Politics

Alaska high court upholds campaign disclosure rule involving client income

The Alaska Supreme Court on Friday ruled in favor of state campaign regulators in a case brought by a former candidate for elected office who refused to disclose clients and commissions associated with his real estate business.

In Studley v. APOC, the court ruled that James Studley, who lost a race for a Haines Borough Assembly seat in 2012, was not entitled to the "blanket exemption" he sought from the Alaska Public Offices Commission's disclosure requirements.

The 5-0 opinion, written by Justice Daniel Winfree, upholds the decision by Juneau Superior Court Judge Philip Pallenberg that also favored the agency.

During his bid for political office, Studley violated APOC requirements that client names and income from each client, if more than $1,000, be reported by self-employed candidates. The issue of client disclosure regularly comes before the agency.

Instead of disclosing his clients, the former real estate broker told APOC broadly that he made $20,000 to $50,000 in income from real estate sales, a lack of specifics that eventually led to a $175 fine from the agency.

Studley, former owner of Haines Real Estate, argued that Alaska is a "non-disclosure" state so client names in real estate transactions aren't part of the public record. He argued he had a statutory duty to protect his clients' privacy rights. He asserted that APOC's requirements competed with that responsibility, impairing his constitutional right to run for office.

Winfree wrote that candidates can request exemptions from disclosure rules. But the applicant must prove the exemption is warranted.

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Studley didn't do that.

He provided "hypothetical" examples of potential harm that real estate clients might face from the disclosure rules, rather than actual scenarios involving his own clients.

"(State law) plainly requires that a disclosure actually be detrimental for the information to be confidential," the court said.

Studley also didn't show that he had not disclosed his clients' names to third parties, another requirement for confidentiality. Such disclosures are common in land sale contracts, the court wrote.

The court struck down Studley's argument that his constitutional right of candidacy was infringed because APOC's rules created a barrier to running for office — he could lose his broker's license for revealing his clients.

In fact, Studley's rights were protected, the court said.

"A broker may stand for elective office by either making the required disclosures or proving an exemption applies," Winfree wrote. "And Studley's right of candidacy was not impaired; he stood for election to the borough assembly and could have avoided any penalty by following the commission's procedures."

Studley said Friday he supports the court's decision but doesn't agree with it. He said the disclosure rules prevent good people from running for office because they don't want to violate responsibilities such as protecting client information.

Heather Hebdon, acting executive director for the agency, said it is "not uncommon" for self-employed candidates to argue that they can't report client names because they have a duty to protect their clients' privacy.

"It certainly clarifies that unless there is confidentiality under the law exempting them from reporting, they do need to report," she said.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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