seec: Declaratory Ruling 2009-02

Declaratory Ruling 2006-2
 
   {Citizens} Political Committees Established or Controlled by Communicator
       Lobbyists                      
        
 

At its Special Meeting on September 20, 2006, the Commission voted to initiate a series
of declaratory rulings concerning the application of Connecticut General Statutes
93331(h) and 9-3331(i), as amended by October 25 Special Session, Public Act No. 05-5,
entitled, "An Act Concerning Comprehensive Campaign Finance Reformfor Statewide
Constitutional and General Assembly Offices
," and Public Act 06-137, "An Act
Concerning the Campaign Finance Reform Legislation and Certain Election Law and
Ethics Provisions
" (hereinafter collectively referred to as "the Act"), to the political
activities of lobbyists and state contractors. The Act becomes effective on December 31,
2006.

This declaratory ruling will expound upon an aspect of the new lobbyist contribution and
solicitation ban as it applies to political committees established or controlled by
communicator lobbyists. The Commission has received many questions concerning the
ban and its application to political committees established or controlled by lobbyists. The
Commission decided to issue this ruling to provide guidance to those subject to the ban
regarding the Commission's interpretation and prospective enforcement of the ban.

A declaratory ruling has the same status and binding effect as an order issued in a
contested case and shall be a final decision for purposes of appeal in accordance with the
provisions of Conn. Gen. Stat. 4-183, pursuant to Conn. Gen. Stat. 4-176(h). No one
is on file with the Commission as having requested notice of declaratory ruling petitions
on this subject matter pursuant to Conn. Gen. Stats. 4-176(c).

The relevant statutory sections encompassing the lobbyist contribution ban were enacted
in Section 29 of October 25 Special Session, Public Act 2005-5, and amended by Section
24 of Public Act 06-137, as follows:

Sec. 29. Section 9-333l of the general statutes is amended by adding
subsections (h) and (i) as follows (Effective December 31, 2006, and
applicable to elections held on or after said date
):

(NEW) (h) No communicator lobbyist, member of the immediate family
of a communicator lobbyist, or political committee established or
controlled by a communicator lobbyist or a member ofthe immediate
family ofa communicator lobbyist shall make a contribution or
contributions to
, or for the benefit of (1) an exploratory committee or a
candidate committee established by a candidate for nomination or election
to the office of Governor, Lieutenant Governor, Attorney General, State
Comptroller, State Treasurer, Secretary of the State, state senator or state
representative, (2) a political committee established or controlled by any
such candidate, (3) a legislative caucus committee or a legislative
leadership committee, or (4) a party committee. (Emphasis added.)

(NEW) (i) No communicator lobbyist, immediate family member of a
communicator lobbyist, agent of a communicator lobbyist, or political
committee established or controlled by a communicator lobbyist or any
such immediatejamily member or agent shall solicit
(A) a contribution
on behalf of a candidate committee or an exploratory committee
established by a candidate for the office of Governor, Lieutenant
Governor, Attorney General, State Comptroller, State Treasurer, Secretary
of the State, state senator or state representative, a political committee
established or controlled by any such candidate, a legislative caucus
committee, a legislative leadership committee or a party committee, or (B)
the purchase of advertising space in a program for a fund-raising affair
sponsored by a town committee pursuant to subparagraph (B) of
subdivision (10) of section 9-333b, as amended by this act. (Emphasis
added.)

(j)The provisions of subdivision (1) of subsection (h) of this section and
subsection (i) of this section shall not apply to the campaign of a
communicator lobbyist, immediate family member of a communicator
lobbyist or agent of a communicator lobbyist who is a candidate for public
office or to an immediate family member of a communicator lobbyist who
is an elected public official.

Any person who violates any provision of subsections (h) and (i) of this
section shall be subject to a civil penalty, imposed by the State Elections
Enforcement Commission, of not more than five thousand dollars or twice
the amount of any contribution donated or solicited in violation of
subsection (h) or (i) of this subsection, whichever is greater.

With that in mind, we first turn to the individuals and entities to whom the ban applies.
The statute provides that those subject to the contribution and solicitation ban are
communicator lobbyists, as distinct from client lobbyists. A communicator lobbyist is
someone compensated for lobbying over the threshold amount of $2,000 in any calendar
year. Conn. Gen. Stat. 1-91. "Communicator lobbyist" is further defined in Conn. Gen.
Stat. 1-91 (v) as "a lobbyist who communicates directly or solicits others to
communicate with an official or his staff in the legislature or executive branch of
government or in a quasi-public agency for the purpose of influencing legislative or
administrative action." Conn. Gen. Stat. 9-333a (16) provides that lobbyist has the
same meaning as Conn. Gen. Stat. 1-91 in the State Code of Ethics.

The Act proscribes a communicator lobbyist from contributing to or soliciting a
contribution for certain candidates and committees. In addition, the ban also applies to
such lobbyist's immediate family, and political committees established or controlled by a
communicator lobbyist and their immediate family. The types of committees that a
communicator lobbyist, his or her immediate family and political committees established
or controlled by them cannot contribute to are:

1) Candidate committees for statewide office or the General Assembly or
    exploratory committees for those offices;
2) Political committees established or controlled by those candidates;
3) Legislative leadership and legislative caucus committees; or
4) Party committees (state central and town committees).

To assess what the legislature meant by the phrase "established or controlled" we apply
well settled principles of statutory construction. Because there is no statutory definition
of "establish" or "control," we look to the "common meaning of the word[s] and [their]
dictionary definition." Gallogly v. Kurrus, 97 Conn. App. 662, 667 (2006). According to
The American Heritage Dictionary, (4th Ed. 2004), "establish" means "[t]o set up; found .
. . [t]o bring about; generate." Thus, the plain meaning of the word "establish" in the
context of political committees would involve the organization, origination, formation or
foundation of a political committee.

The prohibition would therefore appear to apply to all political committees organized or
founded by a communicator lobbyist, or in which a communicator lobbyist had a
substantial or significant role in the political committee's formation. Committees
established by a communicator lobbyist include, but are not limited to, where: (1) one or
more of the individuals serving as officers of the committee on the original statement of
organization were communicator lobbyists; (2) the business entity or organization that
established the committee was a registered communicator lobbyist with the Office of
State Ethics or its predecessor, the State Ethics Commission; and/or (3) for a business
entity or organization that is a communicator lobbyist and forms a political committee on
or after December 31, 2006, if the initial disbursement or contribution to the committee is
made by the business entity or organization that is a communicator lobbyist pursuant to
Conn. Gen. Stats. 9-333o(a) and 9-333p(a), as amended by the Act, or if the initial
disbursement was made by an officer, director, owner, limited or general partner or
holder of stock constituting 5% or more of the total outstanding stock of any class of the
business entity, pursuant to Conn. Gen. Stat. 9-333o(a), as amended by the Act.

There is an historical component to the word "established" that would appear to require a
review of the original statement of organization of the political committee in question.
However, on a practical level, construing the word in this manner would likely yield an
absurd and unworkable result. For example, a political committee may have been
established in 1995 on behalf of an individual who was a communicator lobbyist at that
time
. However, if the individual is no longer a registered lobbyist as of the effective date
of the Act, banning contributions from his or her successors who control the political
committee today would not serve the legislative purpose of the Act and would require
retroactive application of the law; unless, of course, the successors themselves are
communicator lobbyists. This result is of great concern to us. However, we cannot
completely ignore the historical origins of a political committee, as that would
effectively read "established" out of the new law.

Nevertheless, the word "established" must have a meaning. See Avalonbay Commun.
v. Zoning Comm. of the Town of Stratford
, 280 Conn. 405, 423 (2006) ([I]n construing
statutes, we presume that there is a purpose behind every ... phrase ... and that no part
of the statute is superfluous.) We therefore construe "established," for purposes of the
lobbyist contribution and solicitation ban, to relate back to the formation of the political
committee but with a present day component. This will prevent the absurd and
unworkable retroactive application that would appear if the common meaning alone were
to be utilized. Thus, if the political committee was established by a communicator
lobbyist when originally formed and the communicator lobbyist remains a registered
communicator lobbyist as of December 31, 2006, the committee will be deemed to be
"established" by a communicator lobbyist for purposes of the ban.

Moreover, the Ethics Code requiring registration for lobbyists became effective in 1978,
and further definitions of client lobbyist were added in 1991. The definition of
"communicator lobbyist" was not added to the Ethics Code until the adoption of Public
Act No. 95-144. Yet many political committees in existence today were formed prior to
the effective date of P.A. 95-144. If at the time of the creation ofa political committee,
no definition of communicator lobbyist existed, we conclude that such political
committee could not have been "established" by a communicator lobbyist. Therefore, no
political committee established prior to June 28, 1995, the effective date of P.A. 95-144,
will be found to be "established by a communicator lobbyist" for purposes of Conn. Gen.
Stat. 9-3331(h) and 9-3331(i).

We now tum to the issue of whether a political committee is controlled by a
communicator lobbyist. We begin by construing the word "control." The definition of
control is again absent from the relevant statutes. We, therefore, look to the ordinary
meaning of the word. Gallogly v. Kurrus, 97 Conn. App. 667 (2006). "Control" means
"[t]o exercise authoritative or dominating influence over; direct." The American Heritage
Dictionary, (4th ed. 2004). Unlike the word establish, which relates back to facts as they
existed at the time of the formation of a political committee, control can be analyzed in
the present tense.

Consequently, the Commission, in making a fact-based determination of whether an
individual "controls" a political committee, may consider such factors as whether the
individual:

(1) Has substantial involvement or influence in the decision-making concerning how
     the committee solicits or makes contributions or expenditures, or in the day-today
     activities of the committee;
(2) Directs or participates in the appointment or selection of the committee's
     officers; and/or
(3) Serves as a committee chairperson, treasurer, deputy treasurer or other officer.

Additionally, it is important to note that the Act also transfers the function of the filing
repository for campaign finance disclosure statements from the Secretary of State's office
to the State Elections Enforcement Commission, effective December 31, 2006, the same
effective date as the new lobbyist contribution ban. As a practical matter, the State
Elections Enforcement Commission will require all political committees to re-register
with the Commission. Many of the applicable laws changed and the forms have been
redesigned to capture information relevant to new requirements of the law, for example,
whether a political committee is established or controlled by a communicator lobbyist.
Part of the restructuring of the forms and the need to re-register is also to identify and
provide for as much permissible activity as possible.

The Commission has received questions concerning whether committees presently
controlled by communicator lobbyists must terminate prior to the effective date of the
Act. The answer is no. Committees controlled by communicator lobbyists are not
required to terminate. They may still make contributions to federal candidates (subject,
of course, to federal law), municipal candidates and other political committees that are
not established or controlled by covered candidates, pursuant to Conn. Gen. Stat. 9333t.
However, contributions from a communicator lobbyist political committee could
not be given to other permissible recipient committees, earmarked to be forwarded to a
particular campaign, because the law provides that communicator lobbyists may not
make contributions to, or for the benefit of, covered candidates.

The Commission has also received questions as to whether there are restrictions on
expenditures that committees established or controlled by communicator lobbyists or
their immediate family members may make utilizing existing committee funds. Existing
committees may continue to make expenditures consistent with Conn. Gen. Stat. 9333t
and 9-333i(g), under existing law, until December 31,2006, the effective date of the
Act. Committees presently established or controlled by communicator lobbyists also
have the option of spending their existing funds prior to December 31, 2006, the effective
date of the Act. Committees may continue to exist but will have different options going
forward from that date. Even after that date, political committees established or
controlled by communicator lobbyists or their immediate family members may still make
contributions to other political committees that are not established or controlled by
candidates for statewide office or the General Assembly, or legislative leadership and
legislative caucus committees, up to $2,000 annually pursuant to Conn. Gen. Stat. 9333t.
Communicator lobbyists, their immediate families and their political committees
are expressly barred from contributing to or soliciting for legislative leadership and
legislative caucus committees.

A committee that is choosing to terminate asks whether it can close its account with a
contribution to a newly formed political committee, controlled by the same entity, but
with communicator lobbyists removed from control of the new political committee. The
Commission concludes that as long as such transfer takes place prior to the effective date
of the Act, there is no prohibition on such conduct, and it may be accomplished in
accordance with Conn. Gen. Stat. 9-333t. If the new committee is not established or
controlled by a communicator lobbyist, the lobbyist contribution and solicitation ban will
not apply to how the funds may be spent after December 31, 2006. That assumes that the
entity is not itself a communicator lobbyist: Were that the case the newly established
political committee would still be established by a communicator lobbyist and be subject
to the prohibitions in the Act. In the alternative, the same newly formed political
committee could still be subject to the Act if it were controlled by a communicator
lobbyist. The above analysis does not foreclose the possibility that if the same conduct
occurred after the effective date of the Act that the newly created committee could be
restricted from contributing to covered candidates and committees under the theory of
successor liability.

The Commission has also been asked whether a committee established by a
communicator lobbyist could simply be reorganized to remove any communicator
lobbyists from involvement in the political committee. The question assumes that control
is the only operative definition applicable to the committee and ignores the element of
"establish." Again, that has been limited by the Commission for the reasons stated
above, but a committee that was established by a communicator lobbyist on or after June
28, 1995, will be subject to the ban if the communicator lobbyist remains a
communicator lobbyist on December 31, 2006. Such a committee could not reorganize
to escape the requirements of the lobbyist contribution and solicitation ban because the
historical fact cannot be altered. On the other hand, if a communicator lobbyist was not
involved in the establishment of the political committee, but rather presently controls
such a committee, the political committee could avoid application of the ban by removing
the communicator lobbyist from control of the political committee's activities.

The phrase "established or controlled" is also utilized in the Act for purposes of political
committees established or controlled by candidates for statewide office or the General
Assembly. Communicator lobbyists are also barred from contributing to these types of
committees. Factors the Commission will consider in determining whether committees
were established by candidates for statewide office, state senator or state representative
are whether:

(l)  one of the individuals serving as an officer of the committee at the time of its
     formation is a candidate for a covered office;
(2) a candidate for a covered office made the initial disbursement or contribution to
     the committee; and/or
(3) a candidate for a covered office had an active or significant role in the formation
     of the committee.

Notably, a similar analysis will apply concerning a present day view of whether a
committee is established or controlled by a candidate for statewide office or the General
Assembly. For example, a political committee established in 1980 by an individual who
was a candidate for state representative at that time, but who was never elected, or was
but has since resigned from public office or lost an election, should not be subject to the
present ban. However, if said individual is presently a candidate or incumbent office
holder on and after December 31,2006, the committee will be deemed established by a
candidate for statewide office or the General Assembly for purposes of disallowing
receipt of lobbyist contributions.

The definition of "candidate" in Conn. Gen. Stat. 9-333a(11), as amended by the Act, is
temporal and identifies four situations that trigger a candidacy. That definition creates a
practical problem with respect to incumbent members of the General Assembly and
statewide office holders. It is the exception, rather than the rule, that an incumbent does
not seek re-election. For purposes of identifying committees that communicator lobbyists
cannot give to or solicit for, the Commission will also consider whether the committee
was established or is controlled by a member of the General Assembly or statewide office
holder. An incumbent officer holder could establish that a political committee that he or
she established or controls was not subject to the ban on receipt of communicator lobbyist
contributions following a public declaration that he or she would not be seeking reelection
or election to another office.

The Commission has also received questions concerning the nature and extent of advice
that communicator lobbyists may provide to covered candidates. The Commission
concludes that communicator lobbyists may provide advice to covered candidates on
campaign strategy, messages, get out the vote initiatives and other campaign purposes
that do not relate to fundraising. Providing advice on fundraising to covered candidates
may potentially implicate the solicitation ban as such advice could constitute
participation in fundraising, which is solicitation pursuant to Conn. Gen. Stat.
9333a(26). However, the Commission concludes that a communicator lobbyist could
provide advice on laws and regulations with respect to fundraising; particularly with
respect to communicator lobbyists who may also be attorneys. The Commission has no
intention of intruding on a formal attorney/client relationship. Compliance with the law
should be encouraged. Communicator lobbyists, whether or not they are attorneys, could
answer questions such as the legal contribution limits to a particular candidate, but they
must avoid suggesting that a contribution be made. A communicator lobbyist should not
provide strategic fundraising advice, such as identifying a source of potential donors or a
potential venue for a fundraiser. The Commission concludes that that would constitute
soliciting as participating in fundraising. A lobbyist should not participate in the
fundraising event, but after the fact, could assist another individual for purposes of
compliance in the preparation of a committee's statement of receipts and expenditures. A
communicator lobbyist should not prepare checks for a treasurer's signature, as that
would involve participation and control in the decision-making expenditures of a political
committee.

The Commission has also received questions concerning what level or degree of
involvement on the part of a communicator lobbyist in the activities of a political
committee would constitute "control," such that the political committee would be unable
to contribute to candidates for statewide and general assembly offices. The Commission
concludes that a communicator lobbyist may provide compliance advice to a political
committee without being deemed to "control" the committee. A communicator lobbyist
could assist a political committee in preparing its statements of receipts and expenditures,
whether on a volunteer basis or for compensation, without being deemed to "control" the
committee. A communicator lobbyist may make contributions to a committee that is not
established or controlled by a covered candidate, within permissible limits, without being
deemed to "control" the committee. Such activities by themselves would not lead to the
conclusion that a communicator lobbyist "controls" the political committee, absent
factors expressed previously in this ruling, indicating that the commupicator lobbyist has
substantial involvement or influence in the decision making of how the committee solicits
or makes contributions or expenditures. In short, there are levels of participation that a
communicator lobbyist can engage in with respect to a political committee that will not
rise to the level of "control" such that the committee is banned from contributing to
candidates for statewide and general assembly offices.

To the extent that lobbyists remain confused or uncertain as to the application of the Act,
they are advised to seek further guidance from the Commission. Attempting to seek
voluntary compliance is among the Commission's statutory powers and duties as
provided by Conn. Gen. Stat. 9-7b(a)(5). A communicator lobbyist may call and
anonymously ask a question over the telephone, e-mail or write a letter requesting a
written opinion by staff, an Advisory Opinion or further Declaratory Ruling by the
Commission.

This constitutes a declaratory ruling pursuant to Conn. Gen. Stat. 4-176 as to the
applicability of Conn. Gen. Stat. 9-3331(h) and (i), as amended by October 25 Special
Session Public Act 2005-5 and Section 24 of Public Act 06-13 7.

Adopted this 20th day of December, 2006, by Order of the Commission.

                                                                           




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