AGLO 1978 No. 24 - Aug 14 1978
ELECTIONS ‑- PUBLIC DISCLOSURE LAW ‑- REGULATION OF CAMPAIGN CONTRIBUTIONS AND EXPENDITURES
(1) Where a committee which supported a successful candidate for an elective office during 1976 incurred a campaign deficit which remains unpaid at the time of the commencement of the same candidate's next succeeding, 1978, campaign (either for reelection or election to another office), the question of whether a separate bank account must be maintained for or on behalf of the candidate in connection with each such campaign in order to satisfy the applicable requirements of the public disclosure law, chapter 42.17 RCW, will (as in any case) be dependent upon whether the committee was established as an ordinary or as a continuing political committee.
(2) If it is necessary to maintain a separate depository for the 1978 campaign, contributions made to the 1978 campaign may nevertheless be used to repay a loan made by the candidate to his or her 1976 political committee free of the $2,000 per year ceiling contained in RCW 42.17.095(3).
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August 14, 1978
Honorable Cathy Pearsall
State Representative, 29th Dist.
2604 S. 76th
Tacoma, Washington 98409 Cite as: AGLO 1978 No. 24
Dear Representative Pearsall:
By letter previously acknowledged you requested our opinion on two questions which we paraphrase as follows:
(1) Where a committee which supported a successful candidate for an elective office during 1976 incurred a campaign deficit which remains unpaid at the time of the commencement of the same [[Orig. Op. Page 2]] candidate's next succeeding, 1978, campaign (either for reelection or election to another office), must a separate bank account be maintained for or on behalf of the candidate in connection with each such campaign in order to satisfy the applicable requirements of the public disclosure law, chapter 42.17 RCW?
(2) If it is necessary to maintain a separate depository for the 1978 campaign, may contributions made to the 1978 campaign be used to repay a loan made by the candidate to his or her 1976 political committee free of the $2,000 per year ceiling contained in RCW 42.17.095(3)?
We answer your first question in the manner set forth in our analysis and your second question in the affirmative.
In our opinion the answer to your first question is entirely dependent upon whether the organization which incurred the debt in the 1976 election campaign was a "political committee" or, alternatively, a "continuing political committee" as those terms are defined in RCW 42.17.020. A political committee is defined by RCW 42.17.020(24) to be
". . . any person (except a candidate or an individual dealing with his own funds or property) having the expectation of receiving contributions or making expenditures in support of, or opposition to, any candidate or any ballot proposition."
A "continuing political committee, " in turn, is defined by RCW 42.17.020(9) to be
". . . a political committee which is an organization of continuing existence not established in anticipation of any particular election."
Both kinds or organizations are required by RCW 42.17.050 to maintain, throughout their existance, a single campaign [[Orig. Op. Page 3]] depository. The point, however, is that an ordinary political committee only exists for the period of the particular campaign for which it was established while a continuing political committee has a theoretically infinite existence which may span several election campaigns. Thus, it follows that the question of whether a new bank account must be established in a subsequent election is really a question of which kind of organization was created for the prior election. If it was simply a "political committee" and not a "continuing political committee" then a new political committee‑-and therefore a new campaign depository‑-would be required by RCW 42.17.050 under the facts of your first question.1/
To this we would only add the following further thoughts or comments regarding the foregoing dichotomy:
(1) If the requirements of RCW 42.17.040 are met there should generally be no question, at the outset, regarding the proper characterization of any particular committee‑-for subsection (2)(e) of the statutes specifically requires the statement of organization which is to be prepared and filed thereunder to include "A statement whether the committee is a continuing one; . . ."
(2) Generally speaking, since a continuing political committee is defined,supra, to be an organization which is not established in anticipation of any particular election, its goals would presumably extend beyond the support of a single candidate or ballot proposition.2/
[[Orig. Op. Page 4]] (3) This does not mean, however, that even an individual candidate is precluded from establishing a "continuing political committee" at the outset. It is certainly conceivable, and often happens, that a candidate may form a committee in anticipation of several successive candidacies to one or more offices. In that case the mere fact that the committee was established coincidentally with a single election would not preclude its existence as a "continuing political committee" if so designated from the outset pursuant to RCW 42.17.040(2)(e). Otherwise, we believe that we would be placing far too narrow an interpretation upon the phrase ". . . not established in anticipation of any particular election . . ." in RCW 42.17.020.
(4) While it might be argued that a "political committee" could change its status to a "continuing political committee" by amending its Statement of Organization pursuant to RCW 42.17.040(3), we are of the opinion that it cannot do so. This conclusion is required by the definitional language. A continuing political committee is defined so as not to be "established" in anticipation of any particular election. It is thus difficult to conceive of how such a committee could meet the literal language of the definition which requires that it be "established" when the act of amending itself would be a change in the "established" designation. Moreover, this conclusion is further supported by an examination of the reporting requirements for each kind of committee. The reporting requirements for a noncontinuing political committee are oriented around a single election. RCW 42.17.080. Such a committee is required to make reports up through the election campaign and a single report is required following the election. Continual reports after the election are required of such a committee only if it has an outstanding debt of obligation. A continuing political committee, on the other hand, is required to file the report during any month it receives contributions or makes expenditures and is required to file at the same times as an ordinary political committee whenever it becomes involved in any election. RCW 42.17.065. If a political committee could change its status from continuing to noncontinuing and vice versa, the committee would be able to manipulate the reporting requirements to serve its own purposes.
(5) Finally, in connection with the foregoing, it would appear to us that the burden upon the committee or candidate is not substantially different from the burden that would be imposed by concluding that the old political committee could amend its Statement of Organization. Assuming that either kind of committee would be involved in the election campaign, the timing of its reports would be identical. The only difference would be that a new political committee must establish a separate campaign depository and must file a fully completed Statement of Organization as opposed to an amendment to a prior Statement of Organization. Thus the burdens are substantially identical.
[[Orig. Op. Page 5]]
Having so answered your first question we turn, now, to your second which asks:
If it is necessary to maintain a separate depository of the 1978 campaign, may contributions made to the 1978 campaign be used to repay a loan made by the candidate to his or her 1976 political committee free of the $2,000 per year ceiling contained in RCW 42.17.095(3)?
We answer this question in the affirmative; i.e., in our opinion, contributions to a political committee supporting a candidate may be used to repay loans made by that candidate to his previous political committee free of any restrictions as to the amount of that loan.
Our rationale for this conclusion begins with an examination of a newly enacted section of the public disclosure law which generally prohibits a candidate's personal use of contributions received by a political committee. That section, enacted pursuant to § 6, chapter 336, Laws of 1977, 1st Ex. Sess. and now codified as RCW 42.17.125, provides as follows:
"Contributions received and reported in accordance with RCW 42.17.060 through 42.17.090 may only be transferred to a candidate's personal account or expended for a candidate's personal use under the following circumstances:
"(1) Reimbursement for or loans to cover lost earnings incurred as a result of campaigning. Such lost earnings shall be verifiable as unpaid salary, or when the candidate is not salaried, as an amount not to exceed income received by the candidate for services rendered during an appropriate, corresponding time period. All lost earnings incurred shall be documented and a record thereof shall be maintained by the candidate of the candidate's political committee. The committee shall include a copy of such record when its expenditure for such reimbursement is reported pursuant to RCW 42.17.090.
[[Orig. Op. Page 6]] "(2) Reimbursement for direct out-of-pocket election campaign and postelection campaign related expenses made by the candidate. To receive reimbursement from his political committee, the candidate shall provide the committee with written documentation as to the amount, date, and description of each expense and the committee shall include a copy of such information when its expenditure for such reimbursement is reported pursuant to RCW 42.17.090.
"(3) Repayment of loans made by the candidate to political committees, which repayment shall be reported pursuant to RCW 42.17.090."
Initially, we have a general observation regarding this statute. While the prohibition extends to a transfer to a "candidate's" personal account or for his or her personal use, it is our opinion that an individual retains the status of "candidate," within the contemplation of the law, from the time he or she becomes a candidate under RCW 42.17.020(5) until that person and all of his or her political committees have filed their final reports under RCW 42.17.080(2) and have no further reporting obligation under RCW 42.17.060 through 42.17.090.
While RCW 42.17.020(5) defines the point at which an individual becomes a "candidate," it does not deal with the termination of that status. In construing statutory language, we must determine the meaning intended by the legislature and thus is accomplished by reading the statute as a whole and, where possible, by looking to other parts of the act to determine the meaning of doubtful or ambiguous terms. In Re Bracken's Estate, 56 Wn.2d 17, 351 P.2d 151 (1960). Here, several other provisions of the public disclosure law use the term "candidate" with reference to time periods. RCW 42.17.080(2)(c) requires a campaign treasurer to file certain reports after the election and even such reports are required by RCW 42.17.080(4) and RCW 42.17.090(2) to be certified as correct by the "candidate." Further, RCW 42.17.095 refers to the surplus funds of a "candidate" and it is obvious that surplus funds cannot exist until after an election. Finally, RCW 42.17.095(6) provides that if a "candidate" initiates a separate, subsequent campaign, a new reporting obligation is imposed under RCW 42.17.040 through 42.17.090. It is thus clear that in using the term, "candidate," throughout the act, the legislature intended that status to continue until all campaign finances are closed.
[[Orig. Op. Page 7]] Moreover, even if it were nevertheless possible to argue that one is no longer a candidate after the election, we cannot discern anyrationale which would apply the prohibitions of RCW 42.17.125 only to the period prior to the election.
That statute, as above quoted, creates limited exceptions to the general rule that political contributions shall not be devoted to the personal use of the candidate. Those exceptions permit transfers to the candidate for the following three purposes:
(1) Reimbursement for lost earnings incurred as the result of campaigning;
(2) Reimbursement for out-of-pocket expenses incurred as the result of a campaign; and
(3) Repayment of loans made to the political committee.
Thus, clearly, a candidate may use contributions to repay loans made by that candidate to his or her previous political committee.
It is further to be noted that, in sanctioning these exceptions, the legislature did not fix any limit on the amounts that may be so used. At the same time, however, it can be anticipated that most transfers for the three listed purposes would be made from the surplus funds of a political committee after the election. The question thus arises as to whether a transfer of surplus funds for these limited purposes is nevertheless somehow subject to the limitation in RCW 42.17.095(3) which provides that a candidate (or a political committee supporting a candidate) may,
"(3) Transfer the surplus to one or more candidates or to a political committee or party: PROVIDED, That the aggregate value of all contributions transferred to all recipients under this subsection shall in no case exceed two thousand dollars in any one calendar year . . ."
Generally, where there is a potential conflict between one statutory provision that deals with a subject in a general way and another provision which deals with the same subject in a specific manner, the latter will prevail. Hama Hama v. Shorelines Hearings Bd., 85 Wn.2d 441, 536 P.2d 157 (1975).
[[Orig. Op. Page 8]] In applying this aid to statutory construction, in the instant case, it is our opinion that the provisions of RCW 42.17.125 deal with the specific matter of transfer to a candidate for his personal use while RCW 42.17.095 deals with transfers of surplus funds to candidates or political committees forany permitted use. In our judgment, therefore, contributions, whether they are surplus or otherwise, may be transferred for the specific purposes of RCW 42.17.125(1), (2) or (3) free of the $2,000 per year ceiling contained in RCW 42.17.095(3).
In support of this conclusion it should also be noted that the restriction on the amount of surplus funds which may be transferred to a political committee represents the only such limitation to be found in the act. Therefore, if this restriction were to apply to transfers for personal use as set forth in RCW 42.17.125, it would lead to the absurd result that contributions received before an election could be transferred in any amount while those remaining after an election would be subject to that ceiling. Realistically, however, most candidates will wait until their election campaign is over before they attempt to repay themselves for out-of-pocket campaign expenses or to repay loans made to their prior political campaign. Accordingly, to find that preelection contributions may be transferred in any amount for that purpose, but a postelection surplus is subject to a $2,000 ceiling would be absurd and such a conclusion would violate the rule of statutory construction which seeks to avoid absurd or unreasonable results. In Re Horse Heaven Irrigation District, 11 Wn.2d 218, 118 P.2d 972 (1941).
We trust the foregoing will be of assistance to you.
Very truly yours,
THOMAS G. "CHIP" HOLCOMB Jr.
Assistant Attorney General
*** FOOTNOTES ***
1/This campaign depository could, however, be a separate bank account in the same bank used in the 1976 campaign. The statute does not require that a separate bank be designated; however, the requirement to maintain a campaign depository could only be satisfied by the use of an account which is separate and distinct from the accounts used in prior campaigns by the candidate or his or her committee.
2/Examples of such organizations would include the state and local central committees of the major political parties which contribute support to various individuals at every election, organizations supported by corporations or corporate employees which provide support or opposition in a number of elections and those similar organizations supported by labor unions and their members which support their political philosophy in various election campaigns.