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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Libertarian Party of Alaska, Inc. v. State (11/19/2004) sp-5844

Libertarian Party of Alaska, Inc. v. State (11/19/2004) sp-5844

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

LIBERTARIAN PARTY OF ALASKA,  )
INC., KENNETH P. JACOBUS, and           )    Supreme Court No. S-
11012
KENNETH P. JACOBUS, P.C.,               )
                                   )
               Appellants,              )
                                   )    Superior Court No.
     v.                            )    3AN-02-14010 CI
                                   )
STATE OF ALASKA and ALASKA         )    O P I N I O N
PUBLIC OFFICES COMMISSION,         )
                                   )
               Appellees.               )    [No. 5844 - November
19, 2004]
                                   )


          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Mark Rindner, Judge.

          Appearances:   Kenneth  P.   Jacobus,   P.C.,
          Anchorage, for Appellants.  James L. Baldwin,
          Assistant Attorney General, Gregg D.  Renkes,
          Attorney General, Juneau, for Appellees.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          MATTHEWS, Justice.


          The  Alaska Campaign Disclosure Act expressly regulates

only  hard  money.  The question presented is whether  an  Alaska

Public Offices Commission regulation requiring the disclosure  by

political parties of soft money contributions and expenditures is

authorized  by  the  act.  We give an affirmative  answer.   Soft

money   can  be  used  in  numerous  ways  to  evade  hard  money

restrictions.    Requiring   the   disclosure   of   soft   money

contributions and expenditures implements the act  by  aiding  in

its  enforcement, deterring evasions, and informing  the  public.

We  therefore  affirm  the superior courts decision  upholding  2

Alaska Administrative Code (AAC) 50.327.

BACKGROUND AND PROCEEDINGS

          This  case  involves a regulation of the Alaska  Public

Offices  Commission  (APOC) that requires  political  parties  to

report donations and expenditures of soft money.  Soft money  and

hard  money  are  exclusive categories.   Hard  money  refers  to

donations  made for the purpose of influencing the nomination  or

election  of  a  candidate.1  Soft money is most  easily  defined

negatively  as donations to political parties that are  not  hard

money, thus not made directly for the purpose of influencing  the

nomination or election of a candidate.

          The  Campaign  Disclosure  Act  limits  the  amount  of

contributions  that  may  be  made  to  political   parties   and

candidates  and limits contributions that political  parties  may

make  to candidates.2  The act also requires that candidates  and

political  parties  report individual contributions  larger  than

$100  and  all  expenditures made.3   The  word  contribution  is

defined as a donation of hard money.   Contribution means a . . .

gift . . . made for the purpose of influencing the nomination  or

election of a candidate . . . .4  The word expenditure is defined

in  broader terms, in part, as a transfer of money . . . made for

the  purpose  of  influencing the nomination  or  election  of  a

candidate . . . [or] use by a political party . . . .5

          Prior  to  the  2002  legislative  amendment  that   we

describe  below,  APOC  had  considered  that  all  donations  to

political  parties  were  for  the  purpose  of  influencing  the

election  of  candidates and thus were hard money.6   Under  this

interpretation all donations to political parties were subject to

the   $5,000  annual  limit  of  subsection  .070(b)(2)  and  all

donations  in excess of $100 had to be reported under  subsection

.040(b)(2).

          In  Jacobus v. Alaska, the United States District Court

          for the District of Alaska ruled that donations to political

parties for purposes other than the nomination or election  of  a

candidate  could not constitutionally be limited.7  This  holding

necessarily  rejected APOCs view that all donations to  political

parties  are  ultimately  for  the  purpose  of  influencing  the

election of a candidate.

          In  2002, while the district court decision in  Jacobus

was  on  appeal  to  the Ninth Circuit, the  legislature  amended

subsection   .070(b)(2).8   Before  the  amendment  the   statute

provided that An individual may contribute not more than  .  .  .

$5,000  per year to a political party.  The amendment  added  the

following   language:   for  the  purpose  of   influencing   the

nomination or election of a candidate or candidates.9  Literally,

the  new language seems merely redundant since any donation to  a

political  party  would  not be a contribution  under  subsection

.400(4)(A)  unless  it were for the purpose  of  influencing  the

nomination or election of a candidate.10  But the use of the  for

the purpose clause specifically in the context of political party

donations may imply that donations to political parties for other

purposes are possible.  The State observes in its brief that  the

amendment  reflects  an  intent to codify  part  of  the  federal

district courts decision in Jacobus.  The appellants do not  take

issue  with  this.  We can accept, at least for the  purposes  of

this  case,  that the amendment is the product of  a  legislative

purpose  to  reject  APOCs view that all donations  to  political

parties  are intended to influence elections.  Some donations  to

political parties may be, in other words, soft money.11

          Subsequent to the adoption of the 2002 amendments, APOC

received a petition urging the adoption of a regulation governing

the  reporting of soft money received and expended  by  political

parties.   According  to  the  petition,  at  least  hundreds  of

thousands,  and perhaps millions, of dollars of soft  money   had

been  donated  to  Alaskas  major  political  parties  since  the

district court decision.  The petitioners argued that

          [g]iven the lack of reporting to APOC, it  is
          not  possible for the public to determine  if
          the  soft  money has been given to  political
          parties  and/or  spent  in  compliance   with
          Alaska   law  .  .  .  .   This   thwarts   a
          fundamental  goal of AS 15.13,  which  is  to
          require  full public disclosure  of  campaign
          contributions  and  expenditures   prior   to
          elections so that the voting public can  make
          an informed choice between candidates.
          
                . . . .
          
               . . . .  Without immediate disclosure of
          this  information, the voting public  in  the
          primary will not have complete information on
          which  to  base an informed choice  of  which
          partys  ballot  to  choose (in  the  upcoming
          closed primary), or which candidates to  vote
          for.
          
          In  November 2002 the commission voted to adopt  2  AAC

50.327.  The regulation requires political parties to report  all

money  received or spent that does not qualify as a  contribution

or expenditure as those terms are defined in AS 15.13.400.12

          The  Libertarian Party and Kenneth Jacobus (the  Party)

filed suit in the superior court, challenging the legality  of  2

AAC  50.327.   The  Party then filed a motion for  a  preliminary

injunction  on  the basis that the APOC lacked the  authority  to

promulgate  the  regulation.  Superior Court Judge  Mark  Rindner

ruled  that 2 AAC 50.327 was legally promulgated, and denied  the

Partys  motion  for  injunctive  relief.  Subsequently  a   final

judgment  declaring  that APOC had authority  to  promulgate  the

regulation was entered under Alaska Civil Rule 54(b).  The  Party

appeals.

The Decision of the Superior Court

          The   superior  court  concluded  that  APOC  had   the

authority to promulgate the regulation.  We set out a portion  of

the superior courts opinion:

               Administrative      regulations      are
          presumptively valid and the challenger  bears
          the burden of proving such regulations to  be
          invalid.  OCallaghan v. Rue, 996 P.2d 88,  95
          (Alaska  2000).  Under Alaskas Administrative
          Procedures  Act, either expressed or  implied
               statutory authority is sufficient to support
          an agenc[ys] adoption of a regulation.  Kelly
          v.  Zamarello,  486  P.2d  906,  911  (Alaska
          1971).
          
               As  previously noted certain  provisions
          of   the   underlying   Act   were   declared
          unconstitutional   by   the   United   States
          District Court for the District of Alaska  in
          Jacobus  v.  State, 182 F. Supp. 2d  881  (D.
          Alaska 2001).  Prior to that other provisions
          of  the  Act were also reviewed by the Alaska
          Supreme  Court.   See State v.  Alaska  Civil
          Liberties Union, 978 P.2d 597 (Alaska  1999).
          There, the Alaska Supreme Court noted that it
          is  the  purpose of this Act to substantially
          revise Alaskas election campaign finance laws
          in  order to restore the publics trust in the
          electoral   process  and   to   foster   good
          government.  Id. at 601; see also Ch. 48   1,
          SLA 1996.
          
               The    Plaintiffs   concede   that   the
          authority   of   an   administrative   agency
          ordinarily  includes  the  power   to   adopt
          regulations with regard to matters within the
          jurisdiction of the agency, provided that the
          regulations are not inconsistent with law.  A
          regulation is consistent with law if it bears
          a  reasonable  relationship to the  statutory
          objective.  Vail v. Coffman Engineers,  Inc.,
          778  P.2d  211, 214 (Alaska 1989); see  also,
          Kalmakof v. State, Commercial Fisheries Entry
          Commission, 693 P.2d 844, 853 (Alaska 1985).
          
               The   Alaska  Supreme  Court  has   also
          recognized  that  an  agency  may   adopt   a
          regulation   based   on   implied   statutory
          authority, where the Legislature has given an
          agency  authority to promulgate  regulations,
          and the regulation is reasonably necessary to
          carry  out  the  provisions of the  agenc[ys]
          enabling  charter.  See Chevron U.S.A.,  Inc.
          v.  LeResche,  663  P.2d 923  (Alaska  1983);
          Boehl v. Sabre Jet Room, Inc., 349 P.2d  585,
          587-88 (Alaska 1960).
          
               While  the  parties  vigorously  dispute
          whether the APOC has the express authority to
          promulgate  the  regulation,  there  can   be
          little  doubt that the agency has the implied
          authority to require the disclosure  of  soft
          money  contributions in light of the  purpose
          of the Act.  Indeed, the Alaska Supreme Court
          has    previously   noted   that   disclosure
          requirements,  such as the one  at  issue  in
          this  case, serve various purposes  including
          providing   for   an   informed   electorate,
          deterring  corruption, and assisting  in  the
          detection   of   violations  of  contribution
          limitations.  See Veco International, Inc. v.
          APOC,  753  P.2d 703, 711 (Alaska 1988).   In
          Veco, the Alaska Supreme Court reiterated its
          own  observation in Messerli  v.  State,  626
          P.2d  81, 85 (Alaska 1981), and that  of  the
          United  States  Supreme Court in  Buckley  v.
          Valeo, 424 U.S. 1, 67-68 (1976), as follows:
          
               [D]isclosure requirements
               deter  actual  corruption
               and  avoid the appearance
               of corruption by exposing
               large  contributions  and
               expenditures to the light
               of    publicity.     This
               exposure  may  discourage
               those who would use money
               for   improper   purposes
               either  before  or  after
               the  election.  A  public
               armed   with  information
               about  a candidates  most
               generous  supporters   is
               better able to detect any
               post   election   special
               favors that may be  given
               in return.
               
               . . .
          
               [N]ot  least significant,
               record           keeping,
               reporting, and disclosure
               requirements    are    an
               essential    means     of
               gathering    the     data
               necessary    to    detect
               violations     of     the
               contributions
               limitations. . . .
               
          Veco, supra 753 P.2d at 712.
          
               A similar observation was made in United
          States  v.  Kanchanalak, 192 F.3d 1037  (D.C.
          Cir. 1999).  There, the D.C. Circuit in dicta
          noted  that  the Federal Election Commission,
          the  federal equivalent of the APOC, has  for
          some   time   required  by   regulation   the
          disclosure   of   soft  money   contributions
          received by political parties at the  federal
          level   under  11  C.F.R.   104.8(e).    This
          ability  to  require  soft  money  disclosure
          enhances the agencys ability to prohibit  the
          illegal  commingling of hard and  soft  money
          receipts.   While plaintiffs argue  that  the
          APOC   has   less  authority  to   promulgate
          regulations  than  does the Federal  Election
          Commission, the regulation at issue  in  this
          case  similarly  allows the APOC  to  enforce
          hard money limits and other provisions of the
          Campaign Finance Law.
          
               Given  the  stated purpose  of  the  Act
          there can be little doubt that the soft money
          disclosure requirement falls within,  at  the
          very  least,  the  implied authority  of  the
          APOC.     As   previously   indicated    such
          disclosures inform the electorate, aid in the
          deterrence  of corruption, and the  detection
          of  violations  of contribution  limitations.
          Such   requirements   serve   the   expressed
          legislative  purpose of the Campaign  Finance
          Statutes  from  which the  APOC  derives  its
          authority to restore the publics trust in the
          electoral   process  and   to   foster   good
          government.
          
Contentions on Appeal

          The  Party  contends  that the regulation  exceeds  the

authority  of the commission because the act only regulates  hard

money  donations  and expenditures.  Alaska Statute  15.13.010(b)

provides:

               Except   as  otherwise  provided,   this
          chapter     applies     to     contributions,
          expenditures  and communications  made  by  a
          candidate,     group,    nongroup     entity,
          municipality or individual for the purpose of
          influencing   the   outcome   of   a   ballot
          proposition or question as well as those made
          to influence the nomination or election of  a
          candidate.
          
The Party argues that since the act does not apply to soft money,

APOC  cannot  require the disclosure of soft money  donations  or

expenditures.

          The  State contends that the regulation is within  both

the  express  and  the implied authority of the commission.   The

State  notes  that APOC has the express authority to develop  and

provide  forms for reports required under the act, to audit  such

reports,  and  to  adopt regulations necessary to  implement  and

clarify the provisions of the act.13  Based on this authority, the

State  contends  that  the  soft money disclosure  regulation  is

necessary to allow APOC to make sure that soft money is not spent

on  election  activities; without such a regulation  it  will  be

unable to do so.

STANDARD OF REVIEW

          In  this  case  we  are  asked  to  decide  whether   a

regulation is within the authority of the agency that promulgated

it.   The  principles  applicable to  appellate  review  of  such

questions are as follows:

          Regulations are presumptively valid and  will
          be upheld as long as they are consistent with
          and  reasonably  necessary to  implement  the
          statutes  authorizing  their  adoption.   But
          reasonable  necessity is  not  a  requirement
          separate  from  consistency.   If  it   were,
          courts  would be required to judge whether  a
          particular   administrative   regulation   is
          desirable as a matter of policy.  Thus  where
          a  regulation  is adopted in accordance  with
          the  Administrative Procedures Act,  and  the
          legislature  intended  to  give  the   agency
          discretion, we review the regulation first by
          ascertaining   whether  the   regulation   is
          consistent   with  the  statutory  provisions
          which  authorize it and second by determining
          whether the regulation is reasonable and  not
          arbitrary.
          
               In  determining whether a regulation  is
          reasonable and not arbitrary courts  are  not
          to substitute their judgment for the judgment
          of  the  agency.   Therefore review  consists
          primarily  of  ensuring that the  agency  has
          taken a hard look at the salient problems and
          has  genuinely  engaged in reasoned  decision
          making.[14]
          
DISCUSSION

          We  conclude that 2 AAC 50.327 is consistent  with  the

Campaign  Disclosure Act and that its provisions  are  reasonable

and not arbitrary.  We do so largely for the reasons expressed by

Judge Rindner, as expanded in the paragraphs that follow.

          The  purposes of campaign contribution and  expenditure

limits are to prevent corruption and the appearance of corruption

spawned  by  the  real or imagined coercive  influence  of  large

financial  contributions on candidates  positions  and  on  their

actions if elected to office.15  The purposes of campaign finance

disclosure  requirements  are  closely  related.   Disclosure  is

intended  to  inform the electorate, deter actual corruption  and

avoid  the appearance of corruption, and aid in the detection  of

violations  of contribution and expenditure limits.  In  Messerli

v.  State  we  quoted with approval the following  language  from

Buckley  v.  Valeo  concerning the function of  campaign  finance

disclosure requirements:

          First,  disclosure  provides  the  electorate
          with   information  as  to  where   political
          campaign money comes from and how it is spent
          by  the  candidate in order to aid the voters
          in  evaluating those who seek federal office.
          It  allows voters to place each candidate  in
          the political spectrum more precisely than is
          often  possible solely on the basis of  party
          labels and campaign speeches.  The sources of
          a candidates financial support also alert the
          voter  to  the interests to which a candidate
          is  most  likely  to be responsive  and  thus
          facilitate  predictions of future performance
          in office.
          
               Second,  disclosure  requirements  deter
          actual corruption and avoid the appearance of
          corruption  by  exposing large  contributions
          and  expenditures to the light of  publicity.
          This  exposure may discourage those who would
          use money for improper purposes either before
          or  after the election.  A public armed  with
          information about a candidates most  generous
          supporters  is  better  able  to  detect  any
          post-election  special  favors  that  may  be
          given  in  return.  And, as we recognized  in
          Burroughs  v. United States, [290  U.S.  534,
          548   (1934),]   Congress  could   reasonably
          conclude  that  full  disclosure  during   an
          election   campaign  tends  to  prevent   the
          corrupt use of money to affect elections.  In
          enacting these requirements it may have  been
          mindful of Mr. Justice Brandeis advice:
          
               Publicity    is    justly
               commended as a remedy for
               social   and   industrial
               diseases.   Sunlight   is
               said  to  be the best  of
               disinfectants;   electric
               light  the most efficient
               policeman.
               
               Third,   and   not  least   significant,
          recordkeeping,   reporting,  and   disclosure
          requirements  are  an  essential   means   of
          gathering   the  data  necessary  to   detect
          violations  of  the contribution  limitations
          . . . .[16]
          
          We  conclude that all three of these reasons are served

by  the regulation in question.  Soft money disclosure implements

the  act  because it informs the electorate as to the sources  of

political  party money.  It aids in the deterrence of  corruption

by  exposing large contributions and expenditures to the light of

publicity.   And it provides information that aids the commission

in  enforcing the hard money contribution and expenditure  limits

that the act imposes.

          The   nexus  between  soft  money  and  the  recognized

purposes  of  the  act  was recognized by the  Ninth  Circuit  in

Jacobus v. Alaska.17  The Ninth Circuit stated:

          [S]oft  money presents a danger of corruption
          and  the  appearance  of  corruption  because
          political parties trade influence and  access
          to  candidates  for soft money  dollars,  and
          candidates trade influence and access for the
          indirect benefits that they receive from soft
          money  contributions  to  their  party.    In
          addition,  candidates  heavy  involvement  in
          soft  money  fundraising and the creation  of
          tallying and other methods for tracking  soft
          money  contributions  secured  by  particular
          candidates indicate that soft money is indeed
          used  to  circumvent hard money  contribution
          limits.[18]
          
Concerning  the goals of preventing corruption and the appearance

of  corruption,  the  court  expanded on  these  observations  as

follows:

               In  light  of modern campaign practices,
          it  is  not  necessary  that  money  funneled
          through  political  parties  be  specifically
          designated for the election or nomination  of
               a candidate to have a corrupting influence.
          Colorado  Republican II offers  a  compelling
          account  of the danger of corruption inherent
          in  unlimited  soft  money  contributions  to
          parties, one that accounts for how the  power
          of  money  actually works  in  the  political
          structure. 533 U.S. at 450, 121 S. Ct.  2351.
          Parties  centralize fundraising for  a  broad
          set of candidates and programs, and therefore
          act  as  magnets for special interest  groups
          who  are looking for the most efficient  ways
          to  advanc[e] their narrow interests.  Id. at
          451,   121  S.  Ct.  2351  (alteration  marks
          omitted).
          
               [M]any   PACs   .   .   .
               contribut[e]   to    both
               parties  during the  same
               electoral   cycle,    and
               sometimes  even  directly
               to      two     competing
               candidates  in  the  same
               election.   Parties   are
               thus   necessarily    the
               instruments    of    some
               contributors whose object
               is  not  to  support  the
               partys  message   or   to
               elect   party  candidates
               across  the  board,   but
               rather   to   support   a
               specific  candidate   for
               the sake of a position on
               one narrow issue, or even
               to  support any candidate
               who  will  be obliged  to
               the contributors.
               
          Id. at 451-52, 121 S. Ct. 2351 (footnotes and
          citation  omitted).  Such practices  lead  to
          two types of inappropriate influence by large
          soft money contributors.
          
               First,  such  contributions  create  the
          danger  that  the  parties  themselves   will
          become beholden to special interests. As  the
          Supreme  Court  noted in Colorado  Republican
          II,  these obligations are of concern because
          of the parties unique ability to reward major
          benefactors  with  access  to  lawmakers  and
          candidates: the record shows that even  under
          present  law substantial donations  turn  the
          parties   into   matchmakers  whose   special
          meetings  and receptions give the donors  the
          chance  to  get  their points across  to  the
          candidates.   533  U.S. at 461,  121  S.  Ct.
          2351;  see also id. at 461 n.25, 121  S.  Ct.
          2351; Mariani v. United States, 212 F.3d 761,
          768  (3d  Cir.  2000) (en  banc)  (Large  and
          repeat  donors sometime [sic] get more access
          than  other  donors, and donating soft  money
          can  be  a  more effective means for  getting
          access   than  hard  money.).   Like   direct
          influence-peddling by candidates,  this  kind
          of   access-peddling  creates  a  danger   of
          corruption and the appearance of corruption.
          
               Second, candidates and officeholders who
          are   party   members  may  become   directly
          beholden  to the partys donors, even  if  the
          benefit  that  they  receive  from  a   large
          donation    to   the   party   is   indirect.
          Contributing  to  parties  is  an   extremely
          efficient way for a special interest group to
          produce  obligated officeholders, because  it
          allows  such a group to obligate  anyone  and
          everyone  in  a political party, rather  than
          limiting    its   influence    to    specific
          candidates.  Colorado Republican II, 533 U.S.
          at  452,  121  S.  Ct. 2351.  Candidates  and
          officeholders are likely to feel obligated to
          major  party donors because they are  already
          beholden  to  the party as a  result  of  the
          benefits  that  flow from  party  membership.
          See  Colorado Republican I, 518 U.S. at  648,
          116 S. Ct. 2309 (Stevens, J., dissenting)  (A
          party  shares a unique relationship with  the
          candidate it sponsors because their political
          fates  are inextricably linked.  That interde
          pendency  creates a special danger  that  the
          party   or the persons that control the party
          will  abuse  the influence it  has  over  the
          candidate by virtue of its power to  spend.).
          The  Court  in  Colorado Republican  II  even
          noted  that influence within the party itself
          was   a   significant   benefit   for   which
          candidates and officeholders might be willing
          to   trade  influence  over  the  legislative
          process.   See 533 U.S. at 460 n.23,  121  S.
          Ct. 2351.
          
               As  Colorado  Republican II  recognized,
          special  interests contribute  to  candidates
          competing  against  each other  in  the  same
          election   because  they  want  favors   from
          whomever  is elected.  533 U.S. at 451  n.12,
          121  S.  Ct. 2351; see also id. at  451-52  &
          nn.13, 14, 121 S. Ct. 2351.  Because a modern
          election  campaign simply cannot be conducted
          without significant sums of money, candidates
          become   beholden  to  the  sources  of   any
          contributions   that  aid   their   campaign,
          whether  given  directly or indirectly.   See
          Buckley,  424 U.S. at 26, 96 S. Ct. 612  (The
          increasing  importance of the  communications
          media  and  sophisticated  mass-mailing   and
          polling  operations to effective  campaigning
          make  the  raising of large sums of money  an
          ever   more   essential  ingredient   of   an
          effective     candidacy.).     The     Alaska
          Legislature focused on this issue in  passing
          the   Act,  finding  that  organized  special
          interests  are  responsible  for  raising   a
          significant portion of all election  campaign
          funds and may thereby gain an undue influence
          over    election   campaigns   and    elected
          officials.    1996  Alaska  Sess.   Laws   48
          1(a)(3).
          
               Amicus    curiae   Republican   National
          Committee  notes that some political  parties
          have  functions  other than  simply  electing
          candidates to office.  Although this position
          is  contrary  to  that  taken  by  its  state
          affiliates in previous litigation, see, e.g.,
          Colorado  Republican I & II, it may  well  be
          accurate.   However, even where contributions
          to  a political party are expressly earmarked
          for  the  purpose of administrative costs  or
          off-year   issue  advocacy,   and   even   if
          political  parties do not use  donations  for
          these  purposes to shift funds into  election
          campaigns,   the  perception  of   corruption
          decried  by  the  Supreme  Court  may   still
          persist when contributors provide large  sums
          of  money to political parties, regardless of
          the  purpose and ultimate use of  the  funds.
          As noted above, this perception of corruption
          was  a matter of particular concern to Alaska
          legislators in enacting the Act. 1996  Alaska
          Sess. Laws 48  1(b).[19]
          
As  to  the  objective of preventing circumvention of hard  money

limits, the Ninth Circuit stated:

               In  Colorado Republican II, the  Supreme
          Court recognized a closely-related additional
          governmental  interest  that  might   justify
          contribution   limits    the   interest    in
          preventing   circumvention  of   contribution
          limits  designed  to  combat  the  corrupting
          influence    of   large   contributions    to
          candidates.  533 U.S. at 456 n.18, 121 S. Ct.
               2351; see also id. at 456, 121 S. Ct. 2351;
          Beaumont,  --- U.S. at ----, 123  S.  Ct.  at
          2207  ([R]ecent  cases have  recognized  that
          restricting    contributions    by    various
          organizations  hedges against  their  use  as
          conduits   for   circumvention   of   [valid]
          contribution   limits.    (quoting   Colorado
          Republican II, 533 U.S. at 456 & n.18, 121 S.
          Ct.  2351)  (second alteration in original));
          Cal.  Med. Assn, 453 U.S. at 197-99,  101  S.
          Ct.    2712    (holding   that   limits    on
          contributions  to  multicandidate  committees
          are  an  appropriate means by which  Congress
          could  seek to protect the integrity  of  the
          contribution  restrictions  upheld  by   this
          Court  in Buckley); Buckley, 424 U.S. at  35-
          36, 38, 96 S. Ct. 612.
          
               As  the  Supreme Court found in Colorado
          Republican II, faced with federal  limits  on
          direct  contributions to candidates, powerful
          donors  have used contributions  to  a  party
          .  . . as a funnel from donors to candidates.
          533  U.S.  at  461, 121 S.  Ct.  2351.   This
          response  shows how soft money  contributions
          are used to circumvent contribution limits.
          
                    Under   [FECA],    a
               donor   is   limited   to
               $2,000  in  contributions
               to  one  candidate  in  a
               given   election   cycle.
               The  same donor may  give
               as    much   as   another
               $20,000  each year  to  a
               national  party committee
               supporting the candidate.
               What   a  realist   would
               expect   to   occur   has
               occurred.  Donors give to
               the  party with the tacit
               understanding  that   the
               favored  candidate   will
               benefit.
               
          Id.  at  458, 121 S. Ct. 2351.  This practice
          is so common, the Court went on to note, that
          [a]lthough  the understanding  between  donor
          and  party may involve no definite commitment
          and  may  be  tacit on the donors  part,  the
          National  Democratic Party  has  developed  a
          manner  of  informal  bookkeeping  known   as
          tallying  to ensure that the amount of  money
          that  a  candidate receives  from  the  party
          corresponds to the amount that the  candidate
          raised for the party.  Id. at 459, 121 S. Ct.
          2351.     The   theory   that   soft    money
          contributions  are a means  of  circumventing
          limits  on  contributions  to  candidates  is
          bolstered   by   the  extensive   role   that
          candidates play in party fundraising.
          
               Many  of  the party-building  activities
          claimed   by  Jacobus  to  be  unrelated   to
          electing candidates are easily targeted to  a
          particular  candidate, such as the  promotion
          of  a  Get  Out  the  Vote  initiative  in  a
          candidates  district,  or  sponsorship  of  a
          legislative  initiative that a candidate  has
          made  part  of his or her campaign  platform.
          Thus,  these activities provide a low effort,
          low-risk   way   to  circumvent  contribution
          limits.  See Republican Party v. Pauly, 63 F.
          Supp.  2d  at 1016 (The [Republican Party  of
          Minnesota] often provided administrative  and
          strategic  support  to the  candidates.   The
          party  coordinated candidate appearances  and
          voter  registration  drives,  and  helped  to
          recruit volunteer assistance.).
          
               In  sum, parties . . . function for  the
          benefit  of donors whose object is  to  place
          candidates   under   obligation.     Colorado
          Republican  II, 533 U.S. at 455, 121  S.  Ct.
          2351.   Prevention  of  the  corruption   and
          appearance  of  corruption that  result  from
          this  inescapable reality is  a  sufficiently
          important  governmental interest  to  support
          limiting soft money contributions.[20]
          
          The  relevance of unregulated soft money  to  regulated

hard money has also been recognized by the federal counterpart to

APOC,   the  Federal  Election  Commission.   The  FEC   requires

political  committees to report the sources of their  soft  money

donations  even  though the Federal Election  Campaign  Act  only

prohibits transfers of hard money.21  The Court of Appeals for the

District  of Columbia Circuit has observed that the FEC  requires

the  disclosure of soft money donations in order to  enhance  its

ability  to  prohibit the illegal commingling of  hard  and  soft

money  receipts . . . to assist it in tracking the flow of  funds

between the two.22

          In  committee hearings that led to the enactment of the

2002  amendment to AS 15.13.070(b)(2) concern was also  expressed

          about the potential enforcement difficulties that might result

from  exempting  soft  money  from contribution  and  expenditure

limits.   These concerns were answered by assurances  that  APOCs

regulatory  powers could be used to address the  problem.   Thus,

when   the  proposed  amendment  came  before  the  House   Rules

Committee,  Mr. Balash of the staff of the Senate  State  Affairs

Committee testified on behalf of the sponsoring Senate committee.

Representative  Berkowitz  expressed concern  about  commingling.

According to the official minutes:

          REPRESENTATIVE  BERKOWITZ   said   that   his
          biggest concern with the Singleton ruling and
          version  Q  is the $5,000 allowance  for  the
          purpose  of  influencing  the  nomination  or
          election   of   a  candidate.   Although   he
          understood  the courts ruling,  he  expressed
          concern   with  how  large  gifts  could   be
          cordoned  off and how one could  account  for
          what works towards influencing the nomination
          or election of a candidate.  For example, the
          Democratic  Party  has an executive  director
          who isnt always working on campaigns and thus
          he  inquired  as  to how one  segregates  the
          value  of  something generic  from  something
          that benefits a campaign.[23]
          
Balash  responded that APOCs regulatory powers would  supply  the

answer:

          MR.   BALASH   surmised  that   under   APOCs
          regulatory  powers,  certain  instances   and
          forms  would  be  established  in  order   to
          determine what contributions are for what.[24]
          
Based  on  this exchange, it is apparent that in the  process  of

enacting  the 2002 amendment the legislature recognized that  the

commission would be able to provide at least a partial regulatory

solution to the problem of commingling soft and hard money.

          In  sum, as the authorities cited above recognize, soft

and  hard  money contributions to and expenditures  by  political

parties  are closely related.  The regulation at issue, requiring

that  political  parties  report  soft  money  contributions  and

expenditures,   implements  the  Campaign   Disclosure   Act   by

facilitating  the  enforcement of hard  money  limits.   It  also

          deters practices that can reasonably be regarded as efforts to

evade  those limits, and advances the public informational  goals

of  the  act.  For these reasons, we conclude that the regulation

is consistent with the Campaign Disclosure Act.

          The   Party  makes  no  separate  challenge  that   the

regulation is unreasonable and arbitrary.  We have noted that  in

reviewing the reasonableness of a regulation we will not question

its wisdom, but rather will consider whether the agency has taken

a  hard look at the salient problems and has genuinely engaged in

reasoned  decision  making.25  This  regulation  was  promulgated

following  the  district  courts  decision  in  Jacobus  and  the

subsequent  petition  by  a  group  of  citizens  concerned  that

political  parties  would  attempt  to  bypass  contribution  and

expenditure limits through the use of soft money.  The Party does

not contend that the regulation was the product of capricious  or

insufficiently deliberative decision making and thus,  under  the

presumption of administrative regularity,26 the regulation readily

passes this aspect of appellate review.

CONCLUSION

          For  these  reasons we conclude that the Alaska  Public

Offices  Commission was authorized to promulgate  2  AAC  50.327.

The judgment of the superior court is therefore AFFIRMED.

_______________________________
     1     Jacobus  v. Alaska, 338 F.3d 1095, 1098 n.1 (9th  Cir.
2003).

     2    AS 15.13.070 provides:

               (a)  An  individual or  group  may  make
          contributions,   subject    only    to    the
          limitations  of this chapter  and  AS  24.45,
          including  the  limitations  on  the  maximum
          amounts set out in this section.
          
               (b)  An  individual may  contribute  not
          more than
          
               (1) $1,000 per year to a nongroup entity
          for the purpose of influencing the nomination
          or  election of a candidate, to a  candidate,
          to  an  individual  who conducts  a  write-in
          campaign  as a candidate, or to a group  that
          is not a political party;
          
               (2)  $10,000  per year  to  a  political
          party  for  the  purpose of  influencing  the
          nomination  or  election of  a  candidate  or
          candidates.
          
               (c)  A  group  that is not  a  political
          party may contribute not more than
          
               (1)  $2,000 per year to a candidate,  or
          to  an  individual  who conducts  a  write-in
          campaign as a candidate;
          
               (2) $2,000 per year to another group  or
          a nongroup entity;  or
          
               (3)  $4,000  per  year  to  a  political
          party.
          
               (d) A political party may contribute  to
          a candidate, or to an individual who conducts
          a   write-in  campaign,  for  the   following
          offices an amount not to exceed
          
               (1)  $100,000 per year, if the  election
          is for governor or lieutenant governor;
          
               (2) $15,000 per year, if the election is
          for the state senate;
          
               (3) $10,000 per year, if the election is
          for the state house of representatives;  and
          
               (4) $5,000 per year, if the election  is
          for
          
               (A)   delegate   to   a   constitutional
          convention;
          
               (B) judge seeking retention;  or
          
               (C) municipal office.
          
               (e)  This  section does not  prohibit  a
          candidate from using up to a total of  $1,000
          from campaign contributions in a year to  pay
          the cost of
          
               (1)  attendance by a candidate or guests
          of   the  candidate  at  an  event  or  other
          function sponsored by a political party or by
          a subordinate unit of a political party;
          
               (2)  membership  in a  political  party,
          subordinate  unit  of a political  party,  or
          other  entity  within a political  party,  or
          subscription   to   a  publication   from   a
          political party;  or
          
               (3)  co-sponsorship of an event or other
          function sponsored by a political party or by
          a subordinate unit of a political party.
          
               (f) A nongroup entity may contribute not
          more  than $1,000 a year to another  nongroup
          entity  for  the  purpose of influencing  the
          nomination or election of a candidate,  to  a
          candidate,  to an individual who  conducts  a
          write-in campaign as a candidate, to a group,
          or to a political party.
          
     3    AS 15.13.040(a) and (b) provide:

               (a) Except as provided in (g) and (l) of
          this  section, each candidate  shall  make  a
          full  report, upon a form prescribed  by  the
          commission,
          
               (1) listing
          
               (A)   the   date  and  amount   of   all
          expenditures made by the candidate;
          
               (B)    the   total   amount    of    all
          contributions,    including     all     funds
          contributed by the candidate;
          
               (C)  the name, address, date, and amount
          contributed by each contributor;  and
          
               (D)  for contributions in excess of $250
          in  the aggregate during a calendar year, the
          principal  occupation  and  employer  of  the
          contributor;  and
          
               (2)   filed   in  accordance   with   AS
          15.13.110  and  certified  correct   by   the
          candidate or campaign treasurer.
          
               (b)  Except as provided in (l)  of  this
          section, each group shall make a full  report
          upon  a  form  prescribed by the  commission,
          listing
          
               (1) the name and address of each officer
          and director;
          
               (2)   the   aggregate  amount   of   all
          contributions made to it;
          
               (3)  the name, address, date, and amount
          contributed  by  each  contributor  and,  for
          contributions  in  excess  of  $250  in   the
          aggregate   during  a  calendar   year,   the
          principal  occupation  and  employer  of  the
          contributor;  and
          
               (4)    the  date  and  amount   of   all
          contributions made by it and all expenditures
          made, incurred, or authorized by it.
          
     4    AS 15.13.400(4)(A).  contribution

          means   a   purchase,  payment,  promise   or
          obligation  to  pay, loan or loan  guarantee,
          deposit  or gift of money, goods, or services
          for  which charge is ordinarily made and that
          is  made  for the purpose of influencing  the
          nomination or election of a candidate, and in
          AS    15.13.010(b)   for   the   purpose   of
          influencing a ballot proposition or question,
          including the payment by a person other  than
          a    candidate   or   political   party,   or
          compensation  for  the personal  services  of
          another  person,  that are  rendered  to  the
          candidate or political party[.]
          
     5    AS 15.13.400(6)(A).  expenditure

          means  a  purchase or a transfer of money  or
          anything of value, or promise or agreement to
          purchase  or  transfer money or  anything  of
          value, incurred or made for the purpose of
          
               (i)   influencing  the   nomination   or
          election  of a candidate or of any individual
          who  files for nomination at a later date and
          becomes a candidate;
          
               (ii) use by a political party;
          
               (iii) the payment by a person other than
          a    candidate   or   political   party    of
          compensation  for  the personal  services  of
          another  person  that  are  rendered   to   a
          candidate or political party;  or
          
               (iv) influencing the outcome of a ballot
          proposition or question[.]
          
     6     See  Greg  Granquist, APOC Advisory Opinion AO97-08-CD
(issued Feb. 27, 1997).

     7     182  F.  Supp. 2d 881, 892 (D. Alaska 2001),  revd  in
part, 338 F.3d 1095 (9th Cir. 2003).

     8    Ch. 3,  2, SLA 2002.



     9    AS 15.13.070(b)(2) now provides:

               An  individual may contribute  not  more
          than
          
               . . .
          
               (2)  $10,000  per year  to  a  political
          party  for  the  purpose of  influencing  the
          nomination  or  election of  a  candidate  or
          candidates.
          
     10      Substituting  the  definition  of  contribution  for
contribute in the amended subsection, the amended sentence states
that an individual may [donate for the purpose of influencing the
nomination  or election of a candidate] not more than $5,000  per
year  to  a  political party for the purpose of  influencing  the
nomination or election of a candidate or candidates.

     11    After the 2002 amendment was adopted the Ninth Circuit
reversed much of the district courts ruling in Jacobus, 338  F.3d
1095.   Aided  by  an  intervening United  States  Supreme  Court
decision,  Federal  Election Commission  v.  Colorado  Republican
Federal  Campaign Committee, 533 U.S. 431 (2001), the court  held
that  the  $5,000 limit on contributions to political parties  in
subsection .070(b), before it was amended, could constitutionally
be  applied  to  soft  as  well  as  hard  money  donations.   No
legislative change was made in reaction to this decision.

     12    2 AAC 50.327 provides:

               (a)  This  section applies to  political
          party  reporting requirements for a  donation
          received  by a political party that does  not
          qualify  as a contribution under AS 15.13.400
          and for money spent by a political party that
          does  not qualify as an expenditure under  AS
          15.13.400.
          
               (b)  A political party shall file a full
          report,  in  accordance with the contribution
          reporting  requirements for  a  group  in  AS
          15.13.040   and  15.13.110,  of  a   donation
          consisting of a purchase, payment, promise or
          obligation  to  pay, loan or loan  guarantee,
          deposit  or gift of money, goods or services,
          other than volunteer services provided by  an
          individual, that the political party receives
          from  an  individual or person and that  does
          not qualify as a contribution.
          
               (c)  A political party shall file a full
          report,  in  accordance with the  expenditure
          reporting  requirements for  a  group  in  AS
          15.13.040  and 15.13.110, of all money  spent
          by  a political party on a communication  and
          all  money spent that does not qualify as  an
          expenditure.
          
     13    AS 15.13.030(1), (7), and (9).

     14    Interior Alaska Airboat Assn v. State, Bd. of Game, 18
P.3d 686, 689-90 (Alaska 2001) (citations omitted).

     15     State v. Alaska Civil Liberties Union, 978 P.2d  597,
605  (Alaska  1999) (quoting Buckley v. Valeo,  424  U.S.  1,  25
(1976)):

          To  the  extent that large contributions  are
          given to secure a political quid pro quo from
          current  and  potential office  holders,  the
          integrity  of  our  system of  representative
          democracy is undermined. . . .
          
          Of  almost  equal concern as  the  danger  of
          actual  quid  pro  quo  arrangements  is  the
          impact   of   the  appearance  of  corruption
          stemming   from  public  awareness   of   the
          opportunities for abuse inherent in a  regime
          of       large      individual      financial
          contributions.  . . .  Here .  .  .  Congress
          could   legitimately   conclude   that    the
          avoidance  of  the  appearance  of   improper
          influence  is  also  critical  .   .   .   if
          confidence  in  the system of  representative
          Government   is  not  to  be  eroded   to   a
          disastrous extent.
          
     16    626 P.2d 81, 84-85 (Alaska 1980) (quoting Buckley, 424
U.S.  at  66-68) (emphasis added) (citations omitted).   We  also
acknowledged  these purposes in Veco Intl, Inc.  v.  Alaska  Pub.
Offices Commn, 753 P.2d 703, 711-12 (Alaska 1988).

     17    338 F.3d 1095 (9th Cir. 2003).

     18    Id. at 1099.

     19    Id. at 1112-14 (footnotes omitted).

     20    Id. at 1114-15 (footnote omitted).

     21     See United States v. Kanchanalak, 192 F.3d 1037, 1042
(D.C. Cir. 1999).

     22    Id. at 1046.  The Party argues that the federal example
is  inapposite because the FEC has been delegated broader  powers
than  APOC.   But we refer to the federal example  to  illustrate
that  there  is  a logical nexus between the disclosure  of  soft
money   contributions   and   the  enforcement   of   limits   on
contributions  and  expenditures of hard money.   This  nexus  is
factual  and  is  independent  of the  differences  in  delegated
authority between the federal and state agencies.

     23     Committee Minutes, House Rules Committee  Hearing  on
S.B. 103 (April 19, 2001) at 130.

     24    Id.

     25     O'Callaghan  v. Rue, 996 P.2d 88,  98  (Alaska  2000)
(quotations  omitted);  Rutter v.  State,  963  P.2d  1007,  1009
(Alaska 1998).

     26    OCallaghan, 996 P.2d at 95.