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Interpretative Opinion 96-12: Contribution Limitations

January 16, 1997
 

Charles A. Ailstock, Manager
Government Relations - DC
Potomac Electric Power Company
1900 Pennsylvania Avenue, NW
Washington, DC  20068

Re:    Interpretations of  DC Law 11-144

Dear Mr. Ailstock:

This is in response to your request for a written opinion of the interpretation of DC Law 11-144, the “Contribution Limitation Initiative Amendment Act of 1996" effective June 13, 1996.  I must apologize for the delay in the issuance of this opinion.  However, because of the complexity of the issues which will be recurring for this office, it was my best judgment to seize whatever time was necessary to ensure the issuance of a sound, well-reasoned, and considered opinion.

In general, DC Law 11-144 repeals § 401 of the District of Columbia Campaign Finance Reform and Conflict of Interest Act, approved August 14, 1974 (88 Stat. 459; DC Code § 1-1441); and amends §§ 3 and 5 of the District of Columbia Campaign Contribution Limitation Initiative of 1992" ( DC Law 9-204; DC Code § 1-1441.1 et seq.), effective March 17, 1993.

You raise several issues related to the contribution limitations imposed by § 3 of the new  law ( DC Law 11-144).  The following addresses the issues raised in seriatim, as presented in your request.

First, you ask the meaning of the term, “election”, for purposes of the contribution limitations.  The term, “election”,  as defined by DC Code § 1-1401(1) (1981 Edition and 1992 Replacement Volume), means a “primary, general, or special election held in the District of Columbia for the purpose of nominating an individual to be a candidate for election to office or for the purpose of electing a candidate to office or for the purpose of deciding an initiative, referendum, or recall measure, and includes a convention or caucus of a political party held for the purpose of nominating such a candidate.”  For purposes of the contribution limitations, a primary and general
election are considered one election; therefore, contributions to either or both elections may not exceed, in the aggregate, the allowable limits for the office sought.

Second, you inquire as to whether the $8,500.00  aggregate limit applies to all candidates for all offices for a particular election cycle, or to all candidates for a particular office for a particular cycle.  DC Code § 1-1441.1(b)(1), as amended by DC Law 11-144, prohibits any person from making “any contributions in any 1 election for Mayor, Chairman of the Council, each member of the Council, and each member of the Board of Education (including primary and general elections, but excluding special elections), which when combined with all other contributions made by that person in that election to candidates and political committees exceeds $8,500.00."

DC Code § 1-1441.1(b), as amended by DC Law 11-144, is substantially identical to former DC Code § 1-1441(b) (repealed by DC Law 11-144), with the exception of the exclusion of “special elections” from the election cycle used in calculating aggregate contribution limitations; in addition to the phrase, “to candidates and political committees”; and the change in the maximum contributable amount from “$4,000.00" to “$600.00" to $8,500.00.”

Based on the legislative history of the “Full Political Participation Act of 1978", DC Law 2-101, effective August 18, 1978, it has been a longstanding policy of this Office to interpret the aggregate contribution ceiling of now repealed DC Code § 1-1441(b), as later modified by Initiative No. 41, DC Law 9-204, as applying to each particular office per election cycle.  For example, a person may contribute a maximum of $8,500.00  to all candidates running for office of Mayor during a clearly identified election cycle.  Further, the legislative history of the “Full Political Participation Act of 1978" records the inquiry of the Board of Elections and Ethics as to whether the term, “election”, as used in DC Code § 1-1161 (c ) (1973 Edition), the predecessor to DC Code § 1-1441(b), referred to “all candidates for all offices in a particular election period (including primary and general), or to each contest for an office, or to a particular set of offices, e.g., the Office of Mayor.”  See Report No. 1 on Bill No. 2-218 (page 9) of the Committee on Government Operations, Council of the District of Columbia, dated February 15, 1978.

In response thereto, the Committee on Government Operations clarified that the amendment of § 3(k) would clearly indicate that the then $4,000.00 contribution ceiling was for “all elections associated with candidacy for a particular office, e.g., the Office of Mayor, each member of the Council (regardless of number of candidates or  number of elections involved)”.  See Section-By-Section Analysis of Bill No. 2-218, at pp. 33-34 of Committee Report No. 1.

As a consequence of the repeal of DC Code § 1-1441(b), the legislative history of the “District of Columbia Contribution Limitation Initiative Amendment Act of 1996", DC Law 11-144, effective June 13, 1996, was reviewed to determine if the intent of the Council in establishing a new aggregate limit was to again create a ceiling on all contributions in the race for a given office.  The Report on Bill 11-427, “ the District of Columbia Contribution Limitation Initiative Amendment Act of 1996", of the Committee on Government Operations, was not instructive in this regard.

Third, you ask whether the $8,500.00 aggregate limit tracks the candidate for an election cycle or applies to the office the candidate is seeking.  Here, again, the legislative history of the “Full Political Participation Act of 1978" was instructive where the Committee on Government Operations clarified that the then contribution ceiling of $4,000.00 applied to  “all elections associated with the candidacy for a particular office, e.g., the Office of Mayor, . . .”  Therefore, the $8,500.00 aggregate contribution limit  applies to the office the candidate is seeking.

Fourth, you ask whether contributions made by an individual, a company and a PAC are governed individually by the aggregate limit or whether any of these need to be counted as one.  You cite an example concerning whether PEPCO needs to include its PEPCO PAC contributions with its corporate contributions for purposes of the limitation.  The term, “person”, as defined by DC Code § 1-1401(10), means an individual, partnership, committee, corporation, labor organization and any other organization.  The enumerated entities included in the term, “person”, are governed individually by the aggregate limit unless entities exist as affiliated or connected organizations, which would require their contributions to be aggregated for purposes of the contribution limitations.

A “connected organization” as defined by 3 DCMR § 9900 (1994) means any organization which is not a political committee but which directly or indirectly establishes, administers, or financially supports a political committee.  A connected organization may be, inter alia, a corporation.  In such instances, 3 DCMR § 3007.14 (1994) provides that “a corporation, its subsidiaries, and all political committees established, financed, maintained or controlled by the corporation and its subsidiaries share a single contribution limitation.  Although § 3007.14 references repealed DC Code § 1-1441, its application remains appropriate to the contribution limitations imposed by DC Code § 1-1441.1.

Fifth, you inquire concerning whether contributions made to ANC Commissioners are included in the aggregate limit  and, if so, how they are accounted for within the election cycle.  Although DC Code  § 1-1441.1 imposes an individual candidate contribution limitation of $25.00 on contributions in support of a candidate for member of an Advisory Neighborhood Commission, this law does not enumerate the election for ANC Commission as subject to the $8,500.00 aggregate ceiling imposed per election cycle.

Sixth, you ask how the contribution limitations apply to special elections.  The individual candidate contribution limitations established by DC Code § 1-1441.1(a) apply to special elections, e.g., $2,000.00 to candidates for the office of Mayor; $1,500.00 to candidates for the office of Council  Chair, etc.  However, the $8,500.00 aggregated contribution ceiling applicable to a particular elective office in primary and general elections does not apply to special elections.  Similarly, the $5,000.00 aggregate contribution limitation established by DC Code § 1-1441.1(d)(1), as applied to contributions made to any one political committee in any one election cycle, includes primary and general elections, but expressly excludes special elections from its coverage.

Seventh, you inquire concerning the definition of a principal political committee and a political committee, and how they differ?  A principal campaign committee as set forth in DC Code § 1-1412(a)  functions as the primary organization designated by a candidate as a conduit through which all  other political committees accepting contributions or making expenditures on behalf of the candidate must report their financial transactions, which are required to be consolidated for reporting to the Director of Campaign Finance.  The term, “political committee”, as defined by DC Code § 1-1401(5) includes  “any proposer, individual, committee (including a principal campaign committee) club, association, organization, . . . organized for the purpose of, or engaged in: promoting or opposing a political party, promoting or opposing the nomination or election of an individual to office, or promoting or opposing any initiative, referendum, or recall.” (Emphasis added).

Eighth, you ask, if a person gives $5,000.00 to a PAC, other than the principal PAC of a candidate, and such contribution is earmarked for that candidate, does the $5,000.00 limit count toward the $8,500.00 aggregate limit?  Yes.  DC Code § 1-1441.1(g) requires that contributions made by any person, which term includes an individual, corporation, or committee ( DC Code § 1-1401(8)), directly or indirectly to or for the benefit of a particular candidate or that candidate’s political committee, which are in any way earmarked, encumbered, or otherwise directed through an intermediary or conduit to that candidate or political committee, be treated as contributions from that person to that candidate or political committee and subject to the limitations of DC Code § 1-1441.1.

In the instant scenario, notwithstanding the $5,000.00 contribution was made to a PAC, if the contribution is earmarked for an individual candidate, DC Code § 1-1441.1(g) will require that the contribution be treated as a contribution from that person to that candidate, which will be subject to the individual contribution limitations of DC Code § 1-1441.1(a).  Thereafter, an assessment must be made [by this Office] as to whether the overall contributions of said person during the election cycle to that particular elective office were within the total aggregate contribution ceiling imposed by DC Code § 1-1441.1(b)(1) or $8,500.00.  The total aggregate contribution ceiling established under DC Code § 1-1441.1(b)(1) applies to contributions made in an election cycle to both candidates and political committees.  Hence, the $5,000 aggregate contribution ceiling in DC Code § 1-1441.1(d)(1), for contributions made to any 1 political committee during an election cycle, must be considered in determining whether the aggregate contribution ceiling of DC Code § 1-1441.1(b)(1) has been exceeded.

Ninth, you ask if there are contribution limits applicable to the support of or opposition to initiatives, referenda or recalls in general?  Further, you inquire concerning whether the $5,000.00 limit would apply to a contribution made to a political committee in support of or in opposition to an initiative, referendum or recall measure.  DC Code § 1-1441.1(i) clearly excludes contributions made to support or oppose initiative, referendum, or recall measures from the coverage of the provisions of DC Code § 1-1441.1, which establishes contribution limitations.  However, DC Code § 1-1441.1(a)(1)-(5) expressly includes ceilings on amounts which may be contributed for the recall of certain elected officials in the contribution limitations established therein.  Hence, an apparent conflict exists between DC Code §§ 1-1441.1(i) and 1-1441.1(a)(1)-(5), as amended by DC Law 11-144.  To resolve the conflict, new legislation amending the law would have to be enacted by the DC Council.

Lastly, you ask whether constituent services contributions are limited to $400.00 annually.  DC Code § 1-1443(a) states in pertinent part that “[n]o person shall make any contribution which, . . ., when aggregated with all other contributions received from such person, exceed $400 per calendar year . . .”.  Further, DC Code § 1-1443 ( c) provides that “[c]ontributions of personal property from persons . . . or contributions of the use of personal property shall be valued, for purposes of this section, at the fair market value of such property not to exceed $1,000 per calendar year at the time of the contribution.”  Consequently, it is permissible for persons, which term includes an individual, corporation or committee ( DC Code § 1-1401(8) ),  to contribute annually up to $400.00 in cash to a Constituent Services Program, as well as personal property whose value or use does not exceed $1,000.00 in fair market value.  It should be noted that the legislative history of this statute, which dates back to October 1981, supports the foregoing interpretation.