REQUESTED BY: G. Thomas DuBose, National Chairman, Transportation Political Education League.
QUESTION: May a PAC accept and deposit a check from its collecting agent prior to the time it receives from the collecting agent all required information regarding the contributors?
CONCLUSION
No.
FACTS
The United Transportation Union is comprised of approximately 628 locals across the country. It sponsors the Transportation Political Education League (TPEL - Federal), a federal political action committee or PAC. It also sponsors the Nebraska Transportation Political Education League (TPEL - Nebraska) which is a separate segregated political fund or PAC with a statement of organization on file with the Nebraska Accountability and Disclosure Commission.
TPEL - Federal acts as a collecting agent for the various state TPEL's including TPEL - Nebraska. That is, contributions to both the state and federal TPEL's are first directed to TPEL - Federal. Fifty percent (50%) of the contribution is kept by TPEL - Federal and fifty percent (50%) is sent to the state TPEL in the state from which the contribution originated.
Most of the contributions received by TPEL - Federal are payroll contributions of members. These payroll contributions are first directed to the local of the member. Once per month the treasurer of the local sends a single check constituting all contributions received to TPEL - Federal. At the same time, the local treasurer submits a monthly "local billing." This billing includes the name of every member making a contribution. This information is audited by TPEL - Federal and entered into a computer. The check and billing from the local is theoretically due by the 20th of each month, but in practice may be received at anytime during the month. Because of the tedious process of entering each individual contributor's name into the computer, a check may be sent to the local state TPEL prior to the time that the TPEL - Federal is able to provide information as to the contributors. It is believed, however, that this information could be provided by the first day of the following month.
A second source of contributions is the retired members. Again, money received from retired members is split. TPEL - Federal keeps fifty percent (50%) and fifty percent (50%) is forwarded to the state from which the contribution originated. Record keeping on the contribution of a retired member essentially consists of retaining a copy of an acknowledgement letter which show the contributor's name, address, date of the contribution, and the amount of contributions. No computer list is generated of these contributions. TPEL - Federal simply provides a copy of each acknowledgement letter to the appropriate state TPEL. The fifty percent (50%) share of the retired member's contributions sent to the state is included in the monthly check of contributions from active members. Again, there may be a delay between the time that the check is forwarded to the state TPEL and the time that the state TPEL receives information regarding the retired contributors.
A third source of contributions is from the locals' ladies auxiliary lodges. These types of contributions are processed in the same manner as contributions from retired members and the record keeping is the same.
ANALYSIS
Section 49-1447 of the Nebraska Political Accountability and Disclosure Act requires a committee treasurer to keep detailed accounts, records, bills, and receipts necessary to substantiate the information contained in Campaign Statements. Section 49-1455 requires Campaign Statements to include the total amount of contributions received during the period covered by the Campaign Statement. It further requires that the statement show the full name of each individual from whom contributions totaling more than $100 are received during the reporting period together with the individual's street address, the amount contributed, the date on which the contribution is received, and the cumulative amount contributed by the individual during the election period. Section 49-1465 requires that a Campaign Statement filed by a committee by signed by the committee treasurer and notarized. The verification statement must indicate that the treasurer has used all reasonable diligence in his preparation of the Campaign Statement and that to the treasurer's knowledge the Campaign Statement is true and complete.
Section 49-1469(2)(c) provides that all contributions to and expenditures from a separate segregated political fund (or PAC) shall be limited to money or anything of ascertainable value obtained through the voluntary contributions of employees, officers, directors, stockholders, or members of the corporation, union, or other organization which sponsors the separate segregated political fund. That is, there is a limited category of individuals from whom a PAC may accept contributions.
Under the method of operation used by TPEL-Federal and TPEL-Nebraska there is a limited ability by the Nebraska treasurer to comply with Nebraska law. He cannot maintain detailed records of receipts because he does not have them. He cannot list the names, addresses, amounts, etcetera of individual contributors because he does not have them. He cannot necessarily verify that a Campaign Statement is complete because he lacks the records to make that determination. The treasurer does not know if the contributions are coming from permissible sources since he has no information as to the sources of the contributions. In addition, the acceptance of contributions from the federal PAC under these circumstances potentially violates §49-1472 which provides in part:
A person shall not accept or expend an anonymous contribution. An anonymous contribution received by a person shall not knowingly be deposited but shall be given to a tax exempt charitable organization.
It is therefore the position of the Commission that the Nebraska State Transportation Political Education League may not accept checks from the federal PAC of the Transportation Political Education League unless the check is accompanied by all requisite information. Should a check be received by Nebraska TPEL without the requisite information, it would have the option of either returning the check to the federal PAC or treating the check as an anonymous contribution which would then need to be donated to a charitable institution.
By taking this position, we believe that a number of serious difficulties are avoided. First, it lessens the danger that the Nebraska Transportation Political Education League will receive contributions from an unauthorized source. This ought to be a real concern for the Nebraska treasurer since the receipt of funds from an unauthorized source could be prosecuted as a Class III misdemeanor. Second, it reduces the possibility that money from an unauthorized source will be used in a Nebraska election. Third, it eliminates a potential situation in which TPEL - Nebraska receives a contribution, is required to file a Campaign Statement, and is unable to file a complete Campaign Statement because it lacks the requisite information. Fourth, if the money is not available to the local TPEL until the requisite information is provided, there is an incentive to find a more timely method of providing the requisite information.
Two matters need to be clarified.
A question arises as to what date TPEL - Nebraska should use in reporting the receipt of contributions. A contribution is received by TPEL - Federal on one date and transferred to TPEL - Nebraska on a later date. Section 49-1446(6) provides that "a contribution shall be considered received by a committee when it is received by the committee treasurer or a designated agent of the committee treasurer notwithstanding the fact that the contribution is not deposited in the official depository by the reporting deadline." Therefore, TPEL - Nebraska, when completing Campaign Statements, should show contributions as having been received on the date that they are received by TPEL - Federal.
Section 49-1446(5) provides that "contributions received by an individual acting in behalf of a committee shall be reported promptly to the committee's treasurer not later than five days before the closing date of any Campaign Statement required to be filed by the committee and shall be reported to the committee treasurer immediately if the contribution is received less than five days before the closing date." The treasurer for TPEL - Federal is acting as a collecting agent for TPEL -Nebraska. He or she therefore has an obligation to provide the requisite information to TPEL - Nebraska on a timely basis.
