state board of elections

6400 Mail Service Center             Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Director                                                                                                                                                  PO Box 2169

                                                                                                                                                                Raleigh, NC 27602-2169

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-0135

 

October 8, 1998

 

Mr. George E. Wilson, Treasurer

Sampson County Republican Party

PO Box 1325

Clinton, NC 28328

 

                Re: Advisory Ruling issued under G.S. 163-278.23

 

Dear Mr. Wilson:

 

                In your letter dated September 29, 1998, you state that the Sampson County Republican Party is in the process of totally renovating the headquarters it owns.  New bathrooms, kitchen area, heat & air conditioning, new lighting, store front, ceiling, carpet, walls, and other items have been built and paid for from the Building Fund.  The request for a ruling is to determine is whether or not building fun money can be used to purchase appliances, desks, chairs, telephone system, and etc.

 

                An October 7, 1994 opinion on "Political Party Building Funds" permitted State political parties to accept contributions from business entities, including corporations into a separate segregated building fund.  Provided district and county executive committees strictly adhere to the provisions, district and county executive committee building funds may accept business contributions.  The provisions are as follows:

                1.  Business contributions solicited and accepted are designated for the building fund.

                2.  Potential business contributors are advised that all business contributions will be exclusively for the building fund.

                3. A separate segregated bank account in which only business contributions designated for the building fund will be deposited is established.

                4. The funds deposited in that separate account will be expended only to purchase or construct, or in payment of the mortgage, for a headquarters, or to refund contributions if a facility is not acquired.

                5.  No business funds received will be used for the purpose of influencing Federal, State, or local elections.

                6.  No limit, other than on a voluntary basis, is placed on the amount of the business contributions, individual or collectively, to the building fund.

                7.  The building fund contributions and expenditures shall be disclosed to the public in an annual report filed at the Campaign Reporting Office, no later than the last Friday in January of the following year.

 

                The opinion gave particular attention to the fact that the building fund ruling does not allow either monetary or in-kind contributions from any business entity for headquarters rent and utilities, either as a part of a building fund or into any political party fund or bank account.

 

                After careful review, and considering that the opinion provides for a building fund to receive business contributions only to purchase or construct or in payment of the mortgage for a headquarters, or to refund contributions if a facility is not acquired, the response must be no.  The Building Fund cannot be used to purchase equipment and furnishings for headquarters and should refund any business contributions that remain after reconstruction is complete and any mortgage is paid.

 

                I am sorry this ruling is unfavorable. However, the Sampson County Republican Party may certainly pay for equipment and furnishings from its treasury account holding funds contributed by individuals from their personal funds.

 

                                                                                                                Very truly yours,

 

 

                                                                                                                Gary O. Bartlett

                                                                                                                Executive Secretary-Director

STATE BOARD OF ELECTIONS

133 Fayetteville Street Mail

Suite 100

Raleigh, North Carolina 27601

 

 

 

GARY 0. BARTLETT                                                                                                                                                               Mailing Address:

Executive Secretary‑Director                                                                                                                                                       P.O. Box 2129

                                                                                                                                                                                                    Raleigh, NC 27602

                                                                                                                                                                                                         (919) 733‑7173

                                                                                                                                                                                                 Fax (919) 715‑0135

February 17, 2000

 

Mr. Ray C. Tutterow, Advertising Director

Davie County Enterprise Record

Post Office Box 99

Mocksville, North Carolina 27028

 

                                                Re: Campaign Advertising

 

Dear Mr. Tutterow:

 

Your letter asks several questions about disclosure for the media advertisement portion of the 1999 Campaign Reform Act. You seek an opinion pursuant to G.S. 163‑278.23 because you are a candidate for Davie County Register of Deeds.

 

After careful review by staff and counsel with the General Assembly and the Office of the Attorney General, the undersigned officer offers the following answers to your questions and provides the attached opinion.

 

The answer to your first question is yes. All advertisements in the print media require disclosure in the form of a "legend" or the statement: "Paid for by _____(Name of candidate, candidate campaign committee, political party organization, political action committee, referendum committee, individual, or other sponsor)." The legend must be 5% of the height of the printed space of the advertisement, but can be no smaller than 12 point type (This is 12 point type).

 

The second question has several parts. In answer to the first part: small "business" or "pahn" cards require a legend if the card includes support or opposition to clearly identified candidates or the candidates of a clearly identified political party. A card of any size that expressly advocates the election or defeat of a candidate must have a legend that is 5% of the height of the card, but no smaller than 12 point type.

 

The final part of the second question asks about posters displayed in yards and in windows. Yard signs and window signs (approximately 14 x 22 inches), and barn signs (3 x 5 foot or similarly sized, posters used on the sides of buildings, on walls, etc., generally without paying rental costs) are not considered media advertisements and do not require a legend.

 

Campaign paraphernalia such as balloons, bumper stickers, shopping bags, and nail files, etc., imprinted with a campaign message are not considered media advertisements and do not require a legend.

 

I trust these answers and the opinion provide the information you are seeking. Do not hesitate to contact this office any time you have questions.

 

                                                                                                                                Sincerely,

 

 

                                                                                                                                Gary 0. Bartlett

                                                                                                                                Executive Secretary‑Director

STATE BOARD OF ELECTIONS

133 Fayetteville Street Mall

Suite 100

Raleigh, North Carolina 27601

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Executive Secretary-Director                                                                                                            P.O. BOX 2169

                                                                                                                                                                RALEIGH, NC 27602

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                FAX (919) 715-0135

 

April 12, 2000

 

 

Representative Julia C. Howard

1023 Legislative Building

Raleigh, NC 27601-1096

 

Dear Representative Howard:

 

We are in receipt of your request for an opinion pursuant to N.C.G.S.163-278-23 concerning your involvement in a golf event sponsored by the Cooleemee Historical Society and others. On March 22, 2000, our office provided you with an oral opinion, and this letter serves as our response to your request for a written opinion pursuant to N.C.G.S.163-278-23.

 

It is our understanding that you have been asked to lend your name and support to a golf tournament in which you will be honored for your service to citizens of Davie and Davidson Counties.  All fees, donations and proceeds will be payable to the Cooleemee Historical Society. The event is not a campaign event and no proceeds will be payable to, deposited in, or used by your campaign account.

 

It is our opinion that your support of the charitable event and the use of your name does not constitute election activity that would be subject to the election laws of North Carolina, and therefore, would not need to be reported in any way as a campaign activity.

 

If we can be of further assistance, please do not hesitate to contact us.

 

                                                                                                                                Sincerely,

 

 

 

                                                                                                                                Gary O. Bartlett

                                                                                                                                Executive Secretary-Director

 

state board of elections

6400 Mail Service Center, Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Director                                                                                                                                                  P.O. Box 2169

                                                                                                                                                                Raleigh, NC 27602-2169

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-0135

October 2, 2000

Mr. Thomas A. Farr

Maupin Taylor & Ellis, P.A.

P.O. Box 12646

Research Triangle Park, NC 27709-2646

 

Re:  Request for Opinion Pursuant to G.S. 163-278.23

 

Dear Tom:

 

                In your letter of October 2, 2000, you request an opinion pursuant to G.S. 163-278.23 on two requirements for political campaign advertisements recently added to the North Carolina Campaign Reporting Act.

 

                The first question is relative to the requirement in G.S. 163-278.39(a)(5) that print media sponsored by a political party must state in the legend whether or not the mailing is authorized by a candidate.  You state that some NCGOP candidates may be generally aware that the NCGOP is planning to conduct mailings into certain state legislative districts and that some have given their positions on issues.  It is further state that beyond that, no Republican candidate has had any input into producing the mailings.

 

                Considering the information submitted it is my opinion that the candidates have not authorized the mailings described above.  Provided no further coordination occurs between the NCGOP and the Republican candidates it is appropriate for the NCGOP legend on these mailings to state:

 

"Paid for by the North Carolina Republican Party

Not authorized by a candidate"

 

                G.S. 163-278.39(a)(6) requires the name of the candidate who benefits to be listed if the mailings are coordinated with the benefiting candidates.  It is not necessary for the legend to include the names of the candidates who are intended to benefit from the mailing because there had been no consultation with them.

 

                The second question is whether or not the requirement for disclosure as an in-kind contribution in G.S. 163-278.11(b) applies to these mailings.  The first part of the requirement that "a political party executive committee that makes an expenditure that benefits a candidate or group of candidates shall report the expenditure, including the date, amount, and purpose of the expenditure and the name of and office sought by the candidate or candidates on whose behalf the expenditure was made" must be fulfilled.

 

                The second part that "a candidate who benefits from the expenditure shall report the expenditure or the proportionate share of the expenditure from which the candidate benefited as an in-kind contribution if the candidate or the candidate's committee has coordinated with the political party executive committee concerning the expenditure" is not required with the mailings.  The reporting requirement is based on whether or not the mailings were coordinated.

                Please feel free to contact me if you need assistance.

 

                                                                                                                Sincerely,

 

 

                                                                                                                Gary O. Bartlett

                                                                                                                Executive Secretary-Director

state board of elections

6400 Mail Service Center    Raleigh, NC 27699-6400

 

 

GARY O. BARTLETT                                                                                                                        Mailing Address

Director                                                                                                                                                  PO Box 2169

                                                                                                                                                                Raleigh, NC 27602-2169

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-0135

 

November 22, 2000

 

Ms. Libby Anderson

North Carolina Academy of Family Physicians, Inc.

P.O. Box 10278

Raleigh, NC  27605

 

RE:  Request under G.S. 163-278.23 for an opinion

 

Dear Ms. Anderson:

 

This is a response to your inquiry for the North Carolina Academy of Family Physicians Inc.'s political action committee, FAMPAC.

 

When a PAC is formed by a professional organization, unless it's statement of organization differs; the PAC's membership is limited to the members of the professional association.  In that situation, since only members could contribute to the PAC, any gifts to FAMPAC by non-members would be unlawful.  We are assuming that your continuing education courses are open to non-members.  If they are, and you decide to solicit funds for FAMPAC, it would be advisable to note in the solicitation that only members of the North Carolina Academy of Family Physicians could lawfully contribute.

 

Assuming that the political action committee FAMPAC was properly formed and has continued to comply with the election laws of North Carolina, a solicitation on your continuing education forms for this PAC, as set out in your letter of November 13, 2000, would appear not to violate the election law if:

 

1.  Contributions were only received from your membership and not from non-members.

 

2.  The solicitations for such contributions were given only to your members and not any non-member.

 

This would mean that if your solicitation was printed on the registration form, you would need to make sure that particular type of registration form would not be sent to non-members.  It might be simpler to give a separate solicitation sheet to your members as they check-in at the registration table.

 

This is an opinion tendered under the provisions of G.S. 163-278.23.

 

Sincerely,

 

 

Gary O. Bartlett

 

state board of elections

6400 Mail Service Center             Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Director                                                                                                                                                  PO Box 2169

                                                                                                                                                                Raleigh, NC 27602-2169

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-0135

 

February 28, 2001

 

 

Mr. Ferrell Blount

Southern Republican Leadership Conference 2002

PO Box 12949

Raleigh, NC 27605

 

Re: Southern Republican Leadership Conference 2002

 

Dear Mr. Blount,

 

Your letter dated February 22, 2001 details the plans for the Southern Republican Leadership Conference 2002 (SRLC) and requests a ruling pursuant to G. S. 163-278.23.

 

Contingent upon all the assurances and performances set out in your letter, SRLC will not be required to file a report disclosing the finances of the conference. The more important assurances given are as follow:

 

·         The SRLC will be an independent business entity with separate accounts from the North Carolina Republican Party.

·         All funds raised from corporations will be solicited by SRLC and spent on the actual conference.

·         The North Carolina Republican Party will collect registration fees and will not solicit or accept any registration fees from any business entity. 

·         Any potential revenue derived by the North Carolina Republican Party will come totally from individual participants.

 

The November 1, 1989 letter of this office from Executive Secretary-Director Alex K. Brock to Mr. R. Jack Hawke and the October 31, 1989 letter of Mr. Hawke to this office, are attached and are incorporated into this opinion by reference.

 

If any of the circumstances of the 2002 SRLC conference set out in your recent letter change, please contact this office.

 

 

                                                                                Sincerely,

 

 

                                                                                Gary O. Bartlett

                                                                                Executive Secretary-Director

 

Attachments:       Your letter of February 22, 2001

Letter of Mr. Jack Hawke of October 31, 1989

This office's letter of November 1, 1989  

 

cc:  North Carolina Republican Party

 

state board of elections

6400 Mail Service Center             Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                          Mailing Address:

Director                                                                                                                                                   PO Box 2169

                                                                                                                                                                Raleigh, NC 27602-2169

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-0135

April 18, 2001

 

Mr. Duane Royal

Treasurer Sampson County Republican Party

PO Box 1325

Clinton, NC 28328

 

RE: Donation Use as to Party Headquarters

 

Dear Mr. Royal,

 

Your letter of March 29, 2001 requests guidance for political party building fund donation use and a ruling pursuant to GS 163-278.23. We welcome your request in order to have the opportunity to provide more detail to all parties as to this issue.

 

GS 163-278.19B controls the issue of donations to political party headquarters building funds. Please note (4) of that statute that specifically prohibits the use of building funds to pay utilities or to purchase equipment other than fixtures. Only expenditures authorized by GS 63-278.19B(4) may be made from the building fund. As such, the building fund can not be used to:

 

(1)            Pay utilities

(2)            Purchase furniture unless it becomes a fixture

(3)            Purchase computers or related information technology items unless they become fixtures

 

A display case affixed to the building would be a fixture, which could be paid for out of the building fund. A fixture is an item attached to realty to which an expectation attaches that it will stay on or in the real estate. This would include light fixtures, sinks, bathtubs, commodes, heating and air conditioning systems, built-in kitchen appliances, wallpaper or paint, installed carpet or flooring, widow dressings, and other similar type items.

 

Since furniture and computers are not fixtures, they are not allowed to be paid under the provisions of GS 63-278.19(B). Thus the prohibition against contributions from corporations and business entities would come into play to make in-kind donations, of these types and from the list above, from businesses unlawful. In-kind donations by businesses of items and services allowed to be paid from a political party building fund would be lawful.

 

This office would interpret the "renovation" language found in the statute to allow repairs and maintenance to the building and fixtures (both as to the cost of materials and labor) to be paid for out of a political party building fund. Maintenance would also include pest control, lawn-care, and landscaping for the headquarters. Business entities would be able to provide funds or in-kind donations for these maintenance and repair needs as per the provisions of GS 163-278.19A.

 

This office would interpret that maintenance of the building would also include the costs of maintaining property insurance upon it and fixtures, but would exclude liability coverage and personal property coverage on non-fixture contents. Thus it may be necessary that the insurance premium on the party headquarters be unbundled so as to determine the actual cost of property coverage to the building and fixtures.

 

The payment of property tax upon the building and its fixtures from the building fund will be allowed by this office, based upon the fact that the payment of such taxes are necessary to maintain the building ownership in the political party, and that tax payments are often covered in escrow accounts paid into jointly with the allowable mortgage payment. Since items of personal property can not be bought with building fund monies, the tax on personal property can not be paid from the building fund.

 

Based upon a review of building fund reports filed with this office, it appears that disbursements from building funds for personal property have been made. Notice is hereby given that this office will not review building fund reports for enforcement purposes for a period until July 1, 2001 to allow political party organizations to amend their building fund reports to reflect corrected disbursements. The parties are allowed, as well, to amend their reports to reflect additional retroactive disbursements from building funds based upon any allowance of the same contained in this opinion. I would also ask the state parties headquarters staff to share this information with counties that have or plan to have county headquarters.

 

                                                                                                Sincerely,

 

                                                                                                Gary O. Bartlett

                                                                                                Executive Secretary-Director

 

Cc: North Carolina Democratic Party

Cc: North Carolina Republican Party

Cc: North Carolina Libertarian Party

 

state board of elections

6400 Mail Service Center ● Raleigh, NC 27699-6400

 

GARY O. BARLETT                                                                                                                          Mailing Address

Director                                                                                                                                                  PO Box 27255

                                                                                                                                                                Raleigh, NC 27611-7255

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-1035

 

July 25, 2001

 

Attorney Steven B. Long

Maupin, Taylor, and Ellis

PO Box 19764

Raleigh, NC 27619-9764

 

RE: Your Letter of July 16, 2001

 

Dear Mr. Long:

 

This letter contains an opinion of this office being reported as per GS 163-278.23.

 

There is no legal requirement under GS  163-278.7A or any other North Carolina election law or regulation that requires a separate bank account to support only the North Carolina activities of an FEC-registered PAC. The conclusion in your July 16, 2001 letter is correct under the current law.

 

If any of the circumstances set out in your recent letter changes, please contact this office.

 

                                                                                                                Sincerely,

 

 

 

                                                                                                                Gary O. Bartlett

                                                                                                                Executive Secretary-Director

 

 

state board of elections

6400 Mail Service Center ● Raleigh, NC 27699-6400

 

 

GARY O. BARLETT                                                                                                                          Mailing Address

Director                                                                                                                                                  PO Box 27255

                                                                                                                                                                Raleigh, NC 27611-7255

                                                                                                                                                                (919) 733-7173

                                                                                                                                                                Fax (919) 715-1035

 

July 26, 2001

 

Ms. Glenda Clendenin, Director

Moore County Board of Elections

PO Box 787

Carthage, NC 28327

 

Re: Your July 3, 2001 request for an opinion

 

Dear Ms. Clendenin:

 

This letter contains an opinion of this office pursuant to GS 163-278.23.

 

The answer to your first question is that it is permissible for a PAC to organize for the sole purpose of supporting a candidate. The fact that there is a candidate's committee already formed is not relevant.

 

A PAC can only contribute up to $4000 per election to a candidate. An election is considered as a primary, second primary (if on the ballot), a run-off election, and an election to fill a vacancy, and a general election. (See GS 163.278.6(8)) So it is possible to give up to $12,000 to a candidate goes through a primary, second primary, and a general election.

 

As to your question about possible in-kind contributions when a PAC makes expenditures for a candidate, the expenditure aren't treated as in-kind if they are independent expenditures. However if the expenditures were coordinated, those expenditures from a PAC, even one controlled by a candidate or a group of candidates, must be shown in-kind on the one or more of candidate's committee report.  A coordinated expenditure benefiting more than one candidate will have to reported in-kind on each benefited candidate's report and properly noted in the PAC report.

 

It is permissible for a candidate to allow a PAC to handle campaign activities as long as the contributions and expenditures are fully reported. However, the $4,000 contribution limitation would apply.

 

If expenditures and other campaign efforts by a PAC, group, or individuals benefit a candidate, and are performed in coordination with that candidate's campaign, then those expenditures will be counted toward the $4,000 contribution limit. In other words, a person or PAC could not spend $3,000 on a coordinated mailing for a candidate and then contribute $4,000 on top of that. The later contribution would be limited to $1,000 the remaining balance of the $4,000 contribution limits after the $3,000 coordinated mailing.  If the PAC makes an expenditure that benefits more than one candidate, then the coordinated expenditure is offset against the $4,000 contribution limitation of each candidate benefited. So if the mailing referred to above supports three candidates, then $3000 is offset against the $4,000 limit that the PAC may give each of the three candidates. Again, the reporting requirements will mandate that each of the candidates reports must show this as a contribution and the PAC report must show it as an expenditure benefiting more than one candidate.

 

Expenditures by PACs, groups, or persons that may benefit a candidate, but are not done in coordination with that candidate's campaign are independent expenditures and not subject to the $4,000 contribution limit. However, GS 163-278.12 requires the reporting of independent expenditures in excess of $100. The general prohibition against campaign contributions by corporations and business entities would apply to coordinated expenditures and independent expenditures.

 

Who determines what is coordinated or independent? The elections office in which the campaign must file its reports determines the issue, and this issue must be studied on a case by case basis. As a general rule, in order to find coordinated expenditures, there must have been some prior communication between the provider of the expenditure and the candidate. For instance, a citizen sends a candidate a print ad he plans to run to a candidate, asking for the candidate's review of the ad. The candidate makes a change in the ad, and sends it back. That has become a coordinated expenditure. But if the candidate received the unsolicited ad for review and does nothing, then if the ad is run, it continues to be an independent expenditure.  If a county office has questions or concerns on these type issues, the State Board of Elections office will offer advice upon request.

 

Based upon recent court decisions involving our office, it appears that groups that deal with issue advocacy and do not expressly ask voters to or not to "vote" or "support" a candidate, are not considered PACs and do not have to file as a PAC or report their activities. Again, this office would be more than happy to consider any situation that might present itself to your office.

 

                                                                                                Sincerely,

 

 

                                                                                                Gary O. Bartlett

                                                                                                Executive Secretary-Director

 

state board of elections

6400 Mail Service Center ● Raleigh, NC 27699-6400

 

GARY O. BARLETT                                                                                                          Mailing Address

Director                                                                                                                                  PO Box 27255

Raleigh, NC 27611-7255

(919) 733-7173

                                                                                                                                                Fax (919) 715-1035

 

July 26, 2001

 

Ms. Becki Gray

House Minority Leader’s Office

NC House of Representatives

Raleigh, NC

 

RE: GS 163-278.13B

 

Dear Ms. Gray:

 

This letter contains an opinion of this office being reported as per GS 163-278.23.  The prohibition against fund-raising during the General Assembly session is found in GS 163-278.13B, parts of which are set below.

 

163-278.13B. Limitation on fund-raising during legislative session.

(a)  Definitions. – For purposes of this section:

(1)           "Limited contributor" means a lobbyist registered pursuant to Article 9A of Chapter 120 of the General Statutes, that lobbyist's agent, that lobbyist's principal as defined in G.S. 120-47.1(7), or a political committee that employs or contracts with or whose parent entity employs or contracts with a lobbyist registered pursuant to Article 9A of Chapter 120 of the General Statutes.

(2)           "Limited contributee" means a member of or candidate for the Council of State, a member of or candidate for the General Assembly.

(3)           The General Assembly is in "regular session" from the date set by law or resolution that the General Assembly convenes until the General Assembly either adjourns sine die or recesses or adjourns for more than 10 days.

(4)           A contribution is "made" during regular session if the check or other instrument is dated during the session, or if the check or other instrument is delivered to the limited contributee during session, or if the limited contributor pledges during the session to deliver the check or other instrument at a later time.

(5)           A contribution is "accepted" during regular session if the check or other instrument is dated during the session, or if the limited contributee receives the check or other instrument during session and does not return it within 10 days, or agrees during session to receive the check or other instrument at a later time.

(b)  Prohibited Solicitations. – While the General Assembly is in regular session, no limited contributee or the real or purported agent of a limited contributee shall:

(1)           Solicit a contribution from a limited contributor to be made to that limited contributee or to be made to any other candidate, officeholder, or political committee; or

(2)           Solicit a third party, requesting or directing that the third party directly or indirectly solicit a contribution from a limited contributor or relay to the limited contributor the limited contributee's solicitation of a contribution. It shall not be deemed a violation of this section for a limited contributee to serve on a board or committee of an organization that makes a solicitation of a limited contributor as long as that limited contributee does not directly participate in the solicitation and that limited contributee does not directly benefit from the solicitation.

(c) Prohibited Contributions. – While the General Assembly is in regular session:

(1)           No limited contributor shall make or offer to make a contribution to a limited contributee.

(2)           No limited contributor shall make a contribution to any candidate, officeholder, or political committee, directing or requesting that the contribution be made in turn to a limited contributee.

(3)           No limited contributor shall transfer any amount of money or anything of value to any entity, directing or requesting that the entity use what was transferred to contribute to a limited contributee.

(4)           No limited contributee or the real or purported agent of a limited contributee prohibited from solicitation by subsection (b) of this section shall accept a contribution from a limited contributor.

(5)           No limited contributor shall solicit a contribution from any individual or political committee on behalf of a limited contributee ………………..

It is important to note the definition of "limited contributor" and "limited contributee" which restricts the article's prohibition of giving to a registered lobbyist, that lobbyist's agent, the lobbyist's principal (who the lobbyists represents), or a political committee that employs or contracts with or whose parent entity employs or contracts with a registered lobbyist. A political committee of a legislator can not solicit funds, during a session, from a registered lobbyist or anyone that works for or has a registered lobbyist. A fundraiser that involves individuals, who are not lobbyists or work for or have hired lobbyists, during the current session, is allowable under the law.

 

                                                                                                                Sincerely,

 

 

 

                                                                                                                Gary O. Bartlett

                                                                                                                Executive Secretary-Director

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center  ·  Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Director                                                                                                                                                  PO Box 27255

                                                                                                                                                                Raleigh, NC 27611-7255

                                                                                                                                                                (919) 733-7173

 Fax (919) 715-0135

 

 

 

 

                                                                                                January 10, 2002

 

Mr. Bill James

2010 Draymore Lane

Matthews, NC 28105

 

Dear Mr. James:

 

In a letter dated October 11, 2000, Susan Nichols of the Office of the Attorney General determined that certain personal gifts made to Mr. Arthur Griffin, an elected member of the Charlotte-Mecklenburg Board of Education, were not "contributions" governed by and reportable under the campaign finance reporting laws of North Carolina.

 

By a series of emails beginning in November 2001, and continuing most recently on January 2, 2002, you report that you have received a check for $100 from an entity called "Kearns and Company," which you have not cashed.  You state that you are aware that you may not receive political contributions from business entities, but, citing Ms. Nichols's letter, you state further your intention to cash the check and treat it as a personal gift, not a campaign contribution.  In that connection, you ask several questions which I will attempt to answer in this opinion.

 

Because analysis of your questions may be applicable to other potential candidates, I am responding pursuant to the paragraph in N. C. Gen. Stat. 163-278.23 which authorizes the Executive Director of the State Board of Elections to issue opinions to candidates and others.  As required by this statute, this opinion will be filed with the Codifier of Rules to be published unedited in the North Carolina Register.  This opinion will also be posted on the web page for the State Board of Elections (www.sboe.state.nc.us).

 

Your series of e-mails beginning in November 2001, present several questions.  First, you ask whether your may accept a contribution of $100 from "Kearns and Company" with a residence listed as the business address.  You believe the company is owned by a husband and wife and has not been incorporated.  Under N. C. Gen. Stat. 163-278.6(6) a contribution is defined as

 

"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… ."

 

Since you characterize the check from Kearns and Company as a contribution, it must have been given in support of your future candidacy or towards a debt still extent from a previous candidacy.

 

Your specific concern is whether the campaign finance statutes permit you to accept corporate or other business contributions.  Pursuant to N. C. Gen. Stat. 163-278.19, a "corporation, business entity, labor union, professional association or insurance company" is prohibited from making contributions to a candidate.  Exceptions to this prohibition include when a corporation forms a political committee and makes contributions through it or the donor is an entity that meets the criteria of N. C. Gen. Stat. 163-278.19(f).  The case which you reference, N. C. Right to Life, Inc. v. Bartlett, 168 F.3d 705 (4th Cir. 1999), caused the General Assembly to legislate the exception set forth in 163-278.19(f) but did not otherwise remove the prohibition against business entities making contributions to candidates.

 

The campaign reporting staff will assume that any report listing a contribution by "Kearns and Company" is a business contribution, even when the address for the company is a residence, unless your obtain assurances from the contributor that he or she is making the contribution from personal funds maintained in a partnership account.  Without documentation such as a letter so stating, you should not accept the contribution and if you have deposited it, you should return the contribution.

 

Your second question is when you are considered a "candidate" for campaign reporting purposes.  A "candidate" is defined for the campaign reporting article in N. C. Gen. Stat. 163-278.6(4) as follows:

 

"The term 'candidate' means any individual who, with respect to a public office…has filed a notice of candidacy or a petition requesting to be a candidate, or has been certified as a nominee of a political party for a vacancy or has otherwise qualified as a candidate in a manner authorized by law, or has received funds or made payments or has given the consent for anyone else to receive funds or transfer anything of value for the purpose of exploring or bringing about that individual's nomination or election to office. … Status as a candidate for the purpose of this Article continues if the individual is receiving contributions to repay loans or cover a deficit or is making expenditures to satisfy obligations from an election already held."

 

You state in your initial e-mail that you have an open campaign account.  The Kearns and Company contribution was apparently intended for it.  Your question about the permissibility of accepting a corporate contribution indicates the donation was a political contribution and not a personal gift.  The intent of the person or persons making a donation at the time it is given, and the context in which the donation is made, is very important in determining whether it is a political contribution or a personal gift.  Now you would like to characterize the contribution from Kearns and Company as a personal gift rather than a campaign contribution.  To do so would be inconsistent with the apparent intent of the original contribution.  You initially characterized it as a contribution and your e-mail gave no indication that it was a gift to you individually.  This is the key distinction between the facts you have posed and those underlying the dinner honoring Arthur Griffin.  All the evidence in that situation was that funds in excess of the expenses for the dinner honoring Mr. Griffin might be given to him as a personal gift.  The donors of those funds did not intend for them to be used to support or oppose his candidacy for elective office or his duties in office and they were not solicited for that purpose.

 

You are correct that it is possible for a candidate to undermine the campaign reporting system by accepting gifts from individuals, loaning his or her campaign the same amount of money as the gift, and then maintaining it was never intended to be a political contribution.  Quite frankly, the campaign reporting system is dependent on the honesty, integrity, and desire of candidates and their supporters to comply with applicable statutes.  It is the intent of the law to regulate and provide disclosure of contributions made to candidates or to elected officials in support "of their duties and activities while in an elected office."  N. C. Gen. Stat. 163-278.346.  It is not the intent of the campaign reporting statues to regulate personal gifts made to candidates or elected officials by friends and family members for the recipient's personal use.  Thus, I appreciate your stated desire to comply with applicable statutes and your forthrightness in characterizing the check you received from Kearns and Company as a contribution and not as a gift.  You may not, however, now change its character as a contribution by choosing to "accept" it as a personal gift.

 

Finally, there are motions pending in the case of N. C. Right to Life, Inc. v. Leake (E.D.N.C. No. 5:99-CV-798-BO(3)).  There is no date by which the court must rule on these motions.  If the decision on the motions has some bearing on this opinion then I will so inform you.  Until you receive notification that this opinion is no longer in effect, you may rely on it as to the facts on which it is based.

 

                                                                                                                                                Sincerely,

 

 

 

                                                                                                                                                Gary O. Bartlett

                                                                                                                                                Executive Secretary

 

 

cc:           State Board of Elections Members

Kim Westbrook, Deputy Director Campaign Reporting

Peter S. Gilchrist, III, District Attorney for the 26th Prosecutorial District

Molly Masich, Director of APA Services, N. C. Register

Susan K. Nichols, Special Deputy Attorney General

Robert Joyce, Institute of Government

Dot Presser, Former State Board of Elections Member

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center  ·  Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Director                                                                                                                                                  PO Box 27255

                                                                                                                                                                Raleigh, NC 27611-7255

                                                                                                                                                                (919) 733-7173

Fax (919) 715-0135

May 8, 2003

 

Senator Virginia Foxx

11468 Highway 105

Banner Elk, N.C. 28604

 

RE: Request for formal opinion as to GS §163-278.5 and GS § 163-278.13B

 

Dear Senator Foxx,

 

This letter contains an opinion of this office being reported as per GS § 163-278.23.

 

You have requested if it is possible for your active Congressional political committee to continue to solicit and accept political contributions during the course of your campaign for Congress. The North Carolina State Board of Elections can only answer that question from the perspective of North Carolina campaign reporting laws. This office can not give you an opinion that such operation would or would not violate Federal election laws. The Federal Election Commission is the entity that is empowered to render such an opinion in the context of Federal election law.

 

Under North Carolina law, the concurrent operation of the two political committees would be acceptable as long as the various contributions to the different committees are clearly designated as required by GS § 163-278.20, and the contributions to your State Senate committee comply with the other legal restrictions contained in Chapter 163 of the General Statutes. This conclusion is based upon a reading of GS § 163-278.5, which clearly precludes the application of Article 22A of Chapter 163 of the General Statutes to elections for federal office.

 

You have also made inquiry as to whether the provisions of GS § 163-278.13B prevents the solicitation and acceptance of campaign contributions for your Congressional campaign during the prohibited time periods and from the prohibited contributors. It appears that GS § 163-278.5 would again prevent the application of this state statute to your campaign for the Federal office of U.S. Congresswoman..

 

The opinion of this office that GS § 163-278.13B would not apply to a Federal race has been shared with the Honorable Colon Willoughby, the District Attorney for Wake County, and he concurs in this opinion. This opinion is limited as to issues of North Carolina law, and does not and can reflect the position, if any, of the Federal Election Commission on the issue in question. If the North Carolina State Board of Elections can be of further help to you on issues of North Carolina election law, please contact us.

 

                                                                                                Sincerely,

 

 

                                                                                                Gary O. Bartlett

                                                                                                Executive Director

 

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center  ·  Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address:

Director                                                                                                                                                  PO Box 27255

                                                                                                                                                                Raleigh, NC 27611-7255

                                                                                                                                                                (919) 733-7173

Fax (919) 715-0135

May 8, 2003

 

Mr. John B. McMillan

Manning Fulton & Skinner PA

PO Box 20389                                                                     Via Hand Delivery

Raleigh, NC 27619-0389

 

Re:          North Carolina Association of Realtors (NCAR) and its Affiliated Political Committee; Request for Advisory Opinion Pursuant to N.C. Gen. Stat. § 163-278.23

 

Dear Mr. McMillan:

 

You have requested a written opinion pursuant to the final paragraph of N.C. Gen. Stat. § 163-278.23 on the compliance of the political committee of the North Carolina Association of Realtors (NCAR) with the requirements of Article 22A of Chapter 163 of the North Carolina General Statutes. The affiliated political committee of the NCAR is the North Carolina Realtors Political Action Committee (“RPAC”).

 

NCAR has more than 25,000 members from throughout North Carolina. RPAC is a separate segregated fund affiliated with NCAR and organized by its officials and members as a political committee pursuant to N.C. Gen. Stat. § 163-278.19(b). Under this statute, members of a professional association may establish and contribute to such a political committee so long as the contributions are voluntary and the source of any contribution is not dues or other fees required as a condition of membership in the NCAR and do not derive from “any commercial transaction whatsoever.” NCAR proposes that each NCAR affiliate that collects RPAC contributions create a “Transmittal Account,” such as is used pursuant to the regulations of the Federal Election Commission.  See 11 C.F.R. 102.6(c)(4)(ii)(A). The NCAR local affiliates will serve as the collecting agents for RPAC, and will establish transmittal accounts to which they will deposit checks from members of NCAR.  NCAR affiliates will then be responsible for disbursing the checks according to the directions of the member of NCAR.  The amounts directed to be contributed to RPAC must be deposited into its separate segregated fund directly from the transmittal accounts and should not be deposited into any NCAR operating accounts. All contributions to RPAC must be reported as such according to the requirements of Article 22A of Chapter 163 and are subject to the limitations of that Article.

.

The record-keeping, reporting and transmittal requirements will be significant for handling these contributions.  The NCAR and RPAC must take great care to assure there is a “paper trail” for each contribution received by RPAC that shows the amount of the contribution, the source of the contribution, that the contribution came from funds of the NCAR member, and that the contribution was voluntarily given. Except for deposit and disbursement from the transmittal accounts, the monies originating as contributions to RPAC must be kept segregated from the dues and other funds of the NCAR.  So long as the transmittal accounts will be maintained in this manner, with the necessary record keeping and reporting, it is my opinion that the transmittal accounts are an appropriate mechanism for the safeguarding and tracing of voluntary contributions to RPAC. Transmittal accounts meeting these requirements will not be deemed a political committee subject to the requirements of Article 22A of Chapter 163 of the General Statutes.

 

This opinion is based upon the facts as stated in your letter dated April 28, 2003.  If those facts 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,

 

 

                                                                                                                Gary O. Bartlett

                                                                                                                Executive Director

 

cc: Julian Mann III, Codifier of Rules

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center · Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                                        Mailing Address

Director                                                                                                                                                                  PO Box 27255                                                                                                     June 21, 2004                                                       Raleigh, NC 27611-7255

                                                                                                                                                                                (919)733-7173

                                                                                                                                                                                Fax (919)733-0135

 

Mr. John R. Wallace

Wallace, Creech & Sarda, LLP

P.O. Box 12065

Raleigh, NC  27605

 

Re:          North Carolina Democratic Party's Request for Advisory Opinion pursuant to N.C Gen. Sat. § 163-27.23 on Use of Private Aircraft

 

Dear Mr. Wallace:

 

You have requested a written opinion pursuant to N.C. Gen. Stat. § 163-278.23 on the application of the reporting requirements and contribution limits of Article 22A of Chapter 163 of the North Carolina General Statutes to the use of private aircraft by the North Carolina Democratic Party and its nominees.  You anticipate that representatives and nominees of the Party, particularly statewide candidates, will travel extensively this election year and may use private aircraft at times.  Private individuals have on occasion offered to the Party's representatives, including nominees, the use of private aircraft in which they have an ownership interest.  You request guidance on several specific questions that may arise with the respect to the use of private aircraft.

 

There are several means by which a candidate or party political committee may obtain the use of aircraft.  A political committee may purchase a ticket on commercial aircraft or may contract with a charter airline service in an arms-length transaction.  In both instance, the actual expenditure for the ticket or the charter service should be reported.

 

Contributions may not exceed $4,000 per primary or election and must be made by an individual.  G.S. 163-278.13.  Aircraft may be owned by an individual or may be owned by a corporation or other business entity.  If the aircraft is individually owned and its use is donated to a candidate or political committee, the fair market value of the donated use should be reported as an in-kind contribution by the recipient committee under G. S. 163-278.6(6) and 278.8.

 

The use of an aircraft owned by a corporation or business entity, however, may not be donated to a candidate, party or political committee. G.S. 163-278.19(a).  However, in the instance in which a corporate executive is allotted a certain and finite use of a corporate aircraft in compensation for and in consideration of employment, the individual may upon prior approval of the campaign reporting office, donate his or her right to use such aircraft.  In the event such donation is intended, the prospective donee must advise the State Board Campaign Reporting Office five (5) business days prior to the intended use of the corporate aircraft providing the State Board of the following matters: (1) a description of the plane to be used including manufacturer, model number and weight; (2) the intended flight path and distance; (3) whether the crew members are volunteers or are to be provided by the corporation along with the use of the aircraft; (4) expected terminal and related charges; and (5) whether the executive is provided with unlimited or limited usage of the corporate aircraft and if limited, the number of hours or miles such use which are granted per anum.

 

Upon review of the submission, the State Board may determine that the proposed usage is acceptable and upon such determination, such usage shall constitute an in-kind contribution by the individual donor, the value of which shall be established in accordance with the subsequent paragraphs of the instant advisory opinion.  However, the State Board of Elections Campaign Reporting Office may determine that the proposed flight will constitute a contribution by a corporation or business entity not otherwise permitted to contribute and may decline to approve the contribution.  In any event, with respect to any approved flight, usage of the aircraft may only be approved where the access and usage to the aircraft is part of an employee's compensation package and is reported to state and federal tax and other regulatory authorities.  Furthermore, the employee may only donate the use of his or her share of such aircraft to a candidate or committee in an amount not to exceed $4000.00 per primary or general election.

 

A more difficult question is how to value fairly the donation of the use of aircraft.  I have been unable to locate any established, controlling legal or accounting standard ascertaining the value of the use of a donated aircraft; however, there is information publicly available that should permit political committees to ascertain a fair valuation of donated aircraft and crew.  David Roy Blackwell, a licensed pilot and Special Deputy Attorney General in the Attorney General's Office, has identified multiple, publicly available sources for assessing the costs of owning and operation private aircraft.  See Memorandum from D. Blackwell to G. Bartlett (6 May 2004) (copy attached).

 

In calculating the donated use, or in evaluating how much compensation is owed for the use of a private aircraft that is not donated, the first step is to determine the average cost per flight hour of the make and model aircraft.  The average cost per flight hour may be determined from one of the web sites listed in Mr. Blackwell's letter.  Once the average cost per flight hour is determined, it should be multiplied by the number of flight hours fairly attributable to the political committee's use.  These hours would include flight time necessary to reposition the aircraft. 

 

Some of the average cost per hour data includes the average cost of the appropriate crew for the aircraft.  If so, you do not need to separately determine the crew costs per flight hour.  If the crew costs are not included, you must first determine if the pilot is a volunteer.  Sometimes pilots who own their own aircraft will volunteer flight time to a candidate or political committee.  Volunteer services are not included in the definition of a contribution.  G.S. 163-278.6(6).  If the pilot or pilots services are not voluntarily given, them Mr. Blackwell has surveyed the current costs and they range per hour from $30 per flight hour for a single engine pilot with a three-hour minimum to $90 per flight hour with a $300 per day minimum for a turboprop or light jet twin-engine aircraft.  Any time associated with the trip that the pilot or crew must spend in addition to actual flight time, and travel expenses they charge in addition to their other compensation, should be added to the estimated value of the contribution if it is paid by someone other than the committee.  If the pilot costs are paid by the committee, then they would be reported as expenditures.

 

In sum, if a political committee wishes to accept the donated use of an aircraft or its crew, it is essential that the committee report that use as an in-kind contribution.  Information is available by which a committee may assign a reasonable value to the donation.  In auditing reports listing contributions or expenditures for the use of aircraft, this office will use the above principles and information to evaluate the reasonableness of the value assigned.  The committee should specifically disclose the type of aircraft used, the number of hours it was used, and the number of crew members who were compensated for the use.  The committee should be prepared to explain the assumptions it used in calculating the costs associated with committee's use of the aircraft.  Finally, the total contributions of an individual donor should not exceed $4,000.  This office will be happy to answer any questions that may arise as a committee determines the value of a particular contribution of the use of an aircraft.

 

This opinion is based upon the facts as stated in your letter dated February 19, 2004.  If those facts should change, you should evaluate whether this opinion is still applicable and binding.  In addition, changes in statutes or case law may affect this opinion and you should evaluate their applicability.  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,

 

 

 

 

                                                                                                                                                Gary O. Bartlett

                                                                                                                                                Executive Director

 

cc:           Julian Mann III, Codifier of Rules

                Kelly L. Loving, Robinson Bradshaw & Hinson

STATE BOARD OF ELECTIONS

6400 Mail Service Center · Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                                        Mailing Address

Director                                                                                                                                                                  PO Box 27255                                                                                                     October 1, 2004                                                   Raleigh, NC 27611-7255

                                                                                                                                                                                (919)733-7173

                                                                                                                                                                                Fax (919)733-0135

 

Mr. J. David James

Smith, James, Rowlett & Cohen, L.L.P.

Post Office Box 990

Greensboro, North Carolina 27402-0990

 

Re:          Request for Advisory Opinion pursuant to N.C. Gen. Stat. § 163-278.23 on Questions Related to the Scope of Articles 22E and 22F of Chapter 163 of the N.C. General Statutes

 

Dear Mr. James:

 

You have requested on behalf of Teamsters Local 391 and the political committee “Carolina Drive” a written opinion pursuant to N.C. Gen. Stat. § 163-278.23 on the scope of certain statutory requirements of Articles 22E and/or 22F of Chapter 163 of the North Carolina General Statutes.

 

You ask several questions with respect to the permissible source of funds for electioneering communications and the reporting of any funds spent on electioneering communications.  First, you ask whether “only new funds raised and maintained in separate and segregate accounts, comprising only funds directly contributed by individuals” may be used for “the purchase or provision of electioneering communications pursuant to Articles 22E and 22F.” With limited exceptions, only an “individual, committee, association, or any other organization or group of individuals” may make disbursements for electioneering communications. The source of the funds used for the disbursements must be individuals and the entity making the disbursement must be able to clearly document that all funds originated from individuals. 

 

If an entity has maintained an account that has only funds originating from individuals, those funds do not have to be “new” in the sense that they have been raised since the passage of Article 22E and 22F. General Statutes 163-278.81 and -278.91 recognize in subdivision (b)(5) that disbursements for electioneering communications may originate from a “segregated bank account that consists of funds contributed solely by individuals directly to that account for electioneering communications.”  In addition, a corporation exempt from taxation under section 501(c)(4) of the Internal Revenue Code of 1986 or a political organization defined by section 527(e)(1) of the Code may make expenditures for communications paid for exclusively from funds provided by individuals and maintained in a segregated bank account without their being deemed “electioneering communications.” G.S. 163-278.82(a) & -278.92(a). But not all disbursements for electioneering communications have to originate from segregated funds. Subdivisions (b)(6) of G.S. 163-278.82(a) and -278.92(a) contemplate that there may be disbursements from funds other than segregated bank accounts, presumably by entities meeting all the criteria set forth in G.S. 163-278.19(f). Thus, when Articles 22 E and F are read as a whole, they dictate that no funds for electioneering communications may be from an account in which funds from corporations, labor unions or other prohibited sources were commingled with funds from individuals unless the entity making the disbursement for the electioneering communication fits within the narrow statutory exception for entities meeting all the criteria of G.S. 163-278.19(f).

 

You next ask whether the accounts in which the funds used for electioneering communications are deposited must be maintained in North Carolina.  Neither Article 22E nor Article 22F imposes a requirement that the accounts be maintained in this State.  In providing disclosure of disbursements for electioneering communications, the entity making the disclosure is asked to provide the name of the individual who controls the accounts for the entity making the disbursement and that individual’s mailing address, telephone number, their principal place of business or employer’s name, and their occupation. This information is requested so that the State Board has the information necessary to contact the appropriate representative of the entity making the disclosure if it has questions about the reports the entity has filed. The State Board has promulgated a reporting form for electioneering communications and it is available in editable pdf format on the State Board’s web page (www.sboe.state.nc.us/index_cfrs.html). A copy of the form and instructions is attached.

 

Next you ask whether “the State Board intends to apply ‘consultation and coordination standards’ drawn from the Federal Election Campaign Act as is more fully addressed in the administrative scheme promulgated by the Federal Election Commission.”  As you are undoubtedly aware, on September 18, 2004, the United States District Court for the District of Columbia rejected the coordination regulations adopted by the Federal Elections Commission (“FEC”) implementing the Bipartisan Campaign Reform Act of 2002 (“BCRA”) in the case of Shays v. FEC (No. 02-1984(CKK)). The FEC announced on September 28 that it had voted to appeal the decision but it had “not yet determined whether it will ask the court of appeals to review all, or only some, of the rules remanded to the Commission by the district court.” (www.fec.gov) The State Board may review the evolving case law on the validity of the FEC regulations, as well as developments with respect to the statutes or regulations of other jurisdictions dealing with consultation and coordination, in order to better understand and apply North Carolina’s statutes; however, the State Board does not consider regulations adopted by another jurisdiction to be in any way binding on it.

 

Rather, in interpreting North Carolina’s statutes, the State Board will rely on ordinary principles of statutory construction. A fundamental principle on which it will rely is that words used in a statute will be given their common or ordinary meaning unless the General Assembly has specifically defined them.  Food Town Stores, Inc. v. City of Salisbury, 300 N.C. 21, 265 S.E.2d 123 (1980).  In addition, “in the absence of a contextual definition, [the State Board] may look to dictionaries to determine the ordinary meaning of words within a statute.” Perkins v. Ark.Trucking Servs, Inc., 351 N.C. 634, 638, 528, S.E.2d 902, 904 (2000).

 

The term “independent expenditure” is defined in N.C. Gen. Stat. § 163-278.6(9a) in pertinent part to mean “an expenditure to support or oppose the nomination or election of one or more clearly identified candidates that is made without consultation or coordination with a candidate or agent of a candidate whose nomination or election the expenditure supports or whose nomination or election the expenditure opposes.”  (Emphasis supplied.)  The State Board will apply the common understanding of the words used in this definition to determine whether an expenditure is independent. If there is any doubt about the meaning of a word used in the definition, then the State Board may rely on a dictionary to determine the meaning of a word. In addition, if a word has been construed by a North Carolina court in an analogous context, then the meaning given the word by the court will be significant.

 

The purpose of an advisory opinion under N.C. Gen. Stat. § 163-278.23 is to provide an opinion to candidates, committees and others regarding compliance with the campaign reporting statutes.  It is a vehicle for providing guidance on the application of the statutes to a set of facts.  Whether an expenditure is “made without consultation or coordination” will of necessity be made on a case-by-case basis considering the pertinent facts under the principles set forth herein. Since your letter presents no facts to which the statutes may be applied, I am unable to provide any more definitive guidance at this time. You are encouraged in the future to request an opinion with respect to a given set of facts if you are uncertain of the application of the campaign reporting statutes to those facts.

 

Changes in statutes or case law may affect this opinion and you should evaluate their applicability in relying on it.  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,

 

 

 

                                                                                                                Gary O. Bartlett

                                                                                                                Executive Director

 

cc:           Julian Mann III, Codifier of Rules

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center · Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                                        Mailing Address

                                                                                                                                                                                PO Box 27255

Raleigh, NC  27611-7255

 

September 22, 2005                                                                                           

                                                                                                                                                                               

 

Mr. Dennis E. McCollum

Chairman, Union County Republican Party

1431 Helms Shortcut Road

Monroe, NC  28112

 

Dear Mr. McCollum:

 

This letter contains an opinion of the Executive Director of the State Board of Elections pursuant to N.C. Gen. Stat. 163-278.23.

 

In your request, you seek an opinion as to whether an individual obtaining a credit card that earns "reward dollars" could direct such dollars be sent "to their named political party."  Further, you have inquired about the requirements of any such credit card agreement and a statement as to whether this method of contributing would be deemed a corporate contribution.

 

It is my opinion that this method of contributing is permissible and would not be deemed a corporate or business contribution as long as the individual, the political party committee, and the credit card company each comply with requirements to ensure compliance with Article 22A of Chapter 163 of the North Carolina General Statutes.  Based on the scenario you have provided, if an individual is able to obtain documentation from the credit card company that the "reward dollars" are in fact earned by the individual and would be directed to the individual, and that the credit card company will direct only the amount earned by the individual to the political party committee, then the individual can direct such contribution to the political party committee.  Additionally, the individual would be required to provide a letter to the political party committee setting forth their intention to contribute their "reward dollars" to the political party committee, along with all required disclosure information.  The political party committee must be able to obtain from the credit card company detailed information regarding each contribution made by an individual and the specific date of each contribution.  If the credit card company is unable to provide this information to the political party committee within seven days of the financial transaction, the contribution may not be received by the political party committee. 

 

Proper documentation by all parties must be maintained and available for inspection upon request.  If any party involved in the financial transaction fails to provide the aforementioned documentation, the contribution(s) would not be allowed.

 

This opinion is based upon the information provided in your letter dated August 8, 2005.  If the facts should change, you should evaluate whether this opinion is still applicable and binding.  In addition, changes in statutes or case law may affect this opinion and you should evaluate their applicability.  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.

 

Please feel free to contact Kim Strach, Deputy Director-Campaign Finance, with any questions you may have concerning this or any other campaign finance matter.  Your interest in complying with the campaign finance regulations is greatly appreciated.

 

Sincerely,

 

 

 

 

Gary O. Bartlett

Executive Director

 

cc. Julian Mann III, Codifier of Rules

STATE BOARD OF ELECTIONS

6400 Mail Service Center · Raleigh, NC 27699-6400

 

GARY O. BARTLETT                                                                                                                        Mailing Address

Executive Director                                                                                                                               PO Box 27255

Raleigh, NC  27611-7255

 

August 24, 2006

 

The Honorable Bill Daughtridge

340B Legislative Office Building

Raleigh, NC  27603-5925

 

Dear Representative Daughtridge:

 

This is to formalize our conversation yesterday in which you requested an advisory opinion pursuant to G.S. 163-278.23 regarding permissible uses of campaign funds from a candidate's campaign committee.  You want to ensure that your committee complies with current law as well as changes in the law which become effective October 1, 2006.

 

It is my understanding that your committee would like to make expenditures to a charitable organization.  More specifically, your committee would like to purchase a gas grill and donate it to a non-profit organization which would use it for fund raising purposes.

 

This is a legitimate use of campaign funds under our current campaign finance laws.  Under Session Law 2006-161, which becomes effective October 1, 2006, the law is more specific about permissible committee expenditures.  Campaign committees may make "[c]ontributions to an organization described in section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C. 170(c)), provided that the candidate or the candidate's spouse, children, parents, brothers, or organizations will be permitted subject to the restriction that the candidate or the candidate's listed family members may not be employed by the organization."  Under both current law and Session Law 2006-161, any expenditures by a campaign committee would need to be disclosed on campaign finance reports filed with this office.

 

This opinion is based upon the facts as stated in our conversation on August 23, 2006.  If those facts 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,

 

 

Gary O. Bartlett

Executive Director

 

cc:           Julian Mann III, Codifier of Rules

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center l Raleigh, North Carolina 27699-6400

 

 

GARY O. BARTLETT

Executive Director

 

 

Mailing Address:

P.O. BOX 27255

RALEIGH, NC 27611-7255

 

 

 

October 19, 2006

 

Senator Charlie Albertson

North Carolina General Assembly

525 Legislative Office Building

Raleigh, NC  27603-5925

 

Dear Senator Albertson:

 

This is to memorialize our conversation and your communication dated October 16, 2006, in which you have requested an advisory opinion pursuant to G.S. §163-278.23 regarding permissible uses of campaign funds from a candidate's campaign committee.  You also asked whether there are restrictions on one candidate's ability to volunteer in his brother's campaign for another office.  

 

It is my understanding that your brother, Arliss Albertson, is a candidate for re-election in a County Commission District that is incorporated within the North Carolina Senate District where you are a candidate.  You want to help your brother, but at the same time wish to make sure you are compliant with campaign finance laws.

 

Your committee is eligible to make a contribution (direct or in-kind) not to exceed $4,000 per election. You may contribute to your brother's campaign amounts funds from your personal funds that exceed the $4,000.00 limit.  Contributions to a candidate by his siblings are not limited. Below is the pertinent part of the governing statute:

 

§ 163‑278.13.  Limitation on contributions.

(a)  No individual, political committee, or other entity shall contribute to any candidate or other political committee any money or make any other contribution in any election in excess of four thousand dollars ($4,000) for that election.

(b)  No candidate or political committee shall accept or solicit any contribution from any individual, other political committee, or other entity of any money or any other contribution in any election in excess of four thousand dollars ($4,000) for that election.

(c)  Notwithstanding the provisions of subsections (a) and (b) of this section, it shall be lawful for a candidate or a candidate's spouse, parents, brothers and sisters to make a contribution to the candidate or to the candidate's treasurer of any amount of money or to make any other contribution in any election in excess of four thousand dollars ($4,000) for that election.

(d)  For the purposes of this section, the term "an election" means any primary, second primary, or general election in which the candidate or political committee may be involved, without regard to whether the candidate is opposed or unopposed in the election, except that where a candidate is not on the ballot in a second primary, that second primary is not "an election" with respect to that candidate.

 

Though you are a candidate, there is no prohibition against your serving as a volunteer in your brother's campaign.  Below is the definition of contribution set forth in our campaign finance laws.  The bold portion is the pertinent portion.  

 

§ 163‑278.6.  Definitions.

(6)           The terms "contribute" or "contribution" mean 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. These terms include, without limitation, such contributions as labor or personal services, postage, publication of campaign literature or materials, in‑kind transfers, loans or use of any supplies, office machinery, vehicles, aircraft, office space, or similar or related services, goods, or personal or real property. These terms also include, without limitation, the proceeds of sale of services, campaign literature and materials, wearing apparel, tickets or admission prices to campaign events such as rallies or dinners, and the proceeds of sale of any campaign‑related services or goods. Notwithstanding the foregoing meanings of "contribution," the word shall not be construed to include services provided without compensation by individuals volunteering a portion or all of their time on behalf of a candidate, political committee, or referendum committee. The term "contribution" does not include an "independent expenditure." If:

a.             Any individual, person, committee, association, or any other organization or group of individuals, including but not limited to, a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986) makes, or contracts to make, any disbursement for any electioneering communication, as defined in G.S. 163‑278.80(2) and (3) and G.S. 163‑278.90(2) and (3); and

b.             That disbursement is coordinated with a candidate, an authorized political committee of that candidate, a State or local political party or committee of that party, or an agent or official of any such candidate, party, or committee that disbursement or contracting shall be treated as a contribution to the candidate supported by the electioneering communication or that candidate's party and as an expenditure by that candidate or that candidate's party.

 

This opinion is based upon the facts as stated in our conversation on August 23, 2006.  If those facts 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,

 

Gary O. Bartlett

Executive Director

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center l Raleigh, North Carolina 27699-6400

 

 

GARY O. BARTLETT

Executive Director

 

 

Mailing Address:

P.O. BOX 27255

RALEIGH, NC 27611-7255

 

 

 

December 11, 2006

 

The Honorable Charles W. Albertson

525 Legislative Office Building

Raleigh, N.C. 27603-5925

 

Dear Senator Albertson:

 

This is to formalize our conversation on December 4, 2006, in which you have requested an advisory opinion pursuant to G.S. § 163-278.23 regarding permissible uses of campaign funds from a candidate's campaign committee.  Specifically, you want to ensure that you comply with changes in S.L. 2006-161 that became effective on October 1, 2006.

 

It is my understanding that your committee would like to make expenditures to reward campaign contributors, volunteers, office staff members or persons with whom you interact as part of running for and holding public office.  These expenditures may be tickets purchased from a University or a museum, a thank you dinner, a gift or a charitable contribution made in the honor of such persons.  These are legitimate uses of campaign funds under our current Campaign Finance laws and Session Law 2006-161.  Below is the statute that governs these expenditures.

 

"§ 163‑278.16B. Use of contributions for certain purposes.

(a)  A candidate or candidate campaign committee may use     contributions only for the following purposes:

(1)           Expenditures resulting from the campaign for public office by the candidate or candidate's campaign committee.

(2)           Expenditures resulting from holding public office.

(3)           Contributions to an organization described in section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C. § 170(c)), provided that the candidate or the candidate's spouse, children, parents, brothers, or sisters are not employed by the organization.

(4)           Contributions to a national, State, or district or county committee of a political party or a caucus of the political party.

(5)           Contributions to another candidate or candidate's campaign committee.

(6)           To return all or a portion of a contribution to the contributor.

(7)           Payment of any penalties against the candidate or candidate's campaign committee for violation of this Article imposed by a board of elections or a court of competent jurisdiction.

(8)           Payment to the Escheat Fund established by Chapter 116B of the General Statutes.

 

To ensure full compliance with Campaign Finance disclosure laws, the committee must document for its records the relationship of those who benefit from any expenditure and their ties to the committee's campaign or the elected official's public office.  Then any expenditure must be accurately stated on Campaign Finance reports.

 

Please be aware that Session Law 2006-161 prohibits a contribution to a charitable organization if the candidate's spouse, children, parents, brothers or sisters are employed by the organization or on any board governing the organization.

 

Another option available to you is the use of a booster fund.  In short, this fund is governed by all contribution and expenditure laws, is used for support of an elected official's duties and activities while in elective office, and requiring that the elected official must make semi-annual reports in January or July.  Below is the language contained in G.S. §163-278.36:

 

§ 163‑278.36.  Elected officials to report funds.

All donations to, and all payments from any "booster fund," "support fund," "unofficial office account" or any other similar source made or used in support of an individual's candidacy for elective office, or in support of an individual's duties and activities while in an elective office shall be deemed contributions and expenditures as defined in this Article and shall be reported as contributions and expenditures as required by this Article. The reports due in January and July of each year shall show the balance of each separate fund or account maintained on behalf of the elected office holder. (1977, c. 615; 1999‑31, s. 4(c).)

 

The purpose of S.L 2006-161 is to limit the wide discretion candidates and political committees previously were allowed in how campaign funds were spent.  That purpose should be kept in mind by all committees.  Whenever a committee is in doubt about whether an expenditure is proper, it should, as has been done here, request an opinion pursuant to G.S. §163-278.23.

 

This opinion is based upon the facts as stated in our conversation December 4, 2006.  If those facts 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,

 

                                                                               

                                                                                Gary O. Bartlett

 

STATE BOARD OF ELECTIONS

6400 Mail Service Center l Raleigh, North Carolina 27699-6400

 

 

GARY O. BARTLETT

Executive Director

 

 

Mailing Address:

P.O. BOX 27255

RALEIGH, NC 27611-7255

 

 

 

October 2, 2014

 

Mr. John R. Wallace

Wallace, Nordan & Sarda, L.L.P.

P. O. Box 12065

Raleigh, N.C. 27605

 

Re:          Advisory Opinion Pursuant to N.C.G.S. § 163-278.23; Use of Political Committee Funds for Legal Fees and Expenses

 

Dear Mr. Wallace:

 

You have asked for an opinion pursuant to N.C.G.S. § 163-278.23 on whether, under Article 22A of Chapter 163 of the General Statutes, the funds of the Jim Black Committee may be spent for the legal expenses of the Committee, its Treasurer Virginia Kelly and other campaign staff, Speaker Black, and Speaker Black's legislative staff.  Effective October 1, 2006, "[a] candidate or candidate campaign committee may use contributions only for the following purposes" as set forth in N.C.G.S. § 163-278.16B:

 

(1)           Expenditures resulting from the campaign for public office by the candidate or candidate's campaign committee.

(2)           Expenditures resulting from holding public office.

(3)           Contributions to an organization described in section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C. § 170(c)), provided that the candidate or the candidate's spouse, children, parents, brothers, or sisters are not employed by the organization.

(4)           Contributions to a national, State, or district or county committee of a political party or a caucus of the political party.

(5)           Contributions to another candidate or candidate's campaign committee.

(6)           To return all or a portion of a contribution to the contributor.

(7)           Payment of any penalties against the candidate or candidate's campaign committee for violation of this Article imposed by a board of elections or a court of competent jurisdiction.

 

Legal fees and expenses have been incurred because of investigations into the fund raising activities of the Jim Black Committee, its treasurer and others, including the Speaker himself, and investigations related to his tenure in legislative office. These legal expenses arising from investigations into his campaigns or service in office appear to fall under the statute's authorized purposed in that they are "[e]xpenditures resulting from the campaign for public office by the candidate or candidate's campaign committee" or "[e]xpenditures resulting from holding public office."  Thus, they are permitted expenditures under Article 22A of Chapter 163 of the General Statutes.

 

It could be argued that legal fees incurred because of activities which are ultimately deemed to be illegal are not proper expenditures under the statute.  Such a ruling would be inconsistent, however, with the legislature's determination in subsection (7) of N.C.G.S. § 163-278.16B that any penalties assessed against "the candidate or candidate's campaign committee for violation" of Article 22A of Chapter 163 of the General Statutes may be paid from the committee's funds.  If a penalty resulting from an investigation into a campaign finance violation is a permissible expenditure, then it is reasonable to infer that the legislature intended that it is also a permissible expenditure for a candidate's committee to pay any legal fees incurred in the course of the investigation that led to the penalty.

 

For your information, a study committee of the Senate has been appointed to study the issue of legal assistance funds for candidates and elected officials. Any legislation adopted by the General Assembly on this issue may impact this opinion. 

 

This opinion is based upon the facts as stated in your letter of December 21, 2006. If those facts should change, you should evaluate whether this opinion is still applicable and binding.  Finally, this opinion is made pursuant to N.C. Gen. Stat. § 163-278.23 and will be filed with the Codifier of Rules to be published unedited in the North Carolina Register and the North Carolina Administrative Code.

 

                                                                                                                Sincerely,

                                                                                                               

                                                                                                                Gary O. Bartlett

 

cc:  Julian Mann, III Codifier of Rules