Alabama Advisory Opinions February 18, 1999: AGO 1999-115 (February 18, 1999)

Alabama Attorney General Opinions

1999.

AGO 1999-115.

Dear Mr. Bennett:

This opinion of the Attorney General is issued in response to your request.

QUESTION 1

May a candidate simultaneously operate more than one principal campaign committee:

A. If one committee was formed by the candidate at the county level for a previous county election and another committee was later formed by the same candidate by filing with the Secretary of State for a state election?

B. Generally?

FACTS AND ANALYSIS

A principal campaign committee is defined in the Fair Campaign Practices Act (FCPA) as follows:

The principal campaign committee designated by a candidate under Section 17-22A-4. A political committee established primarily to benefit an individual candidate or an individual elected official shall be considered a principal campaign committee for purposes of this chapter.

ALA. CODE § 17-22A-2(11) (Supp. 1998).

A candidate is required to name a principal campaign committee pursuant to section 17-22A-4 of the Code providing:

Within five days after any person becomes a candidate for office, such person shall file with the Secretary of State or judge of probate, as provided in Section 17-22A-9, a statement showing the name of not less than two nor more than five persons elected to serve as the principal campaign committee for such candidate, together with a written acceptance or consent by such committee, but any candidate may declare himself or herself as the person chosen to serve as the principal campaign committee, in which case such candidate shall perform the duties of chairman and treasurer of such committee prescribed by this chapter. If any vacancies be created by death or resignation or any other cause, such candidate may fill such vacancy, or the remaining members shall discharge and complete the duties required of such committee as if such vacancy had not been created. The principal campaign committee, or its treasurer, shall have exclusive custody of all moneys contributed, donated, subscribed or in any manner furnished to or for the candidate represented by such committee, and shall account for and disburse the same. No candidate shall expend any money in aid of his or her nomination or election except by contributing to the principal campaign committee designated by the candidate as aforesaid.

ALA. CODE § 17-22A-4 (1995).

Section 17-22A-4 requires that a candidate have only one principal campaign committee for each office for which the person is a candidate. Neither the foregoing provisions nor any other provisions of the FCPA prohibit a candidate from simultaneously maintaining more than one principal campaign committee when the candidate has been involved in more than one campaign. Although a principal campaign committee continues in existence until dissolved, a candidate is not required to dissolve a principal campaign committee but may do so under certain circumstances as follows:

(d) A political committee, including a principal campaign committee, after having filed its initial statement of organization shall continue in existence until terminated or dissolved as provided herein . When any political committee other than a principal campaign committee determines it will no longer receive contributions or make expenditures during any calendar year in an aggregate amount exceeding $1,000, or when any candidate through his or her principal campaign committee determines that he or she will not receive contributions or make expenditures in the amounts specified in Section 17-22A-2(1)b, the chairman or treasurer of such committee may so notify the Secretary of State or judge of probate , as designated in Section 17-22A-9, of the termination or dissolution of such political committee . Such notice shall contain a statement by the treasurer of such committee of the intended disposition of any residual funds then held by the committee on behalf of a candidate.

ALA. CODE § 17-22A-5(d) (1995) (emphasis added).

A candidate who formed a committee to run for a county office could continue to have a committee in existence even though the candidate later formed a committee to run for another county office or a state office. Although a candidate may have more than one principal campaign committee in existence, a candidate and his or her committee are subject to restrictions with respect to the time in which contributions may be solicited, accepted, and received. See ALA. CODE § 17-22A-7 (Supp. 1998).

CONCLUSION

A candidate may simultaneously have more than one principal campaign committee in existence as the result of having been a candidate for more than one office at different times. QUESTIONS 2, 3, and 4

2. Where a candidate has unpaid debt disclosed from a county election in 1996 and later forms a separate principal campaign committee for a state election in 1998, may the candidate's county principal campaign committee receive money from the state principal campaign committee during the 120-day period after the candidate's participation in the state election?

3. Assuming the answer to Question 2 is in the affirmative, may the county principal campaign committee pay existing debt during the 120-day period following the state campaign?

4. Assuming the answer to Question 2 is in the negative, what is the status of the county principal campaign committee, and what options are available for the county principal campaign committee to pay its debt prior to dissolution?

FACTS AND ANALYSIS

Pursuant to section 17-22A-7 of the Code, a candidate or his principal campaign committee may only solicit, accept, or receive contributions for a period of 12 months before an election in which the person intends to be a candidate and for 120 days after the election in which the person was a candidate but only to the extent of campaign debt or the threshold for qualification as a candidate, or both. ALA. CODE § 17-22A-7 (Supp. 1998). A transfer from one political committee to another political committee is considered a contribution for purposes of the FCPA and is an authorized use of campaign funds. ALA. CODE § 17-22A-2(a)(2), § 17-22A-7(a) (Supp. 1998).

A candidate's principal campaign committee formed for a county election in 1996 would have been entitled to receive contributions to the extent of campaign debt during the 120-day period after the 1996 election. The committee is not authorized to receive contributions, even if from another political committee formed by the same candidate, during the 120 days after the 1998 election since the candidate was not a candidate for the office the committee was formed to support in 1998. Although this arrangement leads to a harsh result for creditors of the 1996 committee and may be the product of a piecemeal approach to revising the FCPA, this Office is, nevertheless, bound by the statute as it is written.

This harsh result may be alleviated in the narrow context of the facts you present. The principal campaign committee formed for the county election, after determining that it can no longer receive contributions or make expenditures, could dissolve itself and transfer the committee's assets and liabilities to the principal campaign committee formed for the state election. The state committee is allowed to receive the transferred assets (i.e., the contribution) during the 12 months before the state election or the 120 days after the election if the state committee has debt. The transferred debt would not be a contribution as that term is defined in the FCPA, nor would the assumption of debt of a dissolved committee be considered a contribution to that committee. A principal campaign committee is allowed to make expenditures without regard to any statutory time restrictions. Accordingly, the principal campaign committee formed for the state election could pay the liabilities it has assumed.

CONCLUSION

A candidate's principal campaign committee for a county election held in 1996 is not authorized to accept contributions in 1998 from the candidate's separate principal campaign committee formed for a state election held in 1998 because the contributions would not be made in accordance with the time frames established by section 17-22A-7 of the Code of Alabama. A principal campaign committee may dissolve and transfer its liabilities to another principal campaign committee formed by the candidate, and that committee could satisfy the liabilities assumed. QUESTION 5

Where a candidate with a principal campaign committee on file that operates a checking account with signature privileges held by the committee members and the candidate later files the same form at the same level of government designating a different membership of his principal campaign committee, does the new designation work a dissolution of the candidate's old principal campaign committee?

FACTS AND ANALYSIS

As stated above, a principal campaign committee continues in existence until terminated or dissolved as provided in section 17-22A-5(d) that states in pertinent part:

[W]hen any candidate through his or her principal campaign committee determines that he or she will not receive contributions or make expenditures in the amounts specified in Section 17-22A-2(1)b, the chairman or treasurer of such committee may so notify the Secretary of State or judge of probate, as designated in Section 17-22A-9, of the termination or dissolution of such political committee.

ALA. CODE § 17-22A-5(d) (1995).

Section 17-22A-4 requires a candidate to name the persons who shall serve as his or her committee. This section specifically allows a candidate to fill a vacancy on the committee created by death, resignation, or any other cause. This section states in pertinent part:

If any vacancies be created by death or resignation or any other cause , such candidate may fill such vacancy, or the remaining members shall discharge and complete the duties required of such committee as if such vacancy had not been created.

ALA. CODE § 17-22A-4 (1995) (emphasis added). Since a candidate is entitled to select the persons who shall serve as his committee, if a candidate chooses to replace one member or all members of the committee with another person or persons, this would be a vacancy created by other cause. The replacement of committee members alone does not terminate the principal campaign committee.

CONCLUSION

The replacement of members of a principal campaign committee does not terminate one principal campaign committee and create a new committee. QUESTION 6

Assuming the same facts as stated in Question 5 and upon the request of the candidate, are the old committee members under a fiduciary responsibility to the candidate to transfer moneys held on account to the new account operated by the new committee members?

FACTS AND ANALYSIS

As stated under Question 5, a new principal campaign committee is not created when members of the committee are replaced. The committee members serve at the pleasure of the candidate and act on behalf of the candidate and the committee. A candidate could, in fact, select himself to serve as the principal campaign committee. ALA. CODE § 17-22A-4 (1995). The relationship is in the nature of a principal and agent. An agent is defined as "[o]ne who acts for or in place of another by authority from him." Black's Law Dictionary 59 (5th ed. 1979). An agent has a duty to act with good faith and loyalty with respect to his principal and can be required to account for any assets put in the agent's hands at the termination of the agency. Allied Supply Company v. Brown , 585 So. 2d 33 (Ala. 1991); Camp v. Roanoke Guano Co. , 177 So. 343, 235 Ala. 61 (1937). Given the nature of this relationship, any members of the committee who are replaced owe a responsibility to the candidate to transfer any rights they have with respect to the committee checking account to the new members of the committee.

CONCLUSION

Members of a principal campaign committee who are replaced should transfer any rights they have with respect to committee funds to the new committee members.

I hope this opinion answers your questions. If this Office can be of further assistance, please contact Brenda F. Smith of my staff.

Sincerely,

BILL PRYOR

Attorney General

By: CAROL JEAN SMITH

Chief, Opinions Division

BP/BFS

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