Libertarian Party of Alaska, Inc. v. State

• Decision Date: 19 November 2004
• Docket Number: No. S-11012.,S-11012.
• Parties: LIBERTARIAN PARTY OF ALASKA, INC., Kenneth P. Jacobus, and Kenneth P. Jacobus, P.C., Appellants, v. STATE of Alaska and Alaska Public Offices Commission, Appellees.
• Court: Alaska Supreme Court

101 P.3d 616

LIBERTARIAN PARTY OF ALASKA, INC., Kenneth P. Jacobus, and Kenneth P. Jacobus, P.C., Appellants, v. STATE of Alaska and Alaska Public Offices Commission, Appellees.

No. S-11012.

Supreme Court of Alaska.

November 19, 2004.

Kenneth P. Jacobus, P.C., Anchorage, for Appellants.

James L. Baldwin, Assistant Attorney General, Gregg D. Renkes, Attorney General, Juneau, for Appellees.

Before: BRYNER, Chief Justice, MATTHEWS, EASTAUGH, FABE, and CARPENETI, Justices.

OPINION

MATTHEWS, Justice.

The Alaska Campaign Disclosure Act expressly regulates only hard money. The question presented is whether an Alaska Public Offices Commission regulation requiring the disclosure by political parties of soft money contributions and expenditures is authorized by the act. We give an affirmative answer. Soft money can be used in numerous ways to evade hard money restrictions. Requiring the disclosure of soft money contributions and expenditures implements the act by aiding in its enforcement, deterring evasions, and informing the public. We therefore affirm the superior court's decision upholding 2 Alaska Administrative Code (AAC) 50.327.

BACKGROUND AND PROCEEDINGS

This case involves a regulation of the Alaska Public Offices Commission (APOC) that requires political parties to report donations and expenditures of "soft money." "Soft money" and "hard money" are exclusive categories. "Hard money" refers to donations made for the purpose of influencing the nomination or election of a candidate.¹ "Soft money" is most easily defined negatively as donations to political parties that are not "hard money," thus not made directly for the purpose of influencing the nomination or election of a candidate.

The Campaign Disclosure Act limits the amount of contributions that may be made to political parties and candidates and limits contributions that political parties may make to candidates.² The act also requires that candidates and political parties report individual contributions larger than $100 and all expenditures made.³ The word "contribution" is defined as a donation of hard money. "`Contribution' means a ... gift ... made for the purpose of influencing the nomination or election of a candidate...."⁴ The word "expenditure" is defined in broader terms, in part, as "a transfer of money... made for the purpose of influencing the nomination or election of a candidate ... [or] use by a political party...."⁵

Prior to the 2002 legislative amendment that we describe below, APOC had considered that all donations to political parties were for the purpose of influencing the election of candidates and thus were hard money.⁶ Under this interpretation all donations to political parties were subject to the $5,000 annual limit of subsection .070(b)(2) and all donations in excess of $100 had to be reported under subsection .040(b)(2).

In Jacobus v. Alaska, the United States District Court for the District of Alaska ruled that donations to political parties for purposes other than the nomination or election of a candidate could not constitutionally be limited.⁷ This holding necessarily rejected APOC's view that all donations to political parties are ultimately for the purpose of influencing the election of a candidate.

In 2002, while the district court decision in Jacobus was on appeal to the Ninth Circuit, the legislature amended subsection .070(b)(2).⁸ Before the amendment the statute provided that "An individual may contribute not more than... $5,000 per year to a political party." The amendment added the following language: "for the purpose of influencing the nomination or election of a candidate or candidates."⁹ Literally, the new language seems merely redundant since any donation to a political party would not be a contribution under subsection .400(4)(A) unless it were for the purpose of influencing the nomination or election of a candidate.¹⁰ But the use of the "for the purpose" clause specifically in the context of political party donations may imply that donations to political parties for other purposes are possible. The State observes in its brief that the amendment reflects an intent "to codify part of the federal district court's decision in Jacobus." The appellants do not take issue with this. We can accept, at least for the purposes of this case, that the amendment is the product of a legislative purpose to reject APOC's view that all donations to political parties are intended to influence elections. Some donations to political parties may be, in other words, soft money.¹¹

Subsequent to the adoption of the 2002 amendments, APOC received a petition urging the adoption of a regulation governing the reporting of soft money received and expended by political parties. According to the petition, "at least hundreds of thousands, and perhaps millions, of dollars of `soft money'" had been donated to Alaska's major political parties since the district court decision. The petitioners argued that

[g]iven the lack of reporting to APOC, it is not possible for the public to determine if the "soft money" has been given to political parties and/or spent in compliance with Alaska law.... This thwarts a fundamental goal of AS 15.13, which is to require full public disclosure of campaign contributions and expenditures prior to elections so that the voting public can make an informed choice between candidates.

....

.... Without immediate disclosure of this information, the voting public in the primary will not have complete information on which to base an informed choice of which party's ballot to choose (in the upcoming closed primary), or which candidates to vote for.

In November 2002 the commission voted to adopt 2 AAC 50.327. The regulation requires political parties to report all money received or spent that does not qualify as a "contribution" or "expenditure" as those terms are defined in AS 15.13.400.¹²

The Libertarian Party and Kenneth Jacobus (the Party) filed suit in the superior court, challenging the legality of 2 AAC 50.327. The Party then filed a motion for a preliminary injunction on the basis that the APOC lacked the authority to promulgate the regulation. Superior Court Judge Mark Rindner ruled that 2 AAC 50.327 was legally promulgated, and denied the Party's motion for injunctive relief. Subsequently a final judgment declaring that APOC had authority to promulgate the regulation was entered under Alaska Civil Rule 54(b). The Party appeals.

The Decision of the Superior Court

The superior court concluded that APOC had the authority to promulgate the regulation. We set out a portion of the superior court's opinion:

Administrative regulations are presumptively valid and the challenger bears the burden of proving such regulations to be invalid. O'Callaghan v. Rue, 996 P.2d 88, 95 (Alaska 2000). Under Alaska's Administrative Procedures Act, either expressed or implied statutory authority is sufficient to support an agenc[y's] adoption of a regulation. Kelly v. Zamarello, 486 P.2d 906, 911 (Alaska 1971).

As previously noted certain provisions of the underlying Act were declared unconstitutional by the United States District Court for the District of Alaska in Jacobus v. State, 182 F.Supp.2d 881 (D.Alaska 2001). Prior to that other provisions of the Act were also reviewed by the Alaska Supreme Court. See State v. Alaska Civil Liberties Union, 978 P.2d 597 (Alaska 1999)

. There, the Alaska Supreme Court noted that "it is the purpose of this Act to substantially revise Alaska's election campaign finance laws in order to restore the public's trust in the electoral process and to foster good government." Id. at 601; see also Ch. 48 § 1, SLA 1996.

The Plaintiffs concede that the authority of an administrative agency ordinarily includes the power to adopt regulations with regard to matters within the jurisdiction of the agency, provided that the regulations are not inconsistent with law. A regulation is consistent with law if it bears a reasonable relationship to the statutory objective. Vail v. Coffman Engineers, Inc., 778 P.2d 211, 214 (Alaska 1989); see also, Kalmakoff v. State, Commercial Fisheries Entry Commission, 693 P.2d 844, 853 (Alaska 1985)

.

The Alaska Supreme Court has also recognized that an agency may adopt a regulation based on implied statutory authority, where the Legislature has given an agency authority to promulgate regulations, and the regulation is reasonably necessary to carry out the provisions of the agenc[y's] enabling charter. See Chevron U.S.A., Inc. v. LeResche, 663 P.2d 923 (Alaska 1983)

; Boehl v. Sabre Jet Room, Inc., 349 P.2d 585, 587-88 (Alaska 1960).

While the parties vigorously dispute whether the APOC has the express authority to promulgate the regulation, there can be little doubt that the agency has the implied authority to require the disclosure of soft money contributions in light of the purpose of the Act. Indeed, the Alaska Supreme Court has previously noted that disclosure requirements, such as the one at issue in this case, serve various purposes including providing for an informed electorate, deterring corruption, and assisting in the detection of violations of contribution limitations. See VECO International, Inc. v. APOC, 753 P.2d 703, 711 (Alaska 1988)

. In VECO, the Alaska Supreme Court reiterated its own observation in Messerli v. State, 626 P.2d 81, 85 (Alaska 1981), and that of the United States Supreme Court in Buckley v. Valeo, 424 U.S. 1, 67-68, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976), as follows:

[D]isclosure requirements deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity. This exposure may discourage those who would use money for improper purposes either before or after the election. A public armed with information about a candidate's most generous supporters is better able to detect any post election special favors that may be given in return.

...

[N]ot least significant, record

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