State of Minnesota

Campaign Finance & Public Disclosure Board
Suite 190, Centennial Building. 658 Cedar Street. St. Paul, MN55155-1603
THIS ADVISORY OPINION IS PUBLIC DATA
pursuant to a consent for release of information signed by the requester
RE: Disclosure related to ballot question committees
To:

John Helmberger, CEO
Minnesota Family Council
2855 Anthony LN S, Suite 150
Minneapolis, MN 55418
ADVISORY OPINION 421
SUMMARY

Minnesota Statutes, Chapter 10A, provides for disclosure by associations that register politicalfunds with the Board. This opinion describes the statutory requirements under various
scenarios presented by the requester.
FACTS
As the representative of the Minnesota Family Council ("MFC"), you ask for an advisory opinion
based on the following facts:
1. Minnesota Family Council is a tax exempt, not for profit corporation, recognized by the
IRS as a 501 (c)(4) social welfare, grassroots lobbying and policy organization. MFC
is actively engaged in supporting the Minnesota Marriage Amendment to be voted onin next year's General Election.
2. MFC has registered a political fund, the Minnesota Family Council Marriage Protection
Fund, ("MFC Political Fund") for purposes of financially supporting the Marriage
Amendment.
Based on the above statement of facts, you ask several questions about the disclosure requiredby Chapter 10A of Minnesota statutes as it applies to Minnesota Family Council. The questions
are restated below as issues. In some cases ambiguous language has been modified to more
precisely state the question.
Introductory Statement
The issues raised in this request relate in part to the concept of a political fund and theassociation that supports it. It is important to understand that a political fund, as defined in
Minnesota Statutes section 10A.01, subd. 28, is simply an accumulation of money collected or
expended for statutorily specified purposes. In the case of the requester, its political fundconsists of the money collected or expended to promote or defeat a ballot question.

An association's political fund is not an entity separate from the association. Rather, it is an
accumulation of money that is tracked and reported on using an accounting mechanism of theassociation's choosing. Thus references to a "transfer" or an "allocation" of money by anassociation to its political fund mean nothing more than the recording of an accounting record of
the fact that an association's general treasury money has been used for purposes which, bystatutory definition, make it a part of the association's political fund.
Throughout this opinion, the terms "general treasury money" or "general treasury funds" mean
money that the association collects from dues, membership fees, or donations for its general
purposes. These terms exclude "contributions" as that term is defined in Chapter 10A, which, inthe present context, is money received by an association for the specific purpose of promoting
or defeating a ballot question.
Issue OneHow does the Board's recent guidance apply as a practical matter when MFC transfers funds
from its general treasury to the MFC Political Fund? Is the record of the 'allocation' of donors ofless than $1,000 maintained solely by MFC or is it to be provided or reported to the Board? If it
is not reported to the Board at the time of the transfer, if a complaint is filed against MFC and/or
the MFC Political fund, will the Board seek to obtain the allocation ledger? If the ledger must be
provided to the Board, isn't that subject to being obtained by the public as a public record and, if
so, how does that protect against disclosure of underlying source(s) of MFC general treasury
donors of less than $1,000?
OpinionIn 2010, the legislature recognized independent expenditure political committees or funds asvehicles for making independent expenditures and other expenditures that do not constitutecontributions to candidates or party units. In its recent guidance, the Board recognized that thisnew legislation was broad enough to also apply to an association that made only ballot question
expenditures. This recognition allows ballot question political committees or funds the option ofreporting under the new independent expenditure political committee or fund disclosure statutes
rather than under the disclosure statutes that existed prior to 2010.
Prior to 2010, Minnesota Statutes section 10A.12, subd. 5, allowed an association to account for
general treasury funds through a political fund account that it established and reported through.
Under that section, the association was required to report to the Board with its political fundreport the name of any individual whose donations to the association constituted more than$100 in aggregate of the money that the association accounted for through its political fund.
Under the independent expenditure political fund disclosure requirements, no underlying source
disclosure is required until the association has allocated $5,000 or more in a year to its politicalfund account. Once allocations of $5,000 or more have been made by an association,
underlying source disclosure is required, which may or may not result in the disclosure ofitemized sources.
Section 10A.27, subd. 15, under which ballot question political funds may operate, provides thatan association may allocate its transfer to a political committee or fund registered with the Board
either by identifying from its donors those to whom it wants to allocate the transfer or by prorating the transfer over all of its donors. After applying either method, if the amount of thetransfer allocated to an individual source is $1,000 or more, the name and address of that-2-source must be itemized on a statement of underlying sources.
If MFC uses general treasury funds to promote or defeat a ballot question, it must prepare astatement of underlying sources and file it with the Board along with its next regular Report ofReceipts and Expenditures.
The underlying calculations resulting in the allocation, including information related to the choiceof allocation method, is retained with the donor association and not provided to the Board at any
time.
In the event of a Board investigation of a complaint related to the allocation, it is possible thatrecords of the calculation of the allocation could be requested by the Board. However, it is theBoard's intention that in such a case, the donor association providing the records would
substitute numbers for the actual names and addresses of the general treasury donors whose
donations were part of the allocation. This would prevent the identification of donors whosenames are not required to be itemized under §10A.27, subd. 15.
Issue Two
If MFC makes contributions from its general funds to Minnesota for Marriage (MFM), a
registered ballot question committee promoting the Minnesota Marriage Amendment, must
those contributions be made from the MFC Political Fund or can MFC contribute to MFM directlyfrom its general treasury funds? Are there different reporting and disclosure requirements
depending on whether the contributions to MFM are made from MFC general treasury funds or
MFC Political Fund? What are the reporting and disclosure differences as they relate to theunderlying source(s) of the contributions?
OpinionBecause MFC has registered a ballot question political fund with the Board, it may makecontributions to MFM by allocating general treasury funds to its own political fund and thenmaking a contribution to MFM that will be reported through its political fund account. In thealternative, MFC may make contributions to MFM directly using its general treasury funds. In
either case, the underlying source disclosure requirements of §10A.27, subd. 15, apply. In thecase of the transfer to MFC's own political fund account, MFC would create an underlying
source disclosure statement and file it with its next political fund account report. In the case of adirect contribution from general treasury funds to MFM, MFC would create an underlying source
disclosure statement and provide it to MFM for filing with MFM's next report.
If MFC donates directly to MFM, MFM will report the contribution received from MFC, along withany required underlying source disclosure. The MFC Political Fund will have no reporting
obligation with respect to the transaction.
If MFC donates to MFM by first allocating general treasury funds to the MFC Political Fund, thenthe MFC Political Fund will report the allocation to it of MFC general funds, along with any
required underlying source disclosure. MFC Political Fund will also report the contribution to
MFM. MFM will report the receipt of a contribution from the MFC Political Fund, but would notreceive or report any underlying source disclosure because the contribution would be comingfrom an association that has a political fund registered with and reporting to the Board.

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Issue Three
If MFC makes expenditures to promote the Marriage Amendment, may those expenditures bemade from MFC general treasury funds or must the expenditures be made from the MFC
Political Fund?
OpinionA "political fund," as defined by §10A.01, subd. 28, is an accumulation of money by anassociation, such as MFC, whose major purpose is something other than to influence thenomination or election of candidates or to promote or defeat a ballot question. Thisaccumulation of money consists of money "collected or expended to influence the nomination orelection of a candidate or to promote or defeat a ballot question."
Thus, once MFC makes expenditures to promote the Marriage Amendment, the money used for
those expenditures becomes a part of this accumulation of money used to promote or defeat aballot question or, in other words, a part of its political fund. This characterization occurs
automatically by virtue of the statutory definition. A political fund account is an accounting
mechanism used for reporting, not an entity separate from the association that accumulates andspends the money that constitutes its political fund.
The question's implication that an association's political fund and its general treasury aremutually exclusive does not accurately reflect the nature of political funds. Money from anassociation's general treasury, once used to promote or defeat a ballot question, must be
tracked through the association's political fund accounting mechanism for reporting purposes.
While many associations establish a separate depository account for money that constitutes its
political fund, it is not the separate account that makes an association's money part of its
political fund; it is the purpose for which the money was raised or used.
Issue Four
If MFC makes expenditures from its general treasury funds to promote the Marriage
Amendment, is MFC required to report such expenditures? Is it required to disclose all MFC
donors over $100 during the calendar year? How must such expenditures be reported? May
they be reported as in-kind contributions to MFM?
OpinionAs indicated in the response to Issue Three, MFC's political fund consists of money collected or
expended to promote or defeat a ballot question. Thus, once general treasury funds are used topromote or defeat a ballot question, they must be tracked through MFC's political fundaccounting mechanism and reported on the Report of Receipts and Expenditures related to that
account. Expenditures that aggregate more than $100 in a calendar year to a single payee
must be itemized on a report. Other expenditures are reported as a lump-sum unitemized total.
Donors to MFC's general treasury are not itemized except, potentially, as underlying sources as
described in Issue Two. However, "contributions" to MFC as that word is defined in Chapter
10A and applied through the Board's guidance means money that is given for the purpose of
influencing a ballot question. "Contributions" must be itemized through the political fundaccount if they aggregate more than $100 in a calendar year from a single source.
Minnesota Statutes section 10A.27, subd. 15, provides a mechanism for associations to-4-

contribute or transfer money to registered political committees or funds. However, neither thatprovision nor any other provides for making expenditures without registering and reporting
through a political fund if the threshold for doing so is met. MFC has already registered apolitical fund. Any expenditures MFC makes to promote or defeat a ballot question must bereported through its political fund account. They may not be reported as in-kind donations to
MFM.
Issue Five
What must MFC Political Fund disclose to the Board as the result of an allocation of MFC
general treasury funds to it?
Opinion
MFC Political Fund is an accounting mechanism. As such, MFC will record transfers or
allocations to its political fund account under either of two options. First, MFC may decide toallocate specific amounts from time to time to be used to promote or defeat a ballot question.
Under this option, it would record an accounting entry documenting the allocation to the politicalfund each time it makes such an allocation.
Alternatively, MFC may account for its general treasury funds in its general treasury accountuntil such time as funds are actually used for an expenditure to promote or defeat a ballot
question. Under this option, when a ballot question expenditure is made, MFC would record an
accounting entry documenting both the allocation of general treasury funds to the political fundand the corresponding use of the funds to promote or defeat a ballot question.
Associations using only their own general treasury funds to make ballot question expenditures
may use a more abbreviated accounting mechanism. These associations must report to theBoard ballot question expenditures, but are not required to report each allocation of generaltreasury funds used to make reportable expenditures. Because these associations are using
only their own general treasury funds, the Board assumes an equal corresponding allocation ofgeneral treasury funds for each reported expenditure. Under this reporting option, theassociation would provide underlying source disclosure based on the total reportable
expenditures because the total would result from the same amount of general treasury funds
allocations to the association's political fund account.
Prior to the time each of its periodic reports must be filed, MFC must prepare a statement ofunderlying sources of general treasury funds used to promote or defeat a ballot question. The
statement will cover all general treasury money used since the most recent previous report filed
for the same calendar year. MFC will file the statement with its periodic political fund report.
The type of accounting mechanism that MFC must use to record the use of money to promoteor defeat a ballot question is not specified in statute. The Board has recognized that it may be
any accounting mechanism that results in keeping accurate records.
Issue Six
MFC receives donations, both large and small, to its general fund, possibly including
anonymous gifts and contributions. How does the Board's Guidance apply to the allocation offunds from MFC to the MFC Political Fund where some of the funds allocated include donations
to MFC from donors whose identity is unknown?
-5-Opinion
The Board takes the statement in this question literally; that is, it refers to general treasury funds
for which the donor is actually unknown, as opposed to funds for which the donor wishes toremain anonymous to the public. This opinion also assumes that there has been no effort toturn known donors into "anonymous" donors by suggesting, implying, or otherwise influencing
them to make their donations anonymously. Such actions could constitute circumvention of thedisclosure provisions of Chapter 10A.
However, in the case of an association using its general treasury funds to promote or defeat aballot question, the immediate source of the funds is the association. Donors to theassociation's general treasury are underlying sources.
The Board declines to apply the anonymous donor prohibition further than to the immediate
source of funds being used to promote or defeat a ballot question. If an anonymous donor is anunderlying source of those funds that would be itemized on a statement of underlying sources,
the donor should be listed as "Anonymous donor #1" with additional anonymous donations
being numbered sequentially.
Issue Seven
Is an expenditure by MFC of general treasury funds to promote the Marriage Amendment an inkind contribution to the MFC Political Fund, subject to reporting by MFC Political Fund? Oralternatively an in-kind contribution to MFM subject to reporting by MFM?
OpinionAn expenditure by MFC will never be an in-kind contribution to the MFC Political Fund.
Because the fund is merely the accounting of all money raised or used to promote or defeat aballot question, an MFC general treasury funds expenditure to promote or defeat a ballot
question is, by definition, a part of its political fund account which will be reported when MFC
files its political fund report.
MFC may not report its expenditures as in-kind contributions to MFM. As indicated in Issue
Four above, Chapter 10A does not provide a means by which an association may make an
expenditure that is not reported through its own political fund if the registration and reporting
threshold has been met. The registration and reporting threshold that will be applied by the
Board is reached when the association has received contributions or made expenditures ofmore than $5,000 to promote or defeat a ballot question.
Issue Eight
When MFC writes in its regular publications such as its newsletter, or on its website, or in othereducational materials regarding the importance of passage of the Marriage Amendment, may
MFC pay such costs as part of its normal program budget or must those costs all be paid by the
MFC Political Fund?
OpinionThe question is not whether these costs may be paid from one account or another. As has
been explained in other sections of this Opinion, money becomes a part of an association's
political fund when it is used to promote or defeat a ballot question. So whether the money is in-6-one budget or another or one depository or another is not relevant.
The board assumes that the intent of the question is to ask whether the costs of the subject
communications must be reported on the association's political fund report. Although thequestion provides little detail, it appears that the subject communications are for the purpose ofpromoting a ballot question. Thus, the costs of the communications are ballot question
expenditures and must be reported on MFC's political fund report.
Issue Nine
The Minnesota Family Institute ("MFI") is a 501(c)(3) subsidiary/affiliate of MFC. If MFI makes
expenditures from its general funds for research and policy papers promoting the importance ofmarriage in Minnesota, describing the social and economic toll on our state resulting from thebreakdown of traditional marriage, and encourages people to support the Marriage Amendment,
must the MFI report those expenditures to the Board as in-kind contributions? Do such
expenditures trigger any additional disclosure(s) to the Board from MFI regarding MFI donors
and, if so, what are those disclosures and reporting obligations?
Opinion
MFI is a separate corporation from MFC and is subject to the same Chapter 10A requirements
as any other association. If MFI makes expenditures of more than $5,000 to promote or defeat
a ballot question, it has two options for complying with Chapter 10A. First, it may register its
own political fund with the Board and report its expenditures through that account. Under thisoption, MFI will provide disclosure of its underlying sources used to make ballot question
expenditures in the same way that other associations do. Second, it may donate money from its
general treasury funds to political committees registered with the Board or to the political fundaccount of associations that have political funds registered with the Board.
As explained in Issue Four, an association that makes expenditures to promote or defeat aballot question in excess of the threshold must register a political fund account with the Boardand report its expenditures through that account.
Issue Tenlf MFI transfers general funds to MFC's general fund, and MFC subsequently uses its generalfunds to promote the Marriage Amendment, would MFI's transfer to MFC trigger any additional
disclosure(s) to the Board from MFI regarding MFI donors and, if so, what are those disclosuresand reporting obligations?
OpinionAs a subsidiary/affiliate of MFC, the Board assumes that MFI is directly or indirectly controlled
by MFC or that MFC closely coordinates its financial activities with those of MFI.
If that is the case, then transfers from MFI to MFC that are later used to promote or defeat aballot question are considered to be "contributions" under Chapter 10A. A "contribution" is atransfer of money for the purpose of promoting or defeating a ballot question. Treatment of thetransfer as a contribution results in the requirement that MFI provide underlying source
disclosure pursuant to §10A.27, subd. 15. In other words, because of the commonality of-7-control of the two corporations, MFI cannot be considered to be merely another underlying
source for MFC's general treasury funds used to promote or defeat a ballot question.
Issue Eleven
Are all contributions to MFC or MFI over $100 subject to reporting to the Minnesota Campaign
Finance Board by virtue of references to the Marriage Amendment in solicitations as one of the
projects and activities in which MFC and MFI are involved, even if not solicited specifically topromote the Marriage Amendment and if each solicitation clearly stipulates that no contributions
may be designated or earmarked for any purpose?
OpinionThe word "contributions" is specifically defined in Chapter 10A and limits on its application havebeen provided in Board guidance. The Board interprets the question as referring to "donations"to MFC or MFI rather than to "contributions" as the word is defined in Chapter 10A. This is not
to say, of course, that donations to MFC or MFI may not also be contributions under Chapter
10A. This is, in fact, the issue raised by the question.
On October 14, 2011, the Board adopted the following Statement of Guidance regarding theapplication of the Chapter 10A definition of "contribution":
1. Money designated for ballot question expenditure purposes
Money received by an association is a contribution if the contributor specified
that the money was given to support the association's campaign to promoteor defeat the ballot question.
2. Money given in response to a solicitation including an express
requestMoney given in response to a solicitation that requests money for the express
purpose of supporting the association's campaign to promote or defeat theballot question is a contribution.
An express request is a request that asks for money and states that themoney is sought to support the ballot question campaign.
3. Money given in response to a solicitation that is the functional
equivalent of an express request.
Money given in response to a solicitation that meets the all of the following
criteria is a contribution:A) The solicitation is made after the date of final enactment by thelegislature of the bill placing the subject ballot question on the generalelection ballot;B) The solicitation clearly identifies the subject ballot question; andC) The solicitation is susceptible to no reasonable interpretation otherthan that money given as a result of the solicitation will be used topromote or defeat the subject ballot question.
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For the purpose of determining whether a solicitation clearly identifies theballot question, the "solicitation" includes:A) For a mailed solicitation: the solicitation itself and any material
included in the same mailing;B) For an electronically transmitted solicitation: the electronic
communication itself and any attachments to the communication. An
electronic solicitation also includes material accessed directly by a
hyperlink in the solicitation or its attachments. Intermediate hyperlinks
inserted merely to subvert the direct link requirement will not be
considered when examining whether the solicitation directly links to apage that refers to the subject ballot question;C) For a website based solicitation: the solicitation form itself and allother pages of the association's website.
Limitation
It is the Board's intention that the definitions of "contribution" set forth in this
Guidance be applied in favor of excluding transfers of money from thedefinition of "contribution" in any case where it is not clear that all of thespecified criteria have been met.
From the facts provided in your statement of the issue, it is clear that parts 1 and 2 ofthe definition of "contribution" do not apply to the transactions about which you
inquire.
With respect to the application of the definition of "contribution" in part 3 of theguidance, requirements A and B are met. That is, the question has already beenplaced on the ballot by the legislature and, according to the premise of the question,
the solicitation will identify the subject of the ballot question.
However, part C of the definition requires that the solicitation be "susceptible to noreasonable interpretation other than that money given as a result of the solicitation
will be used to promote or defeat the subject ballot question." (Emphasis added.)Without specific text or specific web pages to examine, the Board's evaluation of thefact situation must be, as the fact situation is itself, somewhat hypothetical.
However, the Board has made it clear that when determining whether money given isa "contribution" its guidance is to be applied in favor of excluding transfers where therequirements of the definition are not clearly met.
Under the facts presented, the solicitation suggests that money raised could be used
for any of a range of the association's various projects and activities. While donors
may "assume" that some or even all of their donation will be used to promote or
defeat a ballot question, and the association may actually end up using it for that
purpose, disclosure requirements are not based on assumptions.
The Board concludes that the hypothetical solicitation is subject to interpretations
other than that any donations resulting from it will, in fact, be used to promote or
defeat a ballot question. Thus, funds received as a result of the hypothetical-9-solicitation presented in the question would not be "contributions" under Chapter
10A. While the donors may be subject to underlying source disclosure as discussed
in other sections of this opinion, the donations are not reportable as "contributions,"
which must be itemized when they are more than $100.

Issued December 8, 2011/s/ John Scanlon
John Scanlon, Chair
Campaign Finance and Public Disclosure Board- 10 -

Relevant Statutes
10A.01 DEFINITIONS...
Subd 18b. Independent expenditure political fund. “Independent expenditure political fund”
means a political fund that makes only independent expenditures and disbursements permitted
under section 10A.121, subdivision 1.
...
Subd. 28. Political fund. "Political fund" means an accumulation of dues or voluntary
contributions by an association other than a political committee, principal campaign committee,
or party unit, if the accumulation is collected or expended to influence the nomination or electionof a candidate or to promote or defeat a ballot question.
10A.12...

POLITICAL FUNDS.

Subd. 5. Dues or membership fees. An association may, if not prohibited by other law,
deposit in its political fund money derived from dues or membership fees. Under section 10A.20,
the treasurer of the fund must disclose the name of any member whose dues, membership fees,
and contributions deposited in the political fund together exceed $100 in a year.
10A.121
INDEPENDENT EXPENDITURE POLITICAL COMMITTEES AND
INDEPENDENT EXPENDITURE POLITICAL FUNDS
Subdivision 1. Permitted disbursement. An independent expenditure political committee oran independent expenditure political fund, in addition to making independent expenditures, may:
(1) pay costs associated with its fund-raising and general operations;(2) pay for communications that do not constitute contributions or approved expenditures; and(3) make contributions to other independent expenditure political committees or independent
expenditure political funds.
10A.27 CONTRIBUTIONS...
Subd. 14. Contributions of business revenue. An association may, if not prohibited by otherlaw, contribute revenue from the operation of a business to an independent expenditure politicalcommittee or an independent expenditure political fund without complying with subdivision 13.
Subd. 15. Contributions of dues or contribution revenue. (a) An association
may, if not prohibited by other law, contribute revenue from membership dues or fees, orfrom contributions received by the association to an independent expenditure politicalcommittee or an independent expenditure political fund without complying with subdivision 13.
Before the day when the recipient committee or fund's next report must be filed with the board
under section 10A.20, subdivision 2 or 5, an association that has contributed $5,000 or more in- 11 -

aggregate to independent expenditure political committees or funds during the calendar year
must provide in writing to the recipient's treasurer a statement that includes the name, address,
and amount attributable to each individual or association that paid the association dues or fees,or made contributions to the association that, in total, aggregate $1,000 or more of thecontribution from the association to the independent expenditure political committee or fund.
The statement must also include the total amount of the contribution from individuals or
associations not subject to itemization under this section. The statement must be certified astrue and correct by an officer of the donor association.
(b) To determine the membership dues or fees, or contributions made by an individualor association that exceed $1,000 of the contribution made by the donor association to the
independent expenditure political committee or fund, the donor association must:(1) apply a pro rata calculation to all unrestricted dues, fees, and contributions
received by the donor association in the calendar year; or(2) as provided in paragraph (c), identify the specific individuals or associations
whose dues, fees, or contributions are included in the contribution to the independent
expenditure political committee or fund.
(c) Dues, fees, or contributions from an individual or association must be identified
in a contribution to an independent expenditure political committee or fund underparagraph (b), clause (2), if:(1) the individual or association has specifically authorized the donor association to
use the individual's or association's dues, fees, or contributions for this purpose; or(2) if the individual's or association's dues, fees, or contributions to the donor
association are unrestricted and the donor association designates them as the source of thesubject contribution to the independent expenditure political committee or fund. After a portion of
an individual's or association's dues, fees, or contributions to the donor association have been
designated as the source of a contribution to an independent expenditure political committee orfund, that portion of the individual's or association's dues, fees, or contributions to the donor
association may not be designated as the source of any other contribution to an independent
expenditure political committee or fund.
(d) For the purposes of this section, "donor association" means the association contributing toan independent expenditure political committee or fund that is required to provide a statement
under paragraph (a).
Subd. 16. Treasurer to submit disclosure statements. The treasurer of a political committee
or political fund receiving a statement required under subdivision 15, must file a copy of thestatement before the deadline for the committee or fund's next report filed with the board under
section 10A.20, subdivision 2 or 5, after receiving the statement.
Subd. 17. Penalty. (a) An association that makes a contribution under subdivision 15, and fails
to provide the required statement within the time specified is subject to a civil penalty of up to
four times the amount of the contribution, but not to exceed $25,000, except when the violation
was intentional.
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(b) An independent expenditure political committee or an independent expenditurepolitical fund that files a report without including the statement required under subdivision 15, issubject to a civil penalty of up to four times the amount of the contribution for which disclosure
was not filed, but not to exceed $25,000, except when the violation was intentional.
(c) No other penalty provided in law may be imposed for conduct that is subject to a
civil penalty under this section.

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