Dear Ms. Sommers:
I am seeking clarification on the Louisiana Ethics Administration’s enforcement of campaign finance disclosure laws.
It is my understanding that a for-profit limited liability company, The Committee for the Incorporation of St. George, LLC, is currently engaging in a campaign to introduce a ballot initiative or “a question to the voters.” I also understand this company has launched a website, purchased advertising on social media, retained the services of a professional political consultant, fabricated and distributed yard signs and campaign materials, and presented itself to the media and the public as a campaign.
The company is campaigning for a hugely consequential initiative, which, if approved, would result in the creation of the fifth largest city in the State of Louisiana.
I have read and reviewed the relevant and applicable statutes, case law on the subject, and the minutes from recent Ethics Board hearings. Mr. McKay also provided me with a copy of his correspondence with you from a month ago, in which he raises and you address this topic.
I fully understand and recognize that the law treats recall petitions against elected officials slightly differently than petitions for ballot initiatives, but I’m troubled by the Ethics Administration’s statutory interpretation here.
Correct me if I am wrong, but according to your letter to Mr. McKay, the Ethics Administration seems to believe that a campaign for a ballot initiative is only subject to disclosure laws once the question has already been “submitted to the voters.” Is it your agency’s understanding that the law is intended to only apply to political activity after a petition campaign receives the requisite number of signatures necessary to place the question on the ballot?
And not to parse words, but I think this is also critical: What does “submitted” mean? Does it mean that the question has been placed on the ballot but not yet voted on? Because it seems just as easy to interpret the word “submitted” as something “not yet decided” as it would be to interpret it as meaning something that had already been decided, something that is over.
I have two major concerns with the way in which the Ethics Administration appears to be currently interpreting the law, and if I am mistaken, please correct me:
First, if the Ethics Administration believes it can only require disclosure from ballot initiative campaigns unless and until the campaign has received the requisite number of signatures necessary to submit the question to voters, then how can the Administration, for example, adequately ensure that multinational and out-of-state corporations are not unduly influencing a ballot initiative designed to benefit their interests- decreasing their tax exposure or liability, forcing an agency to alter its interpretation of existing regulations? By extension, how would the public ever know if a petition for an initiative was underwritten by shell companies representing the interests of a foreign government?
To be sure, the right to petition the government is fundamental, but that right is enjoyed by citizens. Our laws on campaign finance and disclosure should be interpreted in a way that ensures citizens are empowered and informed, to the greatest extent possible.
My other concern is this: Last year, as you know, two teachers were fined $1,000 for failing to file, in a timely manner, campaign disclosure reports on their recall petitions against Governor Jindal and Speaker Kleckley. Neither campaign received the requisite number of signatures necessary to place the recalls on the ballot, yet these citizens were fined and were held to be in violation of the law. It’s worth noting, I think, that the law also states:
(d) If the recall effort is successful in having the recall question submitted to the voters, the person or political committee shall be required to file reports as provided in Paragraph (1) of this Subsection.
Neither of these efforts were successful in having the question submitted, so why, exactly, were they required to file? Is it because the Administration knew they had raised more than $200? Why does the Ethics Administration interpret every other section of the law about disclosure to be an affirmative duty imposed on the recall petitioner, while seemingly discounting this one?
It is baffling and extremely troubling to me that a private, for-profit corporation clearly engaging in a robust, 21st century campaign and publicly and actively soliciting donations is not subject to any accountability at all, yet a school teacher who raised less than $600 for a petition to recall the Governor (an effort that didn’t even get off the ground) is considered unethical and fined for not filing a report in time.
For what it’s worth, I don’t read Louisiana law to suggest that ballot initiative campaigns are only subject to financial disclosure once the initiative has already been “submitted” to the voters. I read the law as suggesting campaigns in support or in opposition of initiatives that are intended or designed to be submitted to voters are subjected to disclosure requirements if they raise more than $1,000 and campaigns that are intended or designed to recall elected officials are subjected to disclosure requirements if they raise more than $200.
I understand recall petitions have to be filed with the Secretary of State and that this filing triggers a series of deadlines for the filer. Of course, ballot initiative campaigns also register with the Secretary of State as well; the company organized on September 4, 2013.
Let me know if I can help, Chris.
We’ll make it work. But please understand, I put this all online.
The conversation is important. Please forgive me in advance: I really am a nice guy. No harm, no foul, I hope.
All the best, Lamar
From: Chris.Sommers@LA.GOV
To slater@
Subject: RE: Campaign Finance Requirements: Incorporation Campaign: Campaign Finance Inquiries
Date: Thu, 7 Nov 2013 16:13:01 +0000
That is correct
Chris Sommers, Division Director
Campaign Finance & Lobbying
Ethics Administration
P. O. Box 4368
Baton Rouge, Louisiana 70821
DISCLAIMER: The contents of this message are for information purposes only and does not constitute an advisory opinion of the Board of Ethics. If you would like to request an advisory opinion from the Louisiana Board of Ethics, please refer to http://www.ethics.state.la.us/BoardProcedures.aspx for information about submitting a request for an advisory opinion.
From: slater@
Sent: Thursday, November 07, 2013 10:10 AM
To: Chris Sommers
Subject: RE: Campaign Finance Requirements: Incorporation Campaign: Campaign Finance Inquiries
Thank you for the information, Chris.
In short, recall petition campaigns are handled differently than ballot petition campaigns.
From: Chris.Sommers@LA.GOV
To: slater@
Subject: RE: Campaign Finance Requirements: Incorporation Campaign: Campaign Finance Inquiries
Date: Thu, 7 Nov 2013 15:09:46 +0000
In response to your query, I am providing you with an excerpt from the Campaign Finance Disclosure Act relative to proposition elections and requirements for reporting financial activity to this office. As referenced in the information I am providing, reporting to this office does not begin only if the matter becomes a ballot issue.
RS 18:1486 Proposition elections; required reports; recall elections
A.(1) Any person, including a political committee, who receives and accepts any contribution, loan, or transfer of funds, or makes any expenditure in support of or in opposition to a proposition or question submitted to the voters shall be required to file reports of such contributions and expenditures.
(2) Any person, including a political committee, who receives and accepts any contribution, loan, or transfer of funds, or makes any expenditure in support of or in opposition to the recall of a public officer shall be required to file reports of such contributions and expenditures.
(3) Except as otherwise specifically provided in this Section and in R.S. 18:1505.4 and 1505.5, the provisions for reporting and filing requirements, prohibited practices, recordkeeping, and penalties applicable to political committees shall apply to persons subject to the provisions of Paragraphs (1) and (2) of this Subsection.
B. These requirements shall be applicable only if the aggregate amount of contributions, loans, and transfers of funds received and accepted or expenditures made equals or exceeds two hundred dollars at any time during the aggregating period; except that, with regard to expenditures made in support of or in opposition to a proposition or question submitted to the voters by a person who is not a candidate or a member of the principal campaign committee of a candidate or of a political committee, these requirements shall be applicable only if the aggregate amount of expenditures made equals or exceeds one thousand dollars. “Aggregating period” for purposes of this Section shall mean the period from the date on which the first contribution is received or the first expenditure is made by the person or political committee, whichever is earlier, through the closing date for the last report required to be filed in accordance with this Chapter.
C.(1) The reports required as provided in Paragraph A(1) of this Section shall be filed not later than the thirtieth day prior to the election, which shall be complete through the fortieth day prior to the election, not later than the tenth day prior to the election, which shall be complete through the twentieth day prior to the election, and not later than the fortieth day after the election, which shall be complete through the thirtieth day after the election. During the period from midnight of the twentieth day prior to the election and extending through midnight of election day a report shall be filed within forty-eight hours after the time any contribution, loan, or transfer of funds is received and accepted or expenditure in excess of two hundred dollars is made; if such time falls other than during regular working hours, this report shall be filed with the supervisory committee on the next working day after the report is otherwise due. Such report shall provide information relative to such contributions, loans, and transfers of funds and expenditures in excess of two hundred dollars as provided in R.S. 18:1491.6(C). If the report filed on the fortieth day after the election shows a deficit, the person or political committee reporting shall be required to file supplemental reports as required by R.S. 18:1491.6(D).
(2) Any person or political committee who is required to file reports as provided in Paragraph A(2) of this Section shall file reports as provided in this Chapter according to the following schedule:
(a) Not later than the forty-fifth day after the initial filing of the copy of the recall petition with the secretary of state as provided in R.S. 18:1300.2(C), which report shall be complete through the thirty-fifth day after the filing of the copy of the recall petition with the secretary of state.
(b) Not later than the one hundred thirty-fifth day after the filing of the copy of the recall petition with the secretary of state, which report shall be complete through the one hundred twenty-fifth day after the filing of the copy of the recall petition with the secretary of state.
(c) Not later than the two hundredth day after the filing of the copy of the recall petition with the secretary of state, which report shall be complete through the one hundred ninetieth day after the filing of the copy of the recall petition with the secretary of state, which report shall be the final report, unless the report shows a deficit, in which case supplemental reports shall be filed as required in R.S. 18:1491.6(D), or unless the person or committee is required to file reports as provided in Subparagraph (d) of this Paragraph.
(d) If the recall effort is successful in having the recall question submitted to the voters, the person or political committee shall be required to file reports as provided in Paragraph (1) of this Subsection.
I am also providing you with the definition of “political committee” that is included in the act:
RS 18:1483
(14)(a)(i) “Political committee” or “committee” means two or more persons, other than a husband and wife, and any corporation organized for the primary purpose of supporting or opposing one or more candidates, propositions, recalls of a public officer, or political parties, which accepts contributions in the name of the committee, or makes expenditures from committee funds or in the name of the committee, or makes a transfer of funds to or receives a transfer of funds from another committee, or receives or makes loans in an aggregate amount in excess of five hundred dollars within any calendar year.
(ii) “Political committee” or “committee” shall also include two or more persons, other than a husband or wife, and any corporation which supports or opposes one or more candidates, propositions, recalls of a public officer, or political parties, and which accepts direct payments for personal services related to an election or a campaign in the name of the committee in an aggregate amount in excess of five hundred dollars within any calendar year. Except that an entity that (aa) holds a license or permit duly issued by the appropriate governmental entity to provide the personal services provided, regularly does business in the area, and regularly has done business in the area for at least ninety days prior to the date the personal services are provided and (bb) the personal services provided are the same as the personal services regularly provided by the business in the normal and usual scope of its usual business activities shall not constitute a “political committee” for purposes of the requirements of R.S. 18:1491.1 through 1491.8 which would require such an entity to keep records and submit reports.
(iii) Any state central committee, parish executive committee, and any other committee of any political party which receives contributions or makes expenditures in such amount during such period shall be considered a “political committee” for the purposes of this Chapter.
(b) An entity that during the reporting period has supported candidates in states other than Louisiana; has received less than fifty percent of its total receipts for the applicable reporting period from Louisiana candidates or committees formed to support Louisiana candidates; and has expended less than fifty percent, but not more than twenty thousand dollars, of its total disbursements for the applicable reporting period in support of or in opposition to Louisiana candidates shall not constitute a “political committee” for purposes of requirements of R.S. 18:1491.1 through 1491.8 which would require such an entity to keep records and submit reports.
(c) Repealed by Acts 2008, No. 821, §2, eff. July 8, 2008.
Re-stated, two or more persons which support or oppose candidates or ballot issues. So again, this matter must first become a ballot issue.
I am unable to provide you with any information with respect to paperwork for the Secretary of State’s office or tax filing issues. These matters do not fall under the jurisdiction or supervision of this office.
Chris Sommers, Division Director
Campaign Finance & Lobbying
Ethics Administration
P. O. Box 4368
Baton Rouge, Louisiana 70821
DISCLAIMER: The contents of this message are for information purposes only and does not constitute an advisory opinion of the Board of Ethics. If you would like to request an advisory opinion from the Louisiana Board of Ethics, please refer to http://www.ethics.state.la.us/BoardProcedures.aspx for information about submitting a request for an advisory opinion.
—–Original Message—–
From: slater@
Sent: Monday, November 04, 2013 4:00 PM
To: Chris Sommers
Subject: Campaign Finance Requirements: Incorporation Campaign: Campaign Finance Inquiries
Campaign Finance Inquiries
Good evening,
I’ve been following the push for incorporating a large part of East Baton Rouge Parish into the City of St. George. I noticed that yard signs had been produced and a website was created. As an inquisitive sort, it got me wondering whether the petitioning period falls under the requirements for campaign finance. When I looked up the incorporating committee on the Secretary of State’s website, I noticed they were formed as an LLC and don’t appear to have a non-profit designation, so I assume they are not a 501(c)4. I guess my questions are:
1) Does the petitoning portion of a campaign to incorporate an area require campaign finance disclosure?
2) If an entity is acting like a PAC, does it matter whether they are formed as a 501(c)4 or a privately held entity with respect to campaign finance?
I looked up the Committee for the Incorporation of St. George in the Ethics database, but noticed no reports.
Thank you in advance for any assistance with this matter. My contact information is:
CenLamar 