If a Maryland official holds a testimonial dinner in their honor, do the ticket proceeds count as regulated campaign contributions or as a personal gift?

Plain-English summary

The State Ethics Commission's executive director asked the Attorney General whether money given to a public official at a testimonial dinner or similar event counted as a regulated campaign contribution under the election laws, or as a "gift" under the Maryland Public Ethics Law, categories that mattered because the Ethics Law's gift definition specifically excluded regulated political contributions.

The Attorney General concluded that testimonial proceeds were political contributions, and therefore not a gift, whenever the testimonial's actual purpose was to raise money for a past or future election campaign, regardless of how the event was labeled. The opinion explained that this purpose had to be determined from the surrounding circumstances rather than from the "testimonial" label alone, drawing on a series of earlier AG opinions that had wrestled with the same line-drawing problem: who organized the event, whether it was held near an election or years removed from one, whether solicitations and advertising referenced a campaign or only the honoree's past service, and how the money collected was ultimately spent.

Currency note

This opinion was issued in 1986. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a Maryland officeholder simply call a fundraiser a "testimonial dinner" to avoid the campaign contribution limits?
No, according to this opinion. The Attorney General concluded that labeling an event a testimonial did not change how it was treated under the Fair Election Practices Act; what mattered was whether the event's real purpose was to raise election funds, judged from the surrounding facts rather than the name given to the event.

What facts did the Attorney General say mattered in telling a true testimonial apart from a disguised campaign fundraiser?
The opinion identified four factors: who organized the event (a partisan group made it a fundraiser by definition), when it was held relative to an election, whether solicitations and advertising referenced a campaign or a past debt versus only the honoree's past achievements, and how the proceeds were actually used.

If proceeds from a testimonial were a true, unrestricted gift to the official, could that official still not use the money for a campaign?
The official could still use it for a campaign. The opinion noted that a candidate may contribute unlimited amounts to their own campaign, so even a genuine, unrestricted testimonial gift could later be redirected by the honoree into campaign use without retroactively turning the original testimonial proceeds into a regulated contribution.

Background and statutory framework

The Maryland Public Ethics Law's definition of "gift" in Article 40A, §1-201(p) expressly excluded political campaign contributions regulated under the election laws, meaning an official could not be given "gift" treatment for money that actually qualified as a regulated contribution under the Fair Election Practices Act. That Act, in Article 33, §1-1(a)(5), broadly defined "contributions" as anything of value given to a candidate to promote or assist the success or defeat of a candidate at an election, without any specific carve-out or specific inclusion for testimonial events.

Because the statute did not address testimonials directly, the opinion synthesized a line of the office's own prior opinions going back to 1972, most prominently a 1975 opinion finding that the "Four Star Salute" event for four incumbent officeholders was really a campaign fundraiser despite honoring their service, and a 1976 opinion articulating the general principle that a fundraising affair is not a contribution if it is not conducted to eliminate campaign debt or build a future campaign fund. Drawing those threads together, the opinion set out four circumstantial factors, the organizers' identity, the event's timing relative to an election, the content of the solicitations and advertising, and the ultimate use of the proceeds, as the framework for classifying any particular testimonial, while acknowledging that the criteria were imprecise and recommending that the Governor's Commission to Review the Election Laws consider codifying clearer guidance.

Citations

Statutes:

• Article 40A, §3-106, §4-103(d), and §5-105(a)(3) of the Maryland Code (Public Ethics Law provisions turning on the definition of "gift")
• Article 40A, §1-201(p) of the Maryland Code (definition of "gift," excluding regulated campaign contributions)
• Article 33, §1-1(a)(5) of the Maryland Code (Fair Election Practices Act definition of "contributions")
• Article 33, §26-7, §26-9, and §26-11 of the Maryland Code (regulation and reporting of campaign contributions)
• Article 33, §26-9(b) of the Maryland Code (per-candidate and aggregate contribution limits)
• Article 33, §1-1(a)(12), (14), and (15) of the Maryland Code (definitions of "partisan organization" and "political committee")
• Article 33, §26-9(a) of the Maryland Code (contributions given directly to a candidate)
• Article 33, §26-8(a) of the Maryland Code (unlimited candidate self-contributions)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1986/Volume71_1986.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

ELECTIONS

Public Ethics - Fair Election Practices Act - Testimonials - "Contributions" - "Gift" - Funds Provided To An Official As A Result Of A Testimonial Are Political Contributions Regulated By The Election Laws If The Purpose Of The Event Is To Raise Funds For An Election.

April 11, 1986

Mr. John O'Donnell
Executive Director
State Ethics Commission

You have requested our opinion on whether funds given to an official at a testimonial dinner or similar affair are regulated under the State election laws.

For the reasons stated below, we conclude that funds provided to an official as a result of a testimonial are political contributions regulated by the Fair Election Practices Act, and therefore are not a "gift," within the meaning of the Maryland Public Ethics Law, if the testimonial is for the purpose of raising funds for a future or past election campaign. This purpose is measured by the circumstances surrounding the testimonial, including the identity of the organizers; the timing of the event; the content of solicitations, advertising, and other pertinent written materials available to those who attend; and the use of the proceeds from the event.1

I
"Gifts" Under the Public Ethics Law

As you point out in your letter, several provisions of the Maryland Public Ethics Law turn on whether a transfer of valuables constitutes a "gift." See, e.g., Article 40A, §§3-106, 4-103(d), and 5-105(a)(3) of the Maryland Code. The term "gift" is defined in the Ethics Law as follows:

"'Gift' means the transfer of anything of economic value regardless of the form without adequate and lawful consideration. 'Gift' does not include the solicitation, acceptance, receipt, or regulation of political campaign contributions regulated in accordance with the provisions of Article 33, §§26-1 et seq. of this Code, or any other provision of State law regulating the conduct of elections or the receipt of political campaign contributions." Article 40A, §1-201(p).

Thus, under the exclusion in this definition, an official subject to the Public Ethics Law who is given the proceeds of a testimonial would not receive a "gift," if the proceeds are regulated "political campaign contributions." Cf. 68 Opinions of the Attorney General 252, 261-62 (1983) (exclusion of regulated campaign contributions from Public Ethics Law disclosure requirement).2

II
Proceeds of Testimonials

The Fair Election Practices Act, Subtitle 26 of Article 33, contains no express regulation of testimonials. However, the Act broadly defines "contributions" as follows:

"'Contributions' means the gift, transfer or promise of gift or transfer of money or of other thing of value to any candidate, or his representative, or a representative of any political party or partisan organization to promote or assist in the promotion of the success or defeat of any candidate, political party, principle or proposition submitted to a vote at any election." Article 33, §1-1(a)(5).

Contributions are regulated in detail by the Act. See, e.g., Article 33, §§26-7, 26-9, and 26-11. In particular, contributions are subject to the limitations in Article 33, §26-9(b): not more than $1,000 to any one candidate in an election, and not more than $2,500 to all candidates in an election. Donations to defray past election debts are contributions allocable to the limitations for that past election; donations to accumulate a campaign fund for a future election are allocable to that election. See, e.g., 58 Opinions of the Attorney General 266, 267 (1978).

The mere labeling of an event as a testimonial does not affect the applicability of the Act, one way or the other. Rather, the proceeds of a testimonial are political contributions, and therefore subject to the Act's contribution limitations and other requirements, if they are given to the honoree "to promote or assist in the promotion of the success or defeat of [the honoree] at any election." Article 33, §1-1(a)(5). Conversely, if the funds raised at a testimonial are not "to promote or assist in the promotion of" the election of the honoree, they are not political contributions.

The Act's regulation of those who organize a testimonial also turns on the link to electoral activity. Two or more persons who act together to hold a testimonial would be a "political committee" if their activities "assis[t] or attemp[t] to assist in any manner the promotion of the success or defeat of any candidate/candidates, political party, principle or proposition submitted to a vote at any election." Article 33, §1-1(a)(14). See also Article 33, §1-1(a)(12) (definition of "partisan organization").

In applying the Act to testimonials, this office has consistently attempted to draw the distinction between electoral and nonelectoral events that necessarily follows from these definitions. Thus, the office advised that "[a] testimonial dinner committee ... formed well in advance of any election and of a candidate's announcing for public office would seem to be excluded from the coverage of [the definition of 'political committee']." 57 Opinions of the Attorney General 185, 186 (1972).

In 60 Opinions of the Attorney General 232 (1975), the office held that an event called the Four Star Salute, intended to raise campaign funds for incumbent officeholders, was subject to regulation under the Act:

"While we have no doubt that the sponsors did intend for the four incumbent office holders to be honored for their years of prior service at the event, it is equally clear that they always intended that the monies raised would be devoted to the 1974 reelection or election campaigns. Under those circumstances, we do not believe it appropriate to view the event as a testimonial dinner, at least in the pure sense of that term." 60 Opinions of the Attorney General at 237.3

Finally, in 61 Opinions of the Attorney General 407 (1976), the office summarized the difference between true testimonials and political fundraisers as follows:

"[M]oney given to a fund-raising affair held for the benefit of incumbent office holders will not be deemed to constitute a contribution chargeable to the $2,500 per election limitation if that affair is not conducted for the purpose of raising money either to eliminate a prior election campaign deficit or to accumulate a campaign fund for use in a subsequent election effort on the part of the incumbent office holders. ... It is, for example, entirely possible that such affairs may be conducted solely for the purpose of providing the incumbent office holder with a gift or appropriate recognition of his public service or, conceivably, for the purpose of enabling him to defray the normal expenses of holding office and serving his constituents. If this is the only purpose of the affair and if this is the purpose for which the contributors to it intend to serve, then donations would not constitute political contributions chargeable to the $2,500 limitation." 61 Opinions of the Attorney General at 413.

This determination inevitably depends upon the particular circumstances surrounding a given testimonial event. The following factors are pertinent:

1) Identity of the organizers. If a partisan organization or political committee sponsors the testimonial event, the testimonial can only be regarded as a political fundraiser. The nature of these organizations permits no other conclusion. See Article 33, §1-1(a)(12) and (15). Ticket purchases would be "contributions," as defined in Article 33, §1-1(a)(5).

2) Timing. The fact that a testimonial is held "well in advance of any election and of a candidate's announcing for public office" is some evidence that the event is a true testimonial, rather than a political fundraiser. See 57 Opinions of the Attorney General at 186. Conversely, the fact that a so-called "testimonial" is held in the midst of an election campaign is some evidence that the event is really a political fundraiser.

3) Solicitations and advertisements. The opinion concerning the Four Star Salute noted that the organizers of the event themselves described it explicitly as intended to raise campaign funds. 60 Opinions of the Attorney General at 233. Although the opinion does not so state, presumably the written materials used for the affair likewise reflected this intended use. The opinion did indicate that news coverage of the event made clear its electoral nature. As the opinion put it: "While it is possible that some individual ticket purchasers may have perceived the event as nothing more than a testimonial honoring the State's four highest elected officials, it is entirely reasonable to assume that it was correctly viewed by its organizers, the vast majority of ticket purchasers and the general public as a political fundraiser designed to raise a substantial sum of money for use in the 1974 elections." 60 Opinions of the Attorney General at 233.

In our view, it is evidence that an event is a political fundraiser if the solicitations, advertisements, and other written materials associated with an event refer to a future campaign, the honoree's political prospects, or a past campaign debt. By contrast, it is evidence that an event is a true testimonial if the written materials for the affair refer exclusively to the past achievements of the honoree.

4) Use of the funds raised. In the Four Star Salute opinion, this office noted that "virtually all of [the event's] net proceeds were expended 'to promote or assist in the promotion of the success' of the four incumbents as candidates in the 1974 primary election." 60 Opinions of the Attorney General at 234. Plainly, one indication of the nature of the event is the use of the proceeds. If an event is a true testimonial, the disposition of the proceeds must be consistent with its nonelectoral nature, for example, money given to the honoree for his or her unrestricted use.4

We recognize that these criteria are far from precise. But as the Act now stands, no more definitive guidance is possible.5

III
Conclusion

In sum, it is our opinion that funds provided to an official as a result of a testimonial are political contributions regulated by the Fair Election Practices Act, and therefore are not a "gift," within the meaning of the Maryland Public Ethics Law, if the testimonial is for the purpose of raising funds for a future or past election campaign. This purpose is measured by the circumstances surrounding the testimonial, including the identity of the organizers; the timing of the event; the content of solicitations, advertising, and other pertinent written materials available to those who attend; and the use of the proceeds from the event.

Stephen H. Sachs
Attorney General
Jack Schwartz
Chief Counsel
Opinions and Advice

Editor's Note: The Governor's Commission to Review the Election Laws (Nilson Commission) has recommended that the interpretation in this opinion be codified. Report of the Commission 71-73 (January 15, 1987).

1 This opinion confirms the portion of a previous letter of advice that dealt with this subject. Letter of Advice from Assistant Attorney General Jack Schwartz to Marie M. Garber, State Administrator of Election Laws, at 9-10 (August 27, 1985).

2 See also 62 Opinions of the Attorney General 374 (1977), discussed in note 3 below.

3 Another opinion concluded, without discussion, that "the cost of tickets to testimonials or campaign contributions" need not be reported as lobbying expenses under the predecessor of Article 40A, §5-105, because "[t]hese transactions will be reported pursuant to the Fair Election Practices Act." 62 Opinions of the Attorney General 374, 383 (1977). The "testimonials" in question were held for "announced or unannounced candidates for election to the Maryland Legislature or Executive Department." 62 Opinions of the Attorney General at 374-75. These events were evidently campaign fundraisers labeled as "testimonials," rather than nonelectoral fetes.

4 The Act permits political contributions to be given directly to a candidate. Article 33, §26-9(a). Hence, the mere fact that the proceeds of a testimonial are presented to the honoree personally, rather than to his or her campaign treasurer, does not itself negate the possibility that the funds are meant as a political contribution. But, even if an honoree receives money from a testimonial that its organizers intend as an unrestricted gift, to be used as the honoree sees fit, the Act nevertheless does not prohibit that person from subsequently donating those funds to his or her campaign. A candidate may make contributions to his or her own campaign without limit. Article 33, §26-8(a). This kind of subsequent use by the honoree of a testimonial gift would not transform those proceeds into "contributions." See 61 Opinions of the Attorney General at 413.

5 The Governor has appointed a Commission to Review the Elections Laws, chaired by former Deputy Attorney General George A. Nilson. The Act's inadequate treatment of testimonials has been brought to the attention of the Commission.