Document Sample
					June 2011                                 Federal Election Commission                           Volume 37, Number 6

                                                                                   23 Publicly funded presidential
  Using this                                 Table of                                 candidate may redesignate general
  Supplement                                 Contents                                 election contributions to Senate
                                                                                      election within 60 days, AO 2008-
                                             Court Cases                           24 Use of campaign funds for legal
    The purpose of this supplement
                                         2   Shays v. FEC (III)                       and media expenses, AO 2008-7
is to offer a summary of the most        4   Davis v. FEC
recent developments in the Com-                                                    25 Earmarked contribution counts
                                         5   Citizens United v. FEC                   against current spending limits, AO
mission’s administration of federal      6   Unity 08 v. FEC                          2008-08
campaign finance law relating to                                                   25 Application of loan repayment
candidate committees. The following        Commission                                 provision, AO 2008-09
is a compilation of articles from the    8 Commission statement on Davis v.        26 PAC may pay expenses incurred
FEC’s monthly newsletter covering          FEC                                        by Senator’s co-author, AO 2008-
relevant changes. It should be used      8 Commission statement on Citizens           17
in conjunction with the FEC’s April        United v. FEC                           27 Campaign committee employee
2008 Campaign Guide for Congres-                                                      may serve as leadership PAC’s
                                           Regulations                                treasurer, AO 2008-19
sional Candidates and Committees,
                                         9 Final rules on repeal of                27 Senator’s committee may repay
which provides more comprehensive          millionaires’ amendment
information on compliance for can-                                                    certain personal loans with
                                        11 Final rules on reporting                   campaign funds, AO 2008-22
didate committees.                         contributions bundled by lobbyists,     28 Independent expenditures by single
                                           registrants and their PACs                 member LLC, AO 2009-2
                                        13 Final rules on participation            29 Recount and election contest
    Note: Portions of this pub-            by federal candidates and                  funds, AO 2009-04
 lication may be affected by the           officeholders at nonfederal             29 Federal officeholder’s state
                                           fundraisers                                campaign may raise nonfederal
 Supreme Court’s decision in            14 Final rules on campaign travel
 Citizens United v. FEC. Essen-                                                       funds to retire debt, AO 2009-06
                                        17 Final rules on coordinated              30 Use of campaign funds for home
 tially, the Court’s ruling permits        communications                             security upgrades, AO 2009-08
 corporations and labor organiza-       18 Final rules for definition of federal   31 Campaign’s use of candidate-
 tions to use treasury funds to            election activity                          owned LLC’s boat, AO 2009-07
 make independent expenditures          20 Interpretive rule on electronic         32 Federal officeholder may use
 in connection with federal elec-          redesignations of contributions            campaign funds to pay certain
 tions and to fund electioneering                                                     legal fees, AO 2009-10
 communications. The ruling did            Inflation Adjustments                   32 Candidate may use campaign
 not affect the ban on corporate or     21 Contribution limits for 2011-2012          funds for cetrain legal fees, AO
 union contributions or the report-     21 Lobbyist bundling threshold for            2009-12
                                           2011                                    34 Political committee status of
 ing requirements for independent
 expenditures and electioneering                                                      consultants serving LLCs who
                                           Advisory Opinions                          make independent expenditures,
 communications. For more infor-        22 “Stand-by-your-ad” disclaimer              AO 2009-13
 mation, see page 5.                       required for brief television
                                           advertisements, AO 2007-33
Federal Election Commission RECORD                                                                                   June 2011

35     Candidate committee may accept        44   Members of Congress may solicit
       contributions for potential special        nonfederal funds for redistricting     Court Cases
       election, AO 2009-15                       trust, AO 2010-03
37     PAC may use contributor               45   Sale of ad time on a foreign-owned
       information for limited                    TV station, AO 2010-05               Shays v. FEC (III)
       communication, AO 2009-19             46   Members of Congress may solicit         On June 13, 2008, a three-judge
38     Federal officeholder may use               funds for state ballot measure, AO   panel of the U.S. Court of Appeals
       campaign funds to pay certain              2010-07                              for the District of Columbia af-
       legal fees of current and former      47   Candidate may receive refund         firmed in part and reversed in part
       staff members, AO 2009-20                  from his committee, AO 2010-15       the district court’s judgment in the
39     FECA preempts law affecting           47   Undesignated contributions may
       federal candidates, AO 2009-21             be applied to general or special
                                                                                       Shays III case. Specifically, the ap-
40     Federal candidate may fund certain         election, AO 2010-17                 peals court agreed with the district
       activities from state campaign        48   Campaign funds may be used for       court in finding deficient regulations
       account, AO 2009-26                        moving-related storage costs, AO     regarding the content standard for
42     Proposed sale of art on behalf of          2010-26                              coordination, the 120-day coordina-
       committees is not a contribution,     49   Transfers between authorized         tion window for common vendors
       AO 2009-32                                 committees, AO 2010-27               and former campaign employees
43     State party activity on behalf of     50   State party refund to federal        and the definitions of “GOTV activ-
       presumptive nominee, AO 2010-01            campaign not a contribution, AO      ity” and “voter registration activity.”
                                                  2010-28                              The appeals court reversed the dis-
                                             50   Funds received and spent by legal    trict court’s decision to uphold the
                                                  defense fund not contributions or
                                                  expenditures, AO 2011-01
                                                                                       provision allowing federal candi-
     Federal Election Commission
                                             51   Campaign committee may               dates to solicit funds without restric-
     999 E Street, NW
     Washington, DC 20463                         purchase copies of Senator’s         tion at state and local party events.
                                                  autobiography if publisher donates   These regulations were remanded to
     800/424-9530                                 royalties to charity, AO 2011-02     the FEC to issue “regulations con-
     202/694-1100                            53   Candidate position papers posted     sistent with the Act’s text and pur-
     202/501-3413 (FEC Faxline)                   on members-only section of           pose.” The court did not vacate the
     202/219-3336 (TDD for the                    website, AO 2011-04
      hearing impaired)
                                                                                       regulations, so they remain in effect,
                                             54   Use of campaign funds for security   pending further action. The appeals
                                                  upgrades, AO 2011-05                 court upheld the FEC’s regulations
     Cynthia L. Bauerly,
       Chair                                                                           regarding the firewall safe harbor
     Caroline C. Hunter,                                                               for coordination by former employ-
      Vice Chair                                                                       ees and vendors, which the district
     Donald F. McGahn II,                                                              court had found deficient.
     Matthew S. Petersen,                                                              Background
       Commissioner                                                                       In response to the court deci-
     Steven T. Walther,                                                                sions and judgment in Shays I, the
       Commissioner                                                                    FEC held rulemaking proceedings
     Ellen L. Weintraub,                                                               during 2005 and 2006 to revise a
       Commissioner                                                                    number of its Bipartisan Campaign
     Alec Palmer,                                                                      Reform Act (BCRA) regulations.
      Acting Staff Director                                                            On July 11, 2006, U.S. Representa-
     Christopher Hughey,                                                               tive Christopher Shays and then-
      Acting General Counsel                                                           Representative Martin Meehan (the
     Published by the Information                                                      plaintiffs) filed another complaint in
      Division of the Office of                                                        district court. The complaint chal-
      Communications                                                                   lenged the FEC’s recent revisions
     Greg J. Scott,                                                                    to, or expanded explanations for,
       Assistant Staff Director                                                        regulations governing coordinated
     Amy L. Kort,                                                                      communications, federal election
       Deputy Assistant Staff Director                                                 activity (FEA) and solicitations by
     Isaac J. Baker,
                                                                                       federal candidates and officehold-
                                                                                       ers at state party fundraising events.                                                                The plaintiffs claimed that the rules

June 2011                                                                             Federal Election Commission RECORD

did not comply with the court’s          safe harbor provision. The court of      for outside organizations making
judgment in Shays I or with the          appeals reversed the district court’s    independent expenditures. The ap-
BCRA. The complaint also alleged         decision to uphold the provision         pellate court held that, although the
the FEC did not adequately explain       permitting federal candidates to         firewall provision states generally
and justify its actions.                 solicit funds without restriction at     as to what the firewall should actu-
   On September 12, 2007, the            state or local party events.             ally look like, the court deferred to
district court granted in part and           Coordination Content Standard.       the Commission’s decision to allow
denied in part the parties’ motions      The court of appeals held that,          organizations to create functional
for summary judgment in this case.       while the Commission’s decision          firewalls that are best adapted to
The court remanded to the FEC a          to regulate ads more strictly within     the particular organizations’ unique
number of regulations implement-         the 90- and 120-day periods was          structures.
ing the BCRA, including:                 “perfectly reasonable,” the deci-           Definitions of GOTV and Voter
                                         sion to regulate ads outside of the      Registration Activity. The court of
• The revised coordinated commu-
                                         time period only if they republish       appeals upheld the district court’s
  nications content standard at 11
                                         campaign material or contain ex-         decision to remand the definitions
  CFR 109.21(c)(4);
                                         press advocacy was unacceptable.         of “GOTV” and “voter registration
• The 120-day window for coordi-
                                         Although the vast majority of com-       activity.” The court held that the
  nation through common vendors
                                         munications are run within the time      definitions impermissibly required
  and former employees under
                                         periods and are thus subject to regu-    “individualized” assistance directed
  the conduct standard at 11 CFR
                                         lation as coordinated communica-         towards voters and thus continued
  109.21(d)(4) and (d)(5);
                                         tions, the court held that the current   to allow the use of soft money to
• The safe harbor from the defini-
                                         regulation allows “soft money” to        influence federal elections, contrary
  tion of “coordinated communi-
                                         be used to make election-influenc-       to Congress’ intent.
  cation” for a common vendor,
                                         ing communications outside of the           Solicitations by federal candi-
  former employee, or political
                                         time periods, thus frustrating the       dates at state party fundraisers.
  committee that establishes a “fire-
                                         purpose of the BCRA. The appel-          While the district court had upheld
  wall’’ (11 CFR 109.21(h)(1) and
                                         late court remanded the regulations      the regulation permitting federal
  (h)(2)); and
                                         to the Commission to draft new           candidates and officeholders to
• The definitions of “voter registra-
                                         regulations concerning the content       speak without restriction at state
  tion activity” and “get-out-the-
                                         standard.                                party fundraisers, the court of ap-
  vote activity” (GOTV) at 11 CFR
                                             Coordination by Common               peals disagreed. The court stated
                                         Vendors and Former Employees.            that Congress did not explicitly
   On October 16, 2007, the Com-         The appellate court affirmed the         state that federal candidates could
mission filed a Notice of Appeal         district court’s decision concern-       raise soft money at state party
seeking appellate review of all of       ing the 120-day prohibition on the       fundraisers; rather, Congress per-
the adverse rulings issued by the        use of material information about        mitted the federal candidates to
district court. On October 23, 2007,     “campaign plans, projects, activities    “appear, speak, or be a featured
Representative Shays cross-ap-           and needs” by vendors or former          guest.” Congress set forth several
pealed the district court’s judgment     employees of a campaign. The             exceptions to the ban on federal
insofar as it denied the plaintiff’s     court held that some material could      candidates raising soft money, and
“claims or requested relief.”            retain its usefulness for more than      state party events were not included
                                         120 days and also that the Com-          in the exceptions. Thus, the court
Appeals Court Decision                   mission did not sufficiently support     found the regulation impermissible.
   The appellate court upheld the        its decision to use 120 days as the         U.S. District Court of Appeals
majority of the district court’s         acceptable time period after which       for the District of Columbia Circuit,
decision, including the remand of        coordination would not occur.            07-5360.
the content standard for coordina-           Firewall Safe Harbor. Contrary                         —Meredith Metzler
tion, the 120-day common vendor          to the decision of the district court,
coordination time period and the         the court of appeals approved the
definitions of GOTV activity and         firewall safe harbor regulation to
voter registration activity. While the   stand as written. The safe harbor is
district court had held the firewall     designed to protect vendors and or-
safe harbor for coordination by          ganizations in which some employ-
former employees and vendors in-         ees are working on a candidate’s
valid, the court of appeals reversed     campaign and others are working
the district court and upheld the

Federal Election Commission RECORD                                                                           June 2011

Davis v. FEC                            from personal funds and the amount      Protection provision of the Fifth
   On June 26, 2008, the Supreme        of funds the candidate has raised       Amendment. In order to argue that a
Court ruled that provisions of          from other sources in the year          statute violates the Equal Protection
the Bipartisan Campaign Reform          prior to the year of the election. If   Clause of the Fifth Amendment, a
Act (BCRA) known as the “Mil-           increased limits are triggered, then    plaintiff must show that the statute
lionaires’ Amendment” (2 U.S.C.         the eligible candidate may receive      treats similarly situated entities
§319(a) and (b)) unconstitution-        contributions from individuals at       differently. The district court found
ally burden the First Amendment         three times the usual limit of $2,300   that the Millionaires’ Amendment
rights of self-financed candidates.     per election and may benefit from       did not violate the Equal Protec-
The decision overturned an earlier      party coordinated expenditures in       tion Clause of the Fifth Amendment
ruling by the U.S. District Court for   excess of the usual limit.              because Mr. Davis could not show
the District of Columbia that the                                               that the statute treated similarly
                                        District Court Decision                 situated entities differently. The
Millionaires’ Amendment posed no           The district court held that Mr.
threat to self-financed candidates’                                             district court held that self-funded
                                        Davis’s First Amendment chal-           candidates, who can choose to use
First Amendment or Equal Protec-        lenge failed at the outset because
tion rights.                                                                    unlimited amounts of their personal
                                        the Millionaires’ Amendment did         funds for their campaigns, and
Background                              not “burden the exercise of political   candidates who raise their funds
   On March 30, 2006, Jack Da-          speech.”                                from limited contributions are not
vis, a candidate for the House of          According to the district court,     similarly situated. According to
Representatives in New York’s 26th      the Millionaires’ Amendment             the court, “the reasonable premise
District, filed a Statement of Can-     “places no restrictions on a candi-     of the Millionaires’ Amendment is
didacy with the FEC declaring his       date’s ability to spend unlimited       that self-financed candidates are
intent to spend over $350,000 of his    amounts of his personal wealth to       situated differently from those who
own funds on his campaign.              communicate his message to vot-         lack the resources to fund their own
   On June 6, 2006, Davis asked the     ers, nor does it reduce the amount      campaigns and that this difference
U.S. District Court for the District    of money he is able to raise from       creates adverse consequences dan-
of Columbia to declare the Mil-         contributors. Rather, the Million-      gerous to the perception of electoral
lionaires’ Amendment provisions         aires’ Amendment accomplishes its       fairness.” Thus, the court found
unconstitutional on their face, and     sponsors’ aim to preserve core First    no violation of the Fifth Amend-
to issue an injunction barring the      Amendment values by protecting          ment. The District court granted
FEC from enforcing those provi-         the candidate’s ability to enhance      the FEC’s request for summary
sions. Mr. Davis argued that the        his participation in the political      judgment in this case and denied
Millionaires’ Amendment violates        marketplace.” In particular, the        Mr. Davis’s request for summary
the First Amendment by chilling         court cited the fact that Mr. Davis     judgment.
speech by self-financed candidates,     himself has twice chosen to self-
and violates the Equal Protection       finance his campaign. The court         Supreme Court Decision
Clause of the Fifth Amendment by        found that Mr. Davis failed to show        On June 26, 2008, the Supreme
giving a competitive advantage to       how his speech had been limited by      Court issued an opinion reversing
self-financed candidates’ opponents.    the benefits his opponents receive      the district court’s decision. The
   Under the Millionaires’ Amend-       under the statute.                      Court held that the Millionaires’
ment, candidates who spend more            Mr. Davis additionally alleged       Amendment unconstitutionally
than certain threshold amounts of       that the disclosure requirements        violated self-financed candidates’
their own personal funds on their       for self-financed candidates un-        First Amendment or Equal Protec-
campaigns may render their op-          der the Millionaires’ Amendment         tion rights. The Court also rejected
ponents eligible to receive con-        imposed an unfair burden on his         the FEC’s arguments that Davis
tributions from individuals at an       right to speak in support of his own    lacked standing and that the case
increased limit. 2 U.S.C.               candidacy. The district court found     was moot.
§ 441a-1. For House candidates, the     that the Millionaires’ Amendment           Standing. The FEC argued that
threshold amount is $350,000. This      reporting requirements are no more      Davis lacked standing to challenge
level of personal campaign spend-       burdensome than other BCRA              the unequal contribution limits of
ing could trigger increased limits      reporting requirements that the Su-     the Millionaires’ Amendment, 2
for the self-financed candidate’s       preme Court has already upheld.         U.S.C. §319(a), because Davis’ op-
opponent depending upon the oppo-          The court also rejected the          ponent never received contributions
nent’s own campaign expenditures        second prong of Mr. Davis’s facial      at the increased limit and therefore,
                                        challenge, regarding the Equal          Davis had suffered no injury. The

June 2011                                                                            Federal Election Commission RECORD

Court rejected this argument, not-      appearance of corruption, and that           In January 2008, Citizens United,
ing that a party facing prospective     equalizing electoral opportunities       a non-profit corporation, released
injury has standing whenever the        for candidates of different personal     a film about then-Senator Hillary
threat of injury is real, immediate     wealth was not a permissible Con-        Clinton, who was a candidate in
and direct. The Court further noted     gressional purpose.                      the Democratic Party’s 2008 Presi-
that Davis faced such a prospect of        The Court remanded the matter         dential primary elections. Citizens
injury from increased contribution      for action consistent with its deci-     United wanted to pay cable com-
limits at the time he filed his suit.   sion. On June 26, 2008, the Com-         panies to make the film available
   Mootness. The FEC also argued        mission issued a public statement        for free through video-on-demand,
that Davis’ argument was moot be-       outlining the general principles the     which allows digital cable subscrib-
cause the 2006 election had passed      Commission will apply to conform         ers to select programming from
and Davis’ claim would be capable       to the Court’s decision. The full        various menus, including movies.
of repetition only if Davis planned     statement is printed on page 3.          Citizens United planned to make the
to self-finance another election for       U.S. Supreme Court, No. 07-320.       film available within 30 days of the
the U.S. House of Representatives.                       —Gary Mullen            2008 primary elections, but feared
The FEC also argued that Davis’                                                  that the film would be covered by
claim would not evade review as he      Citizens United v. FEC                   the Act’s ban on corporate-funded
could challenge the Amendment in           On January 21, 2010, the Su-          electioneering communications
court should the Commission file        preme Court issued a ruling in           that are the functional equivalent of
an enforcement action regarding his     Citizens United v. Federal Election      express advocacy, thus subjecting
failure to file personal expenditure    Commission overruling an earlier         the corporation to civil and criminal
reports. Considering that Davis         decision, Austin v. Michigan State       penalties. Citizens United sought
had subsequently made a public          Chamber of Commerce (Austin), that       declaratory and injunctive relief
statement expressing his intent to      allowed prohibitions on indepen-         against the Commission in the U.S.
run for a House seat and trigger the    dent expenditures by corporations.       District Court for the District of
Millionaires’ Amendment again, the      The Court also overruled the part        Columbia, arguing that the ban on
Court concluded that Davis’ chal-       of McConnell v. Federal Election         corporate electioneering communi-
lenge is not moot.                      Commission that held that corpora-       cations at 2 U.S.C. §441b was un-
   First Amendment and Equal Pro-       tions could be banned from making        constitutional as applied to the film
tection. In considering Davis’ claim    electioneering communications.           and that disclosure and disclaimer
that imposing different fundraising     The Court upheld the reporting and       requirements were unconstitutional
limits on candidates running against    disclaimer requirements for indepen-     as applied to the film and the three
one another impermissibly burdens       dent expenditures and electioneering     ads for the movie. The District Court
his First Amendment right to free       communications. The Court’s ruling       denied Citizens United a preliminary
speech, the Court noted that it has     did not affect the ban on corporate      injunction and granted the Commis-
never upheld the constitutionality      contributions.                           sion’s motion for summary judg-
of such a law. The Court referred                                                ment. The Supreme Court noted
to Buckley v. Valeo, in which it        Background                               probable jurisdiction in the case.
rejected a cap on a candidate’s            The Federal Election Campaign
expenditure of personal funds for       Act (the Act) prohibits corpora-         Supreme Court Decision
campaign speech and upheld the          tions and labor unions from using           The Supreme Court found that
right of a candidate to “vigorously     their general treasury funds to make     resolving the question of whether
and tirelessly” advocate his or her     electioneering communications or         the ban in §441b specifically ap-
own election. While the Million-        for speech that expressly advocates      plied to the film based on the narrow
aires’ Amendment did not impose         the election or defeat of a federal      grounds put forth by Citizens United
a spending cap on candidates, it        candidate. 2 U.S.C. §441b. An elec-      would have the overall effect of
effectively penalized candidates        tioneering communication is gener-       chilling political speech central to
who spent large amounts of their        ally defined as “any broadcast, cable    the First Amendment. Instead, the
own funds on their campaigns by         or satellite communication” that is      Court found that, in exercise of its
increasing their opponents’ contri-     “publicly distributed” and refers to     judicial responsibility, it was re-
bution limits. The Court determined     a clearly identified federal candidate   quired to consider the facial validity
that the burden thus placed on          and is made within 30 days of a          of the Act’s ban on corporate expen-
wealthy candidates is not justi-        primary or 60 days of a general elec-    ditures and reconsider the continuing
fied by any governmental interest       tion. 2 U.S.C. §434(f)(3)(A) and 11      effect of the type of speech prohi-
in preventing corruption or the         CFR 100.29(a)(2).                        bition which the Court previously
                                                                                 upheld in Austin.

Federal Election Commission RECORD                                                                               June 2011

    The Court noted that §441b’s           based on the speaker’s identity.”        and do not prevent anyone from
prohibition on corporate indepen-             The Court also rejected an anti-      speaking. As a result, the disclaimer
dent expenditures and electioneering       corruption rationale as a means          and disclosure requirements are
communications is a ban on speech          of banning independent corporate         constitutional as applied to both the
and “political speech must prevail         political speech. In Buckley v. Valeo,   broadcast of the film and the ads
against laws that would suppress it,       the Court found the anti-corruption      promoting the film itself, since the
whether by design or inadvertence.”        interest to be sufficiently important    ads qualify as electioneering com-
Accordingly, laws that burden politi-      to allow limits on contributions,        munications.
cal speech are subject to “strict scru-    but did not extend that reasoning to
tiny,” which requires the government       overall expenditure limits because       Additional Information
to prove that the restriction furthers     there was less of a danger that ex-         The text of the Supreme Court’s
a compelling interest and is narrowly      penditures would be given as a quid      opinion is available on the Commis-
tailored to achieve that interest. Ac-     pro quo for commitments from that        sion’s website at http://www.fec.
cording to the Court, prior to Austin      candidate. The Court ultimately held     gov/law/litigation/cu_sc08_opinion.
there was a line of precedent forbid-      in this case that the anti-corruption    pdf.
ding speech restrictions based on          interest is not sufficient to displace      U.S. Supreme Court No. 08-205.
a speaker’s corporate identity, and        the speech in question from Citi-                —Myles Martin
after Austin there was a line permit-      zens United and that “independent
ting them. In reconsidering Austin,        expenditures, including those made
the Court found that the justifica-        by corporations, do not give rise to     Unity08 v. FEC
tions that supported the restrictions      corruption or the appearance of cor-        On March 2, 2010, the U.S. Court
on corporate expenditures are not          ruption.”                                of Appeals for the District of Co-
compelling.                                   The Court furthermore disagreed       lumbia Circuit reversed the district
    The Court in Austin identified         that corporate independent expen-        court’s decision in Unity08 v. FEC
a compelling governmental inter-           ditures can be limited because of        (Case No. 08-5526) and ruled in fa-
est in limiting political speech by        an interest in protecting dissenting     vor of the Plaintiff, Unity08. The ap-
corporations by preventing “the            shareholders from being compelled        peals court found that Unity08 is not
corrosive and distorting effects of        to fund corporate political speech.      subject to regulation as a political
immense aggregations of wealth             The Court held that such disagree-       committee unless and until it selects
that are accumulated with the help         ments may be corrected by share-         a “clearly identified” candidate.
of the corporate form and that have        holders through the procedures of
little or no correlation to the public’s   corporate democracy.                     Background
support for the corporation’s politi-         Finally, Citizens United also            Unity08, a nonprofit corpora-
cal ideas.” However, in the current        challenged the Act’s disclaimer and      tion organized under the laws of
case the Court found that Austin’s         disclosure provisions as applied to      the District of Columbia, described
“antidistortion” rationale “interferes     the film and three ads for the movie.    itself as a “political movement”
with the ‘open marketplace of ideas’       Under the Act, televised electioneer-    formed for the purpose of nominat-
protected by the First Amendment.”         ing communications must include          ing and electing a “Unity Ticket”
According to the Court, “[a]ll speak-      a disclaimer stating responsibility      in the 2008 Presidential election.
ers, including individuals and the         for the content of the ad. 2 U.S.C.      Unity08 intended to solicit funds
media, use money amassed from the          §441d(d)(2). Also, any person who        via the Internet in order to qualify
economic marketplace to fund their         spends more than $10,000 on elec-        for a position on the ballot in ap-
speech, and the First Amendment            tioneering communications within         proximately 37 states and planned
protects the resulting speech.” The        a calendar year must file a disclo-      to hold an “Internet online nomi-
Court held that the First Amendment        sure statement with the Commis-          nating convention” to select its
“prohibits Congress from fining            sion identifying the person making       candidates for President and Vice
or jailing citizens, or associations       the expenditure, the amount of the       President. Unity08 submitted an
of citizens, for simply engaging in        expenditure, the election to which       advisory opinion (AO) request ask-
political speech.” The Court further       the communication was directed           ing whether it would be considered
held that “the rule that political         and the names of certain contribu-       a “political committee” before the
speech cannot be limited based on          tors. 2 U.S.C. §434(f)(2). The Court     conclusion of its online convention
a speaker’s wealth is a necessary          held that, although disclaimer and       in the summer of 2008. In AO 2006-
consequence of the premise that the        disclosure requirements may burden       20 (See November 2006 Record,
First Amendment generally prohibits        the ability to speak, they impose        page 4), the Commission concluded
the suppression of political speech        no ceiling on campaign activities        that Unity08 would be a politi-
                                                                                    cal committee once it spent more

June 2011                                                                              Federal Election Commission RECORD

than $1,000 for ballot access, since     U.S. District Court for the District of   that draft groups were outside of
spending money for ballot access is      Columbia, 1:07-cv-00053-RWR.              the scope of the Act. In Machinists,
considered an expenditure under the                                                the court used the “major purpose”
Federal Election Campaign Act (the       Appellate Court Decision                  test in Buckley v. Valeo, 424 U.S. 1,
Act), Commission regulations and             The appeals court reversed the        79 (1976), to determine that draft
prior advisory opinions. See 11 CFR      district court’s decision and ruled in    groups “whose activities are not
100.111(a). Additionally, the Com-       favor of the Plaintiff.                   under the control of a ‘candidate’
mission determined that Unity08’s            The appeals court rejected            or directly related to promoting or
“major purpose” was the nomination       the Commission’s argument that            defeating a clearly identified ‘can-
or election of federal candidates,       the case was moot once Unity08            didate’” enjoyed protection from
and therefore the FEC was not            ceased activity. The court noted          regulation under the Act. 655 F.2d at
prevented by the First Amendment         that Unity08 claims it will continue      393. Similar to Machinists, Unity08
from finding that Unity08’s activities   operations if it wins this appeal. The    did not fulfill the “major purpose”
qualified it as a political committee.   court also rejected the Commission’s      test from Buckley. The court also
Unity08 filed suit seeking to enjoin     argument that the Administrative          found the risk of corruption from
the FEC from enforcing AO 2006-20        Procedure Act does not authorize          Unity08’s activities no greater
against it and seeking a declaratory     review of advisory opinions because       than the risk presented by the draft
judgment that the advisory opinion       the opinion is not “final agency ac-      groups in Machinists.
violated its First Amendment rights.     tion.” The court, quoting Chicago             Finally, the court rejected the
The FEC filed for summary judg-          & Southern Air Lines v. Waterman          Commission’s argument that accept-
ment, arguing that Unity08 lacked        Steamship Corp, 333 U.S. 103, 113         ing Unity08’s reading of Machinists
standing to bring the action and that,   (1948), noted that administrative         would exempt political parties from
even if Unity08 had standing, the        orders are final when “they impose        regulation as political committees
FEC’s decision was neither arbitrary     an obligation, deny a right or fix        each election cycle until they actu-
nor capricious, nor did the deci-        some legal relationship as a consum-      ally nominated their candidates.
sion infringe on the Plaintiff’s First   mation of the administrative pro-         According to the court, Unity08’s re-
Amendment rights.                        cess.” In this case, the court found      quest for an AO “presented only the
                                         that the advisory opinion procedure       question of whether a group that has
District Court Decision                  is complete and deprives the Plain-       never supported a clearly identified
   On October 16, 2008, the district     tiff of a legal right—2 U.S.C. §          candidate—and so far as appears
court held that, since Unity08 sought    437f(c)’s reliance defense, which         will not support any candidate after
to obtain ballot access merely as a      the Plaintiff would enjoy if it had       the end of its ‘draft’ process—comes
placeholder for its candidates, it was   obtained a favorable resolution in        within the holding of Machinists.”
reasonable for the Commission to         the advisory process. Additionally,       The court found that Unity08 stands
conclude that any monies Unity08         the court rejected the Commission’s       in contrast to political parties that
spent to qualify for the ballot          argument that the text and structure      have previously supported “clearly
would be considered expenditures         of the Act indicated Congressional        identified” candidates and almost
under the Act. The court held that       intent to preclude judicial review        invariably intend to support their
Unity08’s ballot access was certain      of Commission advisory opinions.          nominees.
to benefit its candidates, who would     The court stated it was “improbable           The text of the court’s opinion is
be identified by party affiliation and   that Congress’s imposition of some        available at
office sought, and who would have        procedural rules for investigations       litigation/u08_ac_opinion.pdf
declared their intentions to run for     should, with little else, be read as          U.S. Court of Appeals for the
federal office when this benefit was     an intention to implicitly preclude       District of Columbia Circuit (No.
conferred upon them. Large, unregu-      judicial review, particularly in con-     08-5526).
lated disbursements made to obtain       texts implicating First Amendment                   —Stephanie Caccomo
such access would therefore present      values.” Slip op. at 10.
the possibility of actual or apparent        Additionally, the court agreed
corruption that the Act was intended     with the Plaintiff’s argument that
to limit. The court also concluded       Unity08 is not subject to regulation
that the FEC’s determination that        as a political committee unless and
Unity08 would qualify as a politi-       until it selects a “clearly identified”
cal committee did not violate the        candidate. The court applied its
First Amendment because Unity08’s        ruling in FEC v. Machinists Non-
major purpose was to nominate and        Partisan Political League, 655 F.2d
support candidates for federal office.   380 (D.C. Cir. 1981), which found

Federal Election Commission RECORD                                                                                June 2011

                                            • As of June 26, 2008, opponents          contributions, that were in ac-
     Commission                               of self-financed candidates who         cordance with the Amendment,
                                              triggered the Amendment may not         before June 26, 2008.
Commission Statement on                       accept increased contributions.           Campaigns or party organiza-
Davis v. FEC                                • As of June 26, 2008, political par-    tions with specific questions regard-
                                              ties may no longer make increased
   On June 26, 2008, the Supreme                                                     ing their reporting obligations may
                                              coordinated expenditures on be-
Court issued its decision in Davis                                                   contact the Reports Analysis Divi-
                                              half of opponents of self-financed
v. FEC, 554 U.S. __, No. 07-320,                                                     sion at (800) 424-9530.
                                              candidates whose personal expen-
and found Sections 319(a) and
                                              ditures would have triggered the
319(b) of the Bipartisan Campaign                                                    Commission Statement on
Reform Act of 20021—the so-called                                                    Citizens United v. FEC
“Millionaires’ Amendment” (the                 Regarding pending FEC matters
“Amendment”)—unconstitutional               that have not reached a final resolu-       On February 5, 2010, the Com-
because they violate the First              tion, the Commission intends to          mission announced that, due to
Amendment to the U.S. Constitu-             proceed as follows:                      the Supreme Court’s decision in
tion.2 The Court’s analysis in Davis                                                 Citizens United v. FEC, it will no
                                            • The Commission is reviewing            longer enforce statutory and regula-
precludes enforcement of the House            all pending matters involving the
provision and effectively precludes                                                  tory provisions prohibiting corpora-
                                              Amendment and will no longer           tions and labor unions from making
enforcement of the Senate provision           pursue claims solely involving
as well.                                                                             either independent expenditures or
                                              violations of the Amendment.           electioneering communications. The
   This public statement outlines             Moreover, the Commission will no
the general principles the Commis-                                                   Commission also announced several
                                              longer pursue information requests     actions it is taking to fully imple-
sion will apply to conform to the             or audit issues solely concern-
Court’s decision.                                                                    ment the Citizens United decision.
                                              ing potential compliance with the         In Citizens United v. FEC, issued
• The Commission will no longer               Amendment. However, not all            on January 21, 2010, the Supreme
  enforce the Amendment and will              activity related to the Amendment      Court held that the prohibitions in
  initiate a rulemaking shortly to            was affected by the Davis deci-        the Federal Election Campaign Act
  conform its rules to the Court’s            sion. If, for example, someone         (the Act) against corporate spend-
  decision.                                   accepted a contribution above          ing on independent expenditures
• As of June 26, 2008, any FEC                the amount allowed under the           or electioneering communications
  disclosure requirements related             Amendment’s increased limits, or       are unconstitutional. The Supreme
  solely to the Amendment need not            accepted increased contributions       Court upheld statutory provisions
  be followed. There is no longer             without being eligible, the Com-       that require political ads to contain
  a need to file the Declaration of           mission will consider such matters     disclaimers and be reported to the
  Intent portion of the Statement of          as part of its normal enforcement      Commission. Provisions addressed
  Candidacy (Lines 9A and 9B of               process.                               by the decision are described below:
  Form 2), FEC Form 10, Form 11,            • The Commission will not require
  Form 12, or Form 3Z-1.                      that candidates who received           • The Court struck down 2 U.S.C.
• All other filing obligations unre-          increased contributions in accor-        §441b, which prohibits, in part,
  lated to the Amendment remain               dance with the Amendment before          corporations and labor organiza-
  the same. For example, contribu-            June 26, 2008, return those funds        tions from making electioneering
  tions a candidate makes to his or           so long as the funds are properly        communications and from making
  her own campaign must still be              expended in connection with the          independent expenditures—com-
  reported.                                   election for which they were             munications to the general public
                                              raised. Similarly, the Commis-           that expressly advocate the elec-
                                              sion will not request that political     tion or defeat of clearly identified
                                              parties, if any, that made increased     federal candidates;
    2 U.S.C. § 441a-1.
                                              coordinated expenditures be-           • The Court upheld 2 U.S.C. §441d,
 Under the “Millionaires’ Amendment,”                                                  which requires that political adver-
when a candidate’s personal expendi-          fore June 26 consistent with the
                                              Amendment take any remedial              tising consisting of independent
tures exceeded certain thresholds, that                                                expenditures or electioneering
candidate’s opponent(s) became eligible       action. Additionally, the Commis-
                                              sion will not pursue individual          communications contain a dis-
to receive contributions from individuals
at an increased limit and to benefit from     contributors who made increased          claimer clearly stating who paid for
enhanced coordinated party expendi-                                                    such communication; and

June 2011                                                                             Federal Election Commission RECORD

• The Court upheld 2 U.S.C. §434,          and electioneering communications         The full text of the Commission’s
  which requires certain informa-          under certain conditions;              statement is available at http://www.
  tion about electioneering com-         • 11 CFR 114.14, which places  
  munications and independent              restrictions on the use of corporate   CitizensUnited.shtml.
  expenditures, and the contributions      and labor union funds for election-
  received for such spending, to be        eering communications; and
  disclosed to the Commission and to     • 11 CFR 114.15, which the Com-
  be made public.                          mission adopted to implement the          Regulations
                                           Supreme Court’s decision in Wis-
   The Commission is taking the
                                           consin Right to Life, Inc. v. FEC.
following steps to conform to the                                                 Final Rules on Repeal of
Supreme Court’s decision:                    The Commission is also consider-     Millionaires’ Amendment
                                         ing the effect of Citizens United on        On December 18, 2008, the Com-
• The Commission will no longer
                                         the ongoing Coordinated Commu-           mission approved final rules that
  enforce the statutory provisions or
                                         nications rulemaking. 74 FR 53893        remove regulations on increased
  its regulations prohibiting corpora-
                                         (Oct. 21, 2009). The Commission          contribution limits and coordinated
  tions and labor organizations from
                                         also issued a Supplemental Notice of     party expenditure limits for Senate
  making independent expenditures
                                         Proposed Rulemaking (SNPRM) re-          and House of Representative candi-
  and electioneering communica-
                                         garding issues presented by Citizens     dates facing self-financed opponents.
                                         United. See page 7 for more infor-       The rules implemented provisions
• The Commission is reviewing all
                                         mation. The additional comment           of the Bipartisan Campaign Reform
  pending enforcement matters to
                                         period closed on February 24, 2010.      Act of 2002 (BCRA) known as the
  determine which matters may be
                                         The Commission intends to hold a         “Millionaires’ Amendment.” In Da-
  affected by the Citizens United
                                         hearing on the Coordinated Com-          vis v. Federal Election Commission
  decision and will no longer pur-
                                         munications rulemaking on March 2        (Davis), the Supreme Court held
  sue claims involving violations
                                         and 3, 2010. The text of the SNPRM       that the Millionaires’ Amendment
  of the invalidated provisions. In
                                         is available at      provisions relating to House of Rep-
  addition, the Commission will no
                                         pdf/nprm/coord_commun/2009/              resentatives elections were unconsti-
  longer pursue information requests
                                         notice2010-01.pdf.                       tutional. The Commission retained
  or audit issues with respect to the
                                             Revisions to Commission report-      and revised certain other rules that
  invalidated provisions; and
                                         ing requirements, forms, instruc-        were not affected by the Davis deci-
• The Commission is considering the
                                         tions and electronic software may be     sion. The final rules were published
  effect of the Citizens United deci-
                                         required.                                in the December 30, 2008, Federal
  sion on its ongoing litigation.
                                             Corporations and labor organiza-     Register and took effect February 1,
   The Commission intends to             tions that intend to finance indepen-    2009.
initiate a rulemaking to implement       dent expenditures or electioneering
the Citizens United opinion. It is re-   communications should:                   Background
viewing the regulations affected by      • Include disclaimers on their com-         On June 26, 2008, the Supreme
the invalidated provisions, including      munications, consistent with FEC       Court ruled in Davis that the Mil-
but not necessarily limited to the         regulations at 11 CFR 110.11;          lionaires’ Amendment provisions of
following:                               • Disclose independent expenditures      BCRA relating to House of Repre-
• 11 CFR 114.2(b)(2) and (3), which        on FEC Form 5, consistent with         sentatives elections unconstitution-
  implement the Act’s prohibition          FEC regulations at 11 CFR 109.10;      ally burden the First Amendment
  on corporate and labor organiza-         and                                    rights of self-financed candidates.
  tion independent expenditures and      • Disclose electioneering communi-       Under those provisions, Senate and
  electioneering communications;           cations on FEC Form 9, consistent      House candidates facing opponents
• 11 CFR 114.4, which restricts the        with FEC regulations at 11 CFR         who spent personal funds above cer-
  types of communications corpora-         104.20.                                tain threshold amounts were eligible
  tions and labor organizations may         The Commission notes that the         for increased contribution and coor-
  make to those not within their         prohibitions on corporations or labor    dinated party expenditure limits.
  restricted class;                      organizations making contributions          On July 25, 2008, the Com-
• 11 CFR 114.10, which permits           contained in 2 U.S.C. §441b remain       mission issued a public statement
  certain qualified nonprofit corpora-   in effect.                               announcing that the Davis decision
  tions to use their treasury funds to                                            precluded the enforcement of the
  make independent expenditures                                                   House provisions and effectively
                                                                                  precluded the enforcement of the

Federal Election Commission RECORD                                                                                 June 2011

Senate provisions. The statement             Definition of Personal Funds. The       deletion of Part 400, the reporting
noted that, as of June 26, 2008,          Commission revised the definition of       under section 104.19 is no longer
the increased contribution limits         “personal funds” in 11 CFR 100.33          required. Therefore, the Commission
and reporting requirements of the         by deleting the cross-reference to         removed section 104.19.
Millionaires’ Amendment were no           section 400.2, which the Commis-              Biennial Limit. The Commis-
longer in effect, and political party     sion removed. The Commission               sion deleted paragraph (b)(2) of
committees were no longer permit-         retained the remaining language of         section 110.5 because the statutory
ted to make increased coordinated         section 100.33.                            foundation for this provision was
party expenditures under these               Candidate Designations. The             invalidated by the Supreme Court’s
provisions. See August 2008 Record,       Commission deleted the sentence            decision in Davis. Paragraph (b)
page 3. The Commission published          in paragraph (a) of 11 CFR 101.1           (2) stated the circumstances under
a Notice of Proposed Rulemaking           that required Senate and House of          which the biennial limits on contri-
(NPRM) on October 20, 2008,               Representatives candidates to state,       butions by individuals did not apply
seeking comment from the public           on their Statements of Candidacy on        to contributions made under 11 CFR
on proposed rules implementing the        FEC Form 2 (or, if the candidates          Part 400.
Davis decision.                           are not required to file electronically,
                                          on their letters containing the same       Retention of Certain Other
Removal of 11 CFR Part 400 —              information), the amount by which          Regulations
Increased Limits for Candidates           the candidates intended to exceed              Repayment of candidates’ per-
Opposing Self-Financed                    the threshold amount as defined in         sonal loans. The BCRA added a new
Candidates                                11 CFR 400.9. The Davis decision           provision limiting to $250,000 the
   Part 400 of FEC regulations            invalidated the statutory foundation       amount of contributions collected
implemented the statutory provisions      for this requirement.                      after the date of the election that can
of the Millionaires’ Amendment.              Statement of Organization. Sec-         be used to repay loans made by the
The Supreme Court’s decision in           tion 102.2(a)(1)(viii) requires princi-    candidate to the campaign. When
Davis invalidated the entire BCRA         pal campaign committees of House           promulgating regulations to enforce
section 319 relating to House elec-       and Senate candidates to provide           this statutory provision, the Com-
tions, including the increased limits     an e-mail address and fax number           mission added new sections 116.11
in 319(a) and its companion disclo-       on their Statement of Organization         and 116.12 to the regulations rather
sure requirements in 319(b). While        (FEC Form 1). This regulation was          than including them in Part 400 with
the Davis decision struck down            promulgated to aid with the expe-          the other Millionaires’ Amendment
only the BCRA sections 319(a) and         dited notifications required by the        provisions. Unlike other aspects of
(b) governing House elections, the        Millionaires’ Amendment under Part         the Millionaires’ Amendment, this
Commission concluded that the Su-         400. The Commission retained the           statutory provision applies equally
preme Court’s analysis in Davis also      requirement that these committees          to all federal candidates, including
precludes enforcement of the paral-       provide e-mail addresses because it        Presidential candidates. The person-
lel provisions applicable to Senate       facilitates the exchange of informa-       al loan repayment provision was not
elections. Therefore, the Commis-         tion between the Commission and            challenged in Davis, nor did the Su-
sion decided to delete the regulations    committees for other purposes under        preme Court’s decision address the
found at 11 CFR Part 400 in their         the Act. However, the Commission           validity of this provision. Therefore,
entirety.                                 deleted the requirement that commit-       the Commission retained sections
                                          tees provide their facsimile num-          116.11 and 116.12.
Amendments to Other Provisions                                                           Net debts outstanding calcula-
                                          bers because it does not routinely
   The deletion of the rules at 11                                                   tion. Section 110.1(b)(1)(i) states
                                          communicate with committees via
CFR Part 400 affects several other                                                   that candidates and their committees
                                          facsimile machine.
Commission regulations, as noted                                                     cannot accept contributions after the
                                             Calculation of “Gross Receipts
below.                                                                               election unless the candidate still has
                                          Advantage.” Section 104.19 had
   Definition of File, Filed or Filing.                                              net debts outstanding from that elec-
                                          required principal campaign com-
Section 100.19 specifies when a                                                      tion and only up to the amount of
                                          mittees of House and Senate candi-
document is considered timely filed.                                                 that net debts calculation. This rule
                                          dates to report information necessary
The Commission deleted paragraph                                                     was in place before BCRA added the
                                          to calculate their “gross receipts
(g), which had described the candi-                                                  loan repayment restriction. However,
                                          advantage.” This calculation was
date’s notification of expenditures                                                  to conform with the fundraising con-
                                          then used to determine the “opposi-
of personal funds under 400.21 and                                                   straints put in place with the BCRA
                                          tion personal funds amount” under
400.22.                                                                              by section 116.11, the Commission
                                          400.10. With the Commission’s
                                                                                     added language to 110.1(b)(3)(ii)

June 2011                                                                              Federal Election Commission RECORD

to exclude the amount of personal        trant PAC is any political committee      ing that the reporting committee
loans that exceed $250,000 from the      that a lobbyist/registrant “established   consulted the required web sites and
definition of net debts outstanding.     or controls.” 11 CFR 100.5(e)(7)          did not find the name of the person
For the same reasons stated above,       and 104.22(a)(3). For the purposes        in question. 11 CFR 104.22(b)(2)(ii).
the Commission retained paragraph        of these rules, a lobbyist/registrant     Nevertheless, the reporting com-
(b)(3)(ii)(C).                           “established or controls” a political     mittee is required to report bundled
                                         committee if he or she is required to     contributions if it has actual knowl-
Additional Information                   make a disclosure to that effect to       edge that the person in question is
   The full text of the rules was        the Secretary of the Senate or Clerk      a lobbyist/registrant or lobbyist/
published in the December 30, 2008,      of the House of Representatives. 11       registrant PAC even if the commit-
Federal Register and is available on     CFR 104.22(a)(4)(i). If the politi-       tee consulted the Senate, House and
the FEC web site at http://www.fec.      cal committee is not able to obtain       FEC web sites and did not find the
gov/law/cfr/ej_compilation/2008/         definitive guidance from the Senate       name of the person in question. 11
notice_2008-14.pdf.                      or House regarding its status, then       CFR 104.22(b)(2)(iii).
                  —Isaac J. Baker        it must consult additional criteria in
                                         FEC regulations. Under these crite-       Covered Periods
                                         ria, a political committee is consid-         An authorized committee, Lead-
Final Rules on Reporting                                                           ership PAC1 or party committee (col-
                                         ered a lobbyist/registrant PAC if:
Contributions Bundled by                                                           lectively “reporting committees”)
Lobbyists, Registrants and               • It is a separate segregated fund        must file new FEC Form 3L when
Their PACs                                 whose connected organization            it receives two or more bundled
   On December 18, 2008, the               is a current registrant; (11 CFR        contributions aggregating in excess
Commission approved final rules            104.22(a)(4)(ii)(A)); or                of $16,000 from a lobbyist/registrant
regarding disclosure of contributions    • A lobbyist/registrant had a primary     or lobbyist/registrant PAC during
bundled by lobbyists/registrants and       role in the establishment of the        a specified time period. That time
their political action committees          committee or directs the gover-         period, called a “covered period,”
(PACs). These rules implement Sec-         nance or operations of the commit-      is defined in HLOGA as January
tion 204 of the Honest Leadership          tee. (Note that the mere provision      1 through June 30, July 1 through
and Open Government Act of 2007            of legal compliance services or ad-     December 31 and any reporting
(HLOGA) by requiring “reporting            vice by a lobbyist/registrant would     period applicable under the Federal
committees” (authorized committees         not by itself meet these criteria.)     Election Campaign Act (the Act). 2
of federal candidates, Leadership          (11 CFR 104.22(a)(4)(ii)(B)(1) and      U.S.C. §434(i)(2); 11 CFR 104.22(a)
PACs and political party commit-           (2)).                                   (5). As a result, covered periods will
tees) to disclose certain information       Disclosure is triggered based on       typically coincide with a commit-
about any lobbyist/registrant or lob-    the activity of persons “reasonably       tee’s regular FEC reporting periods,
byist/registrant PAC that forwards,      known” by the reporting committee         except that bundling reports filed in
or is credited with raising, two or      to be lobbyist/registrants or lobbyist/   July and January will also cover the
more bundled contributions ag-           registrant PACs. In order for report-     preceding six months. One excep-
gregating in excess of the reporting     ing committees to determine wheth-        tion, noted below, permits monthly
threshold within a “covered period”      er a person is reasonably known to        filers to file Form 3L on a quarterly
of time. These requirements apply to     be a lobbyist/registrant or lobbyist/     basis, if they choose.
both in-kind and monetary contribu-      registrant PAC, the rules require             Semi-annual Covered Period. All
tions. The reporting threshold for       reporting committees to consult the       reporting committees with bundled
2009 is $16,000 and is indexed an-       Senate, House and FEC web sites.
nually for inflation.                    11 CFR 104.22(b)(2)(i). The Sen-          1
                                                                                     A Leadership PAC is defined as a po-
                                         ate and House web sites identify          litical committee that is directly or indi-
Lobbyist/Registrants and Their           registered lobbyists and registrants,     rectly established, financed, maintained
PACs                                     while the FEC web site identifies         or controlled by a candidate or indi-
    The rules define a lobbyist/reg-     whether a political committee is a        vidual holding federal office but which
istrant as a current registrant (under   lobbyist/registrant PAC. A computer       is not an authorized committee of the
section 4(a) of the Lobbying Disclo-     printout or screen capture showing        candidate or individual and which is not
sure Act of 1995 (the LDA)) or an        the absence of the person’s name on       affiliated with an authorized committee
individual listed on a current regis-    the Senate, House or FEC web sites        of the candidate or individual, except
tration or report filed under sections   on the date in question may be used
                                                                                   that Leadership PAC does not include a
4(b)(6) or 5(b)(2)(C) of the LDA. 11                                               political committee of a political party.
                                         as conclusive evidence demonstrat-        11 CFR 100.5(e)(6).
CFR 104.22(a)(2). A lobbyist/regis-

Federal Election Commission RECORD                                                                                   June 2011

contributions to disclose must file         (5)(iii). As noted above, report-              Bundled contributions also
a report covering the semi-annual           ing committees that file campaign           include those received from the
periods of January 1 through June           finance reports monthly may elect to        original contributor when the contri-
30 and July 1 through December 31.          file their lobbyist bundling disclo-        butions are credited by the reporting
11 CFR 104.22(a)(5)(i). Totals for          sure on a quarterly basis. 11 CFR           committee to a lobbyist/registrant
the first six months of the year will       104.22(a)(5)(iv). Reporting commit-         or lobbyist/registrant PAC through
appear on quarterly filers’ July 15         tees wishing to change their lobbyist       records, designations or other means
report and on monthly filers’ July          bundling disclosure from monthly to         of recognizing that a certain amount
20 report.2 All reporting committees        quarterly must first notify the Com-        of money has been raised by that
will disclose totals for the second         mission in writing. Electronic filers       lobbyist/registrant or lobbyist/regis-
half of the year on their January 31        must file this request electronically.      trant PAC. 11 CFR 104.22(a)(6)(ii).
Year-End Report.                            A reporting committee may change            The final rules outline ways that a
   Quarterly Covered Period. The            its filing frequency only once in a         reporting committee may be consid-
covered period for reporting com-           calendar year. 11 CFR 104.22(a)(5)          ered to “credit” a lobbyist/registrant
mittees that file campaign finance          (iv).                                       or lobbyist/registrant PAC for raising
reports on a quarterly schedule in                                                      contributions.
an election year includes the semi-         Bundled Contributions                          For example, a reporting commit-
annual periods above and also the              The disclosure requirements ap-          tee may credit lobbyist/registrants
calendar quarters beginning on Janu-        ply to two distinct types of bundled        or lobbyist/registrant PACs through
ary 1, April 1, July 1 and October 1,       contributions: those that are for-          records (written evidence, includ-
as well as the pre- and post-election       warded to the reporting committee           ing writings, charts, computer files,
reporting periods (including runoff         by a lobbyist/registrant or lobbyist/       tables, spreadsheets, databases or
or special elections), if applicable.       registrant PAC and those that are           other data or data compilations
11 CFR 104.22(a)(5)(ii) and (v).            received directly from the contribu-        stored in any medium from which
Authorized committees of House              tor and are credited by the reporting       information can be obtained). 11
and Senate candidates have the              committee to a lobbyist/registrant or       CFR 104.22(a)(6)(ii)(A).
same quarterly covered period for a         lobbyist/registrant PAC.                       Designations or other means of
non-election year as in an election            A forwarded contribution is one          recognizing that a lobbyist/registrant
year. However, Leadership PACs or           that is delivered, either physically        or lobbyist/registrant PAC has raised
party committees that file quarterly        or electronically, to the reporting         a certain amount of money include,
in an election year file campaign           committee by the lobbyist/registrant        but are not limited to:
finance reports semi-annually in            or lobbyist/registrant PAC, or by any
                                            person that the reporting committee         • Titles given to persons based on
a non-election year. Therefore, in
                                            knows to be forwarding a contribu-            their fundraising;
a non-election year, these report-
                                            tion on behalf of a lobbyist/registrant     • Tracking identifiers assigned by the
ing committees must file lobbyist
                                            or lobbyist/registrant PAC. These             reporting committee and included
bundling disclosure only for the
                                            contributions count toward the bun-           on contributions or contribution-
semi-annual covered periods, and
                                            dling disclosure threshold regardless         related material that may be used
the pre- and post-special election
                                            of whether the committee awards               to maintain information about a
reporting periods, if applicable.
                                            any credit to the lobbyist/registrant         person’s fundraising;
Some authorized committees of
                                            or lobbyist/registrant PAC.3 11 CFR         • Access, for example through
Presidential candidates may also file
                                            104.22(a)(6)(i).                              invitations to events, given to
quarterly reports.                                                                        lobbyist/registrants or lobbyist/
   Monthly Covered Period. For                                                            registrant PACs as a result of their
reporting committees that file cam-                                                       fundraising levels; or
paign reports on a monthly basis, the       3
                                              These rules do not affect the existing    • Mementos given to persons who
covered period includes the semi-an-        recordkeeping and reporting provisions        have raised a certain amount of
nual periods above and each month           that require each person who receives         contributions. 11 CFR 104.22(a)(6)
in the calendar year, except that in        and forwards contributions to a political     (ii)(A)(1)-(4).
election years they file for the pre-       committee to forward certain informa-
and post-general election reporting         tion identifying the original contributor      Note, however, that the rules
periods in lieu of the November and         and, for contributions received and for-    exclude from the definition of
December reports. 11 CFR 104.22(a)          warded to an authorized committee, the      “bundled contribution” any contri-
                                            reporting and recordkeeping require-        bution made from the personal funds
  In a non-election year, committees that   ments by persons known as “conduits”        of the lobbyist/registrant or his or
                                            or “intermediaries.” See 11 CFR 102.8
file only semi-annually will file Form 3L                                               her spouse, or from the funds of the
on July 31 and January 31.                  and 110.6.

June 2011                                                                               Federal Election Commission RECORD

lobbyist/registrant PAC. 11 CFR          Additional Information                     source prohibitions of the Federal
104.22(a)(6)(iii).                          The new rules will take effect on       Election Campaign Act (the Act) are
                                         March 19, 2009, and recordkeeping          solicited. The rule addresses partici-
Disclosure Requirements                  requirements begin on this date. Re-       pation at the fundraising event and
   As noted above, the Commis-           porting committees must also begin         in publicizing the event. It does not
sion has created new FEC Form 3L,        tracking their bundled contributions       cover fundraising events at which
Report of Contributions Bundled by       as of this date. Compliance with the       only funds within the limitations and
Lobbyists/Registrants and Lobbyist/      reporting requirements for reporting       prohibitions of the Act are solicited
Registrant PACs, to accommodate          committees is required after May 17,       or those in which funds outside the
the new disclosure requirements.         2009. Reports filed in accordance          limitations and prohibitions of the
Reporting committees must use the        with these rules need not include          Act are not solicited but are, never-
form to disclose:                        contributions bundled by lobbyist/         theless, received. 11 CFR 300.64(a).
• Name of each lobbyist/registrant or    registrants if the contributions are
                                         received before March 19. Contribu-        Participation at Nonfederal
  lobbyist/registrant PAC;                                                          Fundraising Events
• Address of each lobbyist/registrant    tions bundled by lobbyist/registrant
                                         PACs need not be reported if they             A federal candidate or office-
  or lobbyist/registrant PAC;                                                       holder may attend, speak at and
• Employer of each lobbyist (if an       are received by April 18.
                                            The final rules and their Explana-      be a featured guest at a nonfederal
  individual); and                                                                  fundraiser. 11 CFR 300.64(b)(1). He
• The aggregate amount of bundled        tion and Justification were published
                                         in the Federal Register on February        or she is also free to solicit funds at
  contributions forwarded by or                                                     the fundraising event, provided that
  received and credited to each.         17, 2009, and are available on the
                                         FEC web site at http://www.fec.            the solicitation is for funds that are
    Electronic filers are required to    gov/law/cfr/ej_compilation/2009/           within the limitations and prohibi-
file Form 3L electronically. A new       notice_2009-03.pdf.                        tions of the Act and are consistent
release of FECFile will be available              —Elizabeth Kurland                with state law.
from the FEC.                                                                          When the federal candidate or
    Reporting committees must main-                                                 officeholder makes such a solicita-
tain records of any bundled contribu-    Final Rules on Participation               tion, he or she may limit the solicita-
tions that aggregate in excess of the    by Federal Candidates and                  tion by displaying at the fundraiser
reporting threshold and are reported     Officeholders at Nonfederal                a clear and conspicuous written
on Form 3L. Reporting committees         Fundraising Events                         notice, or by making a clear and
must keep sufficient documentation          On April 29, 2010, the Commis-          conspicuous oral statement, that the
of the information contained in the      sion approved final rules addressing       solicitation is not for Levin funds
reports to check their accuracy and      participation by federal candidates        (when applicable) and does not seek
completeness and must keep those         and officeholders at nonfederal            funds in excess of federally permis-
records for three years after filing     fundraising events. These rules            sible amounts or from corporations,
FEC Form 3L. 11 CFR 104.22(f).           were promulgated in response to            labor organizations, national banks,
    The Commission has addition-         the decision in Shays v. FEC, 528          federal government contractors and
ally revised FEC Form 1, Statement       F.3d 914 (D.C. Cir. 2008) (Shays           foreign nationals. 11 CFR 300.62(b)
of Organization, to allow political      III), which invalidated the portion        (2). If the federal candidate or office-
committees to identify themselves        of the old regulations that permitted      holder chooses to make an oral state-
as Leadership PACs or lobbyist/          federal candidates and officehold-         ment, it need only be made once.
registrant PACs. As of March 29,         ers to speak at state, district or local
2009, political committees that meet                                                Publicity for Nonfederal
                                         party committee fundraising events
the definition of “lobbyist/registrant                                              Fundraising Events
                                         “without restriction or regulation.”
PAC” or Leadership PAC must                                                            New 11 CFR 300.64(c) ad-
                                         11 CFR 300.64(b).
identify themselves as such when                                                    dresses the publicity for nonfederal
filing FEC Form 1 with the Com-          Scope                                      fundraisers including, but not limited
mission. Political committees that          The final rule covers participation     to, ads, announcements or pre-event
meet the definition of “lobbyist/reg-    by federal candidates and office-          invitation materials, regardless of
istrant PAC” or Leadership PAC that      holders at nonfederal fundraising          format or medium of the communi-
have already filed FEC Form 1 must       events, which are those fundraising        cation.
amend their FEC Form 1 no later          events that are in connection with            If the publicity does not contain a
than March 29, 2009, to identify         an election for federal office or any      solicitation or solicits only federally
themselves as such.                      nonfederal election where funds            permissible funds, then the federal
                                         outside the amount limitations and         candidate or officeholder (or agent

Federal Election Commission RECORD                                                                                    June 2011

of either) is free to consent to the use   Additional Information                     all campaign travelers aboard such
of his or her name or likeness in the         The final rules and Explanation         flights to avoid receiving an in-kind
publicity for the nonfederal fund-         and Justification were published in        contribution. 11 CFR 100.52(a) and
raiser. 11 CFR 300.64(c)(1)-(2).           the May 5, 2010, Federal Register          (d).
   If the publicity contains a solicita-   (75 FR 24375). They are avail-                 For purposes of HLOGA, the
tion for funds outside the limitations     able on the Commission’s website           term “campaign traveler” refers to
or prohibitions of the Act or Levin        at             individuals traveling in connec-
funds, the federal candidate or of-        ej_compilation/2010/notice_2010-           tion with an election for federal
ficeholder (or agent of either) may        11.pdf. The rules are effective June       office on behalf of a candidate or
consent to the use of his or her name      4, 2010.                                   political committee, and candidates
or likeness in the publicity, only if:               —Katherine Wurzbach              who travel on behalf of their own
                                                                                      campaigns. The term campaign
• The federal candidate or office-
                                                                                      traveler also includes any member
  holder is identified in any other        Final Rules on Campaign                    of the news media traveling with
  manner not specifically related          Travel                                     a candidate. Candidates are only
  to fundraising, such as a featured
                                              On November 19, 2009, the Com-          considered campaign travelers when
  guest, honored guest, special
                                           mission approved final rules imple-        they are traveling in connection
  guest, featured speaker or honored
                                           menting provisions of the Honest           with an election for federal office.
  speaker; and
                                           Leadership and Open Government             This term does not include Members
• The publicity includes a clear
                                           Act of 2007 (HLOGA) relating to            of Congress when they engage in
  and conspicuous oral or written
                                           travel on non-commercial aircraft in       official travel or candidates when
  disclaimer that the solicitation
                                           connection with federal elections.         they engage in personal travel or any
  is not being made by the federal
                                                                                      other travel that is not in connection
  candidate or officeholder. 11 CFR        General Rule                               with an election for federal office. 11
  300.64(c)(3)(i). Examples of dis-            HLOGA amended the Federal              CFR 100.93(a)(3)(i).
  claimers are provided in the regula-     Election Campaign Act (the Act)
  tion at 11 CFR 300.64(c)(iv).            to prohibit candidates for the U.S.        Presidential, Vice-Presidential and
   However, a federal candidate or         House of Representatives, their            Senate Candidate Travel
officeholder (or agent of either) may      authorized committees and their                New 11 CFR 100.93(c)(1)
not agree to the consent of his or her     leadership PACs1 from making any           requires candidates for President,
name or likeness in publicity that         expenditure for non-commercial air         Vice-President and the U.S. Senate
contains a solicitation of funds out-      travel, with an exception for travel       to pay the pro rata share of the fair
side the limitations and prohibitions      on government aircraft and on air-         market value of non-commercial
of the Act or of Levin funds if:           craft owned or leased by a candidate       flights. The pro rata share is deter-
                                           or an immediate family member of           mined by dividing the fair market
• The federal candidate or office-         the candidate. 2 U.S.C. §439a(c)(2)        value of the normal and usual char-
  holder is identified as serving in       and (3). HLOGA also specified new          ter fare or rental charge for a com-
  a manner specifically related to         reimbursement rates that Senate,           parable aircraft of comparable size
  fundraising, such as honorary            Presidential and Vice-Presidential         by the number of campaign travelers
  chairperson or member of a host          candidates and their authorized            flying on behalf of each candidate on
  committee; or is identified in the       committees must pay when making            the flight.2
  publicity as extending the invita-       expenditures for flights aboard non-           The pro rata share is calculated
  tion to the event; or                    commercial aircraft. HLOGA did not         based on the number of candidates
• The federal candidate or office-         alter rules for travel on commercial       represented on a flight, regardless
  holder signs the communication.          flights. All candidates must still pay     of whether the individual candidate
   These restrictions apply even if        the “usual and normal charge” for          is actually present on the flight. A
the publicity contains a disclaimer.                                                  candidate is represented on a flight
11 CFR 300.64(c)(v).                       1
                                             HLOGA and Commission regulations
   In addition, the federal candi-         define “leadership PAC” as a political
                                                                                       The term “comparable aircraft” means
date or officeholder is prohibited         committee that is directly or indirectly   an aircraft of similar make and model as
from disseminating publicity for           established, financed, maintained or       the aircraft that actually makes the trip,
nonfederal fundraisers that contains       controlled by a federal candidate or       with similar amenities as that aircraft.
a solicitation of funds outside the        federal officeholder, but which is not     The Commission’s new regulations
limitations or prohibitions of the Act     a candidate’s authorized committee or      interpret HLOGA to include helicopters
or of Levin funds.11 CFR 300.64(c)         a political party committee. 2 U.S.C.      when determining “comparable air-
                                           §434(i)(8)(B) and 11 CFR 100.5(e)(6).      craft.” 11 CFR 100.93(a)(3)(vi).
June 2011                                                                              Federal Election Commission RECORD

if a person is traveling on behalf        later than seven calendar days after     campaign travelers, including mem-
of that candidate or the candidate’s      the date the flight began. 11 CFR        bers of the news media traveling
authorized committee. Accordingly,        100.93(c)(3).                            with a candidate and security per-
when an individual is traveling on                                                 sonnel, if applicable. See 100.93(d).
behalf of another political committee     Travel by or on Behalf of House          This regulation remains the same as
(such as a political party committee      Candidates and House Leadership          the prior regulation regarding other
or a Senate leadership PAC), rather       PACs                                     means of transportation.
than on behalf of the candidate’s            New 11 CFR 100.93(c)(2) gener-
own authorized committee, the             ally prohibits House candidates and      Government Conveyances
reimbursement for that travel is the      individuals traveling on behalf of           Candidates and representatives of
responsibility of the political com-      House candidates, their authorized       political committees may make cam-
mittee on whose behalf the travel         committees or the leadership PACs        paign travel via government convey-
occurs. The reimbursement must be         of House candidates from engaging        ances, such as government aircraft,
made to the service provider within       in non-commercial campaign travel        subject to specific reimbursement
seven calendar days after the date        on aircraft. This prohibition can-       requirements. HLOGA provides
the flight began to avoid the receipt     not be avoided by payments to the        an exception to the prohibition on
of an in-kind contribution.               service provider, even by payments       non-commercial air travel by House
                                          from the personal funds of a House       candidates and their authorized
Travel on behalf of Leadership            candidate.                               committees and leadership PACs,
PACs of Senate, Presidential and             This prohibition does not apply       but does not specify any particular
Vice-Presidential Candidates              when the travel would be considered      reimbursement rate for travel aboard
   For non-commercial travel on           an expenditure by someone other          government aircraft.
behalf of leadership PACs of Senate,      than the House candidate, the House          The Commission is amending
Presidential and Vice-Presidential        candidate’s authorized committee or      its regulations to require that candi-
candidates, the new regulations ap-       House candidate’s leadership PAC         dates, their authorized committees
ply the same reimbursement rates as       (for example, if the House candidate     or House candidate leadership PACs
in the prior regulations:                 were traveling on behalf of a Senate     reimburse the federal, state or local
                                          candidate instead of on behalf of his    government entity providing the
• The lowest unrestricted and non-
                                          or her own campaign).                    aircraft at either of the two following
  discounted first-class airfare in the
  case of travel between cities served    Non-Commercial Air Travel on
  by regularly scheduled first-class      Behalf of Other Committees               • “Per candidate campaign traveler”
  commercial airline service;                The Commission is retaining its         reimbursement rate, which is the
• The lowest unrestricted and non-        current reimbursement rate struc-          normal and usual charter fare or
  discounted coach airfare in the case    ture for campaign travelers who are        rental charge for a comparable
  of travel between a city served by      traveling on behalf of political party     aircraft of sufficient size to ac-
  regularly scheduled coach com-          committees, separate segregated            commodate all of the campaign
  mercial airline service, but not        funds (SSFs), nonconnected com-            travelers. The pro rata share is
  regularly scheduled first-class         mittees and certain leadership PACs.       calculated by dividing the normal
  commercial airline service, and a       Thus, the reimbursement rates (first       and usual charter fare or rental
  city served by regularly scheduled      class, coach or charter, as described      charge by the number of campaign
  coach commercial airline service        above) will apply to campaign              travelers on the flight that are
  (with or without first-class com-       travelers who are traveling on behalf      traveling on behalf of candidates,
  mercial airline service); or            of these types of committees on non-       authorized committees or House
• The normal and usual charter fare       commercial flights.                        candidate leadership PACs, includ-
  or rental charge for a comparable                                                  ing members of the news media,
  commercial aircraft of sufficient       Other Means of Transportation              and security personnel. No portion
  size to accommodate all campaign           For non-commercial travel via           of the normal and usual charter fare
  travelers and security personnel, if    other means, such as limousines            or rental charge may be attributed
  applicable, in the case of travel to    and all other automobiles, trains and      to any other passengers, except
  or from a city not regularly served     buses, a political committee must          for members of the news media
  by regularly scheduled commercial       pay the service provider the normal        and government-provided security
  airline service.                        and usual fare or rental charge for a      personnel, as provided in 100.93(b)
                                          comparable commercial conveyance           (3). 11 CFR 100.93(e)(1)(i); or
   To avoid the receipt of an in-kind
                                          of sufficient size to accommodate all    • “Private traveler reimbursement
contribution, the committee must
                                                                                     rate,” as specified by the govern-
reimburse the service provider no

Federal Election Commission RECORD                                                                                June 2011

 mental entity providing the aircraft,     ment and reimbursement require-              House candidates are prohibited
 per campaign traveler. 11 CFR             ments for travel aboard aircraft that     from exceeding the candidate’s pro-
 100.93(e)(1)(ii).                         are “owned or leased” by a can-           portional share of ownership interest
                                           didate or a candidate’s immediate         in the aircraft. 11 CFR 100.93(g).
    For campaign travelers who are
                                           family, including an aircraft owned       For Senate, Presidential and Vice
traveling on government aircraft but
                                           or leased by any entity in which the      Presidential candidates, the reim-
are not traveling with or on behalf of
                                           candidate or a member of the can-         bursement rate would be based upon
a candidate or candidate’s commit-
                                           didate’s immediate family “has an         the pro rata share of the charter rate
tee (for example, a person traveling
                                           ownership interest,” provided that 1)     where the proportional share of the
on behalf of a political party com-
                                           the entity is not a public corporation,   ownership interest is exceeded. See
mittee or an SSF), the Commission
                                           and 2) the use of the aircraft is not     11 CFR 100.93(c)(1).
is retaining its previous reimburse-
                                           “more than the candidate’s or imme-          In instances where a candidate
ment rate, which provides that the
                                           diate family member’s proportionate       or a candidate’s immediate family
reimbursement be equal either to
                                           share of ownership allows.”               member wholly owns the aircraft,
the lowest unrestricted and non-dis-
                                               HLOGA allows expenditures on          the candidate’s authorized commit-
counted first class airfare to or from
                                           candidate-owned aircraft, but it still    tee need reimburse only the pro rata
the city with regularly scheduled
                                           requires a candidate to reimburse         share per campaign traveler of the
first-class commercial airline service
                                           the service providers (candidates,        costs associated with the trip. Such
that is geographically closest to the
                                           members of their immediate fam-           costs include, but are not limited
military airbase or other location
                                           ily or entities in which either owns      to, the cost of fuel and crew and a
actually used, or, for all other travel,
                                           an interest) if the candidate seeks to    proportionate share of annual and re-
the applicable rate from among the
                                           avoid receiving an in-kind contribu-      curring maintenance costs. 100.93(g)
rates specified in 100.93(c)(3). 11
                                           tion from the service provider for the    (1)(iii).
CFR 100.93(e)(2).
                                           candidate’s use of the aircraft. Al-         The new regulations do not
    Members of the news media who
                                           though federal candidates may make        require a specific time frame for
are traveling with a candidate on
                                           unlimited contributions to their cam-     repayment, except that such repay-
government aircraft and security
                                           paigns, such contributions must be        ment must be made by the candi-
personnel not provided by a govern-
                                           reported by their authorized commit-      date’s committee in accordance with
ment entity must be included in the
                                           tees. 11 CFR 110.10. Contributions        the normal business practices of the
number of campaign travelers for
                                           from all other persons, including         entity administering the shared-own-
the purposes of identifying a com-
                                           family members, are subject to the        ership or lease agreements.
parable aircraft of sufficient size to
                                           applicable amount limits and source
accommodate all campaign travel-                                                     Recordkeeping Requirements
                                           prohibitions. 11 CFR 110.1.
ers. A comparable aircraft, however,                                                    Political committees are required
                                               New Commission regulations at
need not be able to accommodate                                                      to maintain appropriate records for
                                           11 CFR 100.93(g) provide for in-
all government-required personnel                                                    non-commercial travel. Commission
                                           stances where a candidate or imme-
or government-required equipment                                                     regulations also require candidate
                                           diate family member wholly owns
(such as security communication                                                      committees to obtain and keep cop-
                                           the aircraft and where a candidate or
devices, etc.). All security person-                                                 ies of any shared-ownership or lease
                                           his or her immediate family have a
nel, including government-provided                                                   agreements, as well as the pre-flight
                                           shared-ownership arrangement. In
security personnel, are included in                                                  certifications of compliance with
                                           instances where the candidate uses
determining the number of campaign                                                   those agreements.
                                           the aircraft within the limits of a
travelers for purposes of calculating
                                           shared-ownership arrangement, the
each candidate’s pro rata share.                                                     Additional Information
                                           candidate’s committee must reim-
    A political committee must                                                          The final rules and Explanation
                                           burse the candidate, the candidate’s
reimburse the governmental entity                                                    and Justification were published in
                                           immediate family member or the
providing the conveyance within the                                                  the December 7, 2009, issue of the
                                           administrator of the aircraft for the
time frame specified by the govern-                                                  Federal Register (74 FR 63951).
                                           applicable rate charged to the candi-
mental entity. 11 CFR 100.93(e)(1).                                                  They are available on the Commis-
                                           date, immediate family member or
                                                                                     sion’s website at http://www.fec.
Aircraft Owned or Leased by                corporation or other entity through
Candidate or Immediate Family              which the aircraft is ultimately avail-
                                                                                     notice_2009-27.pdf. The rules took
   The Commission is also amend-           able to the candidate. This amount
                                                                                     effect on January 6, 2010.
ing its regulations to conform with        is treated as a personal contribution
                                                                                                       —Myles Martin
HLOGA’s exception from the pay-            from the candidate if the candidate is
                                           the owner or lessee.

June 2011                                                                             Federal Election Commission RECORD

                                        Reform Act of 2002 (BCRA)                 communication is the functional
                                        established a three-prong test for        equivalent of express advocacy if
  FEC Web Site Offers                   determining whether a communica-          it is “susceptible of no reasonable
  Podcasts                              tion is coordinated with a candidate,     interpretation other than as an appeal
  In an effort to provide more
                                        a candidate’s authorized committee,       to vote for or against a clearly identi-
  information to the regulated
                                        a political party committee or the        fied Federal candidate.” This new
  community and the public, the
                                        agents of any of these. Coordinated       standard applies without regard to
  Commission is making its open
                                        communications generally result           the timing of the communication or
  meetings and public hearings
                                        in an in-kind contribution. The test      the targeted audience.
  available as audio recordings
                                        includes a payment prong, a content           In its application of the functional
  through the FEC web site, as
                                        prong and a conduct prong. The con-       equivalent of express advocacy test,
  well as by podcasts. The audio
                                        tent and conduct prong each include       the Commission will be guided by
  files, and directions on how to
                                        several standards, and satisfying any     the Supreme Court’s reasoning and
  subscribe to the podcasts are
                                        one of the standards within a prong       application of the test to the commu-
  available under Audio Recordings
                                        satisfies that prong of the test. 11      nications at issue in Wisconsin Right
  through the Commission Meetings
                                        CFR 109.21(a)(1)-(3).                     to Life v. FEC (WRTL) 551 U.S. 449
  tab at
                                           Various aspects of the coordinated     (2007) and Citizens United v. FEC,
  To listen to the open meeting
                                        communications test were chal-            130 S. Ct. 876 (U.S. Jan 21, 2010).
  without subscribing to the
                                        lenged in court. The new regulations          The new content standard is an
  podcasts, click the icon next to
                                        respond to the decision by the U.S.       objective, well-established standard.
  each agenda item. Although the
                                        Court of Appeals for the District         The functional equivalent of express
  service is free, anyone interested
                                        of Columbia Circuit in Shays III          advocacy test has been developed
  in listening to podcasts must
                                        Appeal. In that decision, the court       by the Supreme Court to apply to a
  download the appropriate software
                                        held that the Commission’s deci-          wide range of speakers as a stand-
  listed on the web site.
                                        sion to have an “express advocacy”        alone test for separating election-
                                        standard as the only content standard     related speech that is not express
                                        that applies outside of 90-day and        advocacy from non-election related
                                        120-day windows before an elec-           speech. The new content standard
Final Rules at Coordinated              tion runs counter to the purpose          applies to all speakers subject to the
Communications                          of BCRA and the Administative             coordinated communications rules
   On August 26, 2010, the Com-         Procedure Act. The court noted that       at 11 CFR 109.21, including indi-
mission approved final rules and        the FEC “must demonstrate that            viduals and advocacy organizations,
Explanation and Justification regard-   the standard it selects ‘rationally       without regard to when a com-
ing coordinated communications.         separates election-related advocacy       munication is made or its intended
These rules comply with the deci-       from other activity falling outside       audience. As required by Shays III
sion of the U.S. Court of Appeals       [the Act’s] expenditure definition.’”     Appeal, the new content standard
for the District of Columbia Circuit    In addition, the court invalidated the    also captures more communications
in Shays v. FEC, 528 F.3d 914 (D.C.     120-day period used in the exist-         than the express advocacy content
Cir. 2008) (“Shays III Appeal”). See    ing conduct prong to determine            standard outside of the 90-day and
the July 2008 Record. The new rules     whether a common vendor or former         120-day time windows.
take effect December 1, 2010.           campaign employee’s relationship
   The new rules add to the existing    with a candidate committee or party       Conduct Standards
definition of coordinated communi-      committee would satisfy the prong.           The “common vendor” and “for-
cations a content standard for com-     11 CFR 109.21(d)(4) and (d)(5). The       mer employee/independent contrac-
munications that are the “functional    court found that the Commission           tor” standards of the conduct prong
equivalent of express advocacy.”        failed to justify its decision to apply   were challenged in Shays III Appeal.
The new rules also create a safe        a 120-day window.                            Current Commission regulations
harbor for certain business and com-                                              provide that the “common vendor”
mercial communications and provide      New Content Standard                      standard of the conduct prong is
further explanation and justification      Functional Equivalent of Ex-           satisfied if the person paying for the
for two “conduct standards” in the      press Advocacy. The Commission is         communication had contracted or
existing regulations.                   revising the content prong by adding      employed a commercial vendor who
                                        a new standard to cover public com-       provided certain specified services to
Background                              munications that are the “functional      the candidate clearly identified in the
  Commission regulations imple-         equivalent of express advocacy.”          communication, the candidate’s au-
menting the Bipartisan Campaign         See new 11 CFR 109.21(c)(5). A            thorized committee, the candidate’s

Federal Election Commission RECORD                                                                                 June 2011

opponent, the opponent’s authorized      The information in the rulemak-           Additional Information
committee or a political party com-      ing record shows the widespread              The final rules and Explanation
mittee during the previous 120 days.     public availability of certain types of   and Justification were published in
Also, the commercial vendor must         campaign information that used to         the Federal Register on Septem-
use or convey to the person paying       remain confidential for much longer       ber 15, 2010. The full text of the
for the communication information        in years past. The record also dem-       Federal Register Notice is avail-
about the plans, projects, activi-       onstrates that changes in technol-        able at
ties or needs of the candidate, the      ogy have significantly reduced the        ej_compilation/2010/notice2010-17.
candidate’s opponent or political        duration of the news cycle, further       pdf.
party committee, and that informa-       decreasing the time that campaign                  —Myles Martin
tion must be material to the creation,   information remains relevant.
production or distribution of the           There is no information in the         Final Rules for Definition of
communication. 109.21(d)(4).             rulemaking record showing that use        Federal Election Activity
    The former employee/indepen-         or conveyance by common vendors              On August 26, 2010, the Com-
dent contractor conduct standard         and former employees of informa-          mission approved final rules revising
is satisfied if the communication        tion material to public communica-        the regulations at 11 CFR 100.24
is paid for by a person or by the        tions outside of the 120-day period       regarding federal election activity
employer of a person who was an          has become problematic in the time        (FEA). The final rules modify the
employee or independent contractor       the 120-day period has been in ef-        definitions of “voter registration ac-
of the candidate clearly identified in   fect. The Commission concludes            tivity” and “get-out-the-vote-activi-
the communication, or the candi-         that it is extremely unlikely that a      ty” (GOTV activity) and make other
date’s authorized committee, the         common vendor or former employee          changes in response to the decision
candidate’s opponent, the opponent’s     may possess information that re-          of the U.S. Court of Appeals for
authorized committee or a political      mains material when it is more than       the District of Columbia in Shays v.
party committee during the previous      four months old.                          FEC, 528 F.3d 914 (D.C. Cir. 2008)
120 days. Additionally, the former                                                 (“Shays III Appeal”).
employee or independent contractor       Safe Harbor for Certain Business
must use, or convey to the person        and Commercial Communications             Scope
paying for the communication, in-           The Commission is also adopting           Under the new definitions, voter
formation about the plans, projects,     a safe harbor to address certain com-     registration and GOTV activities
activities or needs of the candidate     mercial and business communica-           that urge, encourage or assist poten-
or political party committee that is     tions. The new safe harbor excludes       tial voters in registering to vote or
material to the creation, production     from the definition of a coordinated      voting must be paid for with fed-
or distribution of the communica-        communication any public commu-           eral funds or with a combination of
tion. 109.21(d)(5).                      nication in which a federal candidate     federal and Levin funds regardless
    The Commission is not revis-         is clearly identified only in his or      of whether the message is delivered
ing the common vendor or former          her capacity as the owner or opera-       individually or to a group of people
employee conduct standards at this       tor of a business that existed prior to   via mass communication. However,
time. In order to comply with the        the candidacy, so long as the public      the Commission created exceptions
Shays III Appeal decision, the Com-      communication does not promote,           to the new definitions for:
mission has decided to provide a         attack, support or oppose (PASO)
                                         that candidate or another candidate       • Brief, incidental exhortations to
more detailed explanation and justi-
                                         who seeks the same office, and so           register to vote or to vote;
fication for the 120-day period.
                                         long as the communication is consis-      • GOTV and voter identification
    Based on the record, 120 days has
                                         tent with other public communica-           activities conducted solely in con-
been shown to be a sufficient time
                                         tions made by the business prior to         nection with a nonfederal election;
period to prevent circumvention of
                                         the candidacy in terms of the medi-         and
the Act. Many commenters, in writ-
                                         um, timing, content and geographic        • Certain de minimis activities.
ten and oral testimony, agreed that
campaign information must be both        distribution. New 11 CFR 109.21(i).
current and proprietary (i.e. non-       The new safe harbor is meant to           Definition of “Voter Registration
public) to be subject to the coordi-     exclude communications that have          Activity”
nated communications regulation.         bona fide business and commercial            In compliance with the court of
                                         purposes from the definition of coor-     appeals’ decision in Shays III Ap-
                                         dinated communication.                    peal, the Commission revised the
                                                                                   definition of “voter registration ac-
                                                                                   tivity” to cover activities that assist,

June 2011                                                                                 Federal Election Commission RECORD

encourage or urge potential voters to      decision in Shays III Appeal. The          not inoculate speeches or events that
register to vote. The revised defini-      new definition covers activities that      otherwise would meet the defini-
tion lists the following activities as     assist, encourage or urge potential        tion of voter registration activity
voter registration activity:               voters to vote. The revised definition     or GOTV activity, but is intended
                                           identifies the following activities as     to ensure that communications that
• Encouraging or urging potential
                                           GOTV activity:                             would not otherwise be voter regis-
  voters to register to vote, whether
                                                                                      tration activity or GOTV activity do
  by mail, e-mail, in person, by tele-     • Encouraging or urging potential
                                                                                      not become so merely because they
  phone or by any other means;               voters to vote;
                                                                                      include a brief, incidental exhorta-
• Preparing and distributing informa-      • Informing potential voters about
                                                                                      tion to register to vote or to vote.
  tion about registration and voting;        the hours and location of polling
                                                                                         To qualify for the exception, the
• Distributing voter registration            places, or about early voting or
                                                                                      exhortation must be both brief and
  forms or instructions to potential         voting by absentee ballot;
                                                                                      incidental. For example, exhorta-
  voters;                                  • Offering or arranging to transport
                                                                                      tions to register to vote or to vote
• Answering questions about or               voters to the polls, as well as actu-
                                                                                      that consume several minutes of
  assisting potential voters in com-         ally transporting voters to the polls;
                                                                                      a speech, or that occupy a large
  pleting or filing voter registration       and
                                                                                      amount of space on a mailer, are not
  forms;                                   • All activities that assist potential
                                                                                      brief and will not qualify for the ex-
• Submitting or delivering a com-            voters in voting.
                                                                                      ception. Also, a message in a mailer
  pleted voter registration form on          The Commission provided two              that stated only “Register to Vote by
  behalf of a potential voter;             examples of GOTV activities falling        October 1st!” or “Vote on Election
• Offering or arranging to transport,      under the new definition:                  Day!” with no other text would not
  or actually transporting, potential
                                           • Driving a sound truck through a          be incidental and would not qualify
  voters to a board of elections or
                                             neighborhood that plays a message        for the exception from the defini-
  county clerk’s office for them to fill
                                             urging listeners to “Vote next Tues-     tion of GOTV activity. Additional
  out voter registration forms; or
                                             day at the Main Street community         examples of exhortations that would
• Any other activity that assists po-
                                             center”; and                             qualify for the exception are pro-
  tential voters to register to vote.
                                           • Making telephone calls (including        vided in the final rules.
   The Commission provided two               robocalls) reminding the recipient       Voter Identification and GOTV
examples of voter registration activ-        of the times during which the polls      Activity Solely in Connection with
ity falling under the new definition:        are open on election day.                a Nonfederal Election
• Sending a mass mailing of voter                                                        In an attempt to better distin-
                                              The Commission emphasized
  registration forms; and                                                             guish between voter identification
                                           that the new definition is a compre-
• Submitting completed voter reg-                                                     and GOTV activities that are FEA,
                                           hensive list of activities designed
  istration forms to the appropriate                                                  and those activities that do not
                                           to cover all means of contacting
  state or local office handling voter                                                affect elections in which a federal
                                           potential voters to assist, encour-
  registration.                                                                       candidate appears on the ballot, the
                                           age or urge them to vote. However,
   The Commission emphasized               consistent with the Shays III Appeal       Commission created new exceptions
that the new definition is a compre-       decision, the Commission carved out        to 11 CFR 100.24(c) for activi-
hensive list of activities designed to     an exception to the new definition         ties exclusively in connection with
cover all means of contacting po-          for brief, incidental exhortations to      nonfederal elections. Under the new
tential voters to assist, encourage or     vote (discussed below).                    provisions, FEA does not include
urge them to register to vote, regard-                                                any amount expended or disbursed
less of the means used to deliver the      Brief, Incidental Exhortation              by a state, district or local party
message. However, consistent with             The Commission created a new            committee for:
the Shays III Appeal decision, the         exception to the definitions of voter
                                           registration activity and GOTV ac-         • Voter identification that is con-
Commission carved out an excep-                                                         ducted solely in connection with a
tion to the new definition for brief,      tivity that allows for a brief exhorta-
                                           tion to register to vote or to vote, so      nonfederal election held on a date
incidental exhortations to register to                                                  no federal election is held, and
vote (discussed below).                    long as the exhortation is incidental
                                           to a communication, activity or              which is not used in a subsequent
Definition of “GOTV Activity”              event. The exception applies to brief,       election in which a federal candi-
   The Commission also revised the         incidental exhortations regardless of        date is on the ballot; 100.24(c)(5);
definition of “GOTV activity” to           the forum or medium in which they            and
comply with the court of appeals’          are made. Also, the exception does

Federal Election Commission RECORD                                                                                June 2011

• Certain GOTV activity that is           Additional Information                    cally receive a refund. Contributors
  conducted solely in connection             The Final Rules were published in      who visited the website were asked
  with a nonfederal election held on      the Federal Register on September         to fill out an electronic form affirma-
  a date on which no federal election     10, 2010, and take effect on Decem-       tively authorizing the redesignation
  is held. 100.24(c)(6).                  ber 1, 2010. The Federal Register         of the contribution and verifying
                                          Notice is available on the Commis-        their identity by entering their per-
Activities involving De Minimis           sion’s website at http://www.fec.         sonal information. The committee
Costs                                     gov/law/cfr/ej_compilation/2010/          retained a record of each electronic
    Finally, mindful of the admin-        notice2010-18.pdf.                        redesignation in a database, includ-
istrative complexities that state,                         —Zainab Smith            ing the personal information pro-
district and local party committees                                                 vided by each contributor making a
and associations of state and local       Interpretive Rule on                      redesignation, in a manner consistent
candidates would face in tracking         Electronic Redesignations of              with the recordkeeping requirements
nominal, incidental costs, the Com-                                                 for signed written redesignations
mission carved out an exception for                                                 under 11 CFR 110.1(l).
                                             On March 16, 2011, the Commis-            The Commission concluded in
de minimis costs associated with
                                          sion approved a Notice of Interpre-       that particular audit that the process
certain enumerated activities. The
                                          tive Rule regarding redesignations        used by the candidate’s committee
Commission excluded the follow-
                                          of candidate committees’ contribu-        provided assurance of contributor
ing activities from the FEA funding
                                          tions from one election to another.       identity and intent to redesignate a
                                          Commission regulations require            contribution equivalent to a writ-
• On the website of a party commit-       that a contributor’s redesignation        ten signature. Since the specific
  tee or association of state or local    of a contribution for another elec-       method approved by the Commis-
  candidates, posting a hyperlink to a    tion (from a primary to a general         sion requires the contributor to
  state or local election board’s web     election, for example) be in writing      provide personal information that
  page containing information on          and be signed by the contributor.         can be verified against a committee’s
  voting or registering to vote;          11 CFR 110.1(b)(5) and 110.2(b)           records, it provides a level of assur-
• On the website of a party commit-       (5). However, the Commission has          ance as to the contributor’s identity
  tee or association of state or local    determined that it will interpret the     and intent.
  candidates, enabling visitors to        Federal Election Campaign Act (the           The Commission will consider
  download a voter registration form      Act) and Commission regulations           other methods of electronic redes-
  or absentee ballot application;         in a manner that is consistent with       ignation, provided that they offer a
• On the website of a party commit-       contemporary technological innova-        sufficient degree of assurance of the
  tee or association of state or local    tions where such technology will not      contributor’s identity and the con-
  candidates, providing information       compromise the intent of the Act and      tributor’s intent to redesignate. Such
  about voting dates and/or polling       regulations. See, for example, AOs        consideration will be provided on a
  locations and hours of operation;       1999-09 and 1995-09.                      case-by-case basis unless and until
  and                                        During the course of an audit of       the Commission initiates a rulemak-
• Placing voter registration forms        a candidate’s authorized committee,       ing on this issue.
  or absentee ballot applications ob-     the Commission determined that a             The Commission’s Notice of In-
  tained from the board of elections      specific redesignation practice by        terpretive Rule was published in the
  at the office of a party committee      the committee provided the same           Federal Register on March 23, 2011,
  or association of state or local can-   degree of assurance of the contribu-      and was effective upon publication.
  didates.                                tor’s identity and the contributor’s                         —Myles Martin
    The Commission emphasized that        intent to redesignate the contribution
the exception is only for the spe-        to another election as a handwritten
cific activities listed and that costs    signature. In that case, the political
associated with activities not on the     committee informed contributors
list, no matter how small the amount      through postal mail, with a follow-
or how closely related the activities,    up e-mail, that they could choose to
do not qualify for the exception. In      redesignate their contribution to that
addition, amounts incurred for the        candidate’s other authorized commit-
enumerated activities that are not        tee by visiting the committee’s web-
de minimis do not qualify for the         site. Contributors were also informed
exception.                                that, if they did not redesignate their
                                          contributions, they would automati-

June 2011                                                                           Federal Election Commission RECORD

                                                                                those debts were incurred. 11 CFR

  New Version of
                                         Inflation                              110.1(b)(3)(iii).
                                                                                    The Act also includes a rounding
  FECFile Available                      Adjustments                            provision for all of the amounts that
  Starting April 5                                                              are increased by the indexing for
     On April 5, a new version        Contribution Limits for                   inflation.2 Under this provision, if
                                      2011-2012                                 the inflation-adjusted amount is not
  of FECFile will be available
                                                                                a multiple of $100, then the amount
  on the FEC website at http://          Under the Federal Election
                                                                                is rounded to the nearest $100.     Campaign Act (the Act), certain
                                                                                         —Elizabeth Kurland
  html. Current FECFile users         contribution limits are indexed for
  need only open their software       inflation every two years, based on
  and accept the automatic update     the change in the cost of living since    2011 Lobbyist Bundling
  to Format Version 7. Reports        2001, which is the base year for ad-      Threshold
  filed in previous formats will no   justing these limits.1 The inflation-        The Federal Election Campaign
  longer be accepted. Filers may      adjusted limits are:                      Act, as amended by the Honest
  also use commercial or privately                                              Leadership and Open Government
                                      • The limits on contributions made
  developed software as long as the                                             Act of 2007 (HLOGA), requires cer-
                                        by persons to candidates and na-
  software meets the Commission’s                                               tain political committees to disclose
                                        tional party committees (2 U.S.C.
  format specifications, which are                                              contributions bundled by lobbyists/
                                        §441a(a)(1)(A) and (B));
  available on the Commission’s                                                 registrants and lobbyist/registrant
                                      • The biennial aggregate contribu-
  website. Committees using                                                     PACs once the contributions exceed
                                        tion limits for individuals (2 U.S.C.
  commercial software should                                                    a specified threshold amount.
                                        §441a(a)(3)); and
  contact their vendors for                                                        The Commission must adjust the
                                      • The limit on contributions made by
  more information about the                                                    threshold amount at the beginning
                                        certain political party committees
  Commission’s latest software                                                  of each calendar year based on the
                                        (2 U.S.C. §441a(h)).
  release.                                                                      change in the cost of living since
                                         Please see the chart on the next
                                                                                2006, which is the base year for
                                      page for the contribution amount
                                                                                adjusting this threshold.1 The result-
                                      limits applicable for 2011-2012. The
                                                                                ing amount is rounded to the nearest
                                      inflation adjustments to these limits
                                                                                multiple of $100. 2 U.S.C. §441a (c)
                                      are made only in odd-numbered
                                                                                (1)(B)(iii). Based on this formula,
                                      years. The per-election limits on
                                                                                the lobbyist bundling disclosure
                                      contributions to candidates are in
                                                                                threshold for 2011 is $16,200.
                                      effect for the two-year election cycle
                                                                                         —Elizabeth Kurland
                                      beginning the day after the general
                                      election and ending on the date
                                      of the next general election (i.e.,
                                      November 3, 2010 – November 6,
                                      2012). All other contribution limits
                                      are in effect for the two-calendar-
                                      year period beginning on January
                                      1 of the odd-numbered year and
                                      ending on December 31 of the even-
                                      numbered year (i.e., January 1, 2011
                                      – December 31, 2012).
                                         Please note, however, that these
                                      limits do not apply to contributions
                                      raised to retire debts from past elec-    1 The applicable cost of living adjust-
                                      tions. Contributions may not exceed       ment amount is 1.08163.
                                      the contribution limits in effect on      2
                                                                                  This provision also affects the indexing
                                      the date of the election for which        of coordinated party expenditure limits
                                                                                and Presidential expenditure limits in 2
                                                                                U.S.C. §§441a(b) and 441a(d), as well
                                      1 The applicable cost of living adjust-   as the disclosure threshold for lobby-
                                      ment amount is 1.23152.                   ist bundled contributions in 2 U.S.C.

Federal Election Commission RECORD                                                                                   June 2011

                                                                                        claimer would limit the ad’s ability
                                                                                        to get its message to viewers.
     Contribution Limits for 2011-2012
     Type of Contribution                                             Limit                In previous advisory opinions,
                                                                                        the Commission has recognized
     Individuals/Non-multicandidate Committees                                          that in certain types of communica-
     to Candidates per Election                                       $2,500            tions it is impracticable to include
                                                                                        a full disclaimer as required by the
     Individuals/Non-multicandidate Committees                                          Act and Commission regulations.
     to National Party Committees per Year                            $30,800           For example, in AO 2004-10, the
                                                                                        Commission found that the specific
     Biennial Limit for Individuals                                   $117,0001         physical and technological limita-
                                                                                        tions of ads read during live reports
     National Party Committee to a Senate Candidate                   $43,1002          broadcast from a helicopter made it
                                                                                        impracticable for a candidate to read
      This amount is composed of a $46,200 limit for what may be contributed to         the required disclaimer himself or
     all candidates and a $70,800 limit for what may be contributed to all PACs and     herself.
     party committees. Of the $70,800 portion that may contributed to PACs and             Likewise, in AO 2002-09, the
     parties, only $46,200 may be contributed to state and local party committees       Commission determined that certain
     and PACs.                                                                          candidate-sponsored text messages
      This limit is shared by the national committee and the Senate campaign com-       were eligible for the “small items”
     mittee.                                                                            exception from the disclaimer
                                                                                        requirements. Under this excep-
                                                                                        tion, bumper stickers, pins and other
                                              for the communication and indicate
     Advisory                                 that the communication is not au-
                                                                                        small items are not required to carry
                                                                                        a printed disclaimer because their
     Opinions                                 thorized by any candidate or candi-
                                              date’s committee. 11 CFR 110.11(b)
                                                                                        size would make doing so impracti-
                                                                                        cable. 11 CFR 110.11(f)(l)(i).
                                              (3). For televised ads, this disclaimer      However, Club for Growth PAC’s
AO 2007-33                                    must appear in writing equal to or        plan presents facts that are materi-
“Stand-By-Your-Ad”                            greater than four percent of the verti-   ally different from those presented in
Disclaimer Required                           cal picture height for at least four      these advisory opinions. AO 2004-
for Brief Television                          seconds. 11 CFR 110.11 (c)(3)(iii).       10 did not dispense with the spoken
Advertisements                                Radio and television ads must also        disclaimer, but rather allowed the
   A series of 10- and 15-second              include an audio statement identify-      broadcaster, rather than the can-
independent expenditure television            ing the political committee or other      didate, to read it. Moreover, the
ads Club for Growth Political Action          person responsible for the content of     10- and 15-second ads proposed by
Committee (Club for Growth PAC)               the ad. 11 CFR 110.11(c)(4)(i).           Club for Growth PAC do not present
plans to air in support of a federal             In this case, Club for Growth          the same physical or technological
candidate must contain the full, spo-         PAC intends to pay for 10- and 15-        limitations as those described in
ken “stand-by-your-ad” disclaimer in          second television ads that expressly      previous advisory opinions.
addition to meeting other disclaimer          advocate the election of a federal           Likewise, the “small items” ex-
requirements.                                 candidate. It plans to include the re-    ception does not apply to the spoken
                                              quired written disclaimer indicating      disclaimer requirements for televised
Background                                    that it is responsible for the content    ads. Under Commission regulations,
   Under the Federal Election Cam-            and that the ads are not authorized       the “small items” exception applies
paign Act (the Act) and Commission            by any candidate or candidate’s           only to “bumper stickers, pins, but-
regulations, when express advocacy            committee.                                tons, pens and other similar items
ads are paid for by a political com-             However, Club for Growth PAC           upon which the disclaimer cannot
mittee, such as Club for Growth               requested it be allowed to omit or        be conveniently printed.” 11 CFR
PAC, and are not authorized by                truncate the required spoken dis-         110.11(f)(1)(i). Thus, it does not ap-
any candidate, the disclaimer must            claimer. Since the ads are shorter        ply to the spoken disclaimer for the
clearly state the full name, perma-           than most other political ads, which      television ads that Club for Growth
nent address, telephone number or             run for 30 to 60 seconds, Club for        PAC plans to sponsor. Additionally,
web address of the person who paid            Growth PAC argued the spoken dis-         the Commission noted that the Act

June 2011                                                                           Federal Election Commission RECORD

provides no exemptions from the         for U.S. Senate in the 2010 elec-       dential committee filed an advisory
spoken disclaimer requirement sim-      tion. The Presidential Committee        opinion request, 54 days after Sena-
ply because the ads are only 10 or 15   issued refunds to some contributors     tor Dodd’s withdrawal from the race.
seconds long. Thus, Club for Growth     upon request and later sent requests    The Commission determined that
PAC must include the full spoken        via U.S. mail to remaining general      Senator Dodd has six days (the bal-
disclaimer in its 10- and 15-second     election contributors (who had not      ance of the 60-day period remaining
television ads.                         received refunds) asking them to        after the advisory opinion request
   Date Issued: July 29, 2008;          redesignate their contributions to      was filed) after the issuance of the
   Length: 4 pages.                     Senator Dodd’s Senate Committee.        advisory opinion to obtain redes-
                  —Isaac J. Baker       The Presidential Committee paid the     ignations and make refunds. Nor-
                                        costs associated with sending these     mally, the mere filing of an advisory
                                        redesignation requests with funds       opinion request does not toll any
AO 2008-04                              received for the Presidential primary   statutory or regulatory deadlines.
Publicly Funded Presidential            election.                               Some Commissioners believe that
Candidate May Redesignate                                                       the 60-day deadline for obtaining
General Election                        Analysis                                redesignations and making refunds
Contributions to Senate                    A candidate may accept contribu-     should toll in Senator Dodd’s case
                                        tions for the general election prior    because he presented a novel legal
Election Within 60 Days                 to the primary election, or in the      question regarding two potentially
   The authorized committee of a        case of a Presidential candidate,       conflicting regulations, as was the
Presidential candidate receiving        before the candidate receives his       case in Advisory Opinion 1992-
primary matching funds may issue        or her party’s nomination. 11 CFR       15. Other Commissioners believe
refunds or obtain redesignations        102.9(e)(1). The Commission has         that tolling is warranted here only
to his Senate campaign (the Sen-        concluded that Presidential candi-      because on January 1, 2008, and for
ate Committee) for contributions        dates do not waive their ability to     approximately six months thereafter,
made in connection with the general     participate in the general election     a period during which Senator Dodd
election. Additionally, the campaign    public funding program by soliciting    requested this advisory opinion
may treat the costs associated with     and raising general election funds      and it remained pending, the Com-
issuing the refunds or obtaining the    before securing the party’s nomina-     mission was unable to render any
redesignations as “winding down         tion. See AO 2007-03. A Presiden-       advisory opinions because it lacked
costs,” which are qualified campaign    tial candidate who accepted general     a quorum of Commissioners.
expenses.                               election contributions before becom-       Additionally, the Presidential
                                        ing the party’s nominee may refund      Committee may pay costs associ-
                                        general election funds received         ated with refunds and redesignations
   Chris Dodd for President, Inc.
                                        from contributors, or under certain     of contributions received for the
(the Presidential Committee) is the
                                        circumstances, request a redesigna-     general election with funds received
principal campaign committee of
                                        tion for a different election. 11 CFR   for the primary election because
Senator Chris Dodd, who was a
                                        110.1(b)(5) and 110.2.                  such costs would qualify as “wind-
candidate for the nomination of the
                                           Commission regulations gener-        ing down costs,” which are consid-
Democratic Party for President of
                                        ally limit the time period in which     ered “qualified campaign expenses.”
the United States. When Senator
                                        a committee may obtain a redesig-       11 CFR 9034.11(a) and 9034.4(a).
Dodd became a candidate for Presi-
                                        nation to 60 days and require that      Winding down costs include costs
dent, his Presidential Committee be-
                                        impermissible funds be refunded         associated with the termination of
gan accepting contributions for both
                                        within 60 days. 110.1(b)(3)(i) and      a Presidential candidate’s efforts to
the primary and general elections,
                                        (b)(5). The Commission has previ-       obtain his or her party’s nomination,
which were kept in separate bank
                                        ously concluded that the 60-day         such as the costs of complying with
accounts. Senator Dodd applied
                                        period begins to run on the date that   the post-election requirements of the
for federal matching funds for the
                                        the committee “has actual notice of     Federal Election Campaign Act and
primary election and was certified
                                        the need to obtain redesignations…      the Matching Funds Act. 11 CFR
by the Commission on November
                                        or refund the contributions.”           9043.11(a).
27, 2007, as eligible to receive such
                                        In this case, Senator Dodd with-           Date Issued: September 2, 2008;
matching funds.
                                        drew from the Presidential race on
   On January 3, 2008, Senator                                                     Length: 5 pages.
                                        January 3, 2008, which caused the
Dodd withdrew from the Presidential                                                               —Myles Martin
                                        60-day period for obtaining redesig-
race and later filed a Statement of
                                        nations and making refunds to run.
Candidacy indicating his candidacy
                                        On February 26, 2008, the Presi-

Federal Election Commission RECORD                                                                            June 2011

AO 2008-07                               Vitter in the matter before the Senate   (3) making informed decisions about
Use of Campaign Funds for                Ethics Committee, counsel also           how to manage the case and address
Legal and Media Expenses                 consulted with Senator Vitter and his    it publicly.”
                                         public relations professional. Coun-
   David Vitter for U.S. Senate,                                                  Applicability of the Use of Funds
                                         sel billed approximately $85,322 in
the principal campaign committee                                                  Provision
                                         legal fees for work relating to quash-
of Senator David Vitter (LA) may                                                     The FEC determined that Senator
                                         ing the subpoenas; $31,341.25 in le-
use campaign funds to pay for, and                                                Vitter’s principal campaign commit-
                                         gal fees for consultations, including
reimburse Senator Vitter for, legal                                               tee may use campaign funds to pay
                                         with the Senator, the Ethics Counsel
services related to a third party                                                 some, but not all, legal fees and ex-
                                         and a public relations professional;
criminal proceeding in which he was                                               penses rendered in connection with
                                         $75,212.75 in legal fees for monitor-
subpoenaed as a witness.                                                          a legal proceeding against a third
                                         ing the Palfrey criminal proceeding;
                                         and $15,301.50 for miscellaneous         party. The Commission concluded
                                         expenses such as transportation and      that legal fees and expenses incurred
   In March of 2007, Deborah Pal-
                                         photocopying.                            in consultation with Senator Vitter’s
frey was indicted by a federal grand                                              Ethics Counsel and in responding
jury on criminal charges, including      Analysis                                 to press inquiries and news stories
money laundering and racketeering.          The Federal Election Campaign         would not have existed irrespective
Senator Vitter’s telephone number        Act (the Act) identifies six permis-     of the Senator’s campaign or duties
appeared in Ms. Palfrey’s telephone      sible uses of federal campaign           as a federal officeholder and could
records. Senator Vitter retained         funds including campaign-related         be paid with campaign funds. The
counsel to monitor the criminal pro-     expenses; ordinary and necessary         Commission further concluded that
ceedings because of the perception       expenses incurred in connection          the Committee may pay miscella-
that Ms. Palfrey had a “strategy of      with the duties of the individual as     neous expenses incurred in connec-
dragging public figures into her legal   a federal officeholder; and any other    tion with assisting Ethics Counsel,
proceedings.”                            lawful purpose that is not considered    and in connection with press rela-
   In July of 2007, Ms. Palfrey          “personal use.” 2 U.S.C. §439a(a)        tions, as described above, and reim-
released her telephone records and       and 11 CFR 113.2.                        burse Senator Vitter for that part of
posted them on the Internet. Sena-          Contributions accepted by the         his personal payment of $70,000 to
tor Vitter issued a public statement     candidate’s authorized campaign          Subpoena Counsel representing legal
concerning the presence of his           committee may not be converted to        fees and expenses that the Commis-
phone number in Ms. Palfrey’s            personal use by any person. “Person-     sion has determined the Committee
records. Later that month, Citizens      al use” is any use of campaign funds     could pay with campaign funds. The
for Responsibility and Ethics in         to fulfill a commitment, obligation      Committee must maintain appropri-
Washington (CREW) requested that         or expense that would exist irrespec-    ate documentation of any disburse-
the Senate Select Committee on           tive of the candidate’s campaign         ments made to pay permissible legal
Ethics (Senate Ethics Committee)         of officeholder duties. 2 U.S.C.         expenses and report the recipient’s
investigate Senator Vitter for pos-      §439a(b)(2) and 11 CFR 113.1(g).         full name, address and purpose of
sible violation of the Senate Rules of      The Commission has previously         payment. The Commission could
Conduct by allegedly soliciting for      recognized that if a candidate can       not reach a conclusion regarding the
prostitution. Senator Vitter retained    demonstrate that expenses resulted       use of campaign funds for quashing
separate counsel to defend himself       from campaign or official duties, the    subpoenas or monitoring the crimi-
against the Senate Ethics committee      Commission will not consider the         nal proceeding.
complaint.                               use to be personal. The Commission          Date Issued: August 21, 2008;
   In November of 2007, Ms.              examines the use of campaign funds          Length: 7 pages.
Palfrey subpoenaed Senator Vitter        for legal fees and expenses on a case             — Michelle L. Ryan
to testify at a pre-trial hearing. In    by case basis. Senator Vitter asked
March of 2008, Ms. Palfrey subpoe-       the Commission to use campaign
naed Senator Vitter as a trial wit-      funds to pay for legal expenses for
ness. Counsel hired by the Senator       “(1) monitoring and participating
consulted with government attorneys      in Ms. Palfrey’s trial and quashing
and appeared in court in an attempt      the subpoenas issued to him; (2)
to quash both subpoenas. In addition     assisting in the defense of a Senate
to monitoring the trial, attempting      Ethics Committee complaint; and
to quash the subpoenas and consult-
ing with counsel assisting Senator

June 2011                                                                              Federal Election Commission RECORD

AO 2008-08                                rather than within 10 days after Act-    cycle in which the contribution is ac-
Earmarked Contribution                    Blue’s receipt of the contribution.      tually made, regardless of the year in
Counts Against Current                    The Commission also determined           which the particular election is held.
Spending Limits                           that ActBlue could forward the con-      11 CFR 110.5(c)(1). Accordingly,
                                          tribution to a named national party      if his contribution is forwarded to
    An earmarked contribution             committee in the event the intended      a 2010 Senate nominee, it will still
sent by an individual through a           candidate did not register with the      count against his 2007-2008 biennial
nonconnected political action com-        Commission. See also AO 2003-23.         limit. If there is no Democratic Sen-
mittee (PAC) is considered “made”                                                  ate nominee and his contribution is
when the contributor gives the            Analysis                                 forwarded to the DSCC, the contri-
money to the nonconnected PAC,                The Federal Election Campaign        bution will again count against his
not when the committee eventually         Act and Commission regulations           2007-2008 biennial limit and against
forwards the contribution to the          place limits on the amount that any      his calendar-year contribution limit
final recipient. Thus, a contribution     person can contribute to a national      to the DSCC for 2008.
earmarked through a nonconnected          party committee, and this limit is           The Commission further deter-
PAC in 2008 will be subject to the        indexed for inflation. For 2008, an      mined that, because Mr. Zucker may
2008 calendar-year contribution           individual can give no more than         not know until 2010 whether his
limit and count against the contribu-     $28,500 to a national party commit-      contribution was forwarded to a can-
tor’s 2007-2008 biennial limit, even      tee. 11 CFR 110.1(c)(1). Individuals     didate or a political committee, the
if the contribution is not forwarded      are additionally subject to a “bien-     only way to ensure that he does not
to the intended recipient until a later   nial limit,” which limits the total      exceed any possible limit that may
election cycle.                           amount of contributions that any         apply is to consider his contribution
                                          individual may make to all federal       as if it were made to both the 2010
Background                                candidates, PACs and party com-
   On June 25, 2008, Jonathan                                                      Democratic Senate nominee and the
                                          mittees during a two-year cycle. For     DSCC.
Zucker made an on-line credit card        the 2008 cycle, the overall biennial
contribution through ActBlue, a                                                        Date Issued: September 12, 2008;
                                          limit is $108,200, which is further          Length: 4 pages.
nonconnected PAC. ActBlue solicits        broken down into separate limits for
and accepts on-line credit card con-                                                                  —Isaac J. Baker
                                          candidates and other committees.
tributions for candidates and party       The biennial limit is also indexed for
committees and forwards them to
the intended recipient via check. Mr.
                                          inflation every two years. 11 CFR        AO 2008-09
                                          110.1(b)(1)(ii). Inflation adjustments   Application of Loan
Zucker earmarked his contribution         beyond 2008 cannot be determined
for the 2010 Democratic nominee                                                    Repayment Provision
                                          at this time. The date a contribution
for the U.S. Senate in Arizona or, in                                                 A provision of the Bipartisan
                                          is “made” determines the election
the event there is no such nominee,                                                Campaign Reform Act of 2002
                                          limit it counts against, and a contri-
to the Democratic Senatorial Cam-                                                  (BCRA) dealing with the repayment
                                          bution is considered “made” when
paign Committee (DSCC).                                                            of personal loans a candidate makes
                                          the contributor relinquishes control
   Usually, a person who receives a                                                to his or her campaign commit-
                                          over it. 11 CFR 110.1(b)(6). A credit
contribution of any amount for an                                                  tee is not affected by the Supreme
                                          card contribution is “made” when
authorized political committee, or                                                 Court’s finding that the so-called
                                          the credit card or number is present-
a contribution greater than $50 for                                                “Millionaires’ Amendment” is
                                          ed because, at that point, the con-
a political committee that is not an                                               unconstitutional. Therefore, can-
                                          tributor is strictly obligated to make
authorized committee, must forward                                                 didates who loan their campaign
                                          the payment. AO 1990-14.
the contribution to the intended                                                   committees personal funds can still
                                              In this case, Mr. Zucker’s credit
recipient no later than 10 days after                                              only be repaid up to $250,000 of
                                          card has been charged for the
receipt. 11 CFR 102.8(a) and (b)(1),                                               the loan amount using contributions
                                          contribution, and he is obligated to
and 110.6(c)(1)(iii) and (iv).                                                     raised after the date of the election. 2
                                          pay that amount to the credit card
   However, in AO 2006-30, the                                                     U.S.C. §441a(j) and 11 CFR 116.11
                                          company. Thus, his contribution
Commission determined that Act-                                                    and 116.12.
                                          has been “made.” Moreover, under
Blue could solicit and receive contri-                                                Background
                                          Commission regulations a contribu-
butions earmarked for a prospective                                                   On June 26, 2008, the Supreme
                                          tion to a candidate or committee
candidate and delay forwarding                                                     Court ruled that sections 319(a)
                                          with respect to a particular election,
those contributions until no later                                                 and 319(b) of the BCRA, known as
                                          including an earmarked contribu-
than 10 days after the candidate had                                               the “Millionaires’ Amendment” (2
                                          tion, counts against the contribution
registered a campaign committee,                                                   U.S.C. §441a-1), unconstitutionally
                                          limits in effect during the election

Federal Election Commission RECORD                                                                             June 2011

burden the First Amendment rights         AO 2008-17                               The requestor placed the fair market
of self-financed candidates for the       PAC May Pay Expenses                     value of these services at $25,000.
House of Representatives. Davis v.        Incurred by Senator’s Co-                   Senator Bond asked the Com-
Federal Election Commission, 554          Author                                   mission whether Missourians for
U.S.__, 128 S. Ct. 2759 (2008).                                                    Kit Bond, the Senator’s principal
Section 304(a) of BCRA imposes               Expenses incurred by a Sena-          campaign committee (the Commit-
analogous limitations on candidates       tor’s co-author while preparing a        tee), or KITPAC, a nonconnected
for the Senate. In addition to the        manuscript of a book the two are         multicandidate committee associ-
Millionaires’ Amendment provi-            writing may be paid for with funds       ated with Senator Bond, could pay
sions, section 304(a) also includes a     from the Senator’s leadership PAC.       the book’s co-author $25,000 for
provision that limits to $250,000 the     The Senator’s principal campaign         the expenses, time and effort spent
amount of a personal candidate loan       committee, however, may not use its      in preparing the manuscript for the
that can be repaid by the candi-          funds to reimburse the co-author for     second publisher’s approval.
date’s committee with contributions       the expenses.
made after the date of the election.                                               Analysis
                                          Background                                  Missourians for Kit Bond may
2 U.S.C. §441a(j); 11 CFR 116.11,             For three years, Missouri Sena-
116.12. This loan repayment provi-                                                 not reimburse the co-author for the
                                          tor Christopher “Kit” Bond has           $25,000, but KITPAC may pay these
sion applies equally to all candi-        worked on a book about terror-
dates, regardless of whether they or                                               expenses.
                                          ist threats from the Far East. In           Under the Federal Election
their opponents have triggered the        December of 2005, Senator Bond
increased campaign contribution                                                    Campaign Act (the Act) and Com-
                                          and his co-author signed an agree-       mission regulations, candidates and
limits.                                   ment concerning liability, delivery
   New Jersey Senator Frank                                                        their committees have wide dis-
                                          of the manuscript, confidentiality       cretion in making expenditures to
Lautenberg loaned his principal           responsibilities, how the advance of
campaign committee, Lautenberg                                                     influence the candidate’s election. 2
                                          royalties would be split and other       U.S.C. §439(a) and 11 CFR 113.2.
for Senate (the Committee), $1.65         matters. Also in December of 2005,
million in connection with his June                                                However, a candidate or candidate
                                          the Senator and co-author signed a       committee may not convert contri-
3, 2008, primary election campaign.       contract with a company to publish
The Committee has not yet repaid                                                   butions to personal use. Personal
                                          the book, for which they received an     use occurs when a “contribution or
those loans to Senator Lautenberg.        advance of $60,000. The co-author
The Committee asked whether the                                                    amount is used to fulfill any com-
                                          received $43,333 of the advance and      mitment, obligation, or expense of a
loan repayment provision would            Senator Bond received $16,667. The
apply to Senator Lautenberg and the                                                person that would exist irrespective
                                          Senator paid $15,000 of his $16,667      of the candidate’s election campaign
Committee in light of the Supreme         to the publishing agent who secured
Court’s ruling in Davis v FEC.                                                     or individual’s duties as a holder of
                                          the original contract and paid the       Federal office.” 2 U.S.C. §439a(b)
Analysis                                  remaining amount to the co-author.       (2). Using this “irrespective test,”
   The Supreme Court did not ad-              The original agreement required      the Commission concluded that the
dress the constitutionality of the        repayment of the advance if the pub-     Committee’s proposed payment
loan repayment provision. Under           lisher declined to publish the book      to the co-author would amount to
the BCRA, the invalidation of one         and the authors secured a second         personal use.
BCRA provision, such as the Mil-          publisher. The original publisher           While third parties are limited in
lionaires’ Amendment, does not            did decline to publish the book and      what they may pay for on behalf of
affect the validity of any other provi-   Senator Bond and his co-author           federal candidates, the “irrespec-
sions. The Commission determined          found a second publisher, who also       tive test” contained in the third
that the loan repayment provision of      agreed to pay them an advance. That      party payment provision at 11 CFR
the BCRA is not inextricably tied to      advance will be used to reimburse        113.1(g)(6) differs slightly from the
the Millionaires’ Amendment and           the original publisher’s advance.        “irrespective test” contained in the
the increased contribution limits.        Senator Bond will not receive any        general personal use prohibition at
   Therefore, the loan repayment          profits from the book.                   11 CFR 113.1(g). This provision
provision applies to Senator Lauten-          However, the requestor said no       asks whether the third party would
berg and the Committee’s proposal         funds from the second advance will       pay the expense even if the can-
to repay his loans.                       remain to fully compensate Senator       didate was not running for federal
   Date Issued: August, 22, 2008;         Bond’s co-author for the expenses,       office. If the answer is yes, then
   Length: 3 pages.                       time and effort spent in preparing the   the payment does not constitute a
                  — Isaac J. Baker        manuscript for the second publisher.     contribution.

June 2011                                                                            Federal Election Commission RECORD

   The requestor stated that Sena-       Longhorn PAC’s FEC reports and          committee for the 2002 and 2008
tor Bond “seeks to publish the book      has final approval of all disburse-     Senate elections.
purely to advance the ideas and          ments. She does not prepare FEC            Between October 6 and 17, 2002,
philosophies important to his cam-       reports for the PAC and does not        Senator Lautenberg made personal
paign and leadership PAC, and not        sign checks or make deposits.           loans totaling $1.51 million to the
to benefit himself personally.” The         Ms. Stone maintains separation       Committee for the 2002 general
requestor also stated that KITPAC’s      between her two roles. She performs     election. Of that money, $1.09 mil-
interest in the book would exist         all of her duties for Longhorn PAC      lion remains as outstanding debt. For
even in the absence of the Senator’s     on her own time, outside of her         the 2008 primary election, Senator
reelection or his campaign.              paid hours for the Committee. No        Lautenberg also loaned the Commit-
   Because the book promotes KIT-        Longhorn PAC resources or funds         tee a total of $1.65 million, of which
PAC’s goals and the PAC would pay        are used in the performance of Ms.      $250,000 remains as outstanding
for the book and the co-author’s ex-     Stone’s Committee duties, and no        debt and $1.4 million has been
penses irrespective of the Senator’s     Committee resources or funds are        converted to contributions from the
campaign, the payment would not          used in the performance of her          Senator himself.
constitute a contribution under 11       Longhorn PAC duties.
CFR 113.1(g)(6). The Commission                                                  Analysis
concluded that KITPAC may there-         Analysis                                   The Bipartisan Campaign Reform
fore make the proposed $25,000              Neither the Federal Election         Act of 2002 (BCRA) limited the
payment to the book’s co-author.         Campaign Act nor any Commission         extent to which candidates’ personal
   Date Issued: December 22, 2008;       regulation bars a person from serv-     loans to their committees could be
   Length: 5 pages.                      ing as an employee of a principal       repaid after their elections. Under
                  —Isaac J. Baker        campaign committee and as the trea-     BCRA, a committee may only repay
                                         surer of a leadership PAC sponsored     up to $250,000 of a candidate’s loan
                                         by that candidate simultaneously.       to the campaign using contributions
AO 2008-19                               Therefore, Ms. Stone may continue       made after the date of the election. 2
Campaign Committee                       to serve as the treasurer of Longhorn   U.S.C. §441a(j); 11 CFR 116.11(b)
Employee May Serve as                    PAC while she is employed by the        (2).
Leadership PAC’s Treasurer               Committee.                                 2008 Primary Election. The
   An employee of a candidate’s             Date Issued: January 16, 2009;       $250,000 limit on repayment of
principal campaign committee may            Length: 3 pages.                     loans applies separately to the
also serve as the treasurer of a lead-                     —Isaac J. Baker       primary election and the general
ership PAC sponsored by the same                                                 election. Therefore, the Committee
candidate.                                                                       may use general election contribu-
                                         AO 2008-22                              tions received after the 2008 primary
Background                               Senator’s Committee May                 election to repay the outstanding
   Ms. O’Lene Stone is a paid            Repay Certain Personal                  $250,000 in personal loans made by
staff member of Texans for Lamar         Loans With Campaign                     Senator Lautenberg for the primary
Smith (the Committee), which is the      Funds                                   election.
principal campaign committee for            A Senator’s authorized committee        2002 Elections. The Committee
Representative Lamar Smith. In her       may use money raised for the 2008       may use contributions received for
position as the Committee’s office       general election to repay loans made    the 2008 election, or funds that will
manager, she collects mail, super-       by the Senator to the committee         be received for the 2014 election, to
vises volunteers, occasionally acts      (personal loans) of up to $250,000      repay the entire outstanding amount
as a contact person for fundraising      for the 2008 primary campaign.          of Senator Lautenberg’s personal
firms and performs other day-to-day      Also, the Senator’s authorized com-     loan to the Committee for the 2002
administrative tasks for the Com-        mittee may use money raised for the     election. The $250,000 limit on re-
mittee. She is not involved in any       2008 and 2014 campaigns to repay        payment of personal loans imposed
fundraising or in preparing or filing    the Senator’s personal loans of any     by BCRA does not apply to loans
any Commission reports for the           amount for his 2002 campaign.           made before the effective date of the
Committee.                                                                       legislation, which was November
   Ms. Stone is also the treasurer of    Background                              6, 2002. 2 U.S.C. §441a(j); Pub. L.
the Longhorn Political Action Com-         Lautenberg for Senate (the Com-       107-155, Sec. 402, Mar. 27, 2002.
mittee (Longhorn PAC), a leadership      mittee) is New Jersey Senator Frank     Because Senator Lautenberg made
PAC sponsored by Representative          Lautenberg’s principal campaign         the loans for his 2002 election in
Smith. In this position, she signs                                               October 2002, BCRA does not limit

Federal Election Commission RECORD                                                                              June 2011

the amount of personal loans for        AO 2009-02                                that elects to be treated as a corpora-
that election that the Committee can    Independent Expenditures                  tion by the Internal Revenue Service
repay using contributions received      by Single Member LLC                      (IRS) is subject to the Act’s rules on
after the 2002 election.                                                          corporate activity. 11 CFR 110.1(g)
                                           The True Patriot Network, LLC
   The Commission has previously                                                  (3).
                                        (TPN), a single natural person mem-
permitted candidates’ authorized                                                     For federal income tax purposes,
                                        ber limited liability company (LLC),
committees to use otherwise law-                                                  a single member LLC cannot elect
                                        may make independent expendi-
ful campaign contributions to repay                                               to be classified as a partnership. It
                                        tures subject to the limitations and
debts from previous elections. The                                                may either choose to be treated as a
                                        disclosure requirements that apply to
Commission concluded in AO                                                        corporation or to be disregarded as
1989-22 that Representative David                                                 an entity separate from its owner. 26
R. Nagle’s authorized committee         Background                                CFR 301.7701-3(a). Commission
could use contributions made with          TPN is a limited liability com-        regulations provide that contribu-
respect to the 1990 primary cam-        pany organized under the laws of          tions by an LLC with only a single
paign to retire debt incurred by his    the State of Washington. Nicolas          natural person member that does
1988 campaign committee. In that        Hanauer is the sole member and            not elect to be treated as a corpora-
case, the Commission determined         manager of TPN. As TPN’s man-             tion for federal income tax purposes
the use of contributions “does not      ager, he has the “sole and exclusive      “shall be attributable only to that
require that they be counted against    right” to manage TPN’s affairs.           single member.” 11 CFR 110.1(g)
the limits applicable to the previous      TPN plans to expand its activi-        (4).
election unless there are facts and     ties to include communications that          Since TPN is a single natural
circumstances indicating that the       influence federal elections. Such         person member LLC that has not
contributions were actually solicited   communications would endorse and          elected corporate tax treatment,
to pay the debts remaining from the     urge support for specific federal         TPN is subject to the contribution
previous election, or that contribu-    candidates and officeholders who          limitations of Mr. Hanauer, its sole
tors gave to the current campaign       share TPN’s principles and ideals.        member. The Commission has not
with knowledge that the funds would     In undertaking these activities, TPN      previously determined whether or
be applied only to debt retirement.”    states that it will not coordinate with   not expenditures by a single member
   Also, in AO 2003-30, the Com-        federal candidates or party commit-       LLC, like contributions, are attrib-
mission concluded that Senator Peter    tees.                                     utable solely to the LLC’s single
Fitzgerald’s principal campaign                                                   member. Under the circumstances
committee could use contributions       Analysis                                  presented here, the Commission
for the 2004 primary election to           TPN may make independent               concludes that they are.
repay loans made to the committee       expenditures, subject to the limita-         As a result of the unity between
in connection with the 1998 election,   tions and disclosure requirements         Mr. Hanauer and TPN, any inde-
including personal loans from Sena-     that apply to individuals. An LLC is      pendent expenditures made by
tor Fitzgerald.                         treated as a person under the Federal     TPN shall be treated as if they were
   As such, the Committee may use       Election Campaign Act (the Act). 2        made by Mr. Hanauer. However, if
contributions made in connection        U.S.C. §431(11). As such, LLCs            circumstances change such that TPN
with Senator Lautenberg’s 2008 and      are subject to the Act’s provisions       could be construed as a “group of
2014 elections to repay debts from      regarding contributions and expen-        persons,” TPN may need to consider
the 2002 election, including the        ditures made by persons. 2 U.S.C.         whether it may also be a “politi-
Senator’s personal loans.               §§431(8) and (9).                         cal committee” under the Act and
   Date Issued: January 30, 2009;          Commission regulations address         Commission regulations. 2 U.S.C.
   Length: 4 pages.                     LLCs in the context of the Act’s          §431(4)(A) and 11 CFR 100.5(a).
                  —Isaac J. Baker       contribution limitations and prohibi-        Date Issued: April 17, 2009;
                                        tions. The Commission generally              Length: 4 pages.
                                        treats contributions by LLCs con-                            —Myles Martin
                                        sistent with the tax treatment that
                                        the entities elect under the Internal
                                        Revenue Code. An LLC that is
                                        treated as a partnership under the
                                        Internal Revenue Code is subject
                                        to the contribution limits that apply
                                        to partnerships. Similarly, an LLC

June 2011                                                                            Federal Election Commission RECORD

AO 2009-04                               incurred only in connection with the    AO 2009-06
Recount and Election                     election contest.                       Federal Officeholder’s State
Contest Funds                            Analysis                                Campaign Committee May
   A national party committee may           In AO 2006-24, the Commission        Raise Nonfederal Funds to
establish a recount fund subject to      concluded that “because election        Retire Debts
the Federal Election Campaign Act’s      recount activities are in connection       A U.S. Senator who was for-
(the Act) amount limits, source pro-     with a Federal election, any recount    merly a lieutenant governor may,
hibitions and reporting requirements     fund established by either a Federal    under certain circumstances, solicit,
to pay expenses incurred in con-         candidate or the State Party must       receive and spend funds outside of
nection with recounts and election       comply with the amount limitations,     the Federal Election Campaign Act’s
contests of federal elections.           source prohibitions, and reporting      (the Act) amount limitations and
                                         requirements of the Act.” The advice    source prohibitions for the sole pur-
Background                                                                       pose of retiring debts from a previ-
                                         provided by AO 2006-24 applies to
   Al Franken was the Democratic                                                 ous state campaign.
                                         a national party committee as well.
candidate for the U.S. Senate for        Thus, the DSCC may establish a
Minnesota in 2008, facing Repub-                                                 Background
                                         recount fund subject to the Act’s
lican Senator Norm Coleman. The                                                      Prior to becoming a U.S. Senator,
                                         amount limits, source prohibitions
close outcome of the general elec-                                               Senator Jim Risch served as Lieuten-
                                         and reporting requirements to be
tion led to a mandatory recount that                                             ant Governor of Idaho. He set up the
                                         used for expenses incurred in con-
gave a 225-vote lead to Mr. Franken.                                             Jim Risch for Lieutenant Governor
                                         nection with recounts and election
In January 2009, Mr. Coleman filed                                               Committee (the Committee) as his
                                         contests of federal elections, such
a lawsuit to contest the recount,                                                campaign committee for this state
                                         as the 2008 Senatorial recount and
which has resulted in a protracted                                               office. As of December 1, 2008, the
                                         election contest in Minnesota. The
legal battle with no final winner yet                                            Committee had outstanding debts
                                         contribution limits for a national
being determined or seated in the                                                of more than $331,000, which is
                                         party committee for 2009 ($30,400
Senate.                                                                          the balance of a loan Senator Risch
                                         per calendar year from an individual
   The Democratic Senatorial Cam-                                                made to the committee in connection
                                         and $15,000 per calendar year from
paign Committee (DSCC), a national                                               with the 2002 primary election.
                                         a multicandidate political action
committee of the Democratic Party,                                                   The Committee wishes to raise
                                         committee) apply for any recounts
wishes to establish a recount fund,                                              funds in accordance with Idaho state
                                         and election contests during 2009.
separate from its other accounts                                                 law to retire this debt. Under Idaho
                                         Donations to recount funds are not
and subject to a separate limit on                                               law, individuals, corporations and
                                         aggregated with contributions from
amounts received, to pay expenses                                                other recognized legal entities may
                                         those same individuals for purposes
incurred in connection with the                                                  contribute up to $5,000 per election
                                         of the calendar-year and aggregate
2008 Senatorial recount and election                                             to state candidate committees. Also,
                                         biennial contribution limits of 2
contest in Minnesota. Donations to                                               if a political committee has debt
                                         U.S.C. §§441a(a)(1)(B) and (a)(3).
the proposed separate recount fund                                               outstanding, it may accept additional
                                            The Commission could not ap-
would be subject to the limits, pro-                                             contributions to retire the debt, sub-
                                         prove a response by the required
hibitions and reporting requirements                                             ject to the prescribed limits.
                                         four affirmative votes with regard to
of the Act.                              whether Al Franken for U.S. Senate
   In addition, Mr. Franken’s princi-                                            Analysis
                                         may establish an election contest
pal campaign committee, Al Franken                                                  Under the Act, federal candidates
                                         fund, separate from its existing re-
for U.S. Senate (the Committee),                                                 and officeholders cannot raise or
                                         count fund, and subject to a separate
established a recount fund to pay                                                spend funds in connection with a
                                         donation limit.
for expenses incurred in connection                                              nonfederal election unless those
                                            Date Issued: March 20, 2009;
with the recount, and has used the                                               funds comply with the amount
                                            Length: 4 pages.
fund for expenses related to the elec-                                           limitations and source prohibitions
                                                           —Zainab Smith
tion contest. The Committee wishes                                               of the Act. 2 U.S.C. §441i(e)(1)(B)
to establish a separate election con-                                            and 11 CFR 300.62. However, the
test fund that would be subject to the                                           Act provides a limited exception for
Act’s limits, prohibitions and report-                                           federal candidates and officehold-
ing requirements, but would have a                                               ers who also seek, or have sought,
limit separate from its recount fund                                             state or local office. Specifically, the
on amounts received. This proposed                                               restrictions on raising and spending
fund would be used to pay expenses                                               funds for nonfederal elections do

Federal Election Commission RECORD                                                                               June 2011

not apply to any federal candidate        not exist irrespective of his candi-     U.S. Capitol Police recommended
or officeholder who is or was also a      dacy or his duties as an officeholder.   various upgrades to Representative
candidate for a state or local office,                                             Gallegly’s home security system
so long as the solicitation, receipt or   Background                               which would cost between $6,000
spending of funds:                            Representative Gallegly is a         and $7,500. Representative Gallegly
                                          member of the US House of Rep-           wishes to pay for the upgrades using
• Is solely in connection with his or     resentatives from California, and        campaign funds. He confirmed that
  her state or local campaign;            his wife is his longtime campaign        the security upgrades would not
• Refers only to him or her, to other     manager. In October and November         involve any structural improvements
  candidates for that same state or       2008, Representative Gallegly ran        to, and are not intended to increase
  local office, or both; and              for reelection. On October 23, 2008,     the value of, the Galleglys’ property.
• Is permitted under state law.           a man approached Mrs. Gallegly at
   Because Senator Risch is a feder-      her home and claimed to be a gar-        Analysis
al officeholder, and the Committee is     dener looking for work. Mrs. Galleg-        The Federal Election Campaign
directly established, financed, main-     ly told the man that she did not have    Act (the Act) and Commission regu-
tained and controlled by him, the         any work for him, and asked him to       lations prohibit campaign funds from
Committee and its agents are subject      leave her property.                      being converted to “personal use”
to the Act’s restriction on raising and       On October 27, 2008, Mrs.            by any person. 2 U.S.C. §439a(b)
spending nonfederal funds. 2 U.S.C.       Gallegly found a hand-addressed,         (1) and 11 CFR 113.2(e). Personal
§441i(e)(1)(B) and 11 CFR 300.62.         unstamped letter in her mailbox.         use occurs when a contribution or
However, soliciting, receiving and        The envelope was addressed “To:          amount is used to fulfill any commit-
spending funds solely to retire debts     Elton and republican [sic] party,”       ment, obligation or expense of a per-
outstanding from a previous state         and was signed by the man who had        son that would exist irrespective of
candidacy are actions that are solely     approached Mrs. Gallegly on her          the candidate’s election campaign or
in connection with that election to       property four days earlier. The letter   his duties as a federal officeholder. 2
state office. See AO 2007-01. As          demanded that he be allowed to stay      U.S.C. §439a(b)(2).
long as (1) the Committee raises          at the Gallegly residence “or any-          Certain enumerated expenses are
funds solely to retire debts outstand-    where filled with republicans [sic]      automatically considered personal
ing from Senator Risch’s previous         for a guaranteed win of office.” Mrs.    use under the Act and Commission
state candidacy, (2) the Committee’s      Gallegly contacted the local police      regulations, such as payments for
fundraising solicitations refer only to   department, which instructed the in-     mortgage, rent and household food
James Risch, to one or more of his        dividual not to contact the Galleglys    items. See 2 U.S.C. §439a(b)(2) and
former opponents in the campaign          or go to their residence.                11 CFR 113.1(g)(1)(i). However, if
for lieutenant governor of Idaho,             On November 7, 2008, the             the expense is not listed under the
or both, and (3) the Committee’s          individual entered the Galleglys’        Act or Commission regulations, the
fundraising is permitted under Idaho      property again, and Mrs. Gallegly        Commission will make a case-by-
law, the three criteria for the excep-    obtained a Restraining Order and an      case determination of whether any
tion will be satisfied and the Com-       Order to Stop Harassment. However        other use of campaign funds is per-
mittee’s proposed fundraising will        the individual violated the terms of     sonal use. If a candidate can reason-
be permissible.                           the Restraining Order when he en-        ably show that the expense resulted
   Date Issued: April 23, 2009;           tered the Galleglys’ property a fourth   from his campaign or officeholder
   Length: 3 pages.                       time and hid in the bushes near          activities, the Commission will not
                  —Isaac J. Baker         the front door of their home. The        consider it to be personal use. Ex-
                                          individual was arrested and served       planation and Justification for Final
                                          thirty days in jail for violating the    Rules on Personal Use of Campaign
AO 2009-08                                Restraining Order and was released       Funds, 60 Fed. Reg. 7862, 7867
Use of Campaign Funds for                 on probation. After his release, the     (Feb. 9, 1995).
Home Security Upgrades                    individual violated the terms of his        Payments for a home security
   Representative Elton Gallegly          probation and was arrested again. At     system are not specifically listed
may use campaign funds to pay for         the hearing, the judge set the indi-     as a personal use under the Act or
enhanced security for his home with-      vidual’s bail at $100,000, citing the    Commission regulations. In this
out the payments being considered         risk he posed to the Congressman’s       case, the Commission concluded
a personal use of campaign funds          and Mrs. Gallegly’s safety.              that Representative Gallegly’s pay-
because the ongoing threat to his             Representative Gallegly consulted    ment for the home security system
safety, and that of his family, would     the U.S. Capitol Police about the        from his campaign funds would
                                          incidents with the individual. The       not be personal use. The Commis-

June 2011                                                                               Federal Election Commission RECORD

sion found that the content of the       with the remaining forty percent           of influencing the election of Rep.
individual’s letter and the timing of    held by family. After its formation,       Neugebauer. The Committee’s use
his actions strongly suggest that it     the LLC purchased a recreational           of the LLC’s boat without charge,
was Representative Gallegly’s role       boat to be harbored in the Washing-        therefore, would be an in-kind con-
as a candidate and officeholder that     ton, D.C., area with the intention of      tribution by the LLC.
resulted in the threats. Also, the se-   renting the boat to third parties at the      The Commission generally treats
curity upgrades were recommended         seasonal fair market value.                contributions by LLCs consistent
by the U.S. Capitol Police specifical-       The Neugebauer for Congress            with the tax treatment that the enti-
ly because of the continuing threat      Committee, Rep. Neugbauer’s prin-          ties elect under the Internal Revenue
posed by the individual. Because the     cipal campaign committee, asked            Code. Because the LLC in this case
on-going harassment occurred as a        if it could use the LLC’s boat for         has elected to be treated as a partner-
result of Representative Gallegly’s      campaign events without charge so          ship for federal income tax purposes,
re-election campaign and public po-      long as that use did not exceed Rep.       it would be allowed to contribute
sition as a Member of Congress, the      Neugebauer’s right to use the boat,        up to $2,400 per election. 11 CFR
need for the proposed upgrades to        and if so, whether it could pay the        110.1(b) and (e). Accordingly, the
the Congressman’s security system        LLC fair-market-value rental charge        Committee could use the LLC’s boat
would not exist irrespective of the      upon exceeding his right to use. As        without charge up to $2,400 in rental
Congressman’s campaign or duties         an alternative, the committee asked        value of the boat, per election. In
as a federal officeholder. Therefore     if it could simply pay the LLC the         this case, the LLC would be contrib-
the use of campaign funds to pay         fair-market-value rental charge for        uting the charge for the boat rental
for these security system upgrades       use of the boat, and if so, whether        at a commercially reasonable rate in
would not constitute personal use of     Rep. Neugebauer could use his per-         the Washington, D.C., area prevail-
campaign contributions, and would        sonal funds to make that payment.          ing at the time the services of the
not be prohibited by the Act or Com-     If so, the committee wanted to know        boat were rendered to the Commit-
mission regulations.                     how to report such an expenditure          tee. 11 CFR 100.52(d)(2).
    Date Issued: May 7, 2009;            as well as whether or not the LLC             When the Committee’s use of the
    Length: 4 pages.                     could rent the boat to other political     boat exceeds $2,400 per election,
                  —Zainab Smith          committees at the fair-market rate.        the Committee may continue using
                                                                                    the boat if it pays the LLC the usual
                                         Analysis                                   and normal charge for a comparable
                                            Candidates for federal office, ex-      boat rental in the Washington, D.C.,
AO 2009-07                               cept Presidential candidates electing      area. The payment for the use of the
Campaign’s Use of                        to accept public funding, may make         boat at the usual and normal charge
Candidate-owned LLC’s                    unlimited expenditures from person-        would not be treated as an in-kind
Boat                                     al funds. 11 CFR 110.10. Personal          contribution from the LLC to the
   A limited liability company           funds include candidate’s assets. 2        Committee. 11 CFR 100.52(d)(1)
(LLC) partially owned by a member        U.S.C. §431(26); 100.33(a). The            and (d)(2).
of Congress may provide free or          facts presented in the request, how-          The committee would report the
discounted use of its recreational       ever, indicate that the boat is an asset   free or discounted use as an in-kind
boat to the member’s campaign as         of the LLC. Accordingly, the LLC,          contribution from the LLC and its
an in-kind contribution, subject to      rather than Rep. Neugebauer, would         rental payments as operating expen-
the LLC’s contribution limits. The       be providing the use of the boat to        ditures. 11 CFR 110.1(b) and (e),
campaign must pay the usual and          the Committee. Thus, any value             also 11 CFR 100.52(d)(1) and (2).
normal charge for any rental value       deriving from the boat would not           Payments from Rep. Neugbauer’s
of the boat that exceeds the LLC’s       constitute “personal funds” of Rep.        personal funds would be reported
limits, just as any other political      Neugebauer under the Act.                  as in-kind contributions. 11 CFR
committee would.                            Because the LLC would be                104.13. The Commission would
                                         providing the use of the boat to           treat interactions between the LLC
Background                               the Committee, the Commission              and any other campaign committee,
   Rep. Randy Neugebauer, along          analyzed this transaction under the        leadership PAC or party committee
with several members of his family,      statutory framework applying to            in the same manner.
formed an LLC under Texas law that       LLCs. By allowing the Committee               Date Issued: June 26, 2009;
elected to be treated as a partnership   to use the boat for campaign events           Length: 6 pages.
for federal income tax purposes.         without charge, the LLC would be                     —Christopher B. Berg
Rep. Neugebauer and his wife own a       providing the rental value of the boat
sixty-percent share in the company,      to the Committee for the purpose

Federal Election Commission RECORD                                                                               June 2011

AO 2009-10                                expenses incurred in connection           AO 2009-12
Federal Officeholder May                  with the duties of the individual as      Candidate May Use
Use Campaign Funds to Pay                 a holder of federal office. 11 CFR        Campaign Funds for Certain
Certain Legal Fees                        113.2(a)-(e). The Act prohibits the       Legal Fees
                                          “personal use” use of campaign con-
   A federal officeholder may use         tributions by any person. 2 U.S.C.           A Senator’s principal campaign
campaign funds to pay legal fees          §439a(b)(1) and 11 CFR 113.2(e).          committee may use campaign funds
and expenses incurred in connec-          The Act specifies that conversion to      to pay legal fees relating to ethics
tion with a federal investigation         personal use occurs when a contri-        complaints, a possible FBI inves-
of allegedly improper campaign            bution or amount is used “to fulfill      tigation and lawsuits implicating
contributions and legislative appro-      any commitment, obligation, or            the Senator, but not for allegations
priations because the fees would not      expense of a person that would exist      unrelated to his campaign or duties
exist irrespective of his campaign        irrespective of the candidate’s elec-     as a federal officeholder.
or duties as a federal officeholder.      tion campaign or individual’s duties
However, use of campaign funds to                                                   Background
                                          as a holder of Federal office.” 2            Senator Norm Coleman and Cole-
pay for the Congressman’s represen-       U.S.C. §439a(b)(2); see also 11 CFR
tation in legal proceedings regarding                                               man for Senate ’08, the candidate’s
                                          113.1(g).                                 principal campaign committee (the
allegations that are not related to          The Committee may use cam-
his campaign activity or duties as a                                                Committee), seek to use campaign
                                          paign funds to pay legal fees and         funds to pay legal expenses associ-
federal officeholder would constitute     expenses incurred by Rep. Visclosky
an impermissible personal use of                                                    ated with two lawsuits filed in Texas
                                          in connection with a federal inves-       and Delaware, a possible FBI inves-
campaign funds.                           tigation into the alleged provision       tigation and two complaints filed
Background                                of illegal campaign contributions         with the Senate Select Committee on
    Representative Visclosky is the       by the PMA Group and its clients to       Ethics (Senate Ethics Committee).
U.S. Representative from the First        the Committee and Rep. Visclosky’s        While the Senator is not named as a
District of Indiana. Visclosky for        alleged improper earmarking of            defendant in the lawsuits, both suits,
Congress (the Committee) is Rep.          appropriations for clients of PMA,        the possible FBI probe and one of
Visclosky’s principal campaign com-       and any other legal proceedings that      the ethics complaints involve allega-
mittee.                                   involve the same allegations. These       tions that a company employing the
    According to media reports            allegations relate to Rep. Visclosky’s    Senator’s wife received improper
contained in the advisory opinion         campaign or duties as a federal of-       payments from a corporate entity.
request, the FBI and federal pros-        ficeholder, or both, and the legal fees   The other ethics complaint alleges
ecutors are investigating whether a       would not exist irrespective of Rep.      a possible violation of Senate gift
lobbying firm, PMA Group, made            Visclosky’s campaign or duties as a       rules.
improper political contributions to       federal officeholder. The Commit-            In the Texas lawsuit, the Chief
Rep. Visclosky and other members          tee may not, however, use campaign        Executive Officer of Deep Marine
of the U.S. House of Representa-          funds to pay legal fees or expenses       Technology, Inc. (DMT) and Deep
tives. Although many details of the       regarding allegations unrelated to        Marine Holdings, Inc. (DMH) sued
federal investigation are not public      Rep. Visclosky’s campaign or duties       the companies, their controlling
at this time, media reports indi-         as a federal officeholder.                shareholder Nasser Kazeminy and
cate that the investigation centers          In accordance with the Act and         others for using “the companies and
on more than $500,000 in alleged          Commission regulations, the Com-          their assets as their own personal
campaign contributions from PMA           mittee must maintain appropriate          bank account.” Among the speci-
Group and its clients to three Con-       documentation of any disbursements        fied misuses of corporate funds is
gressmen, including Rep. Visclosky.       made to pay legal expenses incurred       an alleged payment of $75,000 to
                                          in connection with the federal inves-     the Hays Companies (Hays), an
Analysis                                  tigation and other legal proceedings.     insurance brokerage company that
   The Federal Election Campaign          11 CFR 102.9(b) and 104.11.               purportedly employed Senator
Act (the Act) identifies six categories      Date Issued: June 18, 2009;            Coleman’s wife. The lawsuit alleges
of permissible uses of contributions         Length: 5 pages.                       that payments to Hays were “for the
accepted by a federal candidate,                            —Myles Martin           stated purpose of trying to financial-
including otherwise authorized                                                      ly assist United States Senator Norm
expenditures in connection with the                                                 Coleman.”
candidate’s campaign for federal                                                       After the Texas lawsuit was filed,
office and ordinary and necessary                                                   a shareholder derivative action (the

June 2011                                                                              Federal Election Commission RECORD

“Delaware Lawsuit”) was filed             with these matters, and he and his       to pay for legal counsel’s review of
against certain officers, directors and   Committee seek to use campaign           the Senate Ethics Committee com-
the controlling shareholders of DMH       funds to pay those costs.                plaints.
and DMT. The Delaware lawsuit,                                                        In past advisory opinions, the
like the one in Texas, raised allega-     Analysis                                 Commission has concluded that
tions concerning Senator Coleman.            Under the Federal Election Cam-       a candidate’s authorized commit-
The complaint alleged that, “Ka-          paign Act (the Act) and Commission       tee may use campaign funds to pay
zeminy is a large donor to Senator        regulations, campaign funds may          legal fees incurred in representing
Coleman’s campaign and that the           be used for expenses in connection       a candidate or federal officeholder
two men have vacationed together          with the individual’s campaign for       before a non-congressional inves-
at Kazeminy’s expense using Ka-           federal office, duties as a federal      tigation or legal proceeding when
zeminy’s private plane in 2004 and        officeholder and for any other lawful    the allegations in that investiga-
2005.” The Delaware lawsuit also          purpose that is not “personal use.”      tion are directly related to a candi-
alleged that news articles reported       See 2 U.S.C. §439a(a); see also 2        date’s campaign activity or duties
that, “Kazeminy may have paid             U.S.C. §439a(b); 11 CFR 113.2. The       as a federal officeholder. See AOs
large bills for clothing purchases at     Commission determines, on a case-        2006-35, 2005-11 and 1996-24. To
Neiman Marcus in Minneapolis by           by-case basis, whether the use of        the extent that the FBI is investigat-
Senator Coleman and his wife.” The        campaign funds to pay legal fees and     ing allegations that Senator Cole-
Delaware lawsuit alleged that Mr.         expenses constitutes personal use.       man may have received unreported
Kazeminy instructed DMT’s Chief           See 11 CFR 113.1(g)(1)(ii)(A).           gifts in violation of federal law or
Financial Officer to have DMT send           In this case, the Commission          violated campaign finance law, the
quarterly payments to Senator Cole-       determined that the Committee may        allegations would not exist irrespec-
man, stating, “‘We have to get some       use campaign funds to pay for legal      tive of Senator Coleman’s campaign
money to Senator Coleman’ because         costs incurred in the following: re-     or duties as a federal officeholder.
the Senator ‘needs the money.’” The       viewing the complaints to the Senate     Therefore, the Commission deter-
Delaware lawsuit alleged that Mr.         Ethics Committee and ABM’s letter        mined that the Committee may use
Kazeminy was informed that such           to the FBI; representing Senator         campaign funds to pay for counsel to
payments to Senator Coleman would         Coleman in the FBI’s investiga-          review ABM’s letter to the FBI and
be improper and that Mr. Kazeminy         tion of alleged violations of federal    to represent Senator Coleman in the
then allegedly directed payment           law or rules governing the office of     FBI’s investigation into allegations
from DMT to Hays, the alleged em-         a Senator or the conduct of cam-         that the Senator violated federal
ployer of Senator Coleman’s wife.         paigns; monitoring and representing      law or rules governing the office of
    In the wake of these lawsuits,        Senator Coleman in the Texas and         a Senator or the conduct of cam-
the Alliance for a Better Minne-          Delaware lawsuits; and responding        paigns. The Committee, however,
sota (ABM) posted online a letter         to media inquiries. However, the         may not use campaign funds to pay
it had sent to the FBI seeking an         Committee may not use campaign           for Senator Coleman’s legal fees that
investigation. ABM also filed a           funds to pay legal costs incurred rep-   stem from allegations not directly
complaint against Senator Coleman         resenting Senator Coleman in an FBI      related to his campaign or duties as a
with the Senate Ethics Committee.         investigation of allegations unrelated   holder of federal office.
ABM alleged that Senator Coleman          to Senator Coleman’s campaign or            Although the causes of action in
may have violated Senate gift and         duties as a federal officeholder.        the Texas and Delaware lawsuits do
disclosure rules and the Ethics in           The Commission has previously         not, on their face, relate to Senator
Government Act as a result of the al-     concluded that efforts to respond        Coleman’s campaign or his duties
leged payments from DMT to Hays           to the Senate Ethics Committee are       as a federal officeholder, factual
described in the complaint in the         directly related to an individual’s      allegations made in the suits do. For
Texas lawsuit.                            duties as a federal officeholder, and    that reason, the Committee may use
    In a separate ethics complaint,       that legal fees and expenses incurred    campaign funds to pay for the legal
Citizens for Responsibility and Eth-      in responding to the Senate Ethics       fees and expenses incurred in rep-
ics in Washington (CREW) alleged          Committee’s inquiries or investiga-      resenting Senator Coleman in these
that Senator Coleman accepted free        tions are ordinary and necessary ex-     lawsuits.
or discounted lodging for his Wash-       penses incurred in connection with          The Commission has recognized
ington, D.C., apartment, in possible      the duties of a federal officeholder.    that “the activities of candidates
violation of Senate gift rules.           See Advisory Opinions 2008-07,           and officeholders may receive
    Senator Coleman continues to          2006-35 and 1998-01. Accordingly,        heightened scrutiny and attention
incur legal expenses in connection        the Commission determined that the       in the news media.” AOs 2008-07
                                          Committee may use campaign funds

Federal Election Commission RECORD                                                                                June 2011

and 1998-01. The Commission               munication, “earned media” and           facilitating certain communications
determined that a candidate or            grassroots messaging. BRG intends        between LLCs by, for example,
officeholder’s need to respond to         to extend these strategic commu-         scheduling meetings or conveying
intense media scrutiny would not          nication and general consulting          messages between them.
exist irrespective of the candidate’s     services to single-member, natural-
campaign or duties as a holder of         person LLCs established for the          Analysis
federal office. Therefore, the Com-       sole purpose of making independent          Treatment of LLC as an Indi-
mittee may use campaign funds to          expenditures that expressly advocate     vidual. Under the Federal Election
pay Senator Coleman’s legal fees          the election or defeat of one or more    Campaign Act (the Act) and Com-
and expenses incurred in respond-         federal candidates.                      mission regulations, contributions
ing to the press regarding the FBI            The LLCs that BRG plans to           and independent expenditures made
investigation, Senate Ethics Com-         work with will all be established for    by a single-member, natural-person
mittee complaints and the Texas and       the sole purpose of making indepen-      LLC are treated as if they were
Delaware lawsuits.                        dent expenditures supporting or op-      made by an individual. 2 U.S.C.
   The Committee may also use             posing federal candidates. BRG will      §431(8) and (9); 11 CFR 110.1(g).
campaign funds to pay certain mis-        only work with an LLC if it consists     In AO 2009-02, the Commission
cellaneous legal expenses, includ-        of a sole member and manager,            determined that independent expen-
ing copying and phone calls, to the       is treated as a disregarded entity       ditures made by an LLC with a sole
extent that those expenses relate to      (not as a corporation) for federal       natural person member should be
legal fees the Commission has deter-      income tax purposes, receives all        treated as if they were made by that
mined may be paid with campaign           capital contributions solely from the    member. Because the LLC is a third
funds.                                    personal funds of its only member,       party and is not the requestor of this
   Date Issued: June 26, 2009;            accepts no donations from any other      advisory opinion, the Commission
   Length: 9 pages.                       individual or entity and engages in      could not state in advance that the
                  —Isaac J. Baker         no for-profit business activities.       LLC at issue would have the same
                                              Each single-member, natural-         kind of unity with the sole member
                                          person LLC will spend more than          of the LLC demonstrated in AO
AO 2009-13                                                                         2009-02. However, for purposes of
                                          $1,000 per calendar year on inde-
Political Committee Status                pendent expenditures expressly           this advisory opinion, the Commis-
of Consultants Serving LLCs               advocating the election or defeat of     sion assumed that the LLC to which
Who Make Independent                      one or more federal candidates via       BRG is providing its services will
Expenditures                              television, radio, direct mail, phone    be similar in all material respects to
                                          banks and print ads. In no case will     the single-member LLC addressed
   A communications consulting
                                          any communication be funded by           in AO 2009-02. Therefore, the
company established as a Limited
                                          more than one LLC. However, in           single-member, natural-person LLCs
Liability Company (LLC) may serve
                                          some cases more than one LLC may         addressed by this opinion are treated
as a commercial vendor to a single-
                                          make independent expenditures for        as individuals, not as “political com-
member, natural-person LLC that
                                          or against the same federal candi-       mittees” under the Act.
makes independent expenditures
                                          date. Neither BRG nor its LLC cli-          Political Committee Status of
concerning federal elections or can-
                                          ents nor any other vendor providing      BRG. This advisory opinion ad-
didates without triggering political
                                          services to each LLC will coordi-        dresses two “political committee”
committee status. This consulting
                                          nate any communications with any         status issues: first, the possible status
company may also serve as a com-
                                          federal candidate or political party     of BRG as a political committee and,
mercial vendor to two or more of
                                          committee. The same BRG person-          second, the status of BRG and one
these LLCs without triggering politi-
                                          nel will service all of the LLCs, and    single-member, natural-person LLC
cal status assuming that it does not
                                          BRG will manage other consultants        as a “group of persons” constituting
facilitate communications between
                                          such as pollsters, media production      a “political committee.” The Act
the LLCs and does not convey infor-
                                          and placement companies and other        and Commission regulations define
mation from one LLC to another.
                                          communication vendors who will           “political committee” as “any com-
Background                                provide services to each LLC. BRG        mittee, club, association, or other
  Black Rock Group (BRG) is an            will not have firewalls preventing       group of persons which receives
LLC that assists its clients, including   BRG personnel advising one LLC           contributions aggregating in excess
CEOs, elected officials and Fortune       from discussing that client’s private    of $1,000 during a calendar year or
500 companies, in building public         plans and activities with staff advis-   which makes expenditures aggre-
policy campaigns through com-             ing another LLC. BRG anticipates         gating in excess of $1,000 during
                                                                                   a calendar year.” 2 U.S.C. §431(4)

June 2011                                                                             Federal Election Commission RECORD

(A); 11 CFR 100.5(a). The Supreme        are consistent with its usual and        Background
Court limited the scope of the term      normal business practice; thus, BRG         Bill White is the current mayor of
to organizations that are controlled     and its LLC client will not constitute   Houston, Texas, and also a candi-
by a federal candidate or whose          a “group of persons.”                    date for election to the U.S. Senate
major purpose is the nomination or          Political Committee Status of         from Texas in 2012. Bill White for
election of a candidate. Buckley v.      BRG and Multiple LLCs. Assuming          Texas (White Committee) is Mayor
Valeo, 424 U.S. 1, 79 (1976); FEC v.     that none of the LLCs directly com-      White’s Senatorial campaign com-
Massachusetts Citizens for Life, Inc.,   municate with one another and that       mittee registered with the FEC.
479 U.S. 238, 262 (1986).                BRG does not facilitate communica-       Currently, Senator Kay Bailey
    The request, as well as the infor-   tion between them, the Commission        Hutchison holds the Senate seat that
mation available on BRG’s website,       agreed that there was nothing to         will be contested in the 2012 prima-
indicates that BRG is organized and      suggest that either the LLCs or the      ry and general elections. However,
operated for commercial purposes,        LLCs together with BRG would be          Senator Hutchison has indicated that
and not for purposes of nominating       a political committee. The Commis-       she will not be a candidate for re-
or electing a candidate. BRG is a        sion has previously concluded that       election in 2012, and she has formed
vendor of communication consult-         individuals using a common com-          a committee under Texas law to raise
ing services to a range of clients.      mercial vendor did not constitute a      funds in order to run for Governor
BRG indicates that it has not in the     “group of persons” and thus were         of Texas in 2010. Senator Hutchison
past advocated the election of any       not a political committee. See AO        has publicly discussed the possibility
federal candidate, supported any         2008-10. In that advisory opinion,       of resigning from her Senatorial seat
political party or stated any politi-    the requestor represented that it did    during the course of the gubernato-
cal purpose, and does not plan to        not facilitate communications or         rial campaign.
do so in the future. BRG is neither      arrangements among its clients. If          Under Texas law, if Senator
owned nor controlled by any federal      BRG does not facilitate communica-       Hutchison were to resign from the
candidate. Therefore, the Commis-        tion between any of its LLC clients      Senate before her term expires, a
sion concludes that BRG is not itself    or otherwise convey any information      special election to fill that seat may
a political committee.                   about one LLC to any other LLC,          be scheduled for November 3, 2009,
    BRG and one single-member,           BRG will simply be establishing a        May 8, 2010, or November 2, 2010,
natural-person LLC as a Group of         separate commercial relationship         depending on the timing of her res-
Persons. Although BRG will advise        with each individual LLC, and the        ignation. However, the Governor of
its LLC client on message develop-       LLCs or the LLC together with BRG        Texas may schedule an “emergency
ment and the communication of            will not become a political commit-      election” on another date to fill the
its views on federal candidates, it      tee. The Commission did not address      vacancy if the Governor determines
offers similar consulting services to    whether any agreements or collabo-       that an emergency exists. The Gov-
its non-political clients by advising    ration between the LLCs that does        ernor has considerable discretion in
them on media strategy, message          not involve BRG would result in the      deciding whether to call an emer-
campaigning and building public          creation of a political committee.1      gency election.
policy campaigns. The LLC will re-          Date issued: September 28, 2009;         Regularly scheduled primary and
tain ultimate control over the timing,      Length: 7 pages.                      general elections for the Senate seat
content, method and candidate refer-              —Christopher B. Berg            will be held in 2012. In those elec-
enced in each communication con-                                                  tions, if no candidate receives a ma-
stituting an independent expenditure,                                             jority in the party primary elections,
and BRG itself will not pay for any      AO 2009-15                               a runoff will be held. In that case, it
communications. The relationship         Candidate Committee May                  is possible that Mayor White could
between BRG and its LLC client is        Accept Contributions for                 be a candidate in up to five elec-
consistent with that of a commercial     Potential Special Election               tions for the same U.S. Senate seat
vendor, defined by Commission                                                     between now and November 2012:
                                            An authorized committee of a
regulations as “any persons provid-                                               a special election in 2009 or 2010;
                                         candidate may accept contributions
ing goods or services to a candidate                                              a runoff for that election; the 2012
                                         that may be used for a special or
or political committee whose usual                                                Democratic party primary; a pri-
                                         emergency election or runoff in 2009
and normal business involves the                                                  mary runoff for that election; and a
                                         or 2010, even though an election
sale, rental, lease or provision of                                               general election in November 2012.
                                         has not been scheduled and may not
those goods or services.” 11 CFR                                                  The White Committee requests guid-
116.1(c). The consulting services                                                 ance concerning how it may raise
BRG will provide to its LLC client                                                funds for these potential and future
Federal Election Commission RECORD                                                                              June 2011

Analysis                                  of the occurrence of a special or        form means the 2012 primary and
    Undesignated contributions.           election is sufficiently real in this    that the second election would mean
Commission regulations permit the         situation. Although the designations     the 2012 general election. Accord-
White Committee to use undesignat-        present these particular elections in    ingly, barring any further instruction
ed contributions for a Senate spe-        the alternative (i.e. (1) the special    from a contributor, the first $2,400
cial election that is called after the    election if held before 2012 and, if a   contributed would be designated
contribution is made. The Federal         special election is not held, the 2012   for the 2012 primary election and
Election Campaign Act (the Act) and       primary; or (2) the special election     any remaining amount up to $2,400
Commission regulations permit in-         runoff if held before 2012 and, if a     would be considered designated for
dividuals to contribute up to $2,400      special election and runoff are not      the 2012 general election.
“with respect to any election.” Un-       held, the 2012 general election), the       Contributions that are already
der Commission regulations, “with         specific use of the contribution will    designated must be redesignated
respect to any election” means: (1)       be clear to both the White Commit-       by obtaining a written instruction
in the case of a contribution desig-      tee and the contributor.                 from the contributor; simply issuing
nated in writing by the contributor          The White Committee should use        a notice to the contributor inform-
for a particular election, the election   an acceptable accounting method to       ing him or her of the redesignation
so designated; and (2) in the case        distinguish between the contribu-        will not suffice. Therefore, if the
of a contribution not designated in       tions received for each of the two       White Committee wishes to use
writing by the contributor, the next      elections, for example, by desig-        contributions that have been des-
election for the federal office after     nating accounts for each election        ignated for the 2012 primary and
the contribution is made. 11 CFR          or maintaining separate books and        general elections for a 2009 or 2010
110.1(b)(2).                              records for each election. 11 CFR        special election or runoff once the
    Under the circumstances present-      102.9(e)(1).                             special election is called, the White
ed in the advisory opinion, a special        If Senator Hutchison were to an-      Committee must first obtain written
election that has been called would       nounce her resignation and a special     contributor redesignations for the
be the next federal election after the    election was called, the designa-        special election or runoff in accor-
undesignated contribution is made         tions that the White Committee had       dance with Commission regulations.
by the contributor. Therefore, the        received for the special election        See 11 CFR 110.1(b)(5)(ii)(A)(1)
undesignated contribution may be          would be treated as designations         and (2).
used for that election, but subject to    for the special election or runoff.         Contributions designated for a
the reporting requirements described      At that point, the contributions         Special or Runoff Election that does
below under “Reporting.”                  designated for the special election      not occur. If the White Committee
    Contributions designated by the       could no longer be considered to be      raises money for a special election
contributor. Contributors may alter-      designated for the 2012 regularly        and the special election does not oc-
natively designate up to $2,400 for a     scheduled elections. After the end       cur, Commission regulations require
special Senate election if one is held,   of any pre-2012 elections (special or    those contributions to be refunded to
or for the 2012 primary election if       runoff) in which Mayor White actu-       the contributor within 60 days of the
there is no special Senate election.      ally participates as a candidate, the    last date that a special election may
Additionally, contributors may alter-     White Committee may use surplus          be scheduled under Texas law, un-
natively designate up to $2,400 for       funds for the 2012 primary election.     less the White Committee receives
either a runoff election following the    11 CFR 110.3(c)(4).                      a written redesignation or combined
special Senate election if a runoff is       Redesignations. With respect to a     redesignation and reattribution from
held, or to the 2012 general election     contribution to the White Committee      the contributor. 11 CFR 110.1(b)
if there is no such runoff.               that exceeds $2,400 and that is made     (3)(i)(C). Likewise, although the
    Commission regulations allow          before a special election is called,     Committee may accept contributions
designation of contributions by a         the Committee may use a form that        designated for the runoff once it is
contributor for “a particular elec-       states that $2,400 would be used for     apparent that a special election will
tion.” 11 CFR 110.1(b)(2), (3) and        the first election and $2,400 “for any   occur, it may not use those contribu-
(4). The Commission concludes             subsequent election.”                    tions unless Mayor White partici-
that designations for the special            If at the time the contribution is    pates in the runoff as a candidate.
election and for the runoff would         made Senator Hutchison has not           Contributions that are designated for
qualify as being designated for “a        resigned (and therefore no special       an election that does not occur, or in
particular election,” because the         or runoff election is called), current   which a person is not a candidate,
Governor is required by law to call       contributors must conclude that the      must be refunded, redesignated or
a special election and the likelihood     “first election” referenced in the       reattributed accordingly.

June 2011                                                                             Federal Election Commission RECORD

   Reporting. If a contributor des-       AO 2009-19                              published phone numbers, the Club
ignates a contribution to be made         PAC May Use Contributor                 or Club PAC may make one tele-
with respect to a particular special      Information for Limited                 phone call.
or runoff election and a particular       Communication                              The communications would not
2012 election, the White Commit-                                                  contain any solicitation of any kind
tee should indicate on Schedule A            A separate segregated fund may       for the Club, Club PAC, any candi-
either a “Primary” contribution or        use contributor information obtained    date or any other entity. No fol-
a “General” contribution for the          from reports filed with the Federal     low up mailings or telephone calls
2012 elections and include a memo         Election Commission to notify con-      would be made unless, during the
text stating either (1) “Designated       tributors to Senator Arlen Specter’s    initial telephone call, the contributor
for special or emergency election if      2010 Senate reelection campaign         requests further information from
scheduled before 2012” or (2) “Des-       that the Senator has switched his       the Club or Club PAC on how to re-
ignated for special or emergency          party affiliation and has publicly      quest a refund. The communications
election runoff if scheduled before       offered to refund contributions upon    would be made independently of any
2012.” Such reporting reflects the        request.                                candidate or political party.
use of the contributions as they are      Background                                 The Club and Club PAC would
intended by the contributor at the           On April 28, 2009, Pennsylvania      not use the list for any purpose other
time the contribution is made.            Senator Arlen Specter announced         than the communication proposed
   If Senator Hutchison announces         he had decided to switch his party      in the advisory opinion request,
her resignation, and Mayor White          affiliation and to run as a Democrat    and would not retain the list for
becomes a candidate in a special          for the 2010 Senate election. Senator   any other purpose. The Club and
election called by the Governor, the      Specter stated that he would return     Club PAC would not put any of the
White Committee must inform the           campaign contributions made dur-        contact information obtained from
Commission that the contributions         ing the 2010 election cycle upon        the Specter Committee’s Commis-
are considered to be designated for       request.                                sion filings into either the Club or
the special election or the runoff           Club for Growth (Club) is an         the Club PAC’s general membership
election. Under the current circum-       incorporated nonprofit membership       database. The Club and Club PAC
stances, where the White Committee        organization, and Club for Growth       would not make the list of contribu-
is attempting to deal with uncertain-     PAC (Club PAC) is the separate          tors to the Specter Committee avail-
ty as to the proper way to designate      segregated fund of the Club.            able to any other entity.
contributions in an unusual electoral        The Club and Club PAC wish to
situation, the Commission consid-                                                 Analysis
                                          communicate with individual con-            Under the Federal Election Cam-
ers it to be sufficient for the White     tributors to the Specter Committee
Committee to file amended reports,                                                paign Act (the Act) and Commission
                                          to inform them of Senator Specter’s     regulations, political committees
simply indicating the proper desig-       decision to run as a Democrat in the
nations of the contributions. The                                                 are required to file reports with the
                                          2010 election. The Club and Club        Commission identifying the names
Commission recommends that to             PAC propose to compile a list of
avoid any confusion, the White                                                    and mailing addresses of their con-
                                          contributors from information con-      tributors. 2 U.S.C. §§434(b)(2)(A)
Committee include a memo text             tained in campaign finance reports
specifically referencing this advisory                                            and (b)(3)(A); 11 CFR 104.8(a). The
                                          that the Specter Committee has filed    Act provides that the Commission
opinion.                                  with the Commission. The com-
   In the case of undesignated con-                                               shall make reports and statements
                                          munication would notify contribu-       filed with it available for public
tributions, in the event that a special   tors about Senator Specter’s stated
election is called, the White Com-                                                inspection and copying within 48
                                          policy of providing refunds upon        hours of receipt. Any information
mittee should similarly file amended      request to those who contributed to
reports for these contributions.                                                  copied from such reports or state-
                                          his campaign while he was running       ments, however, “may not be sold or
   Date Issued: July 29, 2009;            as a Republican. Club PAC indicated
   Length: 9 pages.                                                               used by any person for the purpose
                                          that the communication would not        of soliciting contributions or for
                   —Myles Martin          contain any express advocacy or         commercial purposes,” other than
                                          mention any other candidate.            using the name and address of a po-
                                             Either the Club or Club PAC          litical committee to solicit contribu-
                                          would send a one-time letter to         tions from that political committee.
                                          Specter’s contributors or, alterna-     11 CFR 104.15(a). Under Commis-
                                          tively, for those contributors with     sion regulations, “soliciting contri-

Federal Election Commission RECORD                                                                             June 2011

butions” includes soliciting any type    avoid using the contributor informa-     of the federal investigation are not
of contribution or donation, such as     tion for any purpose not presented in    public at this time, media reports in-
political or charitable contributions.   the advisory opinion request.            dicate that the investigation centers
11 CFR 104.15(b).                           Therefore, in this limited situa-     on more than $500,000 in alleged
    In AO 1981-05, the Commis-           tion, the Commission concludes that      campaign contributions from PMA
sion concluded that a candidate          the use of contributor information       Group and its clients to three Con-
could use information obtained           obtained from the Specter Com-           gressman, including Rep. Visclosky.
from disclosure reports to mail          mittee’s disclosure reports does not     The media reports also indicate that
letters to contributors to his oppo-     violate the solicitation and com-        Rep. Visclosky allegedly improperly
nent’s campaign to correct alleg-        mercial use prohibition at 2 U.S.C.      earmarked appropriations for clients
edly defamatory charges made by          §438(a)(4).                              of PMA. As part of the ongoing
his opponent. In Advisory Opinion           Date Issued: August 28, 2009;         federal investigation, Rep. Visclo-
1984-02, a nonconnected political           Length: 5 pages.                      sky’s former Chief of Staff has been
committee calling itself “Americans                        —Isaac J. Baker        served with a grand jury subpoena to
for Phil Gramm in 84” solicited                                                   produce documents.
contributions without the permission     AO 2009-20
of Phil Gramm or his authorized                                                   Analysis
                                         Federal Officeholder May
campaign committee. The Commis-                                                      The Federal Election Campaign
                                         Use Campaign Funds to                    Act (the Act) identifies six catego-
sion concluded that Representative       Pay Certain Legal Fees of
Gramm and his authorized campaign                                                 ries of permissible uses of campaign
                                         Current and Former Staff                 funds, including otherwise autho-
committee could use contributor
information contained in Americans       Members                                  rized expenditures in connection
for Phil Gramm in 84’s disclosure           A federal officeholder may use        with the candidate’s campaign for
reports to inform contributors that      campaign funds to pay legal fees and     federal office, ordinary and neces-
the nonconnected committee was not       expenses incurred by current and         sary expenses incurred in connection
Phil Gramm’s authorized committee.       former staff members in connection       with the duties of the individual as
    In these AOs, the Commission         with a federal investigation of alleg-   a holder of federal office and any
pointed out that the purpose of the      edly improper campaign contribu-         other lawful purpose not prohibited
sale and use prohibition is to prevent   tions because the fees would not         by the Act. 2 U.S.C. §§439a(a), (b)
contributor information from being       exist irrespective of the officehold-    and 11 CFR 113.2(a)-(e). The Act
used for commercial purposes or for      er’s campaign or duties as a federal     prohibits “personal use” of cam-
making solicitations. The prohibition    officeholder. However, the use of        paign contributions by any person.
does not, “foreclose the use of this     campaign funds to pay for any such       2 U.S.C. §439a(b)(1) and 11 CFR
information for other, albeit po-        employee’s representation in legal       113.2(e). The Act specifies that con-
litical, purposes, such as correcting    proceedings regarding allegations        version to personal use occurs when
contributor misperceptions.” (AO         that are not related to the Congress-    a contribution or amount is used to
1984-02.)                                man’s campaign activity or duties as     “fulfill any commitment, obligation,
    In this advisory opinion the Com-    a federal officeholder would consti-     or expense of a person that would
mission noted that the Club and          tute an impermissible personal use       exist irrespective of the candidate’s
Club PAC will not solicit contribu-      of campaign funds.                       election campaign or individual’s
tions for any reason and will not use                                             duties as a holder of Federal office.”
                                         Background                               2 U.S.C. §439a(b)(2); see also 11
the contributor information for any
                                            Representative Visclosky is the       CFR 113.1(g).
commercial purpose. The Club and
                                         U.S. Representative from the First          The Commission determined that
Club PAC will use contributor in-
                                         District of Indiana. Visclosky for       the Committee may use campaign
formation obtained from the Specter
                                         Congress (the Committee) is Rep.         funds to pay legal fees and expenses
Committee’s disclosure reports only
                                         Visclosky’s principal campaign com-      incurred by Rep. Visclosky’s current
for the limited purpose of notifying
                                         mittee.                                  and former staff members in con-
contributors that Senator Specter has
                                            According to provided media           nection with a federal investigation
switched parties and of his refund
                                         reports, the FBI and federal pros-       into the alleged provision of illegal
policy. Each donor will only be
                                         ecutors are investigating whether a      campaign contributions by PMA
contacted once. Also, the Club and
                                         lobbying firm, PMA Group, made           Group and its clients to the Commit-
Club PAC indicated that they will
                                         improper political contributions to      tee, and Rep. Visclosky’s allegedly
safeguard the contributor informa-
                                         Rep. Visclosky and other members         improper earmarking of appropria-
tion obtained from the reports to
                                         of the U.S. House of Representa-         tions for clients of PMA, as well
                                         tives. Although many of the details      as any other legal proceedings that

June 2011                                                                                Federal Election Commission RECORD

involve the same allegations. Rep.          of the payment. 11 CFR 104.3(b)(2)       jurisdiction in the matter and sought
Visclosky’s current and former staff        and (4).                                 an advisory opinion to that effect,
members are involved in the federal            Date Issued: August 28, 2009;         asking if the West Virginia statute
investigation because of their current         Length: 5 pages                       regulating spending for election
and former employment relation-                      —Katherine Wurzbach             expenses by political committees
ships with Rep. Visclosky in his                                                     is preempted by the Act or Com-
capacity as a U.S. Congressman and                                                   mission regulations with respect to
a candidate.1 Therefore, the Com-           AO 2009-21                               federal candidates.
mission concluded that the current          FECA Preempts West
and former staff members’ legal             Virginia Law Affecting                   Analysis
fees and expenses associated with           Federal Candidates                           The Act and Commission regu-
the federal investigation would not                                                  lations preempt West Virginia law
                                               The Federal Election Campaign
exist irrespective of Rep. Visclo-                                                   insofar as it purports to regulate
                                            Act (the Act), preempts a West Vir-
sky’s campaign or duties as a federal                                                spending by federal candidates and
                                            ginia law insofar as it limits polling
officeholder. The Committee may                                                      their principal campaign commit-
                                            expenditures by federal candidates
not, however, use campaign funds to                                                  tees. The Act states that its provi-
                                            and their principal campaign com-
pay legal fees or expenses regarding                                                 sions and rules “supersede and
allegations unrelated to Rep. Visclo-                                                preempt any provision of State law
sky’s campaign or duties as a federal       Background                               with respect to election to Federal
officeholder.                                  West Virginia law allows politi-      office.” 2 U.S.C. §453; see also 11
   The Commission noted that,               cal committees to pay for a lim-         CFR 108.7(a). The legislative his-
because many of the details of the          ited number of election expenses.        tory indicates that Congress intended
federal investigation are not pub-          Allowed expenses include public          “to make certain that the Federal law
lic at this time, it is possible that       opinion polls, which are prohibited      is construed to occupy the field with
portions of the investigation could         from being “deceptively designed”        respect to elections to Federal office
involve allegations not related to          or conducted in a manner that would      and that Federal law will be the sole
Rep. Visclosky’s campaign or his            influence anyone polled to vote for      authority under which such elections
duties as a federal officeholder. The       or against “any candidate, group of      will be regulated.” HR Rep. No 93-
use of campaign funds to pay any            candidates, proposition or other mat-    1239, 93d Cong, 2d Sess. 10 (1974).
such legal fees would be impermis-          ter to be voted on by the public at          Moreover, in promulgating regu-
sible. See AOs 2009-10 and 2005-            any election.” Furthermore, Chapter      lations at 11 CFR 108.7, which ad-
11. In accordance with the Act and          3 of the West Virginia Code, con-        dress Commission regulations’ effect
Commission regulations, the Com-            cerning elections, explicitly applies    on state law, the Commission stated
mittee must maintain appropriate            to “every general, primary, and spe-     that federal law supersedes state law
documentation of any disbursements          cial election in which candidates are    with respect to the organization and
made to pay legal expenses incurred         nominated or elected” and defines        registration of political committees
in connection with the federal              “any election” or “all elections” to     supporting federal candidates, dis-
investigation or other legal proceed-       include elections for federal offices.   closure of receipts and expenditures
ings. 11 CFR 102.9(b) and 104.11.              In response to a complaint from a     by federal candidates and politi-
The Committee must report all funds         citizen alleging that Ms. Anne Barth,    cal committees and the limitations
disbursed for such legal expenses           a candidate for the 2nd Congressio-      on contributions and expenditures
as operating expenditures, noting           nal District of West Virginia, and       regarding federal candidates and po-
the payee’s full name, address and a        Anne Barth for Congress (the Barth       litical committees. See Explanation
detailed description of the purpose         Committee), her principal campaign       and Justification of the Disclosure
                                            committee, conducted a poll in           Regulations, House Document No.
                                            violation of West Virginia Code 3-8-     95-44, at 51 (1977). In contrast, the
  In a previous Advisory Opinion, the       9(a)(10), the West Virginia Secretary    manner of qualifying as a candidate
Commission concluded that the allega-                                                or political organization, the date
                                            of State sought information about
tions relate to Rep. Visclosky’s campaign                                            and place of election, voter registra-
and duties as a federal officeholder be-    the poll from both the Barth Com-
                                            mittee and the polling company.          tion, voting fraud, ballot theft, can-
cause Rep. Visclosky allegedly received
the contributions in question as part of    Counsel for the Barth Committee          didate financial disclosure, or funds
his campaign and his alleged actions        responded that federal law preempts      used to purchase or build a state or
regarding the congressional appropria-      West Virginia law on this subject,       local party office building are left
tions process are directly related to his   citing AO 1995-41. The Secretary of      exclusively to the jurisdiction of the
duties as a federal officeholder. See AO    State maintained that state laws held    states. See H.R. Rep. No. 93-1438 at
2009-10.                                                                             69, 100-101 and 11 CFR 108.7(c).

Federal Election Commission RECORD                                                                              June 2011

   In this case, the West Virginia       lations, the West Virginia statute is    Campaign Committee exceed the
statute at issue limits expenditures     preempted where federal candidates       limitations set by the Federal Elec-
by federal political committees          and their principal campaign com-        tion Campaign Act (the Act) or come
(including candidate committees),        mittees—such as Ms. Barth and the        from sources which are prohibited
which is one of the areas specifically   Barth Committee—are concerned.           by the Act.
regulated by the Act and Commis-            Date Issued: August 28, 2009;            Rep. Coulson plans to undertake
sion regulations. Furthermore,              Length: 5 pages.                      three activities: 1) to organize a
the West Virginia statute does not                 —Christopher Berg              “seniors fair”; 2) to mail a postcard
address any of the areas that Con-                                                publicizing the seniors fair; and 3)
gress intended to leave exclusively                                               to mail a “health care legislative up-
to the jurisdiction of the states (the   AO 2009-26                               date” letter to health care profession-
manner of qualifying as a candidate      Federal Candidate May                    als in her state legislative district.
or political organization, date and      Fund Certain Activities from                Seniors Fair. Rep. Coulson plans
place of election, voter registration,   State Campaign Account                   to organize a “seniors fair” at a local
voting fraud, ballot theft, candidate       Illinois State Representative         community center in her district. The
financial disclosure, or funds used      Elizabeth Coulson, who is also           purpose of this event is to promote
to purchase or build a State or local    a federal candidate for the U.S.         health and safety programs available
party office building).                  House, may use her state campaign        to seniors in Rep. Coulson’s state
   Accordingly, the West Virginia        committee funds or her state office      legislative district. Rep. Coulson
statute is expressly preempted by        account to sponsor a seniors fair and    has sponsored similar seniors fairs
federal law with respect to federal      to mail postcards publicizing that       for the past eight years in her role as
elections. 2 U.S.C. §453; 11 CFR         event because those activities are       a state officeholder. Rep. Coulson
108.7(b)(3).                             not in connection with any federal       states that this event will not be used
   Commission regulations govern         or nonfederal election. She may also     to expressly advocate her election
permissible and prohibited ex-           use her state campaign account or        or to promote or support her federal
penditures by federal candidates,        her state office account to pay for      candidacy, nor will it be used to
including expenditures for polling       a “health care legislative update”       attack or oppose any of her federal
expenses. 11 CFR 100.131-155,            letter because the letter is also not    election opponents. The seniors fair
106.2, 106.4, 113.2, 116.2, 116.11       in connection with any federal or        will not be used for any federal elec-
and 116.12. With respect to this         nonfederal election. Neither the         tion activity, nor will Rep. Coulson
request, the West Virginia statute, if   postcards nor the letter would consti-   or her agents solicit any contribu-
applied to federal candidates, would     tute “coordinated communications”        tions at the seniors fair.
impede those candidates’ ability to      under Commission regulations.               Promotional Postcard. Addition-
make payment of polling expenses                                                  ally, Rep. Coulson will mail approxi-
governed by the Act and Commis-          Background                               mately 12,000 postcards to seniors
sion regulations. Under the Act’s            Elizabeth Coulson is an Illinois     in her district publicizing the seniors
preemption clause, only federal law      State Representative and a candidate     fair that she plans to organize. The
could limit the ability of a federal     for the U.S. House in 2010. Coulson      postcard will note the date, time
candidate to make expenditures for       for Congress (Federal Committee) is      and location of the seniors fair, in
polling. 2 U.S.C. §453.                  Representative Coulson’s principal       addition to the telephone number of
   Similarly, in AO 2000-23, in          campaign committee. The Coulson          Rep. Coulson’s district office that
which the Commission concluded           Campaign Committee (State Cam-           the recipients may call for more
that because a New York statute          paign Committee) is Rep. Coulson’s       information about the fair. The con-
limited state party expenditures         state campaign committee. Under          tents, timing and distribution of the
regarding federal candidates, rather     Illinois law, Rep. Coulson also          planned postcard mailing will be the
than “those areas defined as interests   receives an office allowance (State      same in all material respects as in
of the State,” the New York law was      Office Account) for the purpose of       previous years when Rep. Coulson
preempted by the Act and Commis-         defraying official office, personnel     was not a federal candidate. Rep.
sion regulations.                        and constituent services expenses. Il-   Coulson plans to pay for the mailing
   Therefore, the Commission con-        linois law allows state candidates to    with funds from her State Office Ac-
cludes that, because West Virginia.      raise funds in connection with state     count or the State Campaign Com-
Code 3-8-9 limits expenditures           races from corporations and labor        mittee’s account.
by candidates and their principal        organizations and raise funds from          Legislative Update. Finally, Rep.
campaigns that are otherwise lawful      individuals without limits. At least     Coulson also plans to mail a “legis-
under the Act and Commission regu-       some of the donations in the State       lative update” letter to approximate-

June 2011                                                                              Federal Election Commission RECORD

ly 4,000 health care professionals       funds do not fall within the scope of     termined is not in connection with a
in her legislative district which        Section 441i(e).” See AO 2003-20.         federal or nonfederal election.
describes various health care legisla-      Although Rep. Coulson is a feder-         The Act and Commission regula-
tive proposals being considered by       al candidate and the State Campaign       tions prohibit a state officeholder
the Illinois legislature. As with the    Committee is established, financed,       from spending funds for a public
postcard, the contents, timing and       maintained or controlled by Rep.          communication that clearly identi-
distribution of the planned mail-        Coulson, the Commission concludes         fies a federal candidate and promotes
ing will be the same in all material     that the seniors fair is not in connec-   or supports a candidate unless the
aspects as in previous years when        tion with any federal or nonfederal       funds are subject to the limitations,
Rep. Coulson was not a federal can-      election, because the event will          prohibitions and reporting require-
didate, and Rep. Coulson plans to        not be used to solicit any contribu-      ments of the Act. 2 U.S.C. §441i(f);
pay for the mailing with funds from      tions for Rep. Coulson, nor will any      2 U.S.C. §431(20)(A)(iii). The
her State Office Account or her State    information about the participants be     postcards would be “public com-
Campaign Committee account.              provided to Rep. Coulson’s Fed-           munications” under the Act and the
                                         eral Committee. The event will not        postcards would clearly identify
Analysis                                 involve any express advocacy of           Rep. Coulson.1 However, the Com-
   Seniors Fair. Rep. Coulson may        Rep. Coulson’s election or the defeat     mission concluded that the post-
sponsor the seniors fair because the     of her opponents, nor will it be used     cards, as proposed, do not promote,
event is not in connection with any      for any “federal election activity” as    attack, support or oppose (PASO)
federal or nonfederal election and it    defined in 2 U.S.C. §431(20) and 11       any candidate for federal office.
does not involve making any “public      CFR 100.24.                               Although the postcards clearly iden-
communications” as defined by the           Similarly, the Commission              tify Rep. Coulson, the Commission
Act. 2 U.S.C. §431(22). The se-          concludes that the seniors fair is not    has previously determined that the
niors fair also does not result in the   in connection with any nonfederal         mere identification of an individual
making of any contributions to Rep.      election. Rep. Coulson is not a can-      who is a federal candidate does not,
Coulson.                                 didate for state office and the seniors   in itself, PASO that candidate. See
   Federal candidates, their agents      fair will not be used to solicit any      AOs 2007-34, 2007-21, 2006-10
and entities directly or indirectly      donations to Rep. Coulson’s State         and 2003-25. The postcards do not
established, financed, maintained        Campaign Committee. The event             PASO Rep. Coulson, and no other
or controlled by, or acting on behalf    will rather be held as a service to       candidate is clearly identified in their
of, federal candidates, may not          Rep. Coulson’s constituents and will      proposed contents. As such, Rep.
raise or spend funds in connection       be consistent with similar events that    Coulson is not required to pay for
with federal elections unless those      Rep. Coulson has held in previous         the costs of this mass mailing with
funds are subject to the limitations,    years when she was not a candidate        federal funds.
prohibitions and reporting require-      for federal office.                          Furthermore, the Commission
ments of the Act. 2 U.S.C. §441i(e)         Since the seniors fair is not in       concluded that the payment for the
(1)(A) and 11 CFR 300.61. Also,          connection with any federal or            postcards by the state campaign
federal candidates, their agents and     nonfederal election and will not in-      committee would not constitute a
entities directly or indirectly es-      volve public communications or the        coordinated communication be-
tablished, financed, maintained or       solicitation of contributions, Rep.       cause the communication would
controlled by, or acting on behalf       Coulson may use nonfederal funds          not meet the “payment prong” of
of, federal candidates, may not raise    to pay for any costs associated with      the Commission’s three-prong test
or spend funds in connection with        sponsoring this event.                    for determining coordination. If the
nonfederal elections unless those           Promotional Postcard. Rep.             communication were determined to
funds are subject to the limitations     Coulson may also pay for postcards        have been coordinated, the pay-
and prohibitions of the Act. 2 U.S.C.    publicizing the seniors fair using        ment for the communication would
§441i(e)(1)(B) and 11 CFR 300.62.        funds in her State Office Account         be considered an in-kind contribu-
Since Rep. Coulson is a federal          or her State Campaign Committee
candidate and her state committee        because, as with the seniors fair, the    1
                                                                                     A public communication includes any
acts on her behalf, Section 441i(e)      postcards are not in connection with      communication by means of a mass
would apply to the seniors fair if it    any federal or nonfederal election        mailing. A “mass mailing” is defined as
were in connection with any federal      and because the postcards would not       “a mailing…of more than 500 pieces of
or nonfederal election. The Com-         be “coordinated communications.”          mail matter of an identical or substan-
mission has previously stated, “if       Instead, the postcards will promote       tially similar nature within any 30-day
the funds are not raised or spent in     an event that the Commission de-          period.” 2 U.S.C. §431(23) and 11 CFR
connection with an election, then the                                              100.27.

Federal Election Commission RECORD                                                                                 June 2011

tion from the person paying for the           With respect to the Commission         political committees a fee for pro-
communication to the candidate or          regulations on “coordinated commu-        viding the solicitation e-mails, and
committee with whom it was coordi-         nications,” the Commission conclud-       the committees will disseminate the
nated. 11 CFR 109.21.                      ed that, like the postcard proposal       e-mails through their own distribu-
   Under the first prong of the            described above, the health care          tion lists.
definition of coordinated communi-         letter would not constitute a coor-          The e-mails will contain images
cation, a communication is only sub-       dinated communication because the         of the products offered for sale and
ject to the regulations if it “is paid     letter would not satisfy the “payment     hyperlinks to purchase the products
for, in whole or in part, by a person      prong” of the coordination three-part     from Dr. Jorgensen’s website. The
other than that candidate, authorized      test because Rep. Coulson and her         hyperlinks will contain an embedded
committee, or political party com-         agents would be paying for the com-       ID tag, unique to each political com-
mittee.” 11 CFR 109.21(a)(1). Under        munication. 11 CFR 109.21(a)(1).          mittee, so that purchases resulting
this scenario, the postcards would            Date Issued: November 6, 2009;         from each committee’s fundraising
be paid for by Rep. Coulson’s State           Length: 10 pages.                      efforts can be appropriately credited
Office Account or her State Cam-                     —Myles Martin                   to that committee and contributor
paign Committee. In AO 2007-01,                                                      information can be collected and
the Commission concluded that the          AO 2009-32                                forwarded to the political com-
payment prong was not met if a U.S.        Proposed Sale of Art on                   mittee for reporting purposes. Dr.
Senator’s former state campaign            Behalf of Committees is Not               Jorgensen will request and provide
committee paid for solicitations for                                                 to the committees information from
                                           a Contribution
the purpose of retiring debts remain-                                                contributors, including their names,
ing from her previous candidacies             An individual who conducts a           addresses and the amount of their
for state offices, because “the can-       web-based business as a sole propri-      purchases and, for contributors
didate and her agents are paying for       etor may sell artwork as fundraising      whose purchases exceed $200, their
these communications.” Thus, since         items for political committees and        occupations and employers.
the postcards are being paid for by        provide the political committees             For sales made through the pro-
Rep. Coulson and her agents, the           with solicitation e-mails. The sale       posed arrangements with political
payment prong of the coordination          of these fundraising items, and the       committees, the price will be marked
test is not met.                           provision of the solicitation e-mails,    up by an amount that Dr. Jorgensen
   Legislative Update Letter. Rep.         would not constitute contributions        and the political committee agree
Coulson may also use either her            from the sole proprietor to the politi-   upon, so that Dr. Jorgensen will
State Office Account or her State          cal committees as long as the fee         receive the same dollar amount he
Campaign Committee to pay for the          received by the sole proprietor is the    would receive from any other sale.
“health care legislative update letter”    usual and normal charge.                  When purchases are made from the
because the letter is not in connec-                                                 website, payment will be collected
tion with any federal or nonfederal                                                  via PayPal Pro, and deposited on a
                                              The requestor, Richard Jorgensen,
election and it similarly does not                                                   weekly basis into a separate bank
                                           operates a web-based business as a
PASO any federal candidate. As with                                                  account for each political commit-
                                           sole proprietor. Through this web-
the proposed postcard described                                                      tee. From those accounts, funds will
                                           site, Dr. Jorgensen sells, among
above, Section 441i(e) would only                                                    be sent to the artist for the prints and
                                           other things, prints of President Ba-
apply to Rep. Coulson if the activity                                                shipping costs, to PayPal Pro for
                                           rack Obama and Secretary of State
involved were in connection with                                                     transaction fees and to Dr. Jorgensen
                                           Hillary Clinton. Dr. Jorgensen sells
any federal or nonfederal election,                                                  for his commissions. The political
                                           these prints for $49.95 plus $5 for
including any federal election activ-                                                committees will retain the remaining
                                           shipping and handling.
ity described at 11 CFR 100.24. The                                                  amount.
                                              Dr. Jorgensen proposes to en-
letter describes Illinois State legisla-   ter into agreements with political        Analysis
tive developments to health care pro-      committees to sell these prints as           Dr. Jorgensen asked the Com-
fessionals residing in Rep. Coulson’s      fundraising items. Dr. Jorgensen          mission whether he could provide
district, and it neither solicits any      plans to draft solicitation e-mails       solicitation e-mails to the political
donations nor expressly advocates          promoting the artwork and provide         committees without the provision of
Rep. Coulson’s election, or the            those solicitation e-mails to the com-    those e-mails constituting a contri-
defeat of any of her opponents. As         mittees he deals with. The political      bution to the political committees.
such, the Commission concluded             committees can request changes to         The Commission determined that
that it is not in connection with any      the solicitation e-mails or customize     Dr. Jorgensen could provide solicita-
election.                                  them. Dr. Jorgensen will charge the       tion e-mails to the political commit-

June 2011                                                                               Federal Election Commission RECORD

tees, and that his provision of those     recordkeeping and reporting obliga-       Analysis
e-mails would not constitute contri-      tions. 11 CFR 102.9. Dr. Jorgensen            Under the Act and Commission
butions to the political committees       will have to request and forward to       regulations, certain disbursements
as long as Dr. Jorgensen receives the     the political committees the name         by a state or local committee of a
usual and normal charge for such          and address of any person contribut-      political party are exempt from the
services. Under Commission regula-        ing more than $50, and the date and       definitions of “contribution” and
tions, the “usual and normal charge”      full amount of the contribution, as       “expenditure” when they are made
for services means the hourly or          well as the occupation and employer       in connection with volunteer activi-
piecework charge for the services         of anyone who contributes more            ties. 2 U.S.C. §§431(8)(B)(ix) and
at a commercially reasonable rate         than $200 to a particular committee.      (9)(B)(viii); 11 CFR 100.87 and
prevailing at the time the services       2 U.S.C. §432(c); 11 CFR 102.9(a).        100.147. This “volunteer materi-
were rendered. 11 CFR 100.52(d)           Also, Dr. Jorgensen will have to for-     als exemption” is limited in several
(2). As long as the fee for drafting      ward the contributions, along with        respects. In this instance, the most
the solicitation e-mail is commer-        the required contributor informa-         important limitation is that the
cially reasonable at the time the         tion, to the treasurer of the recipient   materials purchased by the state or
service is provided, it will constitute   committee within the required time        local party committee must be used
the “usual and normal charge” and         period. 2 U.S.C. §432(b)(1); 11 CFR       in connection with volunteer activi-
therefore not result in a contribution.   102.8(a).                                 ties “on behalf of nominees of such
The Commission also determined               Date Issued: January 29, 2010;         party.” 2 U.S.C. §§431(8)(B)(ix)
that Dr. Jorgensen could sell art-           Length: 5 pages.                       and (9)(B)(viii); 11 CFR 100.87,
work on behalf of political commit-                 —Isaac J. Baker                 100.147.
tees as fundraising items, and that                                                     Although neither the Act nor
his provision of the artwork will         AO 2010-01                                Commission regulations define the
not constitute a contribution to the      State Party Activity on                   term “nominee,” the Commission
purchasing committees because the                                                   has previously determined that the
commission Dr. Jorgensen proposes
                                          Behalf of Presumptive                     volunteer materials exemption may
to receive is the usual and normal        Nominee                                   apply before the nominee is formally
charge in a commercially reason-             Payments by the Nevada State           selected through the primary pro-
able transaction.                         Democratic Party (the State Party)        cess if the party is able to identify
   Dr. Jorgensen proposes to sell         for campaign materials may be ex-         its nominee “as both a matter of fact
the artwork for $49.95 in addition        empt from the definitions of “con-        and as a matter of state law.” See
to a markup to be agreed upon with        tribution” and “expenditure” if the       Matter Under Review (MUR) 4471.
the political committees and a $5         materials are distributed by volun-           Under Nevada law, a candidate
fee for shipping and handling. The        teers on behalf of the State Party’s      of a major political party must be
Commission determined that Dr.            presumptive nominees.                     nominated in the primary election.
Jorgensen will not be making contri-                                                In 2010, the Nevada primary will
butions to the political committees       Background                                be held on June 8th. However, the
because the amount he will receive           The State Party plans to purchase      the period to file as a candidate in
on sales to the political commit-         campaign materials to be used in          the primary closes on March 12,
tees would be the same amount he          connection with volunteer activities      2010, in effect closing the ballot and
would receive on sales that are not       on behalf of candidates seeking to        establishing the field of candidates
made to political committees. 11          become the State Party’s nominees         seeking major party nominations. At
CFR 100.52(d). Because the politi-        in the general election. Specifically,    this point, any candidate of the State
cal committees will receive funds         the State Party plans to have vol-        Party who is on the state ballot and
from individual contributors and not      unteers distribute campaign materi-       has no primary opponent will be the
from Dr. Jorgensen’s sole proprietor-     als on behalf of federal candidates       State Party’s presumptive nominee.
ship, the transactions will not result    whom the State Party believes will        Any candidate who does have an op-
in contributions from Dr. Jorgensen.      either run unopposed in the Ne-           ponent in the primary will not be the
See, e.g., AO 2008-18.                    vada primary election, or whom the        State Party’s presumptive nominee.
   The Commission noted that the          State Party believes are “assured of          Therefore, payments made by the
political committees participating in     winning the nomination.” The State        State Party Committee, for mate-
this proposed plan will authorize Dr.     Party asked whether these proposed        rials that are used in connection
Jorgensen as their agent to receive       disbursements will be exempt from         with volunteer activities on behalf
contributions, and, therefore, Dr.        the Federal Election Campaign Act’s       of candidates not facing primary
Jorgensen will be subject to certain      (the Act’s) definitions of “contribu-     challengers, will qualify for the
                                          tion” and “expenditure.”

Federal Election Commission RECORD                                                                               June 2011

volunteer exemption if those activi-         The Trust does not seek to fund            Since the passage of BCRA, the
ties take place after March 12. These     attempts to directly influence elec-      Commission has addressed the issue
payments will not count against           tions. No funds raised will be used       of whether certain activities are con-
the State Party’s coordinated party       to pay for communications that            sidered to be in connection with an
expenditure limit or $5,000 per can-      expressly advocate the election or        election. The Commission cited AO
didate contribution limit. 2 U.S.C.       defeat of any clearly identified can-     2005-10, in which the Commission
§441a(a) and §441a(d). By contrast,       didate for office. The solicitations      found that federal candidates and of-
payments made by the State Party,         of funds will not expressly advocate      ficeholders were not prohibited from
for materials that are used in con-       the election or defeat of any clearly     raising funds for committees formed
nection with volunteer activities on      identified candidate.                     solely to support or oppose ballot
behalf of candidates, will not qualify       The Trust asked if Members of          measures, including a ballot measure
for the volunteer materials exemp-        Congress could solicit funds on its       specifically related to redistricting.
tion if those activities take place       behalf. These solicitations would re-     The committees, as described by the
before March 12, 2010. Such pay-          quest funds that do not comply with       AO requester, were not established,
ments would either count against the      the amount limitations or source          financed, maintained or controlled
State Party’s contribution limit or its   prohibitions of the Federal Election      by a federal candidate, officeholder
coordinated party expenditure limit,      Campaign Act (the Act). Solicita-         or anyone acting on their behalf, or
if the expenditures are in connection     tions by Members of Congress              by any party committee. No federal
with the general election.                would not advocate the election or        candidates appeared on the same
    Date Issued: March 1, 2010;           defeat of any candidate for office.       ballot as the ballot measure.
    Length: 5 pages.                                                                    The Commission also cited AO
          —Christopher B. Berg            Analysis                                  2003-15, in which the Commission
                                              The Bipartisan Campaign Reform        found that a federal candidate’s costs
                                          Act of 2002 (BCRA) and Commis-            for defending against a lawsuit seek-
AO 2010-03                                sion regulations prohibit federal         ing a special general election were
Members of Congress May                   candidates and officeholders from         not in connection with any election.
Solicit Nonfederal Funds for              soliciting, receiving, directing,             In this case, the Trust seeks to
Redistricting Trust                       transferring or spending any funds        engage in litigation over the redis-
   The activities of a trust estab-       in connection with an election for        tricting process that will govern how
lished to raise funds for pre-litiga-     federal office unless such funds are      the electoral process is conducted in
tion and litigation costs arising from    subject to the limitations, prohibi-      the future. BCRA does not directly
the next redistricting process are not    tions and reporting requirements of       address whether redistricting activi-
considered to be in connection with       the Act. 2 U.S.C. §441i(e)(1)(A); 11      ties are considered to be activities
an election. Therefore, Members of        CFR 300.61. BCRA and the Com-             “in connection with” elections.
Congress may solicit funds on behalf      mission’s regulations also prohibit       The Commission determined that,
of the trust outside the limitations      federal candidates and officeholders      although the outcome of redistrict-
and source prohibitions of federal        from soliciting, receiving, direct-       ing can have political consequences,
law.                                      ing, transferring or spending any         funds raised and spent on the litiga-
                                          funds in connection with an election      tion process surrounding redistrict-
Background                                other than an election for federal        ing are not “in connection with” the
    The National Democratic Redis-        office unless the funds are consistent    actual elections.
tricting Trust (the Trust) was estab-     with the Act’s amount limitations             The Commission concluded that
lished by individuals, not Members        and source prohibitions. 2 U.S.C.         donations to the Trust for the sole
of Congress, to raise funds to pay for    §441i(e)(1)(B); 11 CFR 300.62.            purpose of paying the pre-litigation
the pre-litigation and litigation costs       To determine whether Members          and litigation costs associated with
of the next legislative redistricting     of Congress can solicit nonfederal        reapportionment and redistricting
process. The Trust is run by a trustee    funds on behalf of the Trust, the key     legal matters are not in connection
and an executive director, neither        question is whether the federal can-      with any election under 2 U.S.C.
of whom are Members of Congress.          didate or officeholder is soliciting      §441i(e)(1)(A) and (B). Therefore,
The Trust is not directly or indirectly   funds in connection with an election,     the funds are not subject to the limi-
established, financed, maintained         be it a federal or nonfederal election.   tations and prohibitions of the Act
or controlled by any Member of            If the funds being solicited are not      and, accordingly, a Member of Con-
Congress, any authorized candidate        raised or spent in connection with an     gress may solicit unlimited funds on
committee or any national, state,         election, they do not fall under the      behalf of the Trust for the purposes
district or local party committee.        scope of 2 U.S.C. §441i(e).

June 2011                                                                             Federal Election Commission RECORD

of paying the legal expenses associ-     nel plans to offer federal candidates    (1). “Usual and normal charge”
ated with the Trust’s redistricting      the LUC for time slots on Televisa.      means the price of goods in the
efforts.                                 Starchannel does not believe it is       market from which they ordinarily
   Date Issued: May 7, 2010;             required to offer federal candidates     would have been purchased at the
   Length: 5 pages.                      the LUC because Televisa is a            time of the contribution, or the com-
         —Isaac J. Baker                 Mexican corporation.1 Nevertheless,      mercially reasonable rate prevailing
                                         Starchannel plans to offer the LUC       at the time the services were ren-
AO 2010-05                               because, in its business judgment,       dered. 11 CFR 100.52(d)(2).
                                         it could not otherwise compete with          Based on the information provid-
Sale of Ad Time on a                     American television stations that        ed by Starchannel, the Commission
Foreign-Owned Television                 offer advertising time to federal        concluded that it does not appear
Station                                  candidates at the LUC. Starchannel       that Televisa would be providing
   Starchannel Communications,           plans to require federal candidates      any goods or services at less than
Inc. (Starchannel), the domestic rep-    to comply with all paperwork,            the usual and normal charge. Under
resentative of Televisa, a Mexican       disclaimer and other requirements        Televisa’s contract with Starchan-
broadcasting corporation, may sell       of the Communications Act and Fed-       nel, Televisa establishes a minimum
advertising time on Televisa televi-     eral Communications Commission           price for advertising time that does
sion stations to federal candidates. A   regulations, just as if the ads were     not depend upon the identity of the
prohibited contribution would not re-    being run on a U.S. station.             buyer. Because Televisa’s role in the
sult from offering federal candidates                                             sale of advertising time remains the
the “Lowest Unit Charge” (LUC) for       Analysis                                 same and conforms to its usual and
time slots on Televisa since it is the      The Federal Election Campaign         normal business practices regard-
usual and normal charge for similar      Act (the Act) and Commission             less of the buyer’s identity, Televisa
federal candidate advertisements in      regulations prohibit foreign nation-     would not be making a contribution
the market in which the advertise-       als, including foreign principals        under the plan.
ments will be aired.                     such as partnerships, associations,          With respect to Starchannel, the
                                         corporations, organizations or other     Commission noted that Starchan-
Background                               combination of persons, from mak-        nel plans to offer advertising time
   Starchannel is a Delaware cor-        ing a contribution or donation of        to federal candidates using the
poration that sells advertising time     money or other things in connection      same business practices in which it
slots on television broadcast stations   with a federal, state or local elec-     customarily engages when offering
in Mexico that are owned by Televi-      tion. 2 U.S.C. §441e(a)(1)(A) and 22     advertising time to other customers,
sa. The broadcast stations that carry    U.S.C §611(b)(3); see also 11 CFR        except that it plans to offer federal
these ads broadcast into markets in      110.20(b). The Act also prohibits        candidates the LUC even if it is not
areas of Texas that are located on       corporations from making contribu-       required to do so under 47 U.S.C.
the border between the United States     tions in connection with any federal     §315(b) and 47 CFR 73.1942.
and Mexico (“U.S. border market”).       election. 2 U.S.C. §441b(a).                 The Commission concluded that
Through a contractual agreement,            Any gift, subscription, loan,         Starchannel may sell advertising
Starchannel acts as the exclusive        advance or deposit of money or           time on Televisa stations to federal
representative of Televisa in the        “anything of value” made by any          candidates at the LUC, consistent
sale of advertising time in the U.S.     person for the purpose of influenc-      with the Act and Commission
border market. The contract states       ing a federal election is a “contribu-   regulations, under the specific facts
that Starchannel may not negotiate       tion.” 2 U.S.C. §431(8)(A)(i) and        present here. Because Starchannel
a price with a buyer for an advertis-    11 CFR 100.52(a); see also 2 U.S.C.      plans to offer the LUC only to fed-
ing time slot that is lower than the     §441b(b)(2) and 11 CFR 114.2(b)          eral candidates who comply with all
Televisa-established minimum price,      (1). “Anything of value” includes        relevant requirements of the Com-
but it may negotiate higher prices.      goods or services provided without       munications Act, these federal candi-
The two corporations are indepen-        charge or at less than the “usual and    dates would be entitled to receive
dent of each other and Televisa          normal charge.” 11 CFR 100.52(d)         the LUC from a U.S. broadcaster
does not exercise any ownership or                                                for advertisements airing in the U.S.
control over Starchannel.                                                         border market, even if Starchannel is
   Starchannel wishes to expand its      1
                                          The Communications Act sets certain     not required to offer them the LUC.
business by selling advertising time     requirements for U.S. broadcasters       Thus, the LUC reflects the usual and
slots on Televisa’s broadcasting sta-    providing advertising time to federal    normal charge for Communications
tions to federal candidates. Starchan-   candidates. See 47 U.S.C. §315 and 47    Act-compliant candidate advertising
                                         CFR 73.1942.

Federal Election Commission RECORD                                                                                      June 2011

in the U.S. border market. 11 CFR         FAIR’s official name.1 However,              for the November ballot. The Act
100.52(d). Further, the LUC repre-        the requestor maintains that Yes on          prohibits federal candidates and of-
sents the commercially reasonable         FAIR was not directly or indirectly          ficeholders, their agents and entities
rate prevailing for ads complying         established by, and is not financed,         directly or indirectly established, fi-
with the Communications Act at the        maintained or controlled by, any             nanced, maintained or controlled by
time the ads are broadcast. 11 CFR        federal candidate or officeholder.           them or acting on their behalf from
100.52(d)(2). Thus, Starchannel also          The requestor represents that Yes        raising and spending funds in con-
would not be making a contribution        on FAIR’s sole purpose is to support         nection with an election unless the
under the plan by charging the LUC.       the qualification and passage of the         funds are consistent with the limita-
   Accordingly, the Commission            Financial Accountability In Redis-           tions and prohibitions contained in
ruled that no contribution would          tricting Act (FAIR Act), a proposed          the Act. 2 U.S.C. §441i(e)(1) and 11
result from the sale of advertising       ballot initiative, for the statewide         CFR 300.61 and 300.62. The Com-
time to federal candidates on behalf      November 2, 2010, general election           mission concludes under the facts of
of Televisa at the LUC rate for ads       ballot.                                      this advisory opinion that 2 U.S.C.
that comply with the Communica-               Once the ballot initiative has           §441i(e)(1) does not apply to so-
tions Act.                                qualified for the general election           licitations on behalf of the initiative
   Date issued: May 27, 2010;             ballot in California, Yes on FAIR            before it qualifies for the ballot.
   Length: 6 pages.                       intends to engage in “an extensive              Members of Congress may also
         —Stephanie Caccomo               campaign to promote the FAIR Act’s           solicit funds within the limitations
                                          passage,” including, among other             and prohibitions of the Act on behalf
AO 2010-07                                things, get-out-the vote programs            of Yes on FAIR after the initiative
                                          specifically designed to get the             qualifies for the ballot. However, the
Members of Congress May                   measure’s supporters to the polls on         Commission is unable to agree on
Solicit Funds for State Ballot            election day. Yes on FAIR maintains          whether Members of Congress may
Measure                                   that their campaign advertisements           solicit funds outside the Act’s limits
   Members of Congress may solicit        will not promote, support, attack or         and prohibitions.
funds on behalf of a state ballot mea-    oppose any federal candidate or re-             Finally, the Commission con-
sure in the state of California outside   sult in coordinated communications           cludes that Members of Congress
the amount limitations and source         under Commission rules.                      may solicit up to $20,000 from in-
prohibitions of the Federal Election                                                   dividuals on behalf of Yes on FAIR
Campaign Act (the Act) during the         Analysis                                     after the initiative has qualified for
period before the initiative qualifies       Members of Congress may solicit           the ballot.2 However, as discussed
for the ballot. After the initiative      funds outside the amount limita-             above, the Commission is unable
qualifies for the ballot, Members of      tions and source prohibitions of the         to agree on whether Members of
Congress may solicit funds within         Act and Commission regulations on            Congress may solicit funds outside
the amount limitations and source         behalf of Yes on FAIR during the             the Act’s limitations and prohibitions
prohibitions of the Act and may also      period before the initiative qualifies       after the initiative qualifies for the
solicit up to $20,000 from indi-                                                       ballot.
viduals on behalf of the state ballot     1
                                            The requestor’s full name is Yes on           Date Issued: June 14, 2010;
measure. The Commission was un-           FAIR, a coalition of entrepreneurs,             Length: 4 pages.
able to agree on whether, during the      working people, Karen Bass, and other                  —Myles Martin
post-qualification period, Members        community leaders devoted to elimi-
of Congress may solicit donations of      nating bureaucratic waste of taxpayer
more than $20,000 and from persons        dollars on the political game of redis-
                                          tricting committee (“Yes on FAIR”).
other than individuals.
                                          The requestor represents that California
Background                                state law requires that the official name
                                          of a ballot initiative committee identify
   Yes on FAIR is a ballot measure                                                     2
                                                                                         The Act contains an exception to the
                                          state officeholders who have contributed
committee in the state of Califor-        $50,000 or more to the committee. Ms.        limitations of 2 U.S.C. §441i(e)(1) that
nia that has applied to the Internal      Bass is a California State legislator, and   applies to solicitations for specific types
Revenue Service for recognition as a      state political committees associated        of federal election activity on behalf
section 501(c)(4) organization under      with her have made two contributions to      of certain tax exempt organizations,
Title 26 of the Internal Revenue          Yes on FAIR totaling $50,000. Subse-         provided that the solicitations are made
Code. Karen Bass, who is currently        quently, Ms. Bass decided to run for         only to individuals and do not seek more
a federal candidate (and state of-        election to the U.S. House of Represen-      than $20,000 per individual. 2 U.S.C.
ficeholder), is identified in Yes on      tatives from California.                     §441i(e)(4) and 11 CFR 300.65.

June 2011                                                                             Federal Election Commission RECORD

AO 2010-15                               therefore are not required to be         AO 2010-17
                                         refunded as excessive contributions,
Candidate May Receive                                                             Undesignated Contributions
                                         they may be refunded to the candi-
Refund from His Committee                date.                                    May Be Applied to General
   A candidate who made undesig-             The Federal Election Campaign        or Special Election
nated contributions to his authorized    Act (the Act) provides that candi-           A Congressional candidate who
campaign committee and is not a          dates may contribute an unlimited        is running in both a special and
candidate in the general election        amount of their personal funds to        general election that are being held
may receive refunds, even though         their campaign committees. 11 CFR        on the same day may treat undesig-
the contributions were reported as       110.10; AOs 1985-33 and 1984-60.         nated contributions as contributions
primary election contributions.          Contributions that are not specifi-      made for the general election or for
                                         cally designated by the contributor      the special election. The candidate
Background                                                                        committee may divide undesignated
                                         for use in a particular election are
    Douglas Pike was a first-time                                                 contributions between the two elec-
                                         considered to be for the next elec-
Democratic candidate for the House                                                tions as long as those contributions
                                         tion for that federal office. 11 CFR
of Representatives in the May 18,                                                 do not exceed the contributor’s
                                         110.1(b)(2)(ii). In Mr. Pike’s case,
2010, primary in Pennsylvania’s                                                   combined limit for both elections. If
                                         his contributions were undesig-
Sixth District. In December of 2009                                               the combined contribution limits for
                                         nated and made before the primary
Mr. Pike gave $340,000 in per-                                                    both elections are not exceeded, no
                                         election. As the next election was
sonal funds to Pike for Congress,                                                 redesignation is necessary.
                                         the May 2010 primary election, the
his principal campaign committee                                                  Background
                                         Committee correctly reported Mr.
(the Committee). In March he made                                                     Stutzman for Congress (the Com-
                                         Pike’s contributions as having been
another contribution of $100,000.                                                 mittee), is the principal campaign
                                         made for the primary election.
Neither of these contributions was                                                committee of Marlin Stutzman, a
                                             Under Commission regulations,
designated for a particular election,                                             Republican candidate in Indiana’s
                                         a contributor, including a candidate,
although the candidate maintained                                                 Third Congressional District. The
                                         may request a refund for a primary
they were intended for the general                                                incumbent holder of that office,
                                         election contribution, and the candi-
election.                                                                         Representative Mark Souder, won
                                         date committee is free to make such
    In its year-end 2009 report and                                               the Republican primary election on
                                         a refund. In its advisory opinion, the
its April 2010 quarterly report, the                                              May 4. After the primary, Represen-
                                         Commission noted that the Commit-
Committee reported these two of Mr.                                               tative Souder resigned from office.
                                         tee had no outstanding debts, had
Pike’s contributions as primary elec-                                             Indiana’s governor then scheduled
                                         already refunded the contributions
tion contributions. Mr. Pike made                                                 a special election to fill Souder’s
                                         it received for the general election
other contributions to the Commit-                                                office. That special election will be
                                         from other contributors and had
tee, totaling more than $600,000,                                                 held on November 2, which is the
                                         enough cash on hand to make the
which Mr. Pike maintains were                                                     same day as the general election.
meant for the primary election, and                                               The winner of the special election
                                             While the Act contains a restric-
were reported as such.                                                            will serve the remainder of Repre-
                                         tion on converting campaign funds
    After losing the primary, Mr. Pike                                            sentative Souder’s term of office.
                                         to personal use, the proposed refund
was no longer a candidate. There-                                                 The candidate elected in the general
                                         would not violate this personal use
fore, the committee refunded all                                                  election will serve the next full two-
                                         ban. 11 CFR 113.2(e). The Commit-
the contributions it received for the                                             year term of office.
                                         tee may therefore refund Mr. Pike’s
general election from other contribu-                                                 The Republican Party held a cau-
                                         contributions and must report the
tors. After doing so, the Committee                                               cus to nominate a candidate for the
                                         refund in accordance with the Act
had no outstanding debts and almost                                               special election and a new candidate
                                         and Commission regulations.
$550,000 leftover in its account. The                                             for the general election. Stutzman
                                             Date Issued: August 26, 2010;
Committee asked if it could refund                                                was nominated as the Republican
                                             Length: 4 pages.
contributions totaling $440,000 to                                                Party candidate for both of those
                                                  —Isaac J. Baker
Mr. Pike.                                                                         elections. Stutzman is campaigning
Analysis                                                                          in both elections and the Committee
   Despite the fact that the candi-                                               anticipates it will receive undesig-
date’s undesignated contributions                                                 nated contributions that exceed the
made on December 31, 2009, and                                                    Federal Election Campaign Act’s
March 31, 2010, were treated as                                                   (the Act) contribution limits for
primary election contributions and                                                a single election. The Committee

Federal Election Commission RECORD                                                                               June 2011

wishes to redesignate the excessive          In AO 1986-31, the Commission         Background
portion of those contributions from       addressed a nearly identical situa-         Representative Brian Baird plans
the general election to the special       tion: North Carolina held a special      to retire from Congress when the
election without seeking written          election on the same day as the gen-     current term ends, and return to his
redesignations from the contributors.     eral election for the same Senate seat   home state.
                                          after the incumbent Senator John            To prepare for the move, the
Analysis                                  East died in office. In that case the    Baird family has placed nearly half
    The Commission determined that        Commission concluded that a can-         of the items from its Washington,
the Committee may apply undesig-          didate’s authorized committee could      D.C. residence into a storage facility.
nated contributions to the general        treat undesignated contributions as      These items will remain in storage
election or to the special election. As   made with respect to either elec-        from mid-August to mid-December
long as those contributions do not        tion or divide them between the two      2010. Baird for Congress, the
exceed the contributor’s combined         elections as long as the contributor     Congressman’s principal campaign
limit for both elections, the Com-        did not exceed the combined contri-      committee, seeks to pay the storage
mittee may divide the contributions       bution limits for both elections. The    costs with campaign funds.
between the two elections. The            Commission also determined that             The Baird family is paying the
Committee need not seek a redes-          the committee did not need to seek       full, normal rate for the storage and
ignation from the contributor if the      redesignations from contributors.        neither Representative Baird nor his
combined contribution limits for             Therefore, in this case, the          family members have any personal,
both elections are not exceeded.          Committee may treat undesignated         commercial or political relationship
    Individuals may contribute up to      contributions as made with respect       with the storage company.
$2,400 to a candidate “with respect       to either election or as divided be-
to any election for Federal office.”      tween the two elections. This means      Analysis
11 CFR 110.1(b)(1). These contribu-       the Committee may accept up to the           The Federal Election Campaign
tions limits “apply separately with       contributor’s combined $4,800 limit      Act (the Act) prohibits personal use
respect to each election.” 2 U.S.C.       for both elections ($2,400 for the       of campaign funds. The Act and
§441a(a)(6); 11 CFR 110.1(j)(1).          special election and $2,400 for the      Commission regulations define “per-
The Act and Commission regula-            general election). Accordingly, the      sonal use” as the use of funds “to
tions define “election” to include        Committee does not have to seek          fulfill any commitment, obligation,
both a general election and a special     written designations or redesigna-       or expense of a person that would
election.                                 tions for these contributions from       exist irrespective of the candidate’s
    Under the Act and Commission          the contributors. However, undesig-      election campaign or individual’s
regulations, an undesignated con-         nated contributions that exceed the      duties as a holder of Federal of-
tribution is considered a contribu-       contributor’s combined contribution      fice.” 2 U.S.C. §439a(b)(2), 11 CFR
tion for the next election for that       limits for both elections are prohib-    113.1(g).
federal office. 11 CFR 110.1(b)(2)        ited to the extent they exceed the           The Act and Commission regula-
(ii). In these circumstances, because     combined limits.                         tions provide a non-exhaustive list
the special election and the general         Date Issued: September 23, 2010;      of items that are considered per
election for the same federal office         Length: 4 pages.                      se personal use. 11 CFR 113.1(g)
will be held on the same day, both                  —Isaac J. Baker                (1)(i)(A)-(J). For items not on that
elections are considered “the next                                                 list, such as the storage expenses
election” for purposes of treating                                                 incurred by Representative Baird
undesignated contributions. In this       AO 2010-26                               and his family, the Commission
situation, although the federal office    Campaign Funds May be                    determines on a case-by-case basis
sought by Mr. Stutzman is the same        Used for Moving-Related                  whether the expense is considered
in both elections, each election will                                              “personal use.”
                                          Storage Costs
fill a vacancy for a different term of                                                 In previous advisory opinions,
that office. AO 1984-42 dealt with a         A retiring Member of Congress         the Commission has addressed
similar situation in the State of Ken-    may use campaign funds to pay for        whether Members of Congress can
tucky, which held a special election      temporary storage costs associated       use campaign funds to move them-
for a Congressional district seat on      with his move from Washington,           selves, their family members and
the same day as the general election.     D.C., back to his home state. These      their household and office furnish-
The Commission concluded in that          expenses arise from the ordinary and     ings between Washington, D.C. and
opinion that each election is subject     necessary duties of a federal of-        their home states. AOs 1980-138,
to a separate contribution limit.         ficeholder, and can therefore be paid    1987-11, and 1996-14. In each case,
                                          with campaign funds.                     these expenses were considered to

June 2011                                                                           Federal Election Commission RECORD

be in connection with the duties of        Following the 2008 Presidential      ing dual-candidacy transfers do not
a federal officeholder, meaning the     election, the Commission conducted      apply since former Senator Biden’s
personal use ban did not apply.         a mandatory audit of BFP pursuant       candidacies were not concurrent.
   In keeping with these precedents,    to the rules at 2 U.S.C. §9038(a) and   He withdrew from the Presidential
the Commission found the costs of       11 CFR 9038.1. The Commission           race on January 3, 2008 and his Vice
temporarily storing the Baird fam-      approved findings requiring BFP         Presidential candidacy did not begin
ily’s household items to be part of     to make $133,105 in payments to         until August 27, 2008. The Com-
the moving process, and thus ordi-      the U.S. Treasury within 30 days of     mission noted that former Senator
nary and necessary expenses in con-     issuance of the Final Audit Report      Biden’s principal campaign commit-
nection with Representative Baird’s     (“FAR”) and to make a payment           tee for his 2008 Senate candidacy is
duties as a holder of federal office.   to the U.S. Treasury for $85,900 in     not at issue because he does not seek
As a result, Baird for Congress may     stale-dated checks, which has not yet   to transfer funds to or from Citizens
use campaign funds to pay the stor-     occurred. The Commission has not        for Biden.
age expenses.                           yet issued the Final Audit Report.         The Commission found that the
   The Committee must report the        BFP does not have enough cash on        transfer rules at 110.3(c)(4), which
payments as “other disbursements.”      hand to pay its outstanding debts and   permit unlimited transfers between
   Date Issued: November 18, 2010;      obligations, including the expected     previous and current federal cam-
   Length: 4 pages.                     payments to the U.S. Treasury.          paign committees or between two
         —Isaac J. Baker                   BFP and OFA asked the Com-           previous federal campaign commit-
                                        mission whether OFA may transfer        tees, would apply. The Commission
                                        $138,000 to BFP pursuant to 11          noted that both BFP and OFA would
AO 2010-27                              CFR 110.3(c)(4), or in the alterna-     fulfill the definition of previous
Transfers Between                       tive, may OFA pay BFP’s debts. The      federal campaigns as they were
Authorized Committees                   requestors also asked whether the       organized to further former Sena-
   The principal campaign com-          Commission would toll the running       tor Biden’s campaigns for the 2008
mittee for a Presidential ticket may    of BFP’s 30-day deadline to make        Presidential nomination and Vice-
transfer general election funds to      payments to the U.S. Treasury.          Presidency, respectively. 11 CFR
retire debts from the Vice-Presiden-                                            110.3(c)(4)(i).
tial nominee’s Presidential primary     Analysis                                   Since OFA was former Senator
campaign.                                   The Commission concluded that       Biden’s principal campaign com-
                                        OFA may transfer funds to BFP           mittee for the 2008 Presidential
Background                              pursuant to 11 CFR 110.3(c)(4) to       general election, OFA must be able
   Former Senator Joseph Biden was      cover BFP’s net debts, including        to demonstrate that the transferred
a candidate in 2008 for the Demo-       its expected payments to the U.S.       funds consist only of general elec-
cratic nomination for President.        Treasury.                               tion funds. OFA must also be able to
His principal campaign commit-              The Commission noted that the       demonstrate that they do not include
tee, Biden for President (“BFP”),       Federal Election Campaign Act (“the     contributions made in violation of
received public financing for his       Act”) does not limit the transfers of   the Act. 11 CFR 110.3(c)(4).
campaign for the Presidential nomi-     funds between principal campaign           Finally, the Commission noted
nation. On January 3, 2008, former      committees of a candidate seeking       that the transferred funds do not
Senator Biden ended his campaign        nomination or election to more than     need to be aggregated with contribu-
for the Presidential nomination.        one federal office so long as: (1)      tions to BFP from the same contribu-
   On August 27, 2008, the Demo-        such a transfer is not made when        tor and would not be aggregated for
cratic Party nominated former           the candidate is actively seeking       purposes of the contribution limits
Senator Barack Obama for President      nomination or election to both such     at 11 CFR 110.1, 110.2. However,
and former Senator Biden for Vice       offices; (2) the contribution limits    under the rules at 110.3(c)(4)(iii),
President for the upcoming gen-         are not exceeded by such a transfer;    contributions that make up the
eral election. In September 2008,       and (3) the candidate has not elected   transferred funds would still need
the Obama for America (“OFA”)           to receive public financing. 2 U.S.C.   to be aggregated with contributions
campaign committee amended its          §441a(a)(5)(C). Commission regula-      from the same contributor for the
Statement of Organization to list the   tions provide two sets of rules for     next election unless the contribu-
former Senators as the candidates       transfers between a federal candi-      tions were designated for another
on whose behalf it would operate.       date’s authorized federal campaign      election, and the candidate has net
OFA did not elect to receive public     committees.                             debts outstanding for the election so
financing for the 2008 Presidential         The Commission determined that      designated.
primary or general elections.           the rules at 110.3(c)(5) concern-

Federal Election Commission RECORD                                                                              June 2011

   Since OFA may transfer funds to        tee. See 2 U.S.C. §439a(a)(4) and 11     derstanding that the State Committee
BFP, the Commission found the re-         CFR 113.2(c). These provisions do        would undertake certain activities
questors’ question about OFA paying       not limit the purposes that any trans-   that it did not, which materially
BFP’s debts moot. The Commission          ferred funds may be put to, nor do       altered the circumstances justifying
also found the question on tolling        they restrict the amount that may be     the transfer. Finally, the Commission
the 30 day deadline moot as the FAR       transferred. Furthermore, such trans-    concluded that, since the transfer
has not been issued.                      fers are not subject to the contribu-    occurred just weeks before the
   Date issued: November 18, 2010;        tion limitations of 2 U.S.C. §441a(a)    committees requested an advisory
   Length: 6 pages.                       (1)(D) or 11 CFR 110.1(c)(5).            opinion and well within the 30- and
        —Stephanie Caccomo                   Although the Act and Com-             60-day deadlines for refunding con-
                                          mission regulations provide for          tributions under 11 CFR 103.3(b),
                                          the refund of a contribution, the        the parties were seeking a refund
AO 2010-28                                Commission acknowledged that             rather than making a contribution
State Party Refund to                     the regulations do not address the       subject to the Act.
Federal Campaign Not a                    specific question presented here. See       If the State Committee decides
Contribution                              2 U.S.C. §434(b)(4)(F), 2 U.S.C.         to refund the transferred funds to
   A state party committee may            §434(b)(5)(E), 11 CFR 103.3(b).          Hoosiers for Hill, the Commis-
refund all or a portion of funds trans-   Instead, the Commission cited two        sion advised the State Committee
ferred to it by a federal campaign        advisory opinions where it previ-        and Hoosiers for Hill to maintain
committee without making a contri-        ously held that a refund could be        appropriate documentation of the
bution subject to the limitations of      made notwithstanding the fact that       transaction and to disclose the
the Act.                                  the amount of the refund would           refund in their reports. Since the re-
                                          exceed the applicable contribu-          porting forms do not have a method
Background                                tion limits. In Advisory Opinion         for reporting the specific refund
   Indiana Democratic Congres-            2002-08, the Commission permit-          here, the Commission advised the
sional Victory Committee (the State       ted a state exploratory committee        State Committee to report its refund
Committee) is registered with the         to refund $700,500 to the federal        to Hoosiers for Hill on Form 3X,
Commission as a state committee of        candidate’s principal campaign com-      Schedule B, Line 28c. Hoosiers for
a political party. Hoosiers for Hill is   mittee. It concluded that the refund     Hill should report the receipt of the
the principal campaign committee of       was permissible because the federal      refund on Form 3, Schedule A, Line
Representative Baron Hill, a candi-       committee raised the funds within        15. The committees should also
date for the U.S. House of Repre-         the limits and prohibitions of the       include memo text in their reports
sentatives for the 9th Congressional      Act, and the state committee kept        explaining the circumstances of the
District of Indiana.                      the funds in a segregated account        refund.
   On September 14, 2010, Hoosiers        and had not commingled the funds            Date Issued: October 27, 2010;
for Hill transferred $34,600 to the       with nonfederal funds. In Advisory          Length: 4 pages.
State Committee’s federal account to      Opinion 1995-43, the Commission                    —Zainab Smith
be used for general party projects on     determined that a refund by a law
behalf of its candidates in connec-       firm of $150,000 in legal fees that
tion with the 2010 general election.      were paid by a federal candidate         AO 2011-01
Because the State Committee will          would not be a contribution to the       Funds Received and Spent
not be engaging in the activities,        candidate because the scope of the       by Legal Defense Fund
Hoosiers for Hill requested a full        services to be provided by the law       not Contributions or
refund of the transfer. The State         firm had been “materially altered”       Expenditures
Committee asks if it may refund all       from those originally contemplated          A legal defense fund may be es-
or a portion of the funds transferred     by the parties.                          tablished to pay the costs incurred by
to it by Hoosiers for Hill without           In this case, the Commission          a Congressional campaign commit-
making a contribution subject to the      found that Hoosiers for Hill trans-      tee in defending against a copyright
limitations of the Federal Election       ferred the funds from its federal        infringement and misappropriation
Campaign Act (the Act).                   account to the State Committee’s         lawsuit. The monies received and
                                          federal account, and determined that     spent by the fund would not be
Analysis                                  the transferred funds had not been
   A candidate’s authorized com-                                                   “contributions” or “expenditures” as
                                          commingled with nonfederal funds.        defined in the Federal Election Cam-
mittee may transfer an unlimited          The Commission also concluded that
amount of campaign funds to a                                                      paign Act (the Act) and Commission
                                          the transfer was made with the un-       regulations.
national, state or local party commit-

June 2011                                                                             Federal Election Commission RECORD

Background                               tion” as any gift, subscription, loan,      Since the funds received and dis-
     Robin Carnahan for Senate (the      advance or deposit of money or any-      bursed by the Fund are not contribu-
Committee) is the principal cam-         thing of value made by any person        tions or expenditures, they are not
paign committee for Ms. Carnahan,        for the purpose of influencing any       subject to the source prohibitions,
who was a candidate in the 2010          election for federal office. 2 U.S.C.    amount limitations or reporting
Senate election in Missouri. On          §431(8)(A); 11 CFR 100.52(a).            requirements of the Act and Com-
September 15, 2010, Fox News Net-        Similarly, the term expenditure is       mission regulations
work, LLC, and Chris Wallace filed       defined as any purchase, payment,           Accordingly, nothing in the Act
a complaint against the Commit-          distribution, loan, advance, deposit     or Commission regulations would
tee alleging that an ad aired by the     or gift of money or anything of value    limit or prohibit the Fund from
Committee that contained footage of      made by any person for the purpose       receiving unlimited donations from
a Fox News interview infringed Fox       of influencing any election for fed-     individuals, political committees,
News’ copyright, invaded Mr. Wal-        eral office. 2 U.S.C. §431(9)(A); 11     corporations and labor organiza-
lace’s rights of privacy and publicity   CFR 100.111(a).                          tions. Also, the Fund would not be
and misappropriated his likeness and        The Commission has previously         required to register or file disclosure
persona (the Fox News lawsuit). The      concluded that funds received or dis-    reports under the Act or Commission
litigation was recently settled by the   bursed for the purpose of defending      regulations.
parties. The Committee’s costs to        against certain types of lawsuits are       Date Issued: February 17, 2011;
defend the lawsuit total more than       not for the purpose of influencing a        Length: 4 pages.
$85,000, and may continue to accrue      federal election, and are therefore               —Isaac J. Baker
until the settlement is finalized.       not contributions or expenditures.
    The Committee proposes that          See AOs 1981-16, 1981-13 and             AO 2011-02
a separate legal defense fund (the       1980-04.                                 Campaign Committee May
Fund) be established to defray the          The money received and dis-           Purchase Copies of Senator’s
Committee’s legal costs. The Fund        bursed by the Fund would be strictly     Autobiography if Publisher
would be independent from the            for the purpose of paying the Com-
Committee and would not be admin-        mittee’s legal costs in connection       Donates Royalties to Charity
istered or controlled by the Com-        with the Fox News lawsuit. Specifi-          The Scott Brown for U.S. Senate
mittee. The Committee would not          cally, this money would compensate       Committee (the Committee) may
be involved in soliciting donations      the Committee’s counsel for legal        purchase copies of Senator Scott
to the Fund. None of the individuals     services that enabled the Com-           Brown’s autobiography from the
involved in establishing, adminis-       mittee to present a defense to a         publisher at fair market value, and
tering or operating the Fund would       civil complaint in a lawsuit alleging    the publisher may donate Senator
be federal candidates or federal         copyright infringement, invasion of      Brown’s royalties from that purchase
officeholders. Solicitations for the     privacy and right of publicity, and      to charity. The Committee may ad-
Fund, either in person or in writing,    misappropriation of likeness and         ditionally post a de minimis amount
would be accompanied by a letter         identity, and to settle the case. The    of material promoting the book on
stating the purpose of the Fund and      proposed Fund would be established       its website and social media sites.
noting that no amounts given to the      and administered separately and          Senator Brown may also reimburse
Fund would be used for the purpose       independently from the Committee.        the Committee personally for the
of influencing any federal election.     Solicitations for the Fund would be      fair market value of the rental of its
Solicitations for the Fund would be      conducted separately from any so-        mailing and e-mail lists to promote
conducted separately from any so-        licitation for the Committee, and all    the book.
licitations for the Committee or any     amounts received by the Fund will
other federal political committee.       be held separately from the Com-
                                                                                     Senator Brown will promote his
The Fund plans to accept unlimited       mittee’s funds. No amounts given
                                                                                  book in a national book tour. His
amounts from individuals, politi-        to the Fund could be used for the
                                                                                  agreement with the publisher pro-
cal committees, corporations and         purpose of influencing any federal
                                                                                  vides for the payment of advances
labor organizations. The Fund would      election. Therefore such receipts and
                                                                                  as well as publishing royalties to be
terminate once all legal costs were      disbursements would not be “con-
                                                                                  determined as a percentage of net
paid, and any excess funds would be      tributions” to, or “expenditures” by,
                                                                                  sales revenue. Senator Brown and
refunded or donated to charity.          the Fund, as defined in the Act and
                                                                                  the Committee proposed a number
                                         Commission regulations, nor would
Analysis                                                                          of activities related to the book and
                                         they be in-kind “contributions” from
   The Act and Commission regu-                                                   the promotional tour.
                                         the Fund to the Committee.
lations define the term “contribu-

Federal Election Commission RECORD                                                                              June 2011

    First, the Committee wishes to        Analysis                                 U.S.C. §439a(a) and (b)(1). Senator
purchase several thousand copies             Campaign Purchase of Book.            Brown must not receive any ben-
of the book for campaign-related          The Committee may use campaign           efit, tangible or intangible, from the
activities, such as distributing the      funds to purchase copies of the book     publisher’s donation of the royalty
books as “thank you” gifts to cam-        from the publisher at the fair mar-      amounts.
paign contributors and supporters.        ket price under the proposal where           Promotional Information. The
The Committee plans to purchase           the publisher donates to charity the     Committee may post a de minimis
the books either at the bulk rate or      amount that Senator Brown would          amount of material promoting the
at the usual retail price if the bulk     have otherwise earned as royalties       book on its website and on social
rate is not available. The publisher,     from that purchase.                      media sites such as Facebook, Twit-
under normal industry practice, may          The Federal Election Campaign         ter and LinkedIn without violat-
make the bulk rate available to large     Act (the Act) and Commission             ing the restriction of personal use
purchasers. Senator Brown proposes        regulations prohibit the conversion      of campaign funds. The use of an
to donate the royalties from the          of campaign funds by any person          authorized committee’s asset, such
Committee’s purchase of the book          (including the candidate) to “person-    as the Committee’s website, to
to a charitable organization. Alterna-    al use.” 2 U.S.C. §439a(b); 11 CFR       promote the candidate’s book would
tively, the publisher itself is willing   113.1(g) and 113.2(e)(5). Under the      ordinarily constitute a prohibited
to donate Senator Brown’s royalties       Act, “a contribution or a donation       personal use. However, the Commis-
from this sale to a charitable organi-    shall be considered to be converted      sion has previously determined that
zation.                                   to personal use if the contribution or   the addition of one or two sentences
    Second, the Committee proposes        amount is used to fulfill any com-       of promotional material about a
to promote the book by posting            mitment, obligation or expense of a      candidate’s book to an authorized
information on the Committee’s            person that would exist irrespective     committee’s website did not consti-
website. Under the Committee’s            of the candidate’s election campaign     tute personal use of campaign funds,
proposal, this information would          or individual’s duties as a holder of    since the amount of promotional ma-
consume no more than 25 percent           Federal office.” 2 U.S.C. §439a(b)       terial and the cost to the candidate’s
of its home page. The Committee           (2). In several previous Advisory        committee were de minimis. See AO
also proposes to use the social media     Opinions, the Commission has             2006-07. The Commission conclud-
sites Facebook, Twitter and Linke-        considered whether an authorized         ed in this case that the Committee’s
dIn by posting promotional infor-         committee’s purchase of its own          proposal to devote up to 25 percent
mation about the book and Senator         candidate’s book is personal use.        of the Committee website’s homep-
Brown’s book tour.                        See, e.g. AOs 2006-18 and 2001-08.       age, Facebook page and LinkedIn
    Third, the Committee proposes to      Here, the Committee’s funds would        page to book promotion, and up
promote the book to individuals on        be used to purchase the book solely      to 10 percent of the Committee’s
the Committee’s e-mail and mailing        for distribution as gifts to the Com-    Twitter page, is not de minimis. The
lists.                                    mittee’s financial contributors and      Committee may, however, consistent
    Fourth, when Senator Brown            political supporters, and thus would     with Advisory Opinion 2006-07,
travels to promote the book on the        be used by the Committee only for        post a de minimis amount of material
national book tour, he proposes to        the purpose of influencing Senator       on its own website and social media
host fundraising events for the Com-      Brown’s election to federal office.      sites.
mittee in the book tour cities. The       As in AO 2001-08, the publisher is           Committee E-mail and Mailing
travel costs of the book tour will be     willing to donate the resulting royal-   Lists. Senator Brown may person-
paid by the book’s publisher.             ties to a charitable organization and    ally reimburse the Committee for
    Finally, the Committee proposes       not increase the royalty calculation     the fair market value of the rental of
to have a campaign staffer collect e-     that would go to the candidate.          its e-mail and mailing lists, based
mail addresses from people who at-           Senator Brown may not person-         on an independent list appraisal,
tend Senator Brown’s book-signing         ally accept royalties resulting from     and then use the e-mail and mailing
events while on the book tour. The        the campaigns purchase of his book,      lists to promote the sale of his book.
Committee plans to use the e-mail         even if he then makes a charitable       Commission regulations provide that
addresses that it collects to apprise     donation equal to that amount.           the transfer of campaign committee
people of Committee news and ac-          Although the Act specifically allows     assets does not constitute personal
tivities and for fundraising.             campaign funds to be donated to a        use, provided that the transfer is for
                                          charity, it also provides that such      fair market value. 11 CFR 113.1(g)
                                          a contribution or donation can-          (3). The Commission has previously
                                          not be converted to personal use. 2      determined that a committee’s mail-

June 2011                                                                             Federal Election Commission RECORD

ing lists are assets that have value     AO 2011-04                               organizations, from making contri-
and are frequently sold, rented or       Candidate Position Papers                butions in connection with a federal
exchanged. See, e.g., AOs 2002-14        Posted on Members-Only                   election. 2 U.S.C. §441b(a); 11 CFR
and 1982-41. Since Senator Brown         Section of Website                       114.2(b). However, communications
will receive royalties from the sale                                              by a membership organization to
of the book, the use of the Com-           A nonprofit corporation may post       its restricted class are exempt from
mittee’s e-mail and mailing lists        candidate position papers on the         the definition of contribution and
for promotion of Senator Brown’s         members-only section of its website.     expenditure, and an incorporated
book are subject to the personal use     Background                               membership organization may com-
regulations. However, since Senator         The American Israel Public            municate with its restricted class on
Brown proposes to reimburse the          Affairs Committee (AIPAC) is a           any subject, including by making ex-
Committee personally for the fair        nonprofit 501(c)(4) corporation dedi-    press advocacy statements. 2 U.S.C.
market value of the lists, this will     cated to maintaining and improving       §431(9)(B)(iii) and (8)(B)(vi); 11
not result in prohibited personal use    the bonds between the United States      CFR 114.1(a)(2)(x) and 114.3(a)(2).
of campaign funds.                       and Israel that the Commission has           The Commission concluded that
   Travel Expenses. The Com-             previously determined qualifies as       AIPAC may post candidate-prepared
mission could not approve by the         a membership organization under          position papers on a section of its
required four votes a response to the    11 CFR 114.1(e). Although primar-        website accessible only by its mem-
question of whether Senator Brown        ily a lobbying organization, AIPAC       bers. Because posting the position
may host fundraising events in cities    also encourages its members to be        papers constitutes a permissible
where the book’s publisher pays          involved in campaign activities, such    communication between AIPAC and
his travel costs as part of the book’s   as volunteering for campaigns and        its membership, the Commission
promotion.                               making contributions. AIPAC com-         concluded that any costs associated
   Collection of E-mail Addresses        piles information on candidates and      with posting the papers would not be
by the Committee. The Commission         races for federal office, including      contributions or expenditures.
could not approve by the required        the political history of the district        The Commission pointed out that,
four votes a response to the question    or state, information about money        although a membership organiza-
of whether the Committee could col-      raised by the candidates, public poll-   tion must report the costs incurred
lect the e-mail addresses of people      ing data, recent news about the race     that are directly attributable to an
who attend the Senator’s book-sign-      and a list of announced candidates       express advocacy communication to
ing and promotional events for the       for the office. AIPAC also compiles      its membership if those costs exceed
purpose of soliciting contributions in   voting records of incumbents and         $2,000 for any election,1 the mem-
the future.                              encourages its members to review         ber communications at issue do not
   Date Issued: February 17, 2011;       those records, but the organiza-         contain express advocacy. Therefore
   Length: 9 pages.                      tion does not itself rate or endorse     AIPAC need not report any costs
                   —Myles Martin         candidates.                              associated with the communications
                                            AIPAC would like to encour-           to the Commission. See 2 U.S.C.
                                         age all federal candidates to pre-       §431(9)(B)(iii); 11 CFR 114.3(b),
                                         pare position papers on the United       100.134(a) and 104.6(a).
                                         States-Israel relationship, and asks         Date: April 7, 2011;
                                         the Commission if it can post the            Length: 4 pages.
                                         position papers unedited and in their              —Zainab Smith
                                         entirety on a portion of its website
                                         that is accessible only to AIPAC
                                         members. The position papers would
                                         set forth the candidates’ views on
                                         issues affecting the United States-
                                         Israel relationship and would not
                                         contain any express advocacy.
                                                                                   Communications containing express
                                         Analysis                                 advocacy but that are “primarily
                                            The Federal Election Campaign         devoted to subjects other than the ex-
                                         Act (the Act) and Commission             press advocacy” need not be reported.
                                         regulations prohibit corporations,       2 U.S.C. §431(9)(B)(iii); 11 CFR
                                         including incorporated membership        114.3(b), 100.134(a) and 104.6(a).

Federal Election Commission RECORD                                                                             June 2011

AO 2011-05                               use campaign funds to offset the         officeholder, and therefore, the use
Use of Campaign Funds for                costs of installing those recommend-     of campaign funds to pay the costs
Security Upgrades                        ed security measures at his home.        of the additional security measures
                                                                                  would not constitute personal use
   Representative Lee Terry may use      Analysis                                 of campaign funds under 2 U.S.C.
campaign funds to pay for enhanced           The Federal Election Campaign        §439a(b).
security for his home. The payments      Act (the Act) and Commission                Date Issued: April 1, 2011;
would not be considered a prohibited     regulations prohibit campaign funds         Length: 5 pages.
personal use of campaign funds be-       from being converted to personal use        —Christopher Berg
cause the need for enhanced security     by any person. 2 U.S.C. §439a(b)(1)
stems from threats to Representative     and 11 CFR 113.2(e). For items not
Terry stemming from his roles as a       listed in the regulations as examples
Member of Congress and as a candi-       of personal use, the Commission
date for federal office.                 determines on a case-by-case basis
                                         whether an expense would fall
Background                               within the definition of “personal
   Representative Terry is a member      use.” 2 U.S.C. §439a(b)(2)(A)-(I);
of the U.S. House of Representa-         11 CFR 113.1(g)(1)(i).
tives from Nebraska. Representative          The Commission has previously
Terry was a federal officeholder and     concluded that payments for a home
a candidate for re-election when, in     security system under circumstances
October 2008, an individual became       similar to those presented here do
angry at receiving campaign litera-      not constitute personal use under the
ture from him and caused several         Act and Commission regulations.
disturbances at his Congressional        AO 2009-08. In the facts at issue
office. After Representative Terry’s     here, Representative Terry’s cam-
staff informed the individual that       paign and his role as a Member of
he should contact the Committee          Congress appear to have motivated
to complain, the individual stated       the individual to threaten him. The
that he knew where Representative        individual became angry at receiv-
Terry’s residence was and that he        ing campaign literature from Rep-
would go to the residence to com-        resentative Terry, and left campaign
plain. This led the local Sheriff’s      literature addressed to him at the
office to increase its patrol presence   front step of his residence. The indi-
in Representative Terry’s neighbor-      vidual has stated to law enforcement
hood.                                    that he is “striving against the abuse
   Between December 2008 and             of power by public officials,” and
April 2009, the individual escalated     appears to have a history of stalking,
his behavior, first leaving voicemails   harassment and threats. The indi-
with the Nebraska Governor’s office      vidual may continue to pose a risk to
indicating his intention to appear at    Representative Terry and additional
Representative Terry’s house, and        security measures, which are not
then leaving campaign literature on      intended to increase the value of
Representative Terry’s front step.       Representative Terry’s residence,
The individual was incarcerated          have been recommended by authori-
from March to August, 2010. Since        ties.
his release from custody, the indi-          Based on these facts, the Com-
vidual has been observed driving         mission concludes that the individu-
past Representative Terry’s Congres-     al’s actions would not have occurred
sional office and through Represen-      had Representative Terry not been a
tative Terry’s neighborhood.             Member of Congress or a candidate
   Several security measures were        for re-election. The expenses for
recommended by the Capitol Police.       the proposed upgrades suggested by
Representative Terry asks if he could    the U.S. Capitol Police would not
                                         exist irrespective of the Congress-
                                         man’s campaign or duties as an


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