The Bipartisan Campaign Reform Act of 2002 (often called the McCain-Feingold Act) allows state and local political parties to use nonfederal funds for the purchase or construction of party office buildings. McCain-Feingold said that state law governs exclusively in regulating spending on state and local party buildings. Prior to McCain-Fiengold, this was never an issue in Kansas since it was not allowed by federal law.
On Feb 3, 2009, Mr. Kenny Johnston, Executive Director of the Kansas Democratic Party, sent the Kansas Governmental Ethics Commission a letter requesting an advisory opinion and clarification about how a political party might use a building fund. This request was discussed at the monthly meeting of the Ethics Commission last Wednesday, and an opionon about this matter will be published soon.
The first part of Mr. Johnstone’s letter asked about the building fund itself. General Counsel, Judy Moler, explained the draft advisory opinion to the Ethics Commission to start the discussion among Commissioners:
“It is the opinion of the Kansas Governmental Ethics Commission that donations and disbursements made to the KSDC (Kansas Democratic State Committee) for the purpose of purchasing or constructing a part office building and not for the purpose of influencing any Kansas state or local election are permissible and do not fall under the definitions of contributions. Thus, there would be no limitations under K.S.A. 25-4142 et. seq” (the Kansas Election Campaign Finance Act).
The second part of the letter from the Kansas Democrats asked if specific expenses might be permissible from the building fund:
- Lease payments of satellite offices;
- Office supplies;
- Copier/fax lease payments and maintenance;
- Telephone, internet, and cable equipment and services;
- Office furniture and computer equipment; or
- Maintenance and cleaning.
The response by the Ethics commission was
The proposed expenses are, however, more troubling.
The Ethics Commission had no problem with lease payments of satellite office, office furniture, maintenance, and cleaning, since they could not directly influence state or local elections under the Campaign Finance Act, but had concerns about the other expenses:
… it would be more difficult to assess how office supplies, copier/fax lease payments and maintenance, telephone, internet and cable equipment and services, and computer equipment would be used. It appears more likely that these expenditures could drift in the direction of use for the purpose of influencing state or local elections. For that reason, it is the opinion … that these expenses are limited …
Commission Chair Sabrina Standifer expressed concerns about these expenditures.
Ethics Commission Executive Director Carol Williams explained other states, like Iowa and Illinois, have approved use of contributions not limited by their campaign finance laws for buildings since a building cannot expressly advocate for the election or defeat of a specific candidate. Ms. Williams explained that a fax machine could advocate, but a building could not expressly advocate.
Commissioner Tim Emert said “it seems kind of ‘gray and fuzzy’” in deciding what should be included and what should be excluded.
Commissioner Emert wondered if the opinion were adopted what would happen if the Kansas Republican Party filed some kind of objection or complaint, or whether a group like Americans for Prosperity might seek to block the Commission’s ruling in district court.
Ms. Williams explained that by law the opinion of the Commission would be legally binding. Commissioners Standifer and Solbach wondered if AFP would have standing to challenge the opinion in court. Regardless, the Commission agreed that any objection could only be changed by the legislature through a new law once the opinion was issued.
After discussion, all commissioners except Ms. Barbara Barnard voted “yes” to approve the opinion. Ms. Barnard abstained. The opinion, as amended during the discussions, was published in the Kansas Register.
As of this writing, it’s unclear what reporting requirements apply to a party building fund.
Other States
In general, McCain-Feingold allows building funds by state party committees, where contributions to such funds are unlimited and unrestricted.
Parties could receive contributions in unlimited amounts from unlimited sources for “building funds” established to pay for new buildings or headquarters structures. Outside of this “bricks and mortar” provision, all monies received by parties were subject to federal limits. CSPAN
The Iowa Ethics & Campaign Disclosure Board requires party building fund reports to be online, and both Democrats and Republicans in Iowa have filed such reports since 2006. As of this writing, it’s unclear whether similar building fund reporting like Iowa is required in Kansas.
North Carolina puts these restrictions on expenditures from a building fund:
The building fund can not be used to:
(1) Pay utilities
(2) Purchase furniture unless it becomes a fixture
(3) Purchase computers or related information technology items unless they become fixtures
This campaign finance factoid from the National Center for Public Policy Research may concern Republicans in Kansas:
Union Dues Buys Ohio Democrats New Headquarters
Look for the union label on the cornerstone of the Ohio Democratic Party’s new state headquarters in Columbus. The $830,000 building was paid for, in part, with money donated by labor unions – money taken from member wages as union dues. According to an Ohio Democratic Party press release, “Ohio election law permits the party to spend corporate and union dues money for the purchase of a building. This money cannot be used to fund campaign efforts.”
A Meadowlark article from Dec. 2008 reported a $100,000 contribution from SEIU to Gov. Sebelius’ Blue Stem Fund PAC. Especially under Gov. Sebelius’ leadership, Kansas Democrats have access to considerable labor union money from outside Kansas, which possibly could be used for buildings now.
No summary information of party building funds by state could be located on the Internet.
A new building will do nothing for them. However, it’ll become more and more grey what money goes to what fund. If this is permitted, “building money” will ultimately end up in various campaign accounts and the Ethics Commission will be unwilling to do anything about it.