Campaign regulators set to determine if Republican Governors Association violated Alaska laws

An Alaska campaign ethics commission is set to determine whether the Republican Governors Association violated Alaska’s campaign disclosure laws in its support for Republican incumbent Gov. Mike Dunleavy.

The Alaska Public Offices Commission held a hearing Friday on a complaint filed against the RGA and an independent expenditure group supporting Republican Gov. Mike Dunleavy, after two independent watchdog organizations accused the RGA of using the independent expenditure group as a front while spending money illegally in the state.

The complaint alleges that while the RGA set aside $3 million in February 2021 for expenditure in Alaska, it remained under the control of the RGA.

After a six-hour hearing that included testimony by two of the top executives in the RGA, commissioners said they would issue a decision on the complaint Monday, the day early voting is set to begin ahead of the Nov. 8 election.

In this year’s governor’s race, Dunleavy faces challenges from independent former Gov. Bill Walker, Democratic former state lawmaker Les Gara and Republican former Kenai Peninsula Borough Mayor Charlie Pierce. After campaign contribution limits were eliminated late last year, unprecedented amounts of money have poured directly into the candidates’ campaign accounts. Still, the $3 million from the RGA stands to dwarf the candidates’ direct spending on their campaigns in the days remaining before the election.

The complaint was filed against the RGA and independent expenditure group A Stronger Alaska by the Alaska Public Interest Research Group and the 907 Initiative earlier this month, after they came across tax documents that they said indicated the RGA was directly spending money in the state, and had not transferred $3 million to an independent expenditure group as previously reported.

This was the second complaint filed by the two groups naming the RGA and A Stronger Alaska as defendants. They previously filed a complaint alleging that the groups, along with Dunleavy’s campaign, were engaged in a “scheme” to fund Dunleavy’s campaign using public funds and coordinate illegally between the independent expenditure group and Dunleavy’s official campaign.

After an emergency hearing on the first complaint, the commission determined it could not reach a ruling and granted additional time for a full investigation of the allegations, which will likely conclude after the November election. Scott Kendall, the attorney representing the two groups, said the evidence in the second complaint was discovered in the process of preparing for the first hearing.

That evidence, including documents submitted by the RGA to the Internal Revenue Service, indicated that the RGA did not form a separate independent expenditure group for its Alaska operations. Rather, it transferred the money to another bank account under the control of the RGA and named two RGA employees to serve as the officers for the Alaska spending.

Dave Rexrode, executive director of the RGA, is the president of A Stronger Alaska. Erim Canligil, chief financial officer of the RGA, is the treasurer of A Stronger Alaska. Both Rexrode and Canligil testified on Friday before the Alaska Public Offices Commission. They said the $3 million was transferred from the RGA to the independent expenditure group and has been in the control of the independent expenditure group since then.

But their testimony also indicated that all decisions on how to spend the money rested in the hands of Rexrode and Canligil, who are employed by the RGA and work for A Stronger Alaska on a volunteer basis.

A Stronger Alaska is registered as an independent expenditure group with the Alaska Public Offices Commission, but is not registered as a business in Alaska and has no employer identification number, or EIN, a number assigned by the IRS that’s used to identify the tax accounts of employers.

According to Canligil, the group lacks a separate employer identification number because it does not employ individuals directly. Canligil testified A Stronger Alaska and the RGA also share an office space and a phone number. Canligil also said he conducts work for A Stronger Alaska while “at work at the RGA.”

Rexrode said the RGA, which is involved in all 36 gubernatorial races this year, also operates similar state-specific groups in Vermont, New Hampshire, Michigan and Wisconsin, that also lack separate EINs and thus report to the IRS expenditures directly from the RGA. Reporting requirements are dictated by state laws and are different state by state. The RGA has a budget of tens of millions to spend on key races across the country.

Kendall, the attorney representing the groups that filed the complaint, said all that indicates that the RGA and A Stronger Alaska should be treated as the same entity.

“For federal purposes, they were the same entity. For our purposes, they should be the same entity. Why? Same common control, common people, same address, same phone lines. There was no independent control whatsoever,” Kendall said.

A Stronger Alaska “exists nowhere but in the mind of two employees of the RGA and in false filings with this commission,” said Kendall.

Kendall has previously worked as the chief of staff for Walker, the independent former governor now running against Dunleavy. Kendall has said that he has not been in touch with Walker about the complaint.

Tracey Stone, the attorney representing the RGA, called Kendall’s comments “slanderous.”

Both Stone and attorney Richard Moses, who represents A Stronger Alaska, argued that the decisions of the RGA are controlled by the organization’s board of directors and board of governors, while the decisions of A Stronger Alaska are controlled by Rexrode and Canligil.

“Just because you use the same bank, does not mean that it is somehow a sub-account,” said Moses.

“The law merely requires the group be registered with the commission,” Stone said.

Moses said that A Stronger Alaska has “essentially” conducted only one political poll and sent out one piece of campaign mail since the group was reportedly formed in 2021. Moses provided that information as proof that Rexrode and Canligil could feasibly run A Stronger Alaska on a volunteer basis while working for the RGA.

“It just doesn’t really take up much if any of their day on a regular basis, so they’re able to volunteer for the organization without actually expending really any considerable amount of their personal time,” Moses said.

Of the $3 million allotted to spending in support for Dunleavy by the RGA, more than $300,000 was spent on that single piece of campaign mail — enough for it to arrive in hundreds of thousands of mailboxes.

If the commission rules in favor of the complainants, it must also determine if and how to penalize the RGA and A Stronger Alaska. Typically, the commission doles out per-day fines for violations, but Kendall said that would not provide an adequate remedy in this case.

Under a new disclosure law that went into effect three days after the RGA reportedly donated the $3 million to A Stronger Alaska, groups are required to disclose their top-three donors. Kendall argued that under that rule, if the commission rules that the RGA acted out of line with Alaska’s campaign ethics laws, then the disclosure information on the election mail A Stronger Alaska has sent to voters is incorrect or missing.

Discussing possible penalties for the RGA and A Stronger Alaska, Kendall urged the commissioners to freeze A Stronger Alaska’s spending until after the election or dissolve the independent expenditure group, stopping it from spending the remaining of its $3 million.

“They could tell A Stronger Alaska and by extension the RGA, ‘whatever you’re doing, it’s not transparent,’ ” Kendall said. “ ‘Whatever you’re doing, it has to stop.’ ”