State of Minnesota

Campaign Finance & Public Disclosure Board
Suite 190, Centennial Building. 658 Cedar Street. St. Paul, MN 55155-1603
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:

Cleta Mitchell, Esq.
Foley & Lardner, LLP
3000 K Street NW, Suite 600
Washington, DC 20007
ADVISORY OPINION 419
SUMMARY

Minnesota Statutes Chapter 10A requires certain disclosure when an association accepts
contributions or uses its general treasury money for expenditures to promote or defeat a ballot
question. This opinion describes the statutory requirements under various scenarios presented
by the requester
FACTS
As the attorney for the National Organization for Marriage, you ask the Campaign Finance andPublic Disclosure Board for an advisory opinion. As a basis for your request, you provided anumber of assumed facts and scenarios. The relevant assumed facts from the letter andscenarios are combined below and form the basis for this opinion.
1. The National Organization for Marriage ("NOM") is a nonprofit tax exempt corporation
established under Section 501(c)(4) of the Internal Revenue Code.
2. NOM was founded in 2007 to provide an organized response in opposition to same-sex
marriage in state legislatures. NOM serves as a national resource for marriage-related
initiatives at the state and local level and it lobbies for and supports marriage initiatives
across the nation.
3. NOM raises and spends funds to support traditional marriage and the legal definition of
marriage as described in the ballot question scheduled to be voted on by the citizens of
Minnesota in the 2012 General Election ("the Minnesota ballot question").
4. As a national organization, NOM educates the public about actions and activities in every
state. Through its website and other communications, NOM updates its members,
supporters, and the public about current events related to marriage. NOM has provided
and will continue to provide such information about Minnesota and the Minnesota ballot
question, and about actions in every other state where the legal definition of marriage is at
issue.

5. NOM is a national leader supporting the Minnesota ballot question on its website, in its
materials, and other public venues. Donors contribute to NOM because of NOM's vocal
public support not only of the Minnesota ballot question but similar activities in otherstates.
6. NOM has registered a political fund in Minnesota.
7. NOM publicly solicits contributions for the general support of the organization. All
contributions solicited on its website are for general support and not for a particularpurpose or state. NOM provides information and urges support on its website for the
Minnesota ballot question, but will not solicit contributions online specifically for the
support of the ballot question.
Question 1
Must all donations to NOM of more than $100 be reported to the Minnesota Campaign Finance
Board ("the Board") by virtue of references to the Minnesota ballot question on a separate pageof its website, or in materials describing NOM's activities nationwide, even if the donation was not
solicited specifically for the Minnesota effort?
OpinionIn your request letter you state that according to guidance provided by the Board, "a contribution[to NOM] of over $100 is subject to public disclosure in Minnesota if the funds are received in
response to a solicitation for general purposes, where there are also references to the Minnesota
ballot question campaign as one of several projects and activities in which NOM is involved."
The Board is concerned that this statement suggests a serious misunderstanding of the statutes
requiring disclosure and of the Board's guidance related to application of those statutes. To
clarify the matter, the Board will review its guidance on the subject.
On October 4, 2011, the Board provided advice on the application of the definition of"contribution" as used in Chapter 10A. "Contributions" from a donor must be itemized on a report
filed with the Board if they aggregate more than $100 in a calendar year from that donor.
In the case of ballot question advocacy, Chapter 10A defines a contribution as money given to an
association for the purpose of promoting or defeating a ballot question.
The Board's guidance provides criteria for evaluating when money is, in fact, given for the
purpose of promoting or defeating a ballot question. The guidance on the definition of"contribution" states:
1. Money designated for ballot question expenditure purposes
Money received by an association is a contribution if the contributor specified that themoney was given to support the association's campaign to promote or defeat the ballot
question.
2. Money given in response to a solicitation including an express request
Money given in response to a solicitation that requests money for the express purpose of
supporting the association's campaign to promote or defeat the ballot question is acontribution.
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An express request is a request that asks for money and states that the money 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 the legislatureof the bill placing the subject ballot question on the general election ballot;B) The solicitation clearly identifies the subject ballot question; andC) The solicitation is susceptible to no reasonable interpretation other than thatmoney given as a result of the solicitation will be used to promote or defeat the
subject ballot question.
The assumed facts state that money will not be solicited specifically for the purpose of promoting
the Minnesota ballot question. Therefore, paragraph 2 of the guidance is not applicable. It also
appears from the facts that the donor will not specify that the donation is to promote theMinnesota ballot question. Therefore, paragraph 1 of the guidance is also not applicable.
With respect to the definition in paragraph 3 of the guidance, condition A is met because thelegislature has placed the question on the November, 2012, ballot. Condition B is met because
the facts indicate that NOM's website or solicitation materials clearly identifies the ballot question
as one of the projects or activities in which NOM is involved.
However, condition C of the guidance states that for the resulting donation to be a "contribution",
the solicitation must be "susceptible to no reasonable interpretation other than that money given
as a result of the solicitation will be used to promote or defeat the subject ballot question".
Without actual specific text or web pages to examine, the Board's opinion must be somewhat
hypothetical. However, the Board has made it clear that when determining whether money given
is a "contribution" its guidance is to be applied in favor of excluding transfers where the conditions
stated in the guidance are not clearly met.
The assumed facts state that "[a]ll contributions solicited on its website are for general support
and not for a particular purpose or state." Further, the assumed facts state that contributions are
not solicited online specifically for the purposes of the Minnesota ballot question. Although
donors might "assume" that part or all of their donation will be used to promote the Minnesota
ballot question, they might also assume that all or part of the donation will be used in other states
or for other NOM projects.
The Board concludes that the hypothetical solicitation presented in the assumed facts is subject
to reasonable interpretations other than that donations resulting from it will, in fact, be used topromote or defeat a ballot question. Thus, funds received as a result of the hypotheticalsolicitation would not be "contributions" under Chapter 10A and are not subject to the more-than$100 itemization threshold.
This opinion is based on hypothetical facts. If the actual facts differ from the hypothetical facts
used in this opinion, a different result could be reached.
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Question 2
Is NOM prohibited from spending its general treasury funds to support the Minnesota ballot
question unless the funds are first transferred or contributed to its political fund?
OpinionNOM may spend its general treasury funds to promote or defeat a ballot question, but it musttrack that spending through a political fund accounting mechanism for subsequent reporting to theBoard. Regardless of the accounting mechanism adopted, money used to promote or defeat aballot question in Minnesota is, by statutory definition, part of NOM's political fund.
It is up to NOM to determine the accounting mechanism that it will use to track money raised orspent to promote or defeat a ballot question. Use of the words "transferred to or contributed to"the political fund do not necessarily describe the nature of the accounting. If NOM maintains its
political fund account in a separate checking account, there would be a "transfer" of money to that
account. However, if NOM makes expenditures to promote or defeat a ballot question directlyfrom its general treasury account, there will be no transfer, but disclosure requirements would still
apply.
It is important to recognize that a political fund is not a separate entity from the association itself.
A political fund is simply an accounting and disclosure mechanism that facilitates an association's
disclosure of "contributions," expenditures to promote or defeat a ballot question, and under
specified conditions, the underlying sources of money used to make those expenditures.
Questions 3 and 4(3) If NOM were to make expenditures in excess of $100 from its general treasury funds insupport of the Minnesota ballot question, would NOM then be required to publicly report all
donors to NOM who contributed over $100 regardless of the fact that their support for NOM is notor was not designated for the Minnesota ballot question?
(4) If NOM were to make expenditures in excess of $100 from its general treasury funds insupport of the Minnesota ballot question, would NOM then be required to publically disclose allmembers of NOM whose annual membership fees or dues to NOM were in excess of $100 during
the calendar year?
OpinionQuestions 3 and 4 are the same except that one is based on NOM's receipt of money from"donors" and the other is based on the receipt of money designated as "membership fees ordues."The Board understands these questions to be related to receipts of money that would not be
defined as "contributions" under Chapter 10A. If they are not contributions, the money would
constitute general treasury funds. General treasury funds consist of both voluntary donations to
the association and money that the association characterizes as membership dues or fees.
Receipts of general treasury funds are not subject to the reporting requirement applicable to"contributions", which requires itemization of any contribution of more than $100. However, under
Minnesota Statutes section 10A.27, subd. 15, if NOM uses $5,000 or more of its general treasury
money for expenditures to promote or defeat a ballot question, it must file a statement ofunderlying sources with its political fund report.
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A statement of underlying sources may result in itemization of donors, but at a $1,000-or-morethreshold rather than at the more-than-$100 threshold applicable to "contributions."
Question 5
If NOM transfers general treasury money to its political fund for the purpose of making
expenditures in support of the Minnesota ballot question, what disclosure is required of theunderlying source(s) of the funds transferred?
OpinionUse of the words "transfers" and "transferred" may not accurately reflect the transactions in which
an association uses general treasury money to promote or defeat a ballot question. If theassociation maintains a separate checking account through which to make its ballot question
expenditures, an actual transfer will occur. However, an association is not required to maintain aseparate depository from which to make its ballot question expenditures. If it does not maintain aseparate depository, no actual "transfer" will occur. Rather, the association will simply pay forballot question expenditures directly from its general treasury checking account. In such a case,an accounting entry will be made to record the use of general treasury money to make ballot
question expenditures.
The requirement to disclose underlying sources of general treasury money used to promote or
defeat a ballot question does not depend on whether a physical transfer occurs between checking
accounts or an accounting entry records the use of general treasury money for the expenditure.
Prior to legislative action in 2010, underlying source disclosure was required under Minnesota
Statutes section 10A.12, subd. 5, which requires disclosure of underlying sources if the amountattributable to the source is more than $100.
In 2010, the legislature enacted statutes applicable to associations that make only independent
expenditures. In its statements of guidance, the Board has recognized that these provisions are
written broadly enough to permit their use by associations that make only ballot question
expenditures. The Board's recognition that this additional group of associations may elect toprovide underlying source disclosure under §10A.27, subd. 15, instead of under §10A.12, subd.
5, provides a second option which the Board will accept as meeting the statutory underlying
source disclosure requirements. An association proceeding under §10A.27, subd. 15, is not also
required to disclose underlying sources under §10A.12, subd. 5.
If an association elects to proceed under the §10A.27, subd. 15, option and has used $5,000 or
more in general treasury funds to promote or defeat a ballot question, the association must
disclose underlying sources sufficient to account for the amount of general treasury money used
to promote or defeat a ballot question. The disclosure statement must include itemized
underlying sources at the $1,000-or-more threshold, if any, and a total representing the amountattributable to sources for which itemization is not required.
Question 6
How would the "allocation" described in the June 30, 3011 Statement of Guidance apply to NOM
for purposes of transfers from NOM's general treasury to its political fund, where NOM has
received funds from its website or other activities that reference NOM's active support for the
Minnesota ballot question?
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Opinion
The question refers to the transfer of money from NOM's general treasury. This opinion is basedon the assumption that the money under consideration does not constitute "contributions" under
Chapter 10A.
The allocation of general treasury money to underlying sources is described in statute and wasrecognized in the Board's guidance as being available to associations making expenditures topromote or defeat a ballot question. As discussed in the previous section, NOM's use of the word
"transfers" may not be applicable. However, regardless of whether there is an actual transfer, or
simply the use of general treasury money to promote or defeat a ballot question, allocation of thegeneral treasury money to underlying sources may be required.
If NOM uses $5,000 or more in general treasury funds to promote the Minnesota ballot question,
underlying source disclosure is required under Minnesota Statutes section §10A.27, subd. 15.
The statement of underlying sources may require itemization of some sources, based on how
NOM allocates the money used to promote the Minnesota ballot question among its sources ofgeneral treasury money.
Section 10A.27, subd. 15, provides two options for determining how an association may allocate
general treasury money used to promote or defeat a ballot question to underlying source.
(1) Under one option, NOM may determine on a pro-rated basis, comparedto the total membership dues, fees, and/or donations received by NOM
during the calendar year, each donor's share of the general treasury moneythat NOM used to promote the Minnesota ballot question. "Donor" in thecontext of this requirement means an individual or association that has paiddues or membership fees or made donations to NOM.
If no donor's pro-rated share is $1,000 or more, then no itemization ofunderlying sources is required.
If the pro-ration method is used and if there are donors to NOM whose prorated share of the general treasury money that NOM used to promote theMinnesota ballot question is $1,000 or more, NOM must itemize thosedonors as underlying source(s) of funding for its expenditures to promote theMinnesota ballot question.
(2) Under the second option, NOM may instead choose to allocate its use ofgeneral treasury money to promote the Minnesota ballot question to specificdonors to NOM. If NOM uses this method, it may select from its donors andallocate to its use of general treasury money all or part of each selecteddonor's dues, fees, and/or donations paid to NOM.
If a donor's dues, fees, and/or donations paid to NOM during the calendar
year and allocated by this method total $1,000 or more, the donor must be
itemized as an underlying source.
Under either method of identifying underlying sources, it is possible that general treasury money
used by NOM to promote the Minnesota ballot question will be allocated to sources that do notreach the $1,000 threshold and, therefore, are not required to be itemized. If that is the case,-6-

NOM must indicate the amount of general treasury money used to promote or defeat a ballot
question that is attributed to underlying sources for which itemization is not required.
The Board provides a form which may be used by an association to provide the required
underlying source disclosure statement.
The underlying source disclosure statement must be filed with NOM's political fund report that
includes the expenditures to promote the Minnesota ballot question for which the allocation was
made.
Question 7
What is the "safe harbor" referred to in the Board's guidance? How does the Board's guidance
apply to NOM as a national leader vocally supporting marriage initiative efforts across thecountry, including but not limited to Minnesota, where donors give generally to NOM to enable
NOM to continue to support various efforts such as the Minnesota ballot question but do not(necessarily) earmark the funds specifically for Minnesota? Are all donors of $100 or more to
NOM's general program activities subject to disclosure solely because NOM advocates supportof the Minnesota ballot question as one of several initiatives in which NOM is engaged? If that isthe case, when and how is NOM to know when such donors are subject to disclosure?
Opinion
It is Minnesota Statutes Chapter 10A, not a statement of guidance issued by the Board, that
establishes the disclosure requirements for NOM and other associations. The Board's
statements of guidance represent the Board's enforcement position with respect to the applicationof Chapter 10A to ballot question matters.
The phrase "safe harbor" as used with respect to the Board's guidance means that so long as anentity provides disclosure in conformance with the guidance, that association will not besanctioned by the Board even in the context of a complaint alleging that Chapter 10A requires
more disclosure than the guidance requires.
If NOM interprets Chapter 10A as requiring less disclosure than outlined in the guidance, it may
follow its own interpretation, which will be subject to review in the course of the Board's
compliance activities.
With respect to the disclosure question presented above, only "contributions", as that term isdefined in Chapter 10A and applied through the Board's Statement of Guidance (as explained in
response to Question 1) are itemized at the more-than-$100 threshold. All Chapter 10A
contributions must be reported on the reports NOM submits for its political fund activity.
Contributions of $100 or less are not itemized.
Donations to NOM's general treasury may be subject to underlying source disclosure if statutory
thresholds are met, as discussed in other sections of this opinion.
NOM may determine if money received is a Chapter 10A contribution by reference to theapplicable statutes and to the Board's guidance on the subject. If NOM is unable to make adetermination based on these resources, it may consult with Board staff or seek an advisory
opinion based on the specific facts of the transaction.

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Question 8
According to the June 30, 2011 Guidance, if NOM makes a transfer of general treasury funds to
its Minnesota registered political fund, NOM is allowed to "allocate" the amount transferred to
specific donors to NOM as though those individuals or entities had made contributions designatedto the Minnesota ballot question effort, even if they did not do so. In other words, is it a correctunderstanding of the Guidance that NOM is required by the Board to unilaterally select general
donors to NOM and identify them as donors to the Minnesota ballot question without any proof orevidence that the donor intended to contribute specifically to the Minnesota effort? Is thisallocation a public filing? If it is not a public filing, is there ever a situation where it would become
public?
Opinion
It is not a correct understanding on NOM's part that NOM is "required by the Board" or by the
Board's guidance to do anything. All of the disclosure requirements applicable to NOM are
required by Chapter 10A of the Minnesota Statutes, which the Board administers.
Question 6 discusses the requirements for providing underlying source disclosure and themethods available for attribution of general treasury money to specific underlying sources.
The method selected for completing the allocation to underlying sources is not disclosed to theBoard, nor are the resulting calculations. The disclosure required by the statute consists of thelist of names, addresses, and amounts allocated to those underlying sources for which
itemization is required and a lump-sum of the amount of the allocation attributed to underlying
sources for which itemization is not required.
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 association that made the allocation would substitutenumbers 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 whose names are notrequired to be itemized under §10A.27, subd. 15.
With respect to the final point in your question, it is not possible to state that there is absolutely no
possible scenario under which this information would become public.

Issued January 3, 2012

/s/ Greg McCullough
Greg McCullough, Chair
Campaign Finance and Public Disclosure Board-8-

Relevant Statutes
10A.01...

DEFINITIONS.

Subd. 9. Campaign expenditure. "Campaign expenditure" or "expenditure" means a purchaseor payment of money or anything of value, or an advance of credit, made or incurred for the
purpose of influencing the nomination or election of a candidate or for the purpose of promoting
or defeating a ballot question.
...
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, orparty unit, if the accumulation is collected or expended to influence the nomination or election of acandidate 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, thetreasurer of the fund must disclose the name of any member whose dues, membership fees, andcontributions deposited in the political fund together exceed $100 in a year.
10A.13
ACCOUNTS THAT MUST BE KEPT.
Subdivision 1. Accounts; penalty. The treasurer of a political committee, political fund, principal
campaign committee, or party unit must keep an account of:(1) the sum of all contributions, except any donation in-kind valued at $20 or less, made to thecommittee, fund, or party unit;(2) the name and address of each source of a contribution made to the committee, fund, or party
unit in excess of $20, together with the date and amount of each;. . .
10A.20CAMPAIGN REPORTS.
Subdivision 1. First filing; duration. The treasurer of a political committee, political fund,principal campaign committee, or party unit must begin to file the reports required by this sectionin the first year it receives contributions or makes expenditures in excess of $100 and must
continue to file until the committee, fund, or party unit is terminated. The reports must be filed
electronically in a standards-based open format specified by the board. For good cause shown,
the board must grant exemptions to the requirement that reports be filed electronically.
...
Subd. 3. Contents of report. (a) The report must disclose the amount of liquid assets on handat the beginning of the reporting period.
(b) The report must disclose the name, address, and employer, or occupation if self-employed, ofeach individual or association that has made one or more contributions to the reporting entity, . . .

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10A.27 CONTRIBUTIONS...
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 inaggregate 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 as true and correctby 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 ofthe subject contribution to the independent expenditure political committee or fund. After aportion 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 or fund, that portion of the individual's or association'sdues, fees, or contributions to the donor association may not be designated as the sourceof any other contribution to an independent expenditure political committee or fund.
(d) For the purposes of this section, "donor association" means the association contributing to anindependent expenditure political committee or fund that is required to provide a statement underparagraph (a).
Subd. 16. Treasurer to submit disclosure statements. The treasurer of a political committee orpolitical fund receiving a statement required under subdivision 15, must file a copy of the- 10 -

statement 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 toprovide the required statement within the time specified is subject to a civil penalty of up to fourtimes the amount of the contribution, but not to exceed $25,000, except when the violation was
intentional.
(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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