M
ATTHEW
H. H
AVERSTICK
MHAVERSTICK
@
KLEINBARD
.
COM
Direct Dial 215.496.7225
May 2, 2018
VIA EMAIL
Timothy E. Gates, Chief Counsel PA Department of State Office of Chief Counsel 306 North Office Building 401 North Street Harrisburg, PA 17120-0500 tgates@pa.gov Jonathan M. Marks, Commissioner PA Department of State Bureau of Commissions, Elections and Legislation 210 North Office Building 401 North Street Harrisburg, PA 17120-0500 RA-BCEL@pa.gov
RE: Citizens Alliance of Pennsylvania (CAP)
Dear Messrs. Gates and Marks: We represent the Senate Republican Campaign Committee. Please consider this letter a request for a full investigation of Citizens Alliance of Pennsylvania (CAP) and its related political action committee. The most vital aspect of campaign spending is disclosure. After a review of the limited public information available, we think it is important to determine whether CAP is improperly circumventing several disclosure laws. By refusing to disclose any information regarding the monies CAP garners to fund its operations, there is little way to ensure its compliance with campaign finance laws. CAP heavily relies on corporate contributions to fund its operations, which, in part, seeks to affect that the outcome of campaigns. Coordination between the campaign efforts and operational funds, however, is totally exempt from public disclosure. CAP has exerted a heavy hand in the State senate primary race in the 38th Senatorial District. Notably, identical staff and consultants have been utilized by CAP and Mr. Shaffer, who is a candidate for that seat. This raises the critical question of whether CAP is violating established law regarding
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Timothy E. Gates, Chief Counsel Jonathan M. Marks, Commissioner May 2, 2018 Page 2
CAP’s 501c(4) status that limits the amount it may expend on campaign effort. This issue deserves a full investigative audit. Further, federal law limits the permissibility of coordination between independent expenditures (CAP) and individual candidates, in this case Mr. Shaffer. This too deserves review and, perhaps, the assistance of the Federal Election Commission will be necessary in this endeavor. We fully understand that these inquiries will be difficult due to CAP’s unwillingness to disclose its donors. However, it is our hope that a full audit will ensure that no corporate money is being utilized for campaign purposes. CAP’s PAC has not reported any information since 2017 and although it is likely that there will be some future disclosure, it will provide only a small window of information that is needed to determine whether Mr. Shaffer is circumventing mandatory disclosure laws. In-kind services must be reported and none have been itemized, to date, by Mr. Shaffer. Your department has the power and obligation to ascertain whether CAP is complying with related tax exempt obligations, since no more than 50 percent of CAP’s annual revenues may be utilized for political activities. Very truly yours, Matthew H. Haverstick
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