The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site -
www.ag.state.mi.us) STATE OF MICHIGAN
Section 7b of the Michigan Gaming Control and Revenue Act prohibits an officer or managerial employee of a casino, a casino enterprise, or of a licensed casino supplier from making a contribution to an independent committee operated by a professional organization to which the officer or employee belongs. An independent committee that receives a contribution prohibited by section 7b of the Michigan Gaming Control and Revenue Act is not subject to a penalty for failure to return the contribution unless the committee first receives a notice from the Secretary of State in accordance with section 30 of the Michigan Campaign Finance Act.
January 9, 2002
Honorable Dale L. Shugars You have asked two questions both of which concern section 7b of the Michigan Gaming Control and Revenue Act (Gaming Act), 1996 Initiated Law, MCL 432.201 et seq. The scope and purpose of the Gaming Act is described in its title, which states, in part, that it is:
In furtherance of this purpose, section 7b of the Gaming Act contains provisions that prohibit contributions by certain persons connected with casino operations or with licensed casino suppliers to political candidates and committees, including contributions to an "independent committee" as that term is defined by section 8 of the Michigan Campaign Finance Act, 1976 PA 388, MCL 169.201 et seq.1 Your first question asks whether section 7b of the Gaming Act prohibits an officer or managerial employee of a casino, a casino enterprise, or of a licensed casino supplier from making a contribution to an independent committee operated by a professional organization to which the officer or employee belongs. To illustrate your concern, you describe a series of hypothetical situations each involving a certified public accountant who wishes to make a contribution to the Michigan Association of Certified Public Accountants Political Action Committee (MACPAPAC). You advise that MACPAPAC is an independent committee established by the Michigan Association of Certified Public Accountants to identify and make contributions to candidates who support the advancement of the practice of certified public accounting and that it solicits and accepts contributions only from members of the Association. You ask if section 7b of the Gaming Act would operate to prohibit a certified public accountant from contributing to MACPAPAC if the accountant is, for example, (1) an officer of a non-accounting firm that is a licensed casino supplier; (2) employed by, but owns no equity in, a large accounting firm that is licensed as a casino supplier; or (3) the owner of an equity share in a large accounting firm that is licensed as a casino supplier. You also inquire whether it would make a difference if the employee in any of these circumstances had no role in directing or controlling the independent committee. Subsections 7b(4) and (5) of the Gaming Act provide in pertinent part that:
Violation of these provisions is a felony punishable by 10 years imprisonment, a $100,000 fine, and a permanent bar against receiving or maintaining a casino-related license. Section 18(1)(f) of the Gaming Act. These provisions expressly prohibit contributions to a political candidate or committee not only by a licensee but also by a "person holding an interest" in a licensee or in a casino enterprise.2 Section 7b(2) specifically defines what shall be considered to be such an interest:
Thus, the plain and unambiguous terms of section 7b(2)(b) make it clear that any person who is an officer or a managerial employee3 of a licensee, or of a casino enterprise, is a "person who has an interest in" that licensee or enterprise; such a person is subject to the prohibition in sections 7b(4) and (5) of the Gaming Act. Moreover, while ownership of a financial interest of 1% or more in the licensee or enterprise is sufficient, in and of itself, to give the person an "interest in" the casino licensee or enterprise under section 7b(2)(a), no such financial requirement is included in section 7b(2)(b). Nor does section 7b(2)(b) make any distinction based upon whether the person does or does not play a role in directing the affairs of the independent committee to which the contribution is being made. To the contrary, under the plain language of section 7b(2)(b), the only relevant factor is whether the person is in fact an officer or managerial employee of the licensee or casino enterprise; if so, that person is prohibited from making a contribution to an independent committee even if he or she does not hold a financial interest in the licensee or casino enterprise. These explicit provisions of section 7b directly address each of the specific examples described in your inquiry:
It is my opinion, therefore, in answer to your first question, that section 7b of the Michigan Gaming Control and Revenue Act prohibits an officer or managerial employee of a casino, a casino enterprise, or of a licensed casino supplier from making a contribution to an independent committee operated by a professional organization to which the officer or employee belongs. Your second question asks whether an independent committee that receives a contribution prohibited under section 7b of the Michigan Gaming Control and Revenue Act is subject to a penalty for failure to return the contribution before the committee is notified by the Secretary of State in accordance with section 30 of the Michigan Campaign Finance Act. The Campaign Finance Act regulates the financing of political campaigns. It was enacted "to ensure the integrity of Michigan�s political campaigns and offices, thereby protecting the interest of the public at large, individual citizens, and candidates for political office." Senate Legislative Analysis, SB 1570, December 17, 1976. Section 30 of the Campaign Finance Act, which prohibits a committee from knowingly maintaining the receipt of a contribution prohibited under section 7b of the Gaming Act, provides that:
The term "knowingly," as it is used in this section, is narrowly defined by section 30(2) as follows:
Under section 30 of the Campaign Finance Act, a committee that knowingly maintains receipt of a prohibited contribution must return it or be subject to a penalty. By adopting the very limited definition of the term "knowingly" as provided in sections 30(2)(a) and (b), the Legislature has chosen to require a committee to return a contribution prohibited under section 7b of the Gaming Act only after it receives specific written notification from the Secretary of State. It is my opinion, therefore, in answer to your second question, that an independent committee that receives a contribution prohibited by section 7b of the Michigan Gaming Control and Revenue Act is not subject to a penalty for failure to return the contribution unless the committee first receives a notice from the Secretary of State in accordance with section 30 of the Michigan Campaign Finance Act.
JENNIFER M. GRANHOLM
2 Sections 7b(4) and (5) of the Gaming Act also purport to restrict political contributions by a "spouse, parent, child, or spouse of a child" of certain casino-related licensees or interest holders. OAG, 1997-1998, No 7002, pp 206, 210 (December 17, 1998), concluded that those portions of sections 7b(4) and (5) that purport to prohibit political contributions by a spouse, parent, child, or spouse of a child violate the free speech provisions of the First Amendment to the United States Constitution and are, therefore, unconstitutional. 3 The Administrative Rules promulgated by the Michigan Gaming Control Board [1998 MR 6, R 432.1101 et seq] do not define either "officer" or "managerial employee." However, the Gaming Act itself defines both terms. A "managerial employee" is defined at section 2(cc) as "a person who by virtue of the level of their remuneration or otherwise holds a management, supervisory, or policy making position with any licensee under this act, vendor, or the board." Section 7b(1)(e) defines the term "officer" as either of the following: (i) An individual listed as an officer of a corporation, limited liability company, or limited liability partnership. (ii) An individual who is a successor to an individual described in subparagraph (i). 4 Sections 15(9)-(11) of the Campaign Finance Act authorize the Secretary of State to investigate alleged violations of the act and, in appropriate cases, to issue an order requiring payment of a civil fine. Section 15(12) authorizes the Secretary of State to refer alleged violations of the act to the Attorney General for consideration of criminal prosecution. |