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Interpretative Opinion 98-02: Contribution Limits

August 13, 1998

Kevin M. Sabo, General Counsel
The Carmen Group, Inc.
1299 Pennsylvania Avenue, NW
Eighth Floor
Washington, DC  20004

Re: Contribution Limitations

Dear Mr. Sabo:

This responds to your request for an opinion concerning whether an  individual who controls two (2) Subchapter S corporations in the District of Columbia may contribute the maximum amount allowable by law to DC Council  candidates in his or her individual capacity as well as through the two corporations this individual controls.

For purposes of delineating permissible sources of campaign contributions to candidates for elective office in the District of Columbia, DC Code § 1-1401(8) defines the term, “person”, to mean “an individual, partnership, committee, corporation, labor organization, and any other organization” (emphasis  added).  As you are aware, the Subchapter S corporation is a small business corporation that is a separate legal entity from its incorporators, and possesses all of the characteristics of a corporate entity.

For purposes of the contribution limitations, pursuant to DC Code § 1-1441.1,  a corporation, its subsidiaries, and all political committees established, financed, maintained or controlled by the corporation and its subsidiaries share a single contribution limitation.  (See DC Code § 29-372 (1991 Repl. Vol.)).  Further, DC Code § 1-1441.1(g) directs that “[a]ll contributions made by any person 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, shall be treated as contributions from that person to that candidate or political committee and shall be subject to the [contribution] limitations.”

Since you did not indicate the Council offices to which contributions would be made, you should note that DC Code § 1-1441.1 establishes contribution limits ranging from $1,500 to candidates for Council Chair, $1,000 to candidates for Member of the Council At-Large, and $500 to candidates seeking election as a Member of the Council representing a Ward.  Further, pursuant to DC Code § 1-1441.1(b)(1), with the exception of special elections, no person shall make contributions to candidates that exceed $8,500 per elective office.

Therefore, it is the opinion of the Office of Campaign Finance that Subchapter S corporations may make contributions to candidates for office in the District of Columbia, and that their contributions are considered separate and apart from contributions made by their individual incorporators.