RBG Bush Planes, LLC v. Alaska Public Offices Commission

361 P.3d 886, 2015 Alas. LEXIS 146, 2015 WL 7709446
CourtAlaska Supreme Court
DecidedNovember 25, 2015
Docket7063 S-15397
StatusPublished

This text of 361 P.3d 886 (RBG Bush Planes, LLC v. Alaska Public Offices Commission) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RBG Bush Planes, LLC v. Alaska Public Offices Commission, 361 P.3d 886, 2015 Alas. LEXIS 146, 2015 WL 7709446 (Ala. 2015).

Opinion

OPINION

STOWERS, Justice.

I. INTRODUCTION

Alaska law forbids corporations from making direct contributions to candidates for public office. 1 And in 2010 a corporation that provided a service to a candidate for less than a "commercially reasonable rate" or the "normal charge ... in the market" was deemed to have made a contribution to the candidate equal to the difference between the commercially reasonable rate and the amount charged. 2

In September 2010 RBG Bush Planes, LLC (Bush Planes) allowed two candidates for the Lake and Peninsula Borough Assembly to travel on a series of preexisting flights throughout the borough. Bush Planes charged the candidates a fraction of the fuel *888 costs associated with those flights, The Alaska Public Offices Commission (Commission) investigated these charges, determined that Bush Planes' fractional fuel-cost methodology did not represent a commercially reasonable rate, and assessed a $25,500 fine against Bush Planes for making illegal corporate contributions. Bush Planes appealed to the superior court, which affirmed the Commission.

Bush Planes again appeals, arguing (1) that the Commission erred when it found Bush Planes had violated Alaska law and (2) that the fine the Commission imposed was unconstitutionally excessive. Bush Planes also appeals the superior court's denial of Bush Planes' motion to supplement the ree-ord with allegedly recently discovered evidence and related briefing suggesting Commission bias against Bush Planes. We affirm the superior court's decisions for the reasons discussed below.

II. FACTS AND PROCEEDINGS

A. Facts

Bush Planes is a limited liability company that holds title to several airplanes. It is owned by a revocable trust created for Robert B. Gillam, and it operates as a private carrier under Part 91. 3

Gillam is involved in the politics surrounding mining development in the Bristol Bay area, and he hired George Jacko to be his "eyes and ears in Bristol Bay." Jacko traveled throughout the Lake and Peninsula Borough and flew on Bush Planes' aireraft for his travel. Jacko asked Gillam if he could offer flights to two candidates for the Lake and Peninsula Borough Assembly, Nana Kal-makoff and Michelle Ravenmoon. Gillam consulted counsel and later approved allowing the two candidates to fly with Jacko on Bush Planes' flights. But Gillam also required that the fuel costs for each flight be recorded.

In 2010 Jacko traveled with Kalmakoff and Ravenmoon on two separate trips: one from September 3 through September 6 and another from September 17 through September 18. While some of the flights included both candidates, on others only Kalmakoff or Rav-enmoon was present. Bush Planes invoiced Ravenmoon and Kalmakoff for a fractional portion of the fuel costs related to the flights they took. 4 Ravenmoon paid a total of $351.55, and Kalmakoff paid $1,184.60.

After the election the Commission received two complaints from the Lake and Peninsula Borough regarding the trips Ravenmoon and Kalmakoff took with Jacko. The Commission dismissed the complaints without filing charges, but the Commission staff continued investigating the allegations.

By March 9, 2011, the investigation had produced sufficient information that the Commission's assistant director, Jerry Anderson, intended to have the Commission's staff file a complaint. By March 30, 2011, Anderson directed one of the Commission's staff attorneys to begin drafting a complaint. But the Commission's staff continued investigating the allegations into April, and the Commission's staff did not file a complaint until July 7, 2011.

B. Proceedings

The Commission staff's complaint alleged that Bush Planes had violated AS 15.18.074(f), which prohibits a corporation from making a contribution to a candidate. 5 "Contribution" is defined in both AS 15.18.400 and former 2 AAC 50.250. Relevant here are two definitions previously contained in 2 AAC 50.250. The first definition specifically excluded from the meaning of "contribution" the "provision of a service ... to a candidate ... if the entity providing the *889 service ... is paid at a commercially reasonable rate within a commercially reasonable time." 6 The second definition stated:

The provision of goods or services without charge, or at a charge that is less than the normal charge for the goods and services in the market, is a contribution unless a lower rate is extended to all campaigns. If goods or services are provided at less than the normal charge in the market, the amount of the nonmonetary contribution is the difference between the normal charge for the goods or services at the time of the contribution and the amount charged.! [ 7 ]

The staff alleged that charging Ravenmoon and Kalmakoff fractional fuel costs alone was not commercially reasonable. The staff also alleged that a fuel-only valuation "ignore[d] all of the other normal and customary expenses associated with aireraft use" and noted the following additional expenses: "[olil, maintenance, an engine reserve ..., a propeller reserve ..., insurance, hang[alr fees, . inspection fees," and the pilot's salary. Thus, the staff claimed that Bush Planes had not charged a commercially reasonable rate and had made a prohibited corporate contribution to both candidates. '

1. The Commission hearing

The Commission members heard the case against Bush Planes during one day of testimony presided over by an administrative law judge. One of the main issues during the hearing was whether Bush Planes had charged the candidates a commercially reasonable rate.

Gillam testified regarding Bush Planes' costs. He stated that he owned the hangar in Anchorage where Bush Planes stored its aircraft and personally paid for the "heat, lights, taxes, [and] maintenance" related to the hangar. He did not testify as to how much he paid, nor did he provide Bush Planes' maintenance costs or the cost to run each of Bush Planes' aireraft on a per-hour basis. Gillam noted that McKinley Capital paid the pilots' salaries and benefits in exchange for Bush Planes making its aircraft available to McKinley Capital when it needed them for its business.

Greg O'Keefe, McKinley Capital's chief financial officer, testified regarding Bush Planes' O'Keefe testified that the amount of time Bush Planes' aircraft spent in the air did not affect Bush Planes' fixed costs. 8 But he did not provide values for these fixed costs or the agreement between McKinley Capital and Bush Planes regarding piloting services.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

BMW of North America, Inc. v. Gore
517 U.S. 559 (Supreme Court, 1996)
United States v. Bajakajian
524 U.S. 321 (Supreme Court, 1998)
Handley v. State, Department of Revenue
838 P.2d 1231 (Alaska Supreme Court, 1992)
Theodore v. State
407 P.2d 182 (Alaska Supreme Court, 1965)
Everts v. Rosenberg
41 P.2d 166 (California Court of Appeal, 1935)
Gottschalk v. State
575 P.2d 289 (Alaska Supreme Court, 1978)
Skvorc v. State, Personnel Board
996 P.2d 1192 (Alaska Supreme Court, 2000)
Tobeluk Ex Rel. Tobeluk v. Lind
589 P.2d 873 (Alaska Supreme Court, 1979)
De Witt v. Liberty Leasing Company of Alaska
499 P.2d 599 (Alaska Supreme Court, 1972)
Norcon, Inc. v. Kotowski
971 P.2d 158 (Alaska Supreme Court, 1999)
West v. Municipality of Anchorage
174 P.3d 224 (Alaska Supreme Court, 2007)
Fyffe v. Wright
93 P.3d 444 (Alaska Supreme Court, 2004)
Laidlaw Transit, Inc. v. Crouse Ex Rel. Crouse
53 P.3d 1093 (Alaska Supreme Court, 2002)
State, Department of Revenue v. Andrade
23 P.3d 58 (Alaska Supreme Court, 2001)
Alaska Public Offices Commission v. Stevens
205 P.3d 321 (Alaska Supreme Court, 2009)
Smith v. Stafford
189 P.3d 1065 (Alaska Supreme Court, 2008)
Casciola v. F.S. Air Service, Inc.
120 P.3d 1059 (Alaska Supreme Court, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
361 P.3d 886, 2015 Alas. LEXIS 146, 2015 WL 7709446, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rbg-bush-planes-llc-v-alaska-public-offices-commission-alaska-2015.