Federal and state laws allow state party committees to transfer money between their federal and state accounts – using the national party committee as an intermediary – rendering the state contractor ban meaningless at the party level.
State contractors cannot donate to certain candidates or to state political parties. However, state parties have federal accounts to support presidential and congressional campaigns.
Under federal rules, state parties can transfer money from their federal accounts to the national party committees.
Under state law, a national party committee is explicitly allowed to transfer money from the equivalent of its federal account to the state party’s state account.
In other words, state contractors can give money to a state party’s federal account. That money can be transferred to the national party committee and then back to the state party’s state account.
A law passed last year allows state parties to spend unlimited funds in support of candidates. This means that a state contractor’s donation can flow from the federal account to a national party committee back to the state party and on to benefit an individual candidate.
The Connecticut Democratic Party has been accepting state contractor contributions to its federal account on the basis of a 2007 opinion of counsel provided by staff at the State Elections Enforcement Commission.
“The person requesting the opinion of counsel may rely upon the opinion with respect to any matter brought before the Commission based upon the same facts and circumstances addressed in the opinion of counsel,” according to a SEEC guide.
An opinion of counsel is not as powerful as advisory opinion. When the commission issues advisory opinions, anyone can rely on the advice not just the entity that requested it.
SEEC considers three different organizations to be national committees: each national party committee, each party’s Congressional campaign committee and each campaign committee for the U.S. Senate.