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Interpretative Opinion 96-09: Financial Disclosure Requirements

September 5, 1996

The Honorable David A. Clarke
Chairman, Council of the District of Columbia
3320-17th Street, NW
Washington, DC  20010

Re: Financial Disclosure Requirements

Dear Chairman Clarke:

This responds to your in person oral request on August 27, 1996, as further clarified on September 3, 1996, for an opinion concerning application of the financial disclosure requirements to the proposed event to be held on October 22, 1996 at the National Press Club to celebrate your Birthday, where contributions will be invited on behalf of either “Chairman Clarke’s Constituent Services Organization” or the “Dave Clarke Team”, a Political Action Committee (PAC).

Based on the information provided, notwithstanding the purpose of the event is to celebrate the birthday of the Chairman and is not, in and of itself, political in nature, the reporting requirements of the District of Columbia Campaign Finance Reform and Conflict of Interest Act of 1974, as amended, DC Code, section 1-1401 et seq. (1981 Edition and 1992 Replacement Volume), apply.  The Act requires the disclosure of contributions solicited or accepted for the purpose of financing the operations of both political committees and constituent service programs.

First, as we discussed, DC Code, section 1-1443(a) limits the contributions of persons made to fund Citizen-Service programs to $400.00 per calendar year, and section 1-1443(c) limits contributions of personalty to $1,000.00 per calendar year.  Title 3 DCMR, section 3009.7 defines the term “personal property” to mean goods, services, equipment, supplies and anything of value.  In addition, the contributions received by you as the Chairman of the Council, in support of your constituent service program, may not exceed an aggregate amount of $40,000.00 in any one calendar year.  See DC Code, section 1-1443(a).  Constituent Service Programs file quarterly reports of all contributions and expenditures on the first day of January, April, July and October of each year, in accordance with the provisions of Title 3 DCMR, § 3009.4.

Second, review of our records confirmed that the “Dave Clarke Team” Committee, based on the Amended Statement of Organization filed May 16, 1994, does not support any candidate.  The Committee identified itself as a committee which may support/oppose more than one District of Columbia candidate, and not as a separate segregated fund nor a party committee.  Under these circumstances, the contribution limitations imposed by Sec. 3 (a)(2) and (3) of DC Law 11-144 apply in this election year.  Further, the Political Action Committee is subject to the reporting requirements of DC Code, section 1-1411.

Based on the foregoing, to ensure proper accounting of the contributions received, we strongly recommend that the following actions be taken.  All communications concerning the event must clearly advise contributors to designate the manner in which their contributions are to be distributed, i.e., the funds should be earmarked for a particular committee.  All contributions must be screened to verify that none exceed the contribution limitations imposed under DC Code, section 1-1443(a) and DC Law 11-144.  It is also advisable to develop a formula for the allocation of the expenses which may be paid according to the proportion of collections, similar to action taken in 1993, per your correspondence directed to this Office concerning a related issue.  The monies collected for the respective committees should be maintained in separate accounts and not commingled.  Records should be maintained of all contributions and expenditures allocated to the respective committees, as well as any agreements bearing on same, including check stubs, bank deposit slips, bank statements canceled checks, invoices, contributor cards, statements of fair market value for personal property, and other documentation related to the event which will provide a clear audit trail.  All contributions other than money or legal tender must be given a monetary value, and itemized and reported on Schedules A and C of the reports of receipts and expenditures filed by Committees.  Funds contributed in excess of the contribution limitations must be returned to the donors, and a record made of each such transaction.