Campaigns Ignore State Law at Their Peril | A Question of Ethics
Posted at 12:39 p.m. on May 27, 2014
I heard that a member of the House was in hot water for using a raffle to raise campaign funds. As a longtime campaign employee, this surprised me. I am nearly certain that this issue has come up several times over the years, and that the government has always confirmed that it is legal for campaigns to use raffles to help to raise funds. Why would the campaign of a member of the House now face legal problems for doing so?
Your memory is absolutely correct, at least when it comes to federal law. But, don’t forget that campaigns must comply with state laws, too. In fact, your question is an excellent reminder that election campaigns, even ones for federal office, must be mindful of state laws, not just federal.
The member in question is Tim Huelskamp, R-Kan. In March, Huelskamp’s re-election campaign reportedly sent an email to potential contributors inviting them to participate in a raffle for four tickets to early round games of the NCAA men’s basketball tournament in St. Louis. Three schools from Kansas — Kansas State, Wichita State and the University of Kansas — were all scheduled to play there. The email urged recipients: “Celebrate with me the success of our Kansas basketball teams and enter this opportunity for NCAA Tournament tickets right away.”
As you point out, federal election law generally permits the use raffles like this one to help raise campaign funds. That being said, there are specific regulations and guidance governing such raffles. Any campaign or organization considering a raffle should be sure to familiarize itself with the federal regulations and guidance.
But, that’s not enough — the fact that a campaign fundraiser complies with federal law does not guarantee that it complies with state and local laws as well.
In Huelskamp’s case, soon after the campaign sent out the email about the raffle, he received a letter from Charles Branson, the district attorney of Douglas County, stating that the raffle appeared to be a felony under Kansas law. According to the letter, it is a crime in Kansas to run a “lottery,” and there are three elements that qualify a contest as an illegal lottery: a prize, the fact that chance determines the winner of the prize and “consideration” to enter the contest. The email from Huelskamp’s campaign stated: “A online contribution to our campaign of at least $10 … will enter you in the drawing.” And then: “The winner of these four tickets will be randomly chosen.” Branson reportedly posted his letter to Huelskamp online before the lawmaker actually received it.
The key issue with the email from Huelskamp’s campaign is that it appeared to require “consideration” — that is, people had to pay money to be eligible for the prize. According to Huelskamp’s campaign, this was an error that it promptly corrected by informing recipients of the email that no contribution or payment was required to be eligible for the drawing. The campaign also offered refunds to anyone who made a contribution upon the mistaken belief that it was necessary to be eligible. And, when the campaign announced the winner of the raffle, it stated: “For the attorneys and reporters more interested in legalese than lay-ups — this drawing was strictly voluntary and required no contribution in order to participate!”
The steps taken by the campaign appeared to satisfy Branson. In fact, they mirrored what Branson had requested the campaign do in his initial letter to the campaign. Branson issued a release stating he had received a response from Huelskamp’s campaign and that, in light of the response, his office planned no further investigation or action relating to the raffle.
“Often times, charitable organizations or other well-intentioned groups organize events which run afoul of the criminal prohibition of these types of drawings,” Branson said. “Unless we have some reason to believe there was some actual intent to operate in violation of the law, we do not usually initiate a formal prosecution.”
Of course, the fact that Huelskamp was not prosecuted should be cold comfort to other members and campaigns. The email from Huelskamp’s campaign caused him a number of problems he could have avoided, such as the time and expense of responding to a state prosecutor and the negative publicity that came with it. Moreover, it exposed him to the risk of further legal liability. In short, the takeaway for members and their campaigns is clear: Don’t forget about state laws.
C. Simon Davidson is an attorney with the law firm McGuireWoods. Submit questions to email@example.com. Questions do not create an attorney-client relationship. Readers should not treat his column as legal advice.