(2007)

92 Op. Att'y Gen. 92
Procedural entryThis page is a short order in (2007). Read the opinion of the Court — 92 Op. Att'y Gen. 51
Maryland Attorney General Reports·Decided August 6, 2007·Published

Opinion

You have requested our opinion whether a campaign finance entity registered with the State Board of Elections ("SBE") may expend funds in the form of a contribution to a political party designated exclusively for its ongoing administrative expenses. You advise that, consistent with past legal advice construing prior versions of the State Campaign Finance Law, SBE has prohibited such expenditures by Maryland campaign finance entities. You have asked us to review this advice in light of suggestions by the two principal political parties in Maryland that the SBE's policy conflicts with prior Attorney General opinions and the current version of the Campaign Finance Law.

The Campaign Finance Law explicitly permits a campaign finance entity to transfer up to $6,000 to a political party during a four-year election cycle. Under the longstanding interpretation of the Campaign Finance Law, if an individual or entity contributes funds to a political party and specifies that they be used only for the party's ongoing administrative expenses — as opposed to expenses associated with a particular election cycle — the contribution is not subject to the limits set by the Campaign Finance Law. However, unlike other potential contributors to a political party, a campaign finance entity may expend funds only to "promote or assist in the promotion of the success or defeat of a candidate, political party, or question at an election." In our opinion, if a campaign finance entity were to make a contribution (i.e., transfer) to a political party with the proviso that it couldonly be devoted to the party's ongoing administrative expenses unrelated to any particular election, that expenditure would be for a nonelectoral purpose and would not be a permissible expenditure by the campaign finance entity under the Campaign Finance Law.1

I
Background

A. Statutory Framework

The State Campaign Finance Law, also previously called the Fair Election Practices Act, is set forth in Annotated Code of Maryland, Election Law Article ("EL"), § 13-101 et seq. Under that law, campaign finance activity for an election must generally be conducted through a "campaign finance entity." See EL § 13-202(a). A campaign finance entity is a political committee established under the Campaign Finance Law. EL § 1-101(h).2 A political committee is "a combination of two or more individuals that assists or attempts to assist in promoting the success or defeat of a candidate, political party, or question submitted to a vote at any election." EL § 1-101(ff).3 A campaign finance entity is to file regular reports with SBE of all contributions received and expenditures made.4 See EL § 13-304. SBE has long treated political parties as campaign finance entities and required that the central committees of parties file campaign finance reports.5

A campaign finance entity is funded by contributions from donors. The State election law defines a "contribution" as "the gift or transfer, or promise of gift or transfer, of money or other thing of value to a campaign finance entity to promote or assist in the promotion of the success or defeat of a candidate, political party, or question." EL § 1-101(o)(1). In somewhat similar terms, the statute defines "expenditure" in part as "a gift, transfer, disbursement, or promise of money or a thing of value by or on behalf of a campaign finance entity to. . . promote or assist in the promotion of the success or defeat of a candidate, political party, or question at an election." EL § 1-101(y) (emphasis added). Assets of a campaign finance entity may be disbursed only if they have passed through the hands of its treasurer and are spent in accordance with the purposes of the entity. EL § 13-218(b)(1). Expenditures by a party central committee must also be under the authority and direction of its chairman. El § 13-218(c).

The Campaign Finance Law generally caps a donor's contributions during an election cycle at $4,000 to any one campaign finance entity, and $10,000 to all campaign finance entities in the aggregate. See EL § 13-226. The limits do not apply to: contributions to a ballot issue committee6; aggregate in-kind contributions by the central committee of a state or local political party during an election cycle in an amount of $1 for every two registered voters7; transfers by one campaign finance entity to another campaign finance entity in a cumulative amount of $6,000 or less during an election cycle8; and contributions to the administrative account of a political party. The last exception to the contribution limits is not explicitly provided in the statute, but has been developed in a series of Attorney General opinions beginning three decades ago.

B. Contributions for Administrative Expenses ? Attorney GeneralOpinions

As a prior opinion noted, the Campaign Finance Law is often difficult to comprehend and susceptible to conflicting interpretations. The practical application of that law has been guided for several decades by SBE's administrative practices in light of the "common law" developed in Attorney General opinions. 70 Opinions of the Attorney General 96 (1985). A series of opinions and advice letters has explicated the reasons why a donation to a political party for ongoing administrative expenses is subject to reporting requirements, but is not assessed against the donor's statutory contribution limits. Those opinions acknowled ge difficulty in reconciling the language of the law with its underlying policies. Id. at 96 (noting that the Act's provisions governing political committees and contributions are "especially troublesome, both in concept and practice" and offer "singularly little guidance"); see also 68 Opinions of the Attorney General 252, 255 (1983).

1974 Opinion: Political Parties Subject to ReportingRequirements

In 1974, in response to an inquiry from the Administrator of the State Administrative Board of Election Laws, the predecessor of SBE, Attorney General Burch considered the extent to which contributions to, and expenditures by, the central committee of a political party were subject to the reporting requirements of the campaign finance law. 59 Opinions of the Attorney General 318, 323 (1974) ("1974 Opinion"). He noted that the definitions of "contribution" and "expenditure" in that law included, as they do now, monies given or spent to promote or aid in the success of a political party. He concluded that central committees of political parties "must report all of their contributions and all of their expenditures regardless of when they occur," reasoning that "central committees function continuously and presumably all money which they receive and spend is intended to promote or aid the success of the party, whether at or between elections." Id.

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(2007), 92 Op. Att'y Gen. 92 (Md. 2007).

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