Political Activities of Corporations; Insurance Companies

Subject:

Requested By: Alex K. Brock, Director State Board of Elections

Question: Does G.S. 163-269 and 163-270 prohibit corporations and insurance companies from making contributions and expenditures for any political purpose including bond elections, tax levies, local option elections and any election where issues are submitted to the people such as beer and wine elections, and Statewide referenda?

Conclusion: Yes. The intent of G.S. 163-269 and 163-270 is to prohibit corporations and insurance companies from using their financial resources, directly or indirectly, for any political purpose whatsoever.

G.S.

163-269 provides: "It shall be unlawful for any corporation doing business in this State, either under domestic or foreign charter, directly or indirectly to make any contribution or expenditure in air or in behalf of any candidate or campaign committee in any primary or election held in this State, or for any political purpose whatsoever, or for the reimbursement, or indemnification of any person for money or property so used, or for any contribution or expenditure so made; or for any officer, director, stockholders, attorney or agent of any corporation to aid, abet, advise or consent or knowingly receive any such contribution or expenditure.

G.S.

136-270 contains similar prohibitions as to insurance companies or associations.

The question has been raised as to whether the words "or for any political purpose whatsoever" appearing in G.S. 163-269 and G.S. 163-270 prohibits corporations from making contributions and expenditures in elections where issues are submitted to the people as opposed to elections where candidates are on the ballot.

The intent of the Legislature controls the interpretation of a statute and the language of a statute will be construed contextually to ascertain the legislative intent. Strong’s N.C. Index 2d, Statutes, Sec. 5.

Chapter 348, Public Laws of 1931, was "an act to make more effective the control of the State over corrupt practices in primaries and elections."

Sec. 9 of this act listed 16b things which were prohibited if committed in connection with any primary or election in this State. These covered acts by individuals, election officials and corporations, and were not confined to contributions or expenditures relating to elections where candidates were to be chosen. Included in this listing is Item (15), which now appears as G.S. 163-269.

What is the meaning of the words "or for any political purpose whatsoever" appearing in G.S. 163-269 and G.S. 163-270? Must they be construed to mean acts and things of the same kind and nature as contributions or expenditures in behalf of any candidate or campaign committee in any primary or election?

In the construction of statutes, the ejusdem generis rule is that where general words follow a designation of particular subjects or things, the meaning of the general words will ordinarily be presumed to be, and construed as, restricted by the particular designations and as including only things of the same kind, character and nature as those specifically enumerated. The rule does not necessarily require such limitation in scope of the general words. It is but a rule of construction to aid in ascertaining and giving effect to the legislative intent where there is uncertainty. The rule does not apply to restrict the operation of a general expression where the specific things enumerated have no common characteristic, and differ greatly from one another. It does not warrant the Court subverting or defeating the legislative will. State v. Fenner, 263 NC 698; 50 Am. Jur., Statutes, Sec. 249, 250, Black’s Law Dictionary, 4th Ed. (1951)

"Moreover, where the particular words embrace all the persons or objects of the class mentioned, and thereby exhaust the class or genus, there can be nothing ejusdem generis left for the rule to operate on, and meaning must be given to the general words different from that indicated by the specific words, or there can be ascribed to them no meaning at all." 50 Am. Jur. Statutes, Sec.

250.

In accordance with the rule, such terms as "other," "other thing," "other person," "others," "otherwise," or "any other", when preceded by a specific enumeration, are commonly given a restricted meaning, and the word "other" commonly occurs in a general expression, following specific designations where the ejusdem generis rule is applied. State v. Fenner, supra.

In Commonwealth v. McCarthy, 183 NE 495, the collection by a city official of money to influence people on adoption of a proposed city charter, was held to be for a "political purpose" within the meaning of a statute which prohibited any person holding office to solicit or receive contributions, gifts, etc., for a political campaign purpose, or for any political purpose whatsoever. The ejusdem generis rule was not applied.

In our opinion, the ejusdem generis rule does not apply to G.S. 163-269 or G.S. 163-270. Those statutes list several things which an insurance company or a corporation cannot do. The first is the prohibition against making contributions or expenditures in aid or in behalf of a candidate or campaign committee in any primary or election. The second is "or for any political purpose whatsoever", then follows four other enumerated things. The word "other" does not appear in the term "or for any political purpose whatsoever". The first specific term relating to contributions or expenditures for a candidate or campaign committee exhausts the class or genus. The enumerated prohibitions, but is inserted between them, and is a coordinate term, and must be given effect.

Having concluded that the ejusdem generis maxim is not applicable, we must determine whether the words "or any political purpose whatsoever" embraces elections involving issues rather than candidates.

The word "political" is defined as, or pertaining to, polity, politics, or conduct of government, referring, in widest application, to judicial, executive, and legislative branches, of or pertaining to, incidental to exercise of functions vested in conduct of government, relating to the affairs of the State.

"Political" means, of or pertaining to the exercise of the rights and privileges or the influence by which the individuals of a state seek to determine or control its public policy. Lockheed Aircraft Corp. v. Superior Court of Los Angeles County, 171 P. 2d 211; 166 ALR 702; Words and Phrases, Vol. 32A, p. 502.

"Political purpose" includes any purpose to be attained at an election, whether the voters are asked to vote or work for a candidate or an issue. State, et rel Green v. City of Cleveland, 33 NE2d 35.

A political cause may be non-partisan in nature, such as a charter amendment, bond issue, tax levy, etc. Heidtman v. City of Shaker Heights, 119 NE 2d 644.

In State v. Gandy, 158 NW 195, the Court, in construing the words "political principle or measure", held that it embraced a liquor local option election.

In Commonwealth v. McCarthy, supra, the statute prohibited any person holding public office from soliciting or receiving contributions, etc., for political campaign purposes, or for any political purpose whatsoever.

The Court held the essential significance in the proper and oridnary use of the words includes anything pertaining to the establishment of a form of government, a purpose to influence the exercise of a political right is a political purpose and the statute covered an election to change the city charter.

A contextual construction of G.S. 163-269 and G.S. 163-270, reveals the legislative intent. Corporations are prohibited, directly or indirectly, from using their financial resources to influence the public policy of the state by making contributions or expenditures in aid of, or in behalf of, any candidate or campaign committee, or to make any contributions or expenditures in aid of or in behalf of any political purpose whatsoever.

Thus we conclude that the words "or for any political purpose whatsoever" prohibits a corporation or insurance company or association from using its financial resources in any election where the voters are asked to vote on a candidate or issue.

We direct your attention to Article 22A of Chapter 163 of the General Statutes, which regulates contributions and expenditures in political campaigns. The term "election" is defined therein and does not include any local or statewide referendum or bond election unless the act authorizing such election specifically states that Article 22A shall be applicable thereto. Thus we conclude that Article 22A, standing alone, is not applicable to any local or statewide referendum or bond election.

The term "political purpose" is defined in G.S. 163-278.6(16) to mean any purpose in aid of or seeking to influence an election or a political party or candidate.

In summary, Article 22A deals only with elections involving candidates or parties. However,

G.S. 163-269 and G.S. 163-270 would prohibit corporations, insurance companies, or associations, including fraternal beneficiary associations, from making any contribution or expenditure for any political purpose, including elections involving issues or questions submitted to the people in any local or statewide referendum.

Rufus L. Edmisten Attorney General

James F. Bullock Senior Deputy Attorney General