Advisory Opinion 95-02

     Pursuant to section 11-193(b), Hawaii Revised Statutes ("HRS"), and its duty to supervise campaign contributions and expenditures, the Campaign Spending Commission ("Commission") provides this advisory opinion in response to the following question:

Whether money collected through a charity fundraising function that a candidate has organized, sponsored, or sanctioned, directly or indirectly, is a campaign contribution that must be disclosed and reported by the candidate.

     As a means of soliciting donations to support a charitable or public purpose, groups or organizations have organized, sponsored, or sanctioned various events or functions that are frequently referred to as "charity fundraisers." The Commission understands that candidates have also organized, sponsored, or sanctioned events for the purpose of soliciting donations to support a charitable organization and sometimes to raise funds for political purposes. It has come to the attention of the Commission that monies received by a candidate from charity fundraisers may not have been disclosed by the candidate as a contribution in the candidate’s report of campaign contributions and expenses.

     Typically, a candidate may organize a golf tournament that is promoted as a "charity fundraiser" for the benefit of a candidate and with the understanding that the monies collected will be used by the candidate for a charity or other political purposes. In this instance, the monies may be segregated in a separate account and the candidate may control, directly or indirectly, the manner in which the monies will be dispersed. A candidate may use these monies to make donations to community organizations or to youth, recreation, social groups, or other charities. These monies may also be used to fund scholarships for the candidate’s constituents.

     The Commission believes that the monies collected through a "charity fundraiser" golf tournament organized, sponsored, or sanctioned under these circumstances are campaign contributions that should be disclosed in the candidate’s report of contributions and expenditures.

     A campaign "contribution" is defined in section 11-191, HRS, which states in relevant part as follows:

"Contribution" means:

(1) A gift, subscription, deposit of money or anything of value, or cancellation of a debt or legal obligation and includes the purchase of tickets to fundraisers for the purpose of:

(A) Influencing the nomination for election, or election, of any person to office;....

     Accordingly, candidates shall report as a contribution any money collected at a charity fundraising function that is organized, sponsored, or sanctioned by a candidate for the purpose of influencing the nomination or election of any candidate to an elected office, including a function held under any of the following circumstances:

a. the function is held for the direct or indirect benefit of a candidate;

b. the function is intended, directly or indirectly, to raise funds for a political purpose benefiting the candidate;

c. any money collected through the function is deposited into an account at a financial institution that is directly or indirectly controlled by the candidate;

d. the candidate directly or indirectly determines the manner in which the monies collected will be used or expended; or

e. the candidate is identified as the sponsor of the function which is promoted in a manner that conveys a clear and direct understanding that any money collected at the event will be used to influence or promote the election of a candidate.

     If a function is organized, sponsored, or sanctioned by a candidate in a manner that will result in a portion of the monies being assigned to a charitable organization and any remaining monies are controlled or dispersed by the candidate, all the monies collected shall be reported as campaign contributions to the candidate. The candidate shall report as a contribution the specific amount of money collected at the function or activity. If an amount is collected from an individual that is $100 or more, the name of the individual shall also be obtained by the candidate and disclosed in the candidate’s report to the Commission.

     If a charity fundraising function is organized, sponsored, or sanctioned by a candidate in a way that will result in no money being controlled or dispersed by a candidate and is promoted for a purpose not related to the nomination or election of a candidate, all monies collected through the function shall not be considered campaign contributions that must be reported by a candidate. Contributors shall make donations directly to the recognized community organization or charity. The candidate, candidate committee or any other candidate supporter organization shall have no role in the control or dispersal of the contributions. In this instance, the candidate may be sponsoring or allowing the office for which the candidate was elected to be used for the sole purpose of supporting a charitable organization or a public purpose. The Commission fully recognizes that an elected official gains positive political goodwill by endorsing, supporting, coordinating, or organizing a charity event or fundraiser. However, the use of an elected official’s name or political office to help a charitable cause far outweigh any concern that the public official would gain political value as a result of the official’s participation. The Commission supports efforts by candidates, public officials, and other name celebrities to participate in charitable causes in our community.

     All expenditures related to the function held for the purpose of influencing the nomination or election of a candidate shall be reported in the manner provided under sections 11-212 and 11-213, HRS. Moreover, any donation by a candidate or candidate committee to any community organization or a youth, recreation, or social group from campaign contributions shall be presumed to be a campaign expenditure for reporting purposes. The presumption may be rebutted by clear evidence showing that the donation by a candidate was not intended to influence the nomination or election of the candidate or made for a political purpose.

     This Advisory Opinion is provided by the Commission as a means of stating its current interpretation of the Hawaii Election Campaign Contributions and Expenditures laws provided under HRS section 11-191, et seq. and the administrative rules of the Commission provided in chapter 2-14, Hawaii Administrative Rules. The Commission may adopt, revise or revoke this Advisory Opinion upon the enactment of amendments to the Hawaii Revised Statutes or the adoption of administrative rules by the Commission.

Dated: Honolulu, Hawaii, November 15, 1995.

CAMPAIGN SPENDING COMMISSION

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Jim Wang
Chairperson

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William H. Gilardy, Jr.
Commissioner

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May Oshiro
Commissioner

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Phillip A. Li
Commissioner

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Lissa H. Andrews
Commissioner