Advisory Opinion 2006-38: officeholder's use of state campaign funds

A federal officeholder may identify federally permissible funds in his dormant state campaign account and spend only those funds in connection with state and local elections. The state committee may also use those funds to pay for the senator's travel expenses in connection with state and local campaign events.

Background

Senator Robert P. Casey, Jr. of Pennsylvania was elected to the United States Senate in 2006, after serving as the Treasurer of Pennsylvania. His state campaign committee has surplus funds, some of which are from sources and in amounts that are prohibited under federal law, but permissible under Pennsylvania law.

The state committee proposes to identify its federally permissible funds, then to donate those funds to state and local candidates and party committees, and to pay Senator Casey's travel expenses in connection with attending events on behalf of state and local candidates or state and local elections.

Analysis

The Federal Election Campaign Act (the Act) prohibits federal candidates and officeholders (including entities directly or indirectly established, financed, maintained, or controlled by federal candidates or officeholders) from raising or spending funds in connection with a nonfederal election, unless those funds are subject to the limitations and prohibitions of the Act. 2 U.S.C. 441i(e)(1)(B) and 11 CFR 300.62. Commission regulations also require that such transactions be consistent with relevant state law. 11 CFR 300.62.

Applying these statutory and regulatory provisions, the Commission concluded that Senator Casey's state committee must use a reasonable accounting method to identify federally permissible funds. The Commission has specifically approved the "first in, first out" method described in AO 2006-6 (Busby), and the "last in, first out" method described in AO 2004-45 (Salazar) as reasonable accounting methods. Once the permissible funds are identified, the committee may spend those funds in connection with state and local elections, subject to state law.

Additionally, the state committee may use its federally permissible funds to pay for Senator Casey's (or one of his agents') travel expenses undertaken solely in connection with campaign events for state and local candidates or elections, as permitted by Pennsylvania law.

AO 2006-38; Date Issued: February 8, 2007; Length: 7 pages