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For Immediate Release

Media Contact:
Raquel Guillory, 410-576-6357
rguillory@oag.state.md.us

Attorney General Gansler's Advisory Committee on Campaign Finance Submits Final Report

BALTIMORE, MD ( Jan. 04, 2011) -Attorney General Douglas F. Gansler today received the final report from his Advisory Committee on Campaign Finance.  In the report, the Committee submitted 25 recommendations to clarify or amend existing state campaign law and regulations.  The recommendations include remedies that can be achieved through legislative, regulatory, and administrative action. 

Recognizing the need for a thorough study of the campaign finance system, Attorney General Gansler created the advisory committee last fall and charged the members with the task of thoroughly examining the State's existing statutes, regulations, and legal advice in the spirit of good governance to see where changes in the campaign finance landscape called for revision or modernization of current law. 
               
“The purpose of bringing this committee together and creating the report was to determine whether Maryland's existing laws are out of date or are otherwise ill-suited to today's campaign finance environment,” said Attorney General Gansler.  “The committee members took on the monumental task of reviewing Maryland's laws and regulations and developed well-thought out recommendations that will assist all of the key players who create, regulate and interpret Maryland's campaign finance laws.” 

The report contains four sections that begin with a set of issues where developments in the law, technology, or campaign practices have created potential confusion or uncertainty about how existing laws apply in particular situations and includes recommendations for adapting current laws to deal with newer forms of media, like social networking or mobile phone applications, or to enable campaigns to make greater use of electronic transaction methods.  The second section of the report contains recommendations for enhancing Maryland's disclosure laws, particularly with respect to “independent expenditures” that are not coordinated with a candidate.  Issues related to the State's limits on contributions are discussed in the third section of the report which includes recommendations on LLCs and similar entities, the proper role of slates, personal loans to candidates, and the status of nonfederal out-of-state political committees.  Finally, the report details various ways for improving greater compliance, primarily through improving access to interpretive guidance from the Attorney General's Office and the State Board of Elections.
A copy of the report can be found on the Attorney General's website at:  http://www.oag.state.md.us/Reports/campaignfinance.pdf

SUMMARY OF RECOMMENDATIONS

Improving Clarity in the Statutes

           Scope of Campaign Finance Laws

1. The Office of the Attorney General should undertake a comprehensive review of Title 13 of the Election Law Article, with input from knowledgeable sources, to recommend specific legislative changes that would clarify what conduct is regulated by the State's campaign finance laws.


Application to New Media          

2. The General Assembly should enact legislation directing the State Board to adopt additional regulations in this area and to make recommendations to clarify how the State's campaign finance laws apply to new media.

3. Additional disclosure requirements for candidates using new media may be appropriate, including reporting of sub-vendor information, to prevent covert campaigning by candidates and their committees through anonymous sources.

4. A new chapter of the State Board's Campaign Finance Summary Guide should be drafted that specifically addresses issues related to new media.

Electronic Financing of Campaigns

5. The General Assembly should amend §§13-226(b)(2) and 13-220 to enable contributions and expenditures, respectively, by electronic means that guarantee: (a) the authenticity of the contributor's identity; (b) security of the transaction; and (c) adequate record-keeping.  Authorization of specific means for making electronic transactions might be limited to those in accord with federal standards and as specifically approved by the State Board.

Investing Campaign Funds

6. The State Board should amend its regulations to permit temporary investment of campaign funds in prudent investment vehicles and specify types of permissible investments.

Exploratory Committees

7. The General Assembly should authorize the State Board to regulate “exploratory activity” above a certain threshold, and allow the State Board to adopt regulations for the conversion of exploratory committees to political committees as required.             

Enhancing Disclosure     

Independent Expenditures

8. The General Assembly should enact legislation to require the filing of a disclosure report with SBE by any individual or group that (1) is not registered as a “political committee” with the State Board and (2) makes an “independent expenditure” (i.e., a communication that expressly advocates the election or defeat of a clearly identified candidate for State office or that contains the functional equivalent of express advocacy) or makes an “electioneering communication” (i.e., a communication that refers to a clearly identified candidate for state office; is publicly distributed shortly before an election for the office that candidate is seeking; and is targeted to people the candidate seeks to represent). 


Other Disclosure Improvements

9. The General Assembly should enact legislation authorizing the State Board to require that political committees collect and report to the State Board employer and occupation information from donors who donate more than a threshold amount.

Strengthening Existing Restrictions         

Contributions by LLCs & Other Non-Corporation Entities


10. The General Assembly should enact a statute that treats LLC clusters and all other legal entities with common ownership or control as single entities for contribution limit purposes.  In addition, the statute should similarly treat as a single contributor affiliated         entities that are under common control or ownership.


11. The State Board should be authorized to adopt regulations codifying past advice prohibiting the creation or use of “sham” LLCs or other non-corporation entities as a means to circumvent contribution limits or conceal a contributor's identity.


Slate Transfers 


12. The General Assembly should enact legislation to require treasurers of slates to identify and report which candidate(s) benefited directly from each slate expenditure and/or transfer, and by what amount for each candidate.


13. The General Assembly should enact legislation that provides for when and how slate members exit—or may be forced to exit—a slate, including automatic withdrawal or exit in the event of the retirement or death of a slate member.


14. The General Assembly should enact legislation that limits the transfer exemption in an election year to “active” members of the slate, i.e., members who have filed, or will file, a certificate of candidacy for a current election; after the candidate filing deadline, “inactive” members should be treated as non-members for campaign finance purposes (i.e., all transfers or in-kind donations to the slate or its members by the inactive member would be subject to ordinary limits).


Loans to Candidates 

     
15. The General Assembly should enact legislation that enables loan-related violations of campaign contribution limits to be assessed against candidates as well as lenders.


16. The General Assembly should codify that the statute of limitations for loan-related violations begins to accrue only after the repayment deadline expires.


17. The General Assembly should enact legislation that requires non-bank loans of more     than $4,000 by third parties to candidates to be disclosed by the recipient candidate to the State Board within 24 hours, and to be posted by the State Board on its website within 24 hours of receiving the disclosure.


Out-of-State Political Committees


18. The General Assembly should amend § 13-227 by deleting subsection (a), thus treating out-of-state nonfederal political committees the same as any other unregistered “person,” subject to the ordinary contribution limits of § 13-226(b) and not the transfer limits of § 13-227. 


Contribution Limits     

    
19. The State Board is urged, in collaboration with other interested groups, to collect and disseminate data on contributions, including data on the number of contributors that reach the aggregate contribution limit and data on costs of campaigning, that would help legislators and the public to determine (a) whether an adjustment of 1991 contribution limits is warranted and (b) what the appropriate adjustment should be, based on the data.

Facilitating Greater Compliance
               

Access to Campaign Finance Interpretive Advice


20. The Office of the Attorney General should organize and make available on-line all appropriate legal authority interpreting the State's campaign finance laws.


Permitted/Prohibited Spending by Campaigns


21. The Office of the Attorney General should undertake a comprehensive review of past advice regarding the “electoral purpose test” to develop a clearer, more consistent standard that the State Board may use to promulgate regulations.


22. The General Assembly should enact legislation that gives candidates the discretion to use campaign funds as they deem best for their electoral purposes, but that prohibits “personal use” of the funds.  The legislation and State Board regulations should provide guidelines as to what is considered a prohibited “personal use” of campaign funds, similar to the federal model. 


Administrative Accounts


23. The General Assembly should authorize SBE to promulgate rules codifying its existing guidance relating to administrative contributions and permissible uses of administrative funds.


Guidance for Campaign Treasurers


24.  The Office of the Attorney General should publish online a compendium of the guidance it has given and will give on treasurer issues, both in the form of Attorney General opinions and letters to particular persons.


25. The State Board should draft and publish online a set of examples that illustrate, non-exhaustively, activities that clearly run afoul of treasurer obligations and activities that clearly do not. 

   

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