FEC rejects Miller's Senate race complaint

Sean Cockerham | Tribune Media Services
Joe Miller speaks at a rally for his Senate candidacy at the Dena'ina Center in Anchorage on October 29, 2010. Marc Lester / Anchorage Daily News

The Federal Election Commission has dismissed a complaint by losing U.S. Senate candidate Joe Miller alleging Alaska Native corporations broke federal law by pumping more than $800,000 into the effort to re-elect Sen. Lisa Murkowski.

Miller's campaign filed the complaint in the heat of the election, in October 2010, when the Native corporation money was helping Murkowski in her ultimately successful write-in effort after losing to Miller in the Republican primary that August.

The FEC ruling comes a year later and could carry major implications. It confirms the Native corporations, which banded together as the group Alaskans Standing Together, were acting within the law and could do so again to have an influence on future elections. Miller's complaint was one of the first tests of new campaign finance rules in the wake of the Citizens United decision by the U.S. Supreme court, which allows unlimited independent campaign spending by corporations and labor unions so long as the spending is not coordinated with the campaign it is intended to support.

Miller accused Alaskans Standing Together and the 11 Native regional corporations that donated to the group of breaking laws that forbid federal contractors from contributing to any political party, committee or candidate for federal office.

The FEC ruling, sent to those involved in the case Thursday, said eight of the companies involved have no federal government contracts. It made a distinction between the corporations and the federal contracts of their subsidiaries.

"Although they each have subsidiaries that hold federal contracts, those subsidiaries are separate and distinct legal entities from them, and the parent companies have sufficiently demonstrated that they made their contributions (to Alaskans Standing Together) with revenue sources other than the federal-contract-holding subsidiaries," the Federal Election Commission ruled.

"Therefore, they are not government contractors as defined by the Act and the Commission's regulations," the FEC concluded.

Three of the Native corporations that donated, Arctic Slope, Ahtna and NANA, do have leases with the federal government to provide office space or land. Those corporations are government contractors, the ruling said.

But the FEC still decided to dismiss Miller's complaint, saying there were "unique facts." The three corporations themselves do not ordinarily enter into contracts with the federal government, and the executives who decided to contribute to Alaskans Standing Together said they weren't even aware of the lease arrangements until after Miller's complaint was filed, the FEC ruling said. It also noted that the leases were small, with Arctic Slope's arrangement the most lucrative at $28,800 a year, which represents a miniscule portion of the company's gross revenue.

"None of the three companies sought the leases in question. Rather, all three companies were approached by federal agencies to lease certain office space and land space only because the government had no other options in the area, and it appears that the lease arrangements primarily benefit the public, especially NANA Regional's lease for the FAA beacon," the ruling said.

NANA's lease rate on that land is $400 a year, according to the FEC.

The FEC also found there was no information to support the Miller campaign's allegation that Alaskans Standing Together was a "front group" for Murkowski or that the Native corporation contracts were a result of earmarks by Murkowski.

Miller said he's deeply disappointed in the ruling. He characterized it as the FEC blessing "crony capitalism" -- giving corporations that are government contractors a pass and letting others hide behind subsidiaries.

"Allowing corporations to hide behind their subsidiaries in order to conceal funding derived from federal taxpayers ensures that future U.S. elections will be tainted. Incumbents will continue to direct federal funds to cronies who will, in turn, use their subsidiaries to flood the airwaves with anything necessary to defeat any challenger," Miller said in a written statement.

There's no question that Alaskans Standing Together played a significant role in helping Murkowski to her unprecedented write-in victory.

Post-election disclosures show the group reported raising $1.7 million over 38 days in its independent effort to help Murkowski win re-election.

Not all the contributors were Native corporations. One of the biggest contributors was Alaska telecommunications giant GCI, which gave $100,000 in its own name and another $100,000 through its rural subsidiary, Unicom Inc.

Alaskans Standing Together treasurer Barbara Donatelli said she was "very pleased" with the FEC ruling. Donatelli said the group was careful and sought legal advice while organizing as this was new territory following the Citizens United ruling.

She said Alaskans Standing Together was not formed just to help Murkowski's re-election and is still in existence.

Donatelli, who is also senior vice president for Cook Inlet Region Inc., said there has been no discussion of Alaskans Standing Together becoming involved in any other specific election races but that it "could be a possibility."

Reach Sean Cockerham at scockerham@adn.com or 257-4344.

Anchorage Daily News