California Advisory Opinions October 04, 1983: Ca. Att. Gen Opinion 83-109

Advisory Opinion Text

TO BE PUBLISHED IN THE OFFICIAL REPORTS

JOHN K. VAN DE KAMP Attorney General

OPINION
of
JOHN K. VAN DE KAMP Attorney General
CLAYTON P. ROCHE Deputy Attorney General

THE HONORABLE ALFRED E. ALQUIST, MEMBER OF THE CALIFORNIA SENATE, has requested an opinion on the following question:

May an officeholder conclusively designate in his will the purposes for which surplus campaign funds are to be used or held as specified in and required by section 12404 of the Elections Code?

An officeholder may not conclusively designate in his will the purposes for which surplus campaign funds will be used where such funds are held by a committee, although there is nothing which would prevent the committee from carrying out any such designation. As to campaign funds which are held by the officeholder personally, he or she may make such a conclusive designation by will. Any such disposition of surplus campaign funds must conform to the purposes authorized by section 12404 of the Elections Code.

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In 1981 the Legislature enacted sections 12400 through 12407 of the Elections Code. (Stats. 1981, ch. 956.) The basic purposes of this legislation were to prevent the personal use of campaign funds by candidates and prescribe the purposes for which surplus campaign funds may be used or held. (See Elec. Code, §§ 12401-12404; see also, generally, 65 Ops.Cal.Atty.Gen. 493 (1982).) Our focus herein is on section 12404 of this new law regarding the disposition of surplus funds. That section provides:

"Upon leaving any elective office, or at the end of the post election reporting period following the defeat of a candidate for elective office, whichever occurs last, surplus campaign funds under the control of a former candidate or officeholder or his or her controlled committee shall only be used or held for the following purposes:

"(a) The repayment of personal or committee loans or other obligations if there is a reasonable relationship to political, legislative, or governmental activity.

"(b) The payment of outstanding campaign expenses.

"(c) Contributions to any candidate, committee, or political party.

"(d) The pro rata repayment of contributors.

"(e) Donation to any religious, scientific, educational, social welfare, civic, or fraternal organization no part of the net earnings of which inures to the benefit of any private shareholder or individual or to any charitable or nonprofit organization which is exempt from taxation under subsection (c) of Section 501 of the Internal Revenue Code of 1954 or Section 17214 or Sections 23701a to 23701j, inclusive, or Section 23701(l), 23701n, 23701p, or 23701s of the Revenue and Taxation Code.

"(f) Held in a segregated fund for future political campaigns not to be expended except for political activity reasonably related to preparing for future candidacy to elective office."

It is to be noted that this section applies to campaign funds (1) under the control of a "controlled committee" or (2) under the personal control of the candidate or officeholder. The issue presented for resolution herein is whether an officeholder is legally empowered to make a conclusive designation in his or her will as to the mode of

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disposition of surplus campaign funds should he or she die in office. In answering this question we will consider separately the above specified situations with regard to where control of the funds lies.

1. Funds Under The Control Of A "Controlled Committee"

Campaign contributions may be made either directly to a candidate or to a campaign committee. The receipt and expenditure of and reporting of campaign funds are generally regulated in California by the Political Reform Act of 1974, Government Code section 81000 et seq. A "controlled committee" is defined in that act as follows:

"'Controlled committee' means a committee which is controlled directly or indirectly by a candidate or which acts jointly with a candidate or controlled committee in connection with the making of expenditures. A candidate controls a committee if he, his agent or any other committee he controls has a significant influence on the actions or decisions of the committee." (Gov. Code, § 82016.)

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Accordingly, a "controlled committee" receives campaign contributions for a particular candidate. It also makes expenditures for that candidate, acting jointly with the candidate or under his or her "influence."

Section 12404 of the Elections Code specifies the objects for which surplus campaign funds may be used or held when an officeholder leaves "any elective office." Certainly, a person leaves an office if he or she dies. While alive, the officeholder could and would at least "influence" the purposes for which surplus campaign funds would be used or held. May such "influence" transcend the candidate's life through his or her will by a provision therein specifying how section 12404 of the Elections Code should conclusively be carried out? We conclude that the answer is "no."

Although as a general proposition any individual may will property he or she owns (Probate Code, §§ 20, 21), in our view it cannot be said that an officeholder "owns" the campaign funds held by a committee. The contributions or gifts were made to the committee , albeit for his or her benefit or use. Since "[a]ll property has an owner . . .," (Civ. Code, § 669), both the legal and equitable title would appear to be vested in the committee. The committee was the donee of the gifts, giving it legal title thereto. And although the committee would appear to be a mere trustee of the funds, the law specifically negates such conclusion. Section 12400 of the Elections Codes declares that "the making or receipt of a campaign contribution does not create an actual or resulting trust or a trust-like relationship limiting the use of campaign contributions." (See also Elec. Code § 12407.) Therefore, the officeholder cannot even claim "equitable" title to funds as could the beneficiary of a trust. Accordingly, we see no grounds upon which to conclude that an officeholder may make a testamentary disposition of campaign funds.

Additionally, the law is silent with respect to whether an officeholder may designate in his or her will the manner in which surplus campaign funds should be distributed. In this regard we further note that the law does not appear to give the officeholder absolute control of the funds in the hands of his or her committee during the officeholder's lifetime. To permit a candidate a designation by will would provide such absolute control.

Finally, there is no legal necessity to permit an officeholder to make the section 12404 designations by will. The committee will survive the officeholder and will still be in a position to carry out the provisions of that section. Therefore, there is no need to "read into" the law such power in order to effectuate the law or its general purpose.

Accordingly, we conclude that the law does not grant an officeholder the absolute right to designate in his or her will the manner in which section 12404 should be

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carried out should he or she die in office. However, such conclusion would in no way prevent the officeholder from making such designation in his or her will nor prevent a committee from carrying out such designation so long as it comported with the statutory scheme.

2. Campaign Funds In The Personal Control Of The Officeholder

It is our understanding that at the present time almost all candidates for public office receive campaign contributions through campaign committees. However, there is no legal requirement that they do so. Accordingly, still to be considered is the situation where campaign funds are not in the custody of a committee but are given directly to and are in the personal control of the officeholder.

Again, since "[a]ll property has an owner . . ." (Civ. Code, § 669) it would appear that full legal title to such funds would be in the officeholder as the donee. Here, however, additional provisions of the Civil Code come into play. Section 678 of that code provides that "ownership of property is either: 1. Absolute; or, 2. Qualified." Section 680 of that code then provides, inter alia , that "ownership of property is qualified: . . . 3. When the use is restricted." Thus, by virtue of the restrictions placed upon the disposition of surplus campaign funds by section 12404 of the Elections Code, the officeholder, although owner of the campaign funds, would be at most a "qualified owner." ( Cf . 56 Ops.Cal.Atty.Gen. 190 (1973).)

As with committee funds, the law is silent as to the disposition of funds under the personal control of an officeholder should he or she die in office. However, since there is no committee which will survive the officeholder to carry out the provisions of section 12404 of the Elections Code, a different analysis and result appears necessary to effectuate the intent and purpose of the law.

We return to section 20 of the Probate Code, already cited above, which provides in full,

" Every person of sound mind , over the age of 18 years , may dispose of his or her separate property , real and personal , by will . In addition, every such person may by will dispose of the whole or any part of his or her body to a teaching institution, university, college, State Director of Public Health or legally licensed hospital, or to or for the use of any nonprofit

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blood bank, artery bank, eye bank, or other therapeutic service operated by any agency approved by the Director of Public Health under rules and regulations established by the director, either for use as such institution, university, college, hospital or agency may see fit, or for use as expressly designated therein." (Emphasis added.)

Since the officeholder is the owner of excess campaign funds, albeit a "qualified owner," we believe that section 20 of the Probate Code constitutes authority for the officeholder to dispose of such property by will, subject to the restrictions or qualifications placed upon that ownership. ( Cf . 17 Ops.Cal.Atty.Gen. 79, 82 (1951).)

Accordingly, we conclude that an officeholder may make a conclusive designation in his or her will as to the manner in which excess campaign funds will be held or disposed of so long as such designation is in accordance with the provisions of section 12404 of the Elections Code.