Legislature(2001 - 2002)

03/22/2001 08:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 177-CAMPAIGN FINANCE: CONTRIB/DISCLOS/GROUPS                                                                               
                                                                                                                                
Number 1865                                                                                                                     
                                                                                                                                
CHAIR  COGHILL announced  the  next order  of  business would  be                                                               
HOUSE  BILL NO.  177, "An  Act placing  certain special  interest                                                               
organizations within  the definition  of 'group' for  purposes of                                                               
Alaska's  campaign  finance   statutes;  providing  a  contingent                                                               
amendment to  take effect in case  subjecting these organizations                                                               
to  all of  the statutory  requirements pertaining  to groups  is                                                               
held  by  a  court  to  be  unconstitutional;  requiring  certain                                                               
organizations  to   disclose  contributions  made  to   them  and                                                               
expenditures  made  by them;  requiring  disclosure  of the  true                                                               
source of campaign contributions;  and providing for an effective                                                               
date."   He noted that  Representative Kott also had  a committee                                                               
substitute to offer.                                                                                                            
                                                                                                                                
REPRESENTATIVE PETE KOTT, Alaska  State Legislature, came forward                                                               
to testify as sponsor of HB 177.                                                                                                
                                                                                                                                
REPRESENTATIVE  JAMES moved  to  adopt  the CS  for  HB 177  [22-                                                               
LSO406/P Kurt] as the working document before the committee.                                                                    
                                                                                                                                
REPRESENTATIVE KOTT explained that  the original HB 177 contained                                                               
contingency language.   The CS removes  the contingency language,                                                               
which was not felt to be necessary.   That is the only change, he                                                               
said.                                                                                                                           
                                                                                                                                
REPRESENTATIVE KOTT said  HB 177 is a relatively  simple piece of                                                               
legislation.     It  does  two   things.    In  Section   2,  the                                                               
"contributor" is defined as "the  true source of funds, property,                                                               
or service being  contributed."  This comports  with federal law,                                                               
he said.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  KOTT said  the  language added  to  Section 3  is                                                               
"probably  the heart  of  the  matter."   It  defines "a  special                                                               
interest  organization" as  "a person  other  than an  individual                                                               
that  cannot participate  in business  activities, does  not have                                                               
shareholders  who have  a  claim on  corporate  earnings, and  is                                                               
independent from  the influence of business  corporations."  This                                                               
spells out what a "special  interest organization" is and what it                                                               
can and  cannot do.   This provision  also comports  with federal                                                               
law, he said.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOTT  said the  purpose  of  HB  177 is  to  keep                                                               
nonprofit   organizations  like   the   Alliance,  the   Resource                                                               
Development  Council, and  "others  of that  nature" from  making                                                               
unlimited contributions  to political campaigns.   They could not                                                               
make any greater contribution than $1,000.                                                                                      
                                                                                                                                
Number 1516                                                                                                                     
                                                                                                                                
REPRESENTATIVE HAYES asked  about the motivation for HB  177.  He                                                               
wondered if  the intent  was to prevent  something that  has gone                                                               
on.                                                                                                                             
                                                                                                                                
REPRESENTATIVE KOTT  said he thinks  the motivation  is primarily                                                               
to close  a loophole in the  law; and whether something  has gone                                                               
on or not is somewhat irrelevant.                                                                                               
                                                                                                                                
Number 1416                                                                                                                     
                                                                                                                                
CHAIR  COGHILL noted  that there  was testimony  to come  from at                                                               
least two groups.                                                                                                               
                                                                                                                                
Number 1384                                                                                                                     
                                                                                                                                
BROOKE  MILES,   Director,  Public  Offices   Commission  (APOC),                                                               
participated by  teleconference.  She  said she was  available to                                                               
answer questions  and that the  commissioner would review  HB 177                                                               
next week.  She thought  the CS removing the contingency sections                                                               
makes HB 177 a more legible piece of legislation for reviewing.                                                                 
                                                                                                                                
MS.  MILES said  the  APOC  staff anticipates  that  HB 177  will                                                               
result in a proliferation of  groups.  Under current regulations,                                                               
APOC  has   restricted  the   definition  of   "special  interest                                                               
organization" to not-for-profit corporations  and has described a                                                               
process by  which those corporations can  qualify to participate.                                                               
Also, she said,  although this would mean all  these groups could                                                               
only give  up to $1,000  to a candidate in  the form of  a direct                                                               
contribution,  it would  not  limit  independent expenditures  or                                                               
non-coordinated expenditures.                                                                                                   
                                                                                                                                
Number 1256                                                                                                                     
                                                                                                                                
HUGH  BROWN  III,  Volunteer, Alaska  Conservation  Voters,  came                                                               
forward to  testify.  He said  he was concerned about  HB 177 and                                                               
not certain  it was necessary.   He liked the CS  better than the                                                               
bill itself.    Alaska  Conservation Voters is one of the special                                                               
interest groups that  participated in the last election.   He has                                                               
heard  some  comments  that cause  him  concern,  including  that                                                               
Alaska  Conservation voters  had a  lot  of Outside  money.   But                                                               
Outside money  can be good for  Alaska, he said, noting  that oil                                                               
money  is  Outside money.    As  to  closing  a loophole  in  the                                                               
campaign laws, he  thinks "that if we are  doing campaign finance                                                               
reform,   we  should   do  it   across  the   board,"  not   just                                                               
incrementally.   As  campaign laws  are written  now, there  is a                                                               
level playing  field.   He supports  full disclosure,  and thinks                                                               
the current system works.                                                                                                       
                                                                                                                                
MR. BROWN said  participating in the election process  is a right                                                               
everyone  has.     It  discourages   him  when  he   sees  Alaska                                                               
Conservation Voters  described as  "some extreme  Outside group."                                                               
He is a 26-year  Alaska resident.  "I care about  clean water.  I                                                               
care about  clean air.  I  care about development," he  said.  "I                                                               
don't like to be characterized as an Outside extremist."                                                                        
                                                                                                                                
Number 1008                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES said  she, too,  supports full  disclosure.                                                               
She   would  rather   have  full   disclosure   than  limits   on                                                               
contributions.    "That doesn't  seem  to  be  an option  for  us                                                               
because the  general public thinks that  we should keep a  lid on                                                               
the spending,"  she stated.  She  asked Mr. Brown where  he works                                                               
and about the  various levels of funding  for Alaska Conservation                                                               
voters.                                                                                                                         
                                                                                                                                
MR. BROWN said  he did not know about levels  of funding or where                                                               
the funds  come from.   He said  he is a  volunteer.  He  is from                                                               
Anchorage and  is in Juneau  on vacation, taking some  paid leave                                                               
from his  job and  getting involved with  the legislature  as his                                                               
civic duty.   To the best  of his knowledge, everything  has been                                                               
above board  and Alaska  Conservation Voters  has qualified  as a                                                               
non-group  entity.   He is  concerned about  the issues,  such as                                                               
clean air and clean water.                                                                                                      
                                                                                                                                
REPRESENTATIVE JAMES  said she agreed  with him about  clean air,                                                               
clean water, clean soil.   (However, she noted, she parts company                                                               
with  those  in  conservation  groups when  it  comes  to  visual                                                               
impact.)    She  said  she   does  not  know  much  about  Alaska                                                               
Conservation  Voters  but  has  heard that  the  money  comes  in                                                               
through different  organizations that  contribute funds  that may                                                               
or  may not  be used  in political  campaigns.   She said  HB 177                                                               
would let people know where the  money comes from, and she thinks                                                               
that information should be disclosed.                                                                                           
                                                                                                                                
MR. BROWN  observed that  it healthy to  have both  sides talking                                                               
about issues.                                                                                                                   
                                                                                                                                
Number 0683                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  asked Mr. Brown  how he thinks HB  177 would                                                               
impact Alaska Conservation Voters.                                                                                              
                                                                                                                                
MR. BROWN said he understands  that Alaska Conservation Voters is                                                               
the only  501C-4, which is a  qualified non-group entity.   So HB
177 would only  affect Alaska Conservation Voters.   He said that                                                               
causes him concern.                                                                                                             
                                                                                                                                
MR.  BROWN explained  that his  concern was  not just  for Alaska                                                               
Conservation Voters, but also for  other non-group entities.  The                                                               
definition,  "does not  have  business  activities, doesn't  have                                                               
shareholders  or  corporate  earnings,   and  is  independent  of                                                               
business influences"  to him described  parents, he said.   He is                                                               
concerned about parents because of  some of the current education                                                               
proposals.  "When we start  giving out diplomas with endorsements                                                               
and different  types of diplomas for  different children, parents                                                               
are going  to want to  respond to that  in the legislature  or in                                                               
the  election process,"  he said.   He  envisioned parents  whose                                                               
children  are  going to  be  getting  "inferior diplomas"  coming                                                               
together, forming  a non-group entity, and  seeking Outside money                                                               
to help them.                                                                                                                   
                                                                                                                                
Number 0513                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE clarified  that he did not want  to know what                                                               
the Alaska Conservation  Voters was, but how HB  177 would affect                                                               
them.                                                                                                                           
                                                                                                                                
MR.  BROWN  said he  thought  that  to  participate in  the  2002                                                               
elections,  they   would  have  to   list  all  the   people  who                                                               
contributed.   He also  thinks HB  177 might put  a limit  on how                                                               
much a person contributes.                                                                                                      
                                                                                                                                
CHAIR COGHILL asked Mr. Brown if he would object to that.                                                                       
                                                                                                                                
MR. BROWN said he did not  have an objection to knowing where the                                                               
money came from.                                                                                                                
                                                                                                                                
Number 0422                                                                                                                     
                                                                                                                                
STEVE CONN,  Executive Director, Alaska Public  Interest Research                                                               
Group  (AKPIRG), testified  by teleconference.   He  reminded the                                                               
committee  that  the Alaska  Supreme  Court  ruled in  1999  that                                                               
ideological nonprofit  corporations have  a right  to participate                                                               
in the political process.  He said:                                                                                             
                                                                                                                                
     Those  ideological  nonprofit   corporations  that  are                                                                    
     formed  to   promote  political  ideas  and   that  are                                                                    
     independent  from  the  influence of  business  have  a                                                                    
     unique  status  because  their  political  expenditures                                                                    
     don't   pose   the   same   "dangers"   as   those   of                                                                    
     corporations.   It  would appear  even  in the  amended                                                                    
     substitute  that this  bill  is  directed at  replacing                                                                    
     that court  opinion with a statute  that re-encompasses                                                                    
     that sort  of entity.  The  focus ... seems to  be [on]                                                                    
     the  issue of  political ideas  and political  beliefs.                                                                    
     That is  to say,  my "read"  of this  is that  with the                                                                    
     disclosure  that   is  being   asked  for,   that  some                                                                    
     individuals [such  as] a  high-placed executive  in one                                                                    
     of the oil companies or  in an oil service company like                                                                    
     VECO [Corporation] who  wants to participate monetarily                                                                    
     in  this sort  of  alliance ...  would  fear that  they                                                                    
     would suffer some sort of retribution ....                                                                                 
                                                                                                                                
     This brings  me to ...  the thrust of my  testimony and                                                                    
     that is  that I think  we need to determine  whether or                                                                    
     not this  bill effectively institutionalizes a  kind of                                                                    
     intolerance of  the free flow  of political ideas.   In                                                                    
     other  words,  I  think  Alaskans  believe  that  their                                                                    
     beliefs  should  be  set in  motion  in  the  political                                                                    
     process  without fear  of retribution  and that  we are                                                                    
     served, as the  previous witness said, by  a free, open                                                                    
     discourse.  I think in  the issue of development versus                                                                    
     non-development,  the  Alaska  population is  really  a                                                                    
     blend of ideas, and this  is what surveys seem to show,                                                                    
     and I  don't think that  ... most people are  deeply on                                                                    
     one side  or the other,  but what  they want to  see is                                                                    
     that all  of these  ideas are introduced  and developed                                                                    
     in the political  process.  And so it would  seem to me                                                                    
     that  this  bill  is  perhaps  overreaching  and  would                                                                    
     ultimately  be found  unconstitutional, but  that is  a                                                                    
     matter for another day and another time.                                                                                   
                                                                                                                                
     More important  is that in  this period of time  when I                                                                    
     know  the  legislature  is  quite  concerned  about  an                                                                    
     emerging intolerance  in our  society that  they should                                                                    
     step back  from this  ... as  a bill  that seems  to be                                                                    
     targeted  and  [word  indisc.] revisit  this  from  the                                                                    
     standpoint of the belief  that political beliefs should                                                                    
     be  practiced, there  should be  a free  flow of  ideas                                                                    
     however  unpopular whether  about  development or  non-                                                                    
     development,  or  other   forms  of  civil  libertarian                                                                    
     belief, and I  think this is what ... the  logic of the                                                                    
     court's decision was about ....                                                                                            
                                                                                                                                
TAPE 01-28, SIDE A                                                                                                              
                                                                                                                                
Number 0040                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  asked  Mr.  Conn, "Don't  you  think  that                                                               
Alaska's public ... needs to know  where the money is coming from                                                               
to sell  these ideas?"   She went  on to say  the whole  issue of                                                               
campaign finance  reform and  the ability to  have money  be your                                                               
voice and  the efforts  to actually  keep down  so much  money in                                                               
different areas, the whole gist  of everything seems to be, "It's                                                               
OK for you  to put your money  where your mouth is,  but the rest                                                               
of the people  need to know whose  money it is."   Don't you want                                                               
that in all of  the people who are working on  the other sides of                                                               
the issue from you, she asked.                                                                                                  
                                                                                                                                
MR. CONN  returned to what  he thinks is  the basic logic  of the                                                               
court decision that excluded a particular category of group.                                                                    
                                                                                                                                
     In  an ideal  world,  that would  be  precisely what  I                                                                    
     would  want to  see happen.    But in  the real  world,                                                                    
     tainted   by  the   possibility   of  retribution   for                                                                    
     political  expression, some  people and  some forms  of                                                                    
     belief are in  the minority and are always  going to be                                                                    
     unpopular.  And  the court's point of view  was that to                                                                    
     allow  the  exercise  of  political  expression,  there                                                                    
     needed to  be a  shield for  the practice  of political                                                                    
     activity  in  some instances,  and  they  carved out  a                                                                    
     particular  area   that  deals  with  ...   matters  of                                                                    
     ideology  and nonprofits.   Now  it might  be something                                                                    
     about   parents  going   up  against   the  educational                                                                    
     establishment; it  might be in this  instance something                                                                    
     about  how much  we  develop or  don't develop,  where,                                                                    
     how, and  what, but that's  the nature of things.   And                                                                    
     so this  is a kind of  shield and ... it's  a balancing                                                                    
     act, and that's the best ...[way I can] put it.                                                                            
                                                                                                                                
Number 0286                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES responded:                                                                                                 
                                                                                                                                
      "It  is a  shield, and  that is  the problem  with the                                                                  
     whole thing.   It is a shield and so  you have somebody                                                                    
     you're talking about  who is in the  minority, wants to                                                                    
     make  their voice  louder, gets  money from  people who                                                                    
     are not disclosed,  who take no blame or  no credit for                                                                    
     getting the message out.  That  is the issue and let me                                                                  
     tell you  as a  campaigner for  the legislature,  I can                                                                    
     tell you ... a long list  of people who refused to give                                                                    
     me more  than $100 because  they don't want  their name                                                                    
     disclosed.   So  certainly there  are people  out there                                                                    
     that don't  want their name  disclosed but ...  in this                                                                    
     whole  issue  of  the  greater   good  for  the  public                                                                    
     interest,  if you  want to  participate, you've  got to                                                                    
     let people know who you are.  That's the point ....                                                                        
                                                                                                                                
CHAIR COGHILL observed that there  were just 15 minutes remaining                                                               
in the committee meetings.   "Certainly, some of the substance of                                                               
the bill has  been brought to light" along  with different points                                                               
of view, he said.                                                                                                               
                                                                                                                                
Number 0406                                                                                                                     
                                                                                                                                
PAMELA  LaBOLLE, President,  Alaska  State  Chamber of  Commerce,                                                               
came forward  to testify.  She  said the Alaska State  Chamber of                                                               
Commerce supports  HB 177.  1.   The special interest  group that                                                               
is  being addressed  in this  legislation  is a  creation of  the                                                               
court.   The courts  are creating policy  that the  State Chamber                                                               
feels  is the  purview  of  the legislature.    The Alaska  State                                                               
Chamber of  Commerce has  a political  action committee  and must                                                               
follow the APOC rules and declare  who gives money and where that                                                               
money is coming  from.  "It's like signing your  name on a letter                                                               
to  the editor,"  she  said. "If  you believe  in  it, if  you're                                                               
willing to give any money to  the cause, what's wrong with saying                                                               
who you are and  what you believe in?"  The  State Chamber is not                                                               
an  industry-oriented  organization,  she said.    "We  represent                                                               
people  from all  [kinds of]  businesses across  the state.   The                                                               
point is,  we have no  problem with  complying with this  law but                                                               
why because  we are a 501C-6  [as opposed to a  501C-4] should we                                                               
be the only  ones who have to  say what we believe in.   We don't                                                               
have any problems  with putting our money up and  then saying who                                                               
we  are and  what we  believe in,  and we  don't think  any other                                                               
group in this  state that is formed for the  purpose of advancing                                                               
their philosophies or their thinking  in the political arena that                                                               
they should have any problems with  saying who they are and where                                                               
their money is coming from."                                                                                                    
                                                                                                                                
Number 0632                                                                                                                     
                                                                                                                                
CHAIR COGHILL noted  that HB 177 has a referral  to the Judiciary                                                               
Committee.   He then reminded  the committee that "the  policy of                                                               
the  State  of Alaska  resides  within  the legislature  and  the                                                               
courts follow suit  from that, instead of us  following suit from                                                               
them."   Whether  or  not these  [non-group  entities] should  be                                                               
subject to the full disclosure  requirements, as other groups are                                                               
required by law to be is  the policy decision he thinks the State                                                               
Affairs Committee is being asked to make.                                                                                       
                                                                                                                                
Number 0688                                                                                                                     
                                                                                                                                
REPRESENTATIVE  FATE  commented, "I  do  not  know of  any  court                                                               
determination that  compels an ideology  to be based on  how much                                                               
money  is  spent  in  a  campaign.     An  ideology  ...  can  be                                                               
promulgated by  a campaigner or by  a person who is  supporting a                                                               
campaign, but the dollar amount --  I've never heard of the court                                                               
...[doing] any adjudication of that."                                                                                           
                                                                                                                                
CHAIR COGHILL  observed that people  have the right  to associate                                                               
with an  organization or group,  but if they exercise  that right                                                               
of  association  by contributing  to  an  organization or  group,                                                               
their names should be on  the list of contributors for disclosure                                                               
to the public.                                                                                                                  
                                                                                                                                
Number 0782                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  moved to  report  CS  FOR HOUSE  BILL  NO.                                                               
177(STA), "An Act placing  certain special interest organizations                                                               
within  the  definition  of  'group'  for  purposes  of  Alaska's                                                               
campaign finance  statutes; and requiring disclosure  of the true                                                               
source  of   campaign  contributions,"  out  of   committee  with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being no objection, CSHB  177(STA) was moved from the House                                                               
State  Affairs  Standing  Committee. [CSHB  177(STA)  MOVED  FROM                                                               
COMMITTEE]                                                                                                                      

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