A politically appointed commission just vaporized Alaska’s campaign donation caps. Here’s what happens now.

With high-stakes gubernatorial, legislative and local elections looming, Alaska candidates can now collect unlimited campaign donations after the commission charged with enforcing the state’s campaign finance laws chose to eliminate the state’s contribution limits rather than update them to satisfy a federal court order.

The politically appointed members of the Alaska Public Offices Commission said their decision Thursday puts the onus on the state Legislature to reinstitute limits higher than the $500-per-year rejected as unconstitutional by a divided panel of the 9th Circuit Court of Appeals in July.

But it’s far from certain that lawmakers will have time to act before the end of this year’s legislative session. And any new caps would only take effect without a veto by GOP Gov. Mike Dunleavy, who said in a phone interview Friday that he thinks political donors should be able to contribute as much as they want — provided that candidates also have to disclose where their money comes from.

“You know me: I’m the guy that wants people to be able to drive four wheelers on the road. I’m a freedom guy,” he said. “My tendency is to just let people do what they want in campaign finance law, as long as it’s disclosed and it’s accurate.”

The commission’s decision to remove the caps will satisfy the political conservatives who filed the 2015 lawsuit challenging Alaska’s donation limits, which led to last year’s decision by the 9th Circuit panel.

But good government groups and other supporters of tighter limits are now sounding alarms, saying that the complete absence of limits could allow a flood of campaign money that influences elected officials and risks corruption.

The commission’s ruling transforms Alaska, at least temporarily, from a state with one of the lowest set of campaign contribution limits to one of about a dozen with no limits at all.

Another is Oregon, where activist groups have been trying for nearly two decades to reinstate caps invalidated by the state Supreme Court — an action that’s resulted in wealthy donors like Nike co-founder Phil Knight giving millions of dollars to gubernatorial candidates.

“It’s been a disaster,” said Jason Kafoury, a Portland-based attorney working on a campaign to institute new limits. “Big money has been dominating Oregon elections.”

Kafoury said he thinks Alaska is particularly vulnerable to the “corrupting influence” of money given its small population and its multibillion-dollar oil industry.

“Unlimited contributions are going to lead to, just like we’ve seen in the Oregon Legislature, big money really being able to stymie good policy,” Kafoury said. “If you guys go to super-high limits, you’re going to see bad public policy as a result and you’re going to have elected officials who are more beholden to the big money interests up there.”

‘Unfortunate circumstance’

The outcome in Alaska stems from a meeting last week where commissioners, in response to the federal court ruling, were considering a proposal by their staff to raise Alaska’s donation limits to $1,500 for individuals. That would have been triple the previous limit of $500, set in a 2006 citizens initiative that passed with 73% of the vote.

The commission’s staff suggested that commissioners could revert to the $1,000 limits in place before the 2006 initiative, then add $500 to account for inflation.

Approving the suggestion, however, required four votes from the commission’s five members. The proposal got just three.

The two no votes came from Chair Anne Helzer, an Anchorage attorney, and Rick Stillie of Delta Junction — the two members nominated to the commission by the Alaska Republican Party, which advances names for the governor’s consideration under an obscure state law. Democratic Party-nominated commissioners Dan LaSota and Van Lawrence voted yes, along with public member Suzanne Hancock.

Helzer and Stillie didn’t respond to requests for comment Friday.

But LaSota said his impression was that Helzer and Stillie were skeptical about returning to the pre-existing limits because it had been nearly two decades since the Legislature passed them — a point echoed in the commission’s four-page order signed Thursday by Helzer.

“I don’t think the results are what anyone on the commission wanted,” LaSota said in a phone interview Friday. “It’s an unfortunate circumstance, and we’re hoping that the Legislature or a ballot initiative will address it.”

The commission, in its Thursday order, said it “implores” the Legislature to revisit the state’s campaign finance laws to balance the federal court’s order “with the desire of Alaska voters.” But some advocates were frustrated that the commission itself didn’t take a more active role.

“No campaign limits is chaos, when it comes to the impact it’s going to have. And I think that has to be taken really, really seriously — and it doesn’t feel like it was,” said Veri di Suvero, executive director of the Alaska Public Interest Research Group, which issued a statement saying the commission was “punting” to the Legislature.

Di Suvero said their group is considering appealing the commission’s ruling to the courts.

‘Motivation for us to take action’

In Juneau, the commission’s decision quickly got the attention of lawmakers — some of whom have already been advancing bills to try to replace the $500 limit invalidated by the 9th circuit.

Members of the House’s largely Democratic majority coalition seem keen to pass new caps before the end of this year’s legislative session. And this week, the chamber advanced a leading proposal, from Anchorage independent Rep. Calvin Schrage, out of committee.

Schrage’s House Bill 234 raises the individual donation limit to $2,000 per election, rather than $500 per year, and it provides for once-a-decade adjustments for inflation.

Schrage, in a phone interview Friday, said he’s optimistic about the legislation’s chances in the House. But he is less sure about its fate in the Republican-controlled Senate.

“We have been having conversations with senators to make sure that we are setting this bill up for success. Those conversations are ongoing,” Schrage said. “Yesterday’s actions, I think, do add motivation for us to take action this year.”

Wasilla GOP Sen. Mike Shower, who chairs the Senate committee with jurisdiction over campaign finance, said he expects to hold hearings on legislation in the coming weeks.

“I am interested in it — I’d like to stop all dark money from coming into the state from anywhere else,” he said.

Even if lawmakers can pass a campaign finance bill before the session ends, though, there’s no guarantee that Dunleavy will sign it.

‘I haven’t had anybody call and offer me a big chunk of money’

Dunleavy said he doesn’t think lawmakers will have time to pass legislation anyway. And he’s not convinced that the level of the donation limits makes much of a difference, either.

“I don’t think the amount of money turns somebody into a crook,” Dunleavy said. “I think it’s their character.”

Dunleavy said he had directed his Department of Law not to ask the full 9th Circuit Court to rehear the lawsuit — even though one of the judges on the court invited such a request — because he thought the panel’s decision invalidating the contribution limits was correct. (A spokesman for the Department of Law said that “litigation decisions fall to the attorney general in consultation with client agencies.”)

One of Dunleavy’s opponents, Democrat Les Gara, has blasted the governor for his position, pointing out that two wealthy donors — sportfishing advocate Bob Penney and Dunleavy’s brother, Francis — each donated hundreds of thousands of dollars to an independent group supporting Dunleavy’s election in 2018.

“Massive campaign donations like that can now go straight to Dunleavy under yesterday’s order,” Gara’s campaign said in a prepared statement Friday. He added: “Campaigns will now be a battle between those who donate for good policy, and those who donate to undermine the public interest for personal and corporate benefit.”

A third leading gubernatorial candidate, independent Bill Walker, called the commission’s decision “concerning” and “troubling,” and said it would be good if lawmakers can squeeze legislation setting new donation limits “into an already very full agenda.”

But Walker, whose law partner Robin Brena represented the conservatives who originally challenged the $500 limit in court, said he hasn’t been a big advocate on contribution caps “one way or the other.”

“We’re going to stay focused on the campaign that we’re in,” Walker said.

While some lawmakers and activists warned of near-apocalyptic impacts from the commission’s decision, candidates for Anchorage municipal office, whose by-mail election begins later this month, said their campaigns remain generally unaffected.

“I haven’t had anybody call and offer me a big chunk of money,” said Kathy Henslee, who’s running for a Midtown Anchorage Assembly seat. “I think we’re going to have to see how it goes.”

Opponents of the $500 cap argue that the new campaign finance regime will allow more money to flow directly to candidates, who are more accountable for how they spend the money than the super PAC-like independent groups run by political consultants outside candidates’ control.

Kafouris, the Oregon attorney, said similar arguments are being made in his state. But people also need to consider the potential power of money to influence a candidate whose campaign receives it directly, he said.

“I think that getting a check for six figures is a much more corrupting influence than having an outside entity spend money on your behalf,” he said.

Daily News reporters James Brooks and Iris Samuels contributed to this report.