principal communicate to a candidate or campaign committee that the PAC has decided to contribute to the candidate and the amount of the contribution? Does it matter to the answer whether the PAC checks are cut and mailed from a location separate from the lobbyist directly to the candidate or committee(i.e. the lobbyist never takes possession)?N.C. Gen. Stat. § 163-278.13C does not prohibit a lobbyist from communicating with a candidate or campaign committee on any subject. Therefore, a lobbyist would be permitted to communicate to a candidate that the PAC they are associated with intends to make a contribution to that candidate's campaign. As long as the lobbyist doesn't take possession of multiple checks and deliver them to the candidate or campaign committee, the location where the checks were cut or mailed from would not be relevant. As has been stated above, there are prohibitions on soliciting contributions from individuals and other political committees on behalf of legislative and executive branch candidates while the General Assembly is in regular session.

5. Does N.C. Gen. Stat. § 163-278.13C allow a lobbyist or employee of a principal to host or organize a fundraiser for a candidate? N.C. Gen. Stat. § I63-278.13C does not address the activities of a lobbyist's principal or an employee of a principal. It only addresses a registered lobbyist as defined by Chapter 120C of the General Statutes. While the General Assembly is in regular session, a lobbyist's principal is included in the definition of "limited contributor" and is subject to the same limitations as a lobbyist. At times when the General Assembly is not in regular session, a lobbyist is prohibited from making contributions to legislative and executive branch candidates who meet the definitions referenced in N.C. Gen. Stat. § 163-278.13C(a) (1) & (2). The definition of "contribution" includes "anything of value whatsoever" given to a candidate in support of their nomination or election. Therefore, a lobbyist could not spend any of their own funds in organizing or hosting a fundraiser. This would include but not be limited to invitations, catering expenses, entertainment, or anything purchased for the event. If there were any rental expenses associated with the location of the event, the lobbyist could not provide payment to anyone for those costs.

Often fundraisers are held at the homes of a host. It has been the position of this office not to place a fair market value on a home if that home is not rented for similar events. It is difficult, however, to host an event and not incur any expenses for that event. If a lobbyist were to pay for anything it would be considered an in-kind contribution which would violate N.C. Gen. Stat. § 163-278.13C.

6. Can a lobbyist or employee of a principal set up a meeting with a third party and a candidate for the purpose of that third party giving the candidate a contribution? Can the lobbyist or employee of a principal attend the meeting? If so, can the lobbyist or employee of a principal do so with multiple but separate third parties?

While the General Assembly is in regular session, a lobbyist is prohibited from making and bundling contributions. Activities outside of those two prohibitions are not addressed by N.C. Gen. Stat. § 163-278.13C and are therefore not subject to regulation by the State Board of Elections. Planning and attending meetings (while the General Assembly is not in regular session) between potential contributors and candidates is not prohibited. Therefore, the number of meetings organized or third parties involved would not be relevant.

7. How do the statutes limit campaign involvement by a lobbyist or employee of a principal? Can the lobbyist or employee of a principal serve as campaign manager or county chair for a candidate? Can the lobbyist or employee of a principal volunteer to make calls or put a yard sign up for a candidate? Give strategic advice to a candidate?

Lobbyists may not make contributions, therefore any activities that would involve giving anything of value to a legislative or executive branch candidate or their committee as defined by N.C. Gen. Stat. § 163-278.13C(a)(l) & (2) would not be allowed. Providing volunteer services to a candidate is not considered a contribution under N.C. Gen. Stat. § 163-278.6(6) and would be allowed. Volunteer services could include making calls (if expenses were not incurred) and putting up yard signs for a candidate. As long as the lobbyist does not normally charge candidates for strategic advice, such advice could be given without violating any statute in Chapter 163 of the General Statutes.

This opinion is based upon the information provided in your letter of February 28, 2007. If the information should change, you should evaluate whether this opinion is still applicable and binding. Finally, this opinion will be filed with the Codifier of Rules to be published unedited in the North Carolina Register and the North Carolina Administrative Code.

Sincerely,

@#7#@

Gary O. Bartlett

cc: Julian Mann, III. Codifier of Rules

GARY O. BARTLETT

Executive Director

MAILING ADDRESS:

P.O. BOX 27255

RALEIGH, NC 27611-7255

April 21, 2008

The Honorable Joe Hackney, Co-Chair

The Honorable Linda Garrou, Co-Chair

The Honorable Julia Howard, Co-Chair

Host State Committee, 2009 Annual Conference of the Southern Legislative Conference

North Carolina General Assembly

16 West Jones Street

Raleigh, N.C. 27603-5925

Re: Request for Advisory Opinion Pursuant to N.C. Gen. Stat. § 163-278.23 on Applicability of Campaign Finance Laws to Fundraising for the 2009 Annual Conference of the Southern Legislative Conference in Winston-Salem

Dear Speaker Hackney, Senator Garrou and Representative Howard:

By memorandum dated March 10, 2008, you requested an advisory opinion on the applicability of the campaign finance laws to the work of the Host Committee for the 2009 Southern Legislative Conference Annual Meeting scheduled for August 15-19, 2009, in Winston-Salem. Your letter provides the detailed history of the Southern Legislative Conference ("SLC"). It is one of four regional branches of the Council of State Governments ("CSG"), which is a nonpartisan "joint governmental agency of this State." N.C. Gen. Stat. § 143-186. You indicate the CSG is also a nonprofit corporation that has 501(c) (3) tax exempt status.

The SLC holds an annual meeting in late summer for legislators, legislative staff, and their families with as many as 1800 individuals in attendance. Responsibility for hosting the annual meeting is rotated among the 16 member States of the SLC. These responsibilities include:

* Providing social and recreational activities for attendees and their families.

* Sponsoring a social event at the annual meeting to be held in Oklahoma City in July 2008 to promote the 2009 annual meeting.

* Providing printed materials such as souvenir programs, menus, and informational booklets.

* Transporting attendees, speakers, and VIPs.

* Providing onsite administrative support such as office space at the conference location, staff to assist the SLC staff, staff to conduct activities such as registration, and office equipment such as copiers and computers for the meeting.

* Providing gift bags for attendees (recommended but not required).

* Assisting with registration costs of attendees, including complimentary registration for contributors at designated contribution levels.

*Fundraising to cover or defray the costs of all of the above and providing accounting services for the annual meeting.

It is apparent from your letter that the host State is charged not only with making the meeting as productive and pleasant as possible for those attending from other States, but also with obtaining through cash or in-kind contributions funds to reduce the costs of the meeting for the SLC and those in attendance. The General Assembly has appointed a committee of legislators from both the Senate and the House to serve as the Host State Committee and delegated to it the above duties. Legislative staff will be providing support to the Host State Committee and the smaller committees it has formed to accomplish these tasks. One of those subcommittees is the Private Sector and Fund Raising Committee which plans to solicit cash and in-kind donations from private parties, including lobbyists and lobbyists' principals, to assist with the financing of the activities listed above. In the past, SLC host committees from other States have raised between $1,000,000 and $1,500,000 to cover meeting costs.

Your letter indicates that cash contributions will be made to the CSG or the SLC and will be deposited in an account designated for the 2009 Annual Conference. The Host Committee or the Legislative Services Commission will contract for the services needed for the meeting, and as those services are rendered will approve payment for them and forward invoices to the CSG. Providers of the services will be paid by the CSG using the funds raised by the Host Committee. Undoubtedly, registration fees will be collected from attendees and will also be deposited in the designated account for use in paying meeting expenses.

The question you present is:

With respect to election laws, are there any issues with or prohibitions on a member, or group of members, of the General Assembly, or other individuals at their direction, soliciting and receiving donations from individuals, businesses and other entities while the General Assembly is in regular session, or while the General Assembly is not in regular session?

The election laws potentially applicable to this issue are N.C. Gen. Stat. §§ 163-278.13B, -278.13C, and -278.16B in Article 22A of Chapter 163.

Limitations on the solicitation and acceptance of contributions by legislators and others during legislative sessions are set forth in N.C. Gen. Stat. § 163-278.13B. The word "contribution" is a defined term in Article 22A and

means any advance, conveyance, deposit, distribution, transfer of funds, loan, payment, gift, pledge or subscription of money or anything of value whatsoever, to a candidate to support or oppose the nomination or election of one or more clearly identified candidates, to a political committee, to a political party, or to a referendum committee, whether or not made in an election year, and any contract, agreement, promise or other obligation, whether or not legally enforceable, to make a contribution.

N.C. Gen. Stat. § 163-278.6(6). Even though the members and staff" for the Host Committee will be soliciting donations for the 2009 Annual Meeting of the SLC, your letter makes clear that these donations will not be used to support or oppose any candidate, political party or political committee. They will be used by a nonpartisan organization for an event unrelated to any given legislator's election or reelection. Thus, N.C. Gen. Stat. § 163-278.13B does not bar the fundraising activities for the 2009 Annual Meeting of the SLC.

Similarly, N.C. Gen. Stat. § 163-278.13C is applicable only to contributions as defined in N.C. Gen. Stat. § 163-278.6(6). Section 163-278.13C, among other things, prohibits lobbyists from making contributions to legislators who are candidates for reelection and from collecting contributions from others for legislators who are candidates. However, the funds to be raised by the Host Committee are not "contributions" as defined in N.C. Gen. Stat. § 163-278.6(6), thus the limitations in N.C. Gen. Stat. § 163-278.13C do not apply.

Your letter presumes that in-kind contributions will be made to the General Assembly. Under the campaign finance laws, in-kind contributions are just one type of contribution. As explained above, donations to the SLC or the CSG for the 2009 Annual Conference are not contributions within the meaning of the campaign finance statutes. However, this assumes that any in-kind contributions to the General Assembly for the 2009 Annual Conference are used for that Conference. No in-kind donations should be given, either directly or indirectly, to a candidate or candidate committee or other kind of political committee. Such donations would then constitute contributions under the campaign finance laws and subject to the statutes governing the source, reporting, and amount of contributions. In other words, in-kind contributions to the General Assembly for the 2009 Annual Conference would be treated as contributions if transferred to candidates or political committees for use in campaigns. An individual legislator or other State official or candidate for legislative or other State office attending the 2009 Annual Conference, however, could accept a complimentary gift offered to every attendee without it constituting a contribution under the campaign finance statutes.

Finally, N.C. Gen. Stat. § 163-278.16B specifies the use of contributions accepted by candidates or candidate campaign committees. If a legislator were to wish to donate from his or her campaign account to the SLC or CSG for the 2009 Annual Conference, then the question arises whether such expenditure would comply with this statute. A donation by a candidate campaign committee would appear to result from the legislator's holding of public office since the Annual Conference of the SLC is designed to promote sharing of ideas and foster working relationships among legislators of member States. Thus, it would be a permissible expenditure under N.C. Gen. Stat. § 163-278.16B(a) (2).

This letter addresses the election laws that most appear to be applicable to the question you presented. It does not address other types of laws, such as ethics provisions outside of Chapter 163. The agencies charged with administering any other laws should be consulted about whether the activities of the Host Committee are covered by those laws.

If you should have any questions about this response, please do not hesitate to contact me or Kim Strach, Deputy Director-Campaign Finance. This analysis is based on the statutes as they currently exist and the facts as recited herein. If the facts should change, or if the General Assembly should change the statutes discussed as it is certainly free to do, then the issues addressed may need to be revisited. As required by law, this opinion will be published unedited in the North Carolina Register by the Codifier of Rules.

Sincerely,

@#8#@

Gary O. Bartlett

Executive Director

Cc: Julian Mann III, Codifier of Rules

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