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Official Opinion 95-26

Official Opinion 95-26

May 30, 1995
To: 

Chairman
State Ethics Commission

Re: 

Expenditures made independently of a candidate, including expenditures in favor of or opposing a candidate, are not subject to the dollar limitations and reporting and registration requirements of the Ethics in Government Act.

The State Ethics Commission has requested my opinion regarding the ability of the Commission to regulate expenditures by noncandidates, independent committees or organizations on behalf of or in opposition to specific candidates, where those expenditures are not made in coordination with the candidate. Additionally, the Commission has inquired whether such independent expenditures are subject to the dollar limitations of O.C.G.A. § 21-5-40 et seq. and whether persons or groups making such independent expenditures are also required to either register their existence or to file disclosure reports with the Secretary of State, as is required of political candidates themselves.

It is my official opinion that expenditures made independently of a candidate, including expenditures in favor of or opposing a candidate, are not subject to the dollar limitations and reporting and registration requirements of the Ethics in Government Act.

Georgia Law

In addressing these issues, it is first necessary to present a brief outline of the development and scope of the regulatory structure regarding campaign finance and disclosure in Georgia. In 1974, the General Assembly enacted the Campaign Financing Disclosure Act in order to, "[P]rovide procedures for public disclosure of contributions and expenditures made in connection with campaigns for certain State offices." 1974 Ga. Laws 155, 155-56. In doing so, the General Assembly intended to further:

[I]ts responsibility to protect the integrity of the democratic process and to insure fair elections [for state and local offices and] to institute and establish a requirement of public disclosure of campaign contributions and expenditures relative to the seeking of such offices.

Id. at 156, § 2. See also O.C.G.A. § 21-5-2.

In regulating this campaign process, the General Assembly required campaign officials to disclose contributions received and expenditures made by candidates. 1974 Ga. Laws 155, 159-60, § 6. See also O.C.G.A. § 21-5-34. The General Assembly defined a "contribution" to be:

[A] gift, subscription, loan, forgiveness of debt, advance or deposit of money or anything of value conveyed or transferred for the purpose of influencing the nomination for election or election of any person for the offices provided for [under the statute.]

1974 Ga. Laws 155, 157, § 3(c). See also O.C.G.A. § 21-5-3(6). The original definition of "expenditure" parallels this definition, stating that an expenditure is:

[A] purchase, payment, distribution, loan, advance, deposit or gift of money or anything of value made for the purpose of influencing the nomination for election or election of any person for the offices provided for [under the statute.]

1974 Ga. Laws 155, 157, § 3(d). See also O.C.G.A. § 21-5-3(9).

In interpreting the scope of this statute and these particular definitions, the Supreme Court of Georgia recognized that if a person makes an expenditure on behalf of a candidate, such as the purchase of advertising, then this expenditure also is a "contribution" to a candidate and the recipient candidate has a duty to report the expenditure as such on his or her campaign disclosure reports, if they can reasonably do so. Fortson v. Weeks, 232 Ga. 472, 480-81 (1974).

However, in reaching this determination, the Supreme Court of Georgia also noted that while the Court construed such actions to be direct contributions to the candidate, they also represented the exercise of First Amendment protected speech by the person making the expenditure. Fortson at 481. Therefore, the Court limited the regulation of this protected expression, stating:

[A]ctivities in the exercise of First Amendment freedoms may not be harshly channeled and controlled simply by being deemed "contributions," for those activities are constitutionally protected from significant legislative chilling. Accordingly, even though we conclude that the purchase of media publicity for a candidate, the example here under consideration, is a "contribution" because it is covered by the Act's definition, we construe this Act to mean that this and other financial outlays by persons in the course of the exercise of First Amendment rights, shall be deemed to be the equivalent of a direct contribution to the candidate or his campaign committee, so that the contributor is not in violation of the Act.

Fortson at 481 (emphasis added). This indicates that under Georgia law, the restrictions on campaign contributions and expenditures were originally directed to regulating the candidate and not the regulating of a contributor who was acting to express his or her First Amendment rights.

In the intervening years, the General Assembly expanded the definitions of both "contributions" and "expenditures" to exclude the value of volunteer labor donated to a candidate from falling in either category and also to include the value of the payment of a qualifying fee for a candidate. See, e.g., 1986 Ga. Laws 957, 960-61; 1987 Ga. Laws 297 et seq. The General Assembly also provided that:

Any person who accepts contributions for, makes contributions to, or makes expenditures on behalf of candidates is subject to the same disclosure requirements of this chapter as a candidate . . . .

1986 Ga. Laws 957, 971; O.C.G.A. § 21-5-31(a). In 1990, dollar limits were adopted on contributions made by persons, partnerships, corporations and political committees. 1990 Ga. Laws 922, 924-26; O.C.G.A. § 21-5-40 et seq. The General Assembly also acted to prohibit the making of contributions by regulated entities. O.C.G.A. §§ 21-5-30(f), 21-5-30.1, 21-5-30.2.

Therefore, in relation to expenditures made by third parties or noncandidates on behalf of a candidate, the General Assembly has provided that any person accepting contributions for, making contributions to or making expenditures on behalf of candidates is subject to regulation, including dollar limitations and reporting requirements. However, that does not end the inquiry as to what these statutes mean. As demonstrated by the previous opinions of the Georgia Supreme Court, federal constitutional principles must also be factored into the interpretation of these statutes.

Federal Law

In enacting Georgia's campaign finance disclosure legislation, the General Assembly chose to model some of its provisions after the Federal Election Campaign Act of 1971. 2 U.S.C. § 431 et seq. (Pub. L. No. 92-225, 86 Stat. 3) (1972). The state statute tracks to some extent the language of the federal act in defining the crucial terms of "contribution" and "expenditure." Compare 2 U.S.C. § 431(8)(A)(i) and O.C.G.A. § 21-5-3(6); 2 U.S.C. § 431(9)(A)(i) and O.C.G.A. § 21-5-3(9).

The meaning and constitutionality of the federal statute was determined in the seminal case of Buckley v. Valeo, 424 U.S. 1 (1976). In Buckley, the Supreme Court specifically addressed what types of expenditures can be regulated under the federal statute, in light of the protection of free speech afforded by the First Amendment.

In relation to independent expenditures on behalf of a candidate, federal law regarding the reporting of campaign contributions and expenditures provided at that time:

Every person (other than a political committee or candidate) who makes contributions or expenditures, other than by contribution to a political committee or candidate, in an aggregate amount in excess of $100 within a calendar year shall file with the Commission a statement containing the information required by this section.

Buckley at 160, Opinion Appendix containing the provisions of 2 U.S.C. § 434(e) under review. Additionally, a parallel provision was included under 18 U.S.C. § 608 (Crimes and Criminal Procedure - Elections and Political Activities) which stated:

No person may make any expenditure (other than an expenditure made by or on behalf of a candidate within the meaning [of the code] relative to a clearly identified candidate during a calendar year which, when added to all other expenditures made by such person during the year advocating the election or defeat of such candidate, exceeds $1,000.

18 U.S.C. § 608(e). A "clearly identified" candidate was one whose name, photograph or likeness was used or whose identity was unambiguous. Buckley at 193, citing 18 U.S.C. § 608(e)(2)(A).

In reviewing both of these provisions, the Court concluded that in order to avoid finding these restrictions on expenditures by noncandidates unconstitutionally vague, it was necessary to interpret this provision so as to be, "limited to communications that include explicit words of advocacy of election or defeat of a candidate." Buckley at 43, 79-80. The Court also specifically held:

[I]n order to preserve the provision against invalidation on vagueness grounds § 608(e)(1) must be construed to apply only to expenditures for communications that in express terms advocate the election or defeat of a clearly identified candidate for federal office.

. . . .

. . . So long as persons and groups eschew expenditures that in express terms advocate the election or defeat of a clearly identified candidate, they are free to spend as much as they want to promote the candidate and his views.

* * * * *

To insure that the reach of § 434(e) is not impermissibly broad, we construe "expenditure" for purposes of that section in the same way we construed the terms of § 608(e) - to reach only funds used for communications that expressly advocate the election or defeat of a clearly identified candidate. . . . In summary, § 434(e), as construed, imposes independent reporting requirements on individuals and groups that are not candidates or political committees only in the following circumstances: (1) when they make contributions earmarked for political purposes or authorized or requested by a candidate or his agent, to some person other than a candidate or political committee, and (2) when they make expenditures for communications that expressly advocate the election or defeat of a clearly identified candidate.

Id. at 44, 45, 80 (emphasis added).

The Court also noted that truly independent expenditures, "may well provide little assistance to the candidate's campaign and indeed may prove counterproductive." Id. at 47. The Court noted:

The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.

Id. As a corollary to this principle, the Court specifically also found that where expenditures were made in cooperation with or with the consent of a candidate, his agents, or an authorized committee of the candidate, then such expenditures could constitutionally be restricted under the campaign finance act. Id. at 47 n.53; 80-82.

Applying this narrow construction of "expenditures," construing it to apply only where the expenditure is made as express, coordinated advocacy of the election or defeat of a candidate, the Court found that persons or groups making such expenditures could be required to file the campaign disclosure reports required under the federal act. Id. at 60-64. The Court found that the government's interest in providing information to the voters on the source of campaign contributions for a candidate, as well as the deterrence of actual or apparent corruption and the ability to detect possible violations of the law, presented a sufficiently compelling basis for upholding the disclosure reporting requirements. Id. at 66-68.

Over the years since the Buckley decision, the Supreme Court has consistently held to these two principles. Only express, coordinated advocacy on behalf of or in opposition to a specific candidate may fall within the regulation of federal campaign laws and that, where there is such express advocacy as a part of an independent expenditure, then the person or group making the expenditure is subject to the disclosure requirements of the law. McIntyre v. Ohio Elections Comm'n, U.S. , 63 U.S.L.W. 4279, 4285 (1995); Federal Election Comm'n v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, 249, 262 (1986); Federal Election Comm'n v. National Conservative Political Action Comm., 470 U.S. 480, 493-500 (1985). See also Faucher v. Federal Election Comm'n, 928 F.2d 468, 470-71 (1st Cir. 1991), cert. denied sub nom. Federal Election Comm'n v. Keefer, 502 U.S. 820 (1991); United States v. Goland, 959 F.2d 1449, 1452-53 (9th Cir. 1992), cert. denied, U.S. , 113 S. Ct. 1384 (1993); Vote Choice, Inc. v. DiStefano, 4 F.3d 26, 31-32 (1st Cir. 1993).

In Buckley, the Court also addressed the issue of dollar limitations on independent expenditures. Under Section 608(e)(1) of the Federal Election Campaign Act of 1971, as amended in 1974, the Congress had placed a limitation of $1,000.00 on expenditures for a clearly identified candidate by any person or association other than a political party or a campaign organization. Buckley at 39-41. The Supreme Court found such a limitation an unconstitutional restriction on the First Amendment rights of expression of such independent persons or associations. Id. at 43-57.

The Court subsequently has reaffirmed this determination in Federal Election Comm'n v. National Conservative Political Action Comm., 470 U.S. 480 (1985). In this case, the Court addressed a provision of the Presidential Election Campaign Fund Act, 26 U.S.C. § 9001 et seq., which prohibited presidential candidates who received matching federal funds from also accepting contributions from independent political committees. 470 U.S. at 482-83. In striking down this prohibition, the Court again reiterated that such independent expenditures amounted to speech protected under the First Amendment. 470 U.S. at 493 (quoting Buckley, 424 U.S. at 14). The Court concluded that the Congress' restriction of this protected speech was not narrowly tailored to achieve the avowed purpose of preventing political corruption and the statute was fatally overbroad. 470 U.S. at 496-501.

Regulating Independent Expenditures under Georgia Law

Given the above and foregoing developments in the law, it is clear that Georgia law must be interpreted and applied by the State Ethics Commission in accordance not only with the statutes enacted by the General Assembly but also in harmony with the requirements of the federal constitution. This means that the terms "contribution" and "expenditure" must be interpreted and applied as outlined in Buckley and its progeny, and as recognized by the Supreme Court of Georgia in the aforementioned cases.

In doing so, it is my official opinion that under O.C.G.A. § 21-5-31, the State Ethics Commission may require persons, organizations, corporations or any other entity to comply with the campaign disclosure requirements of O.C.G.A. § 21-5-34 only where such "expenditures" fall within the constitutional definition outlined in Buckley. This means that such regulation is permissible only if these expenditures are made in conjunction or coordination with the beneficiary candidate and if the expenditures expressly advocate the election or defeat of a clearly identified candidate.

Finally, it should also be remembered that while the State Ethics Commission may be limited by the aforementioned provisions from regulating truly independent expenditures, this does not eliminate a candidate's obligation under Fortson v. Weeks as outlined above. An expenditure on behalf of a candidate, even if a truly independent contribution, would still be a transfer of something of value to the candidate. This would therefore be a contribution to the candidate which should be reported as such on the candidate's disclosure reports, if the candidate knows or could reasonably discover who made this contribution. Fortson v. Weeks, 232 Ga. 472, 480-81 (1974). However, because this is the candidate's obligation, and not that of the person or entity making the independent expenditure, this contribution would not be subject to the dollar limitations of O.C.G.A. § 21-5-40 et seq.

Conclusion

Therefore, it is my official opinion that expenditures made independently of a candidate, including expenditures in favor of or opposing a candidate, are not subject to the dollar limitations and reporting and registration requirements of the Ethics in Government Act.

Prepared by:

DENNIS R. DUNN
Senior Assistant Attorney General