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Federal Election Commission Campaign Guide

Federal Election Commission Campaign Guide Corporations and Labor Organizations January 2007

Corporations and Labor Organizations

January 2007

About this Guide

Ths Guide replaces the June 2001 edton of the Campaign Guide for Corporations and Labor Organiza- tions. It summarzes the federal campagn finance laws applcable to corporatons, labor organzatons and ther separate segregated funds as of January 2007. For updated nformaton, please consult the monthy Record supplements to ths Guide at www. fec.gov/nfo/publcatons.shtml#gudes.

Federal Election Commission

Washngton, DC 20463

Commssoners:

Robert D. Lenhard, Charman Davd M. Mason,Vce Charman Mchael E.Toner Hans A. von Spakovsky Steven T. Walther Ellen L. Wentraub

Staff Drector:

Patrna M. Clark Actng General Counsel:

Thomasena P. Duncan

Prepared by the Informaton Dvson Drector:

Greg J. Scott Wrter:

Gary A. Mullen

Layout and Desgn:

James Landon Jones

Cover: Mchael Lantz, Man Controllng Trade, 1942. photo by James Landon Jones

Introduction

Using This Guide

The rules and procedures explaned n ths gude

apply to labor organzatons and to all types of cor- poratons, ncludng:

• Incorporated busnesses;

• Incorporated membershp organzatons (n- cludng trade assocatons);

• Natonal banks;

• Corporatons wthout captal stock; and

• Incorporated cooperatves.

Citations

Authortes prmarly cted n ths Gude nclude FEC regulatons and advsory opnons (AOs). All regulatory ctatons are to Ttle 11 of the Code of Federal Regulatons, Parts 100–116 and 9001– 9039 (2001). Copes of AOs may be obtaned from the FEC; n addton, each AO s summarzed n the Commsson’s monthly newsletter, the Record.AOs are also reported n the Federal Electon Campagn Fnancng Gude, publshed by Commerce Clearng House, Inc.

Italicized Words

Terms prnted n talcs n ths Gude have specfic defintons under the electon law. Defintons of these terms can be found n Appendx G.

Getting More Help

Advisory Opinions

Any person or group requrng a clarficaton of the electon law wth regard to an actvty that they plan to undertake may request an AO from the FEC. Indvduals and organzatons nvolved n the actv- ty specfically addressed n an AO (or n an actvty that s materally ndstngushable) may rely on the opnon for legal gudance. AO requests may be ad- dressed to the Office of General Counsel at:

Federal Electon Commsson 999 E Street, NW Washngton, DC 20463.

Toll-Free Line

Many questons about federal campagn finance law do not requre formal advsory opnons. Such questons may be addressed to traned FEC staff members by callng the FEC’s 800 number, below. Persons n the Washngton, DC, area may call locally. The numbers are:

800/424-9530

202/694-1100

202/219-3336 (TDD) Hearng-mpared persons may reverse the charges when callng long-dstance on the TDD number.

Free Publications

In addton to ths Gude, the FEC publshes a seres of brochures and other publcatons on several aspects of campagn financng and the electon law. Subscrptons to the Commsson’s newsletter, the Record, are avalable free of charge.Wrte or call the FEC for a lst of publcatons currently avalable.

FEC Web Site

Flng forms and other nformatonal materals, such as advsory opnons and recent changes n FEC regulatons are also avalable on the FEC web ste (www.fec.gov).

Compliance with Small Business Regulatory Enforcement Fairness Act of 1996

Ths gude serves as the small entty complance gude for corporatons and labor organzatons, as requred by secton 212 of the Small Busness Regu- latory Enforcement Farness Act of 1996, Pub. L. No. 104-121,Ttle II, 110 Stat. 857 (1996).

The Law

The Federal Election Campaign Act (the Act) prohbts corporatons and labor organzatons from usng ther general treasury funds to make contrbutons or expendtures n connecton wth federal elec- tons. 2 U.S.C. §441b(a). In spte of ths broad proh- bton, there are many ways n whch a corporaton or unon may legally partcpate n federal electon actvtes. The Federal Electon Commsson (FEC)—the agency that admnsters and enforces the Act—has prepared ths Campagn Gude to help corporatons and labor organzatons pursue federal campagn actvtes wthn the lmts of the law.

The SSF

Whle corporatons and labor organzatons are prohbted from makng contrbutons or expend- tures n connecton wth federal electons, the Act and Commsson regulatons permt them to set up poltcal commttees, whch may make contrbutons to and expendtures on behalf of federal canddates and other commttees. Federal electon law refers to a corporate or labor poltcal commttee as a “separate segregated fund” (SSF), though t s more commonly called a “poltcal acton commttee” or PAC. (Unless oth- erw se nd cated, the terms “SSF,” and “the comm t - tee” are used nterchangeably n ths Gude.) As the name mples, money contrbuted to a separate segregated fund s held n a separate bank account from the general corporate or unon trea- sury.

The Connected Organization

A corporaton or unon that sponsors an SSF s called the connected organzaton.The connected organzaton may use ts general treasury funds to pay for the costs of operatng and rasng money for the SSF. The connected organzaton may also exercse control over ts commttee. 114.5(d). Corporatons and unons often adopt bylaws to govern ther SSFs, though bylaws are not requred under the law and do not have to be filed wth the FEC except when requested.

Contents

About ths Gude

Introducton

Usng Ths Gude

CHAPTER 1

Getting Started

1

1. Regsterng wth the FEC

1

2. Treasurer

1

3. Namng the SSF

2

4. Fllng Out the Statement of Organzaton

2

5. Flng the Form

4

6. Updatng Regstraton Informaton

4

7. Notficaton of Multcanddate Status

5

8. Affilaton

5

9. Affilaton & Corporate Restructurng

7

10. SSF and Nonconnected PAC

7

11. Operatng Costs

8

12. Incorporatng the SSF

8

13. Lmted Lablty Companes and SSFs

8

CHAPTER 2 Understanding Contributions

9

1. What Is a Contrbuton

9

2. Lmts on Contrbutons Receved by the SSF

10

3. Lmts on Contrbutons Made by the SSF

10

4. Desgnaton

13

5. Affilaton and Contrbuton Lmts

14

6. Prohbted Corporate and Labor Contrbutons

15

7. Other Prohbted Contrbutons

16

8. Bank Loans

17

9. Other Recepts

18

CHAPTER 3 Fundraising for the SSF

19

1. General Rules on Solctatons

19

2. Corporatons: Solctable Personnel

20

3. Labor Organzatons: Solctable Personnel

21

4. Membershp Organzatons:

Solctable Personnel

21

5. Solctaton Methods

23

6. Fundrasng Events and Specal Promotons

25

7. Corporate Collecton Methods Used by Labor Organzatons

26

8. Handlng Illegal Contrbutons

27

9. Collectng Agents

28

10. Investng SSF Funds

30

CHAPTER 4 Supporting Candidates

31

1. Contrbutons

31

2. Independent Expendtures

32

3. Electoneerng Communcaton

34

4. Independent Expendtures and Electoneerng Communcatons by Qualfied Nonprofit Corporatons

35

5. Dsclamer Notces

37

CHAPTER 5 Keeping Records

41

1. Three-Year Retenton of Records

41

2. Recepts

41

3. Recordng Contrbutons

41

4. Recordng Other Recepts

42

5. Recordng Dsbursements

42

6. Treasurer’s Best Efforts

43

CHAPTER 6 Filing FEC Reports

45

1. Treasurer’s Dutes

45

2. Flng Deadlnes

45

3. Electon Year Flng

46

4. Nonelecton Year Flng

49

5. Specal Electons

49

6. Electronc Flng

49

7. Where to Fle

51

8. Publc Revew of Reports

51

CHAPTER 7 Completing FEC Form 3X

53

1. Reportng Forms

53

2. Itemzed Recepts: Schedule A

54

3. Reportng Recepts:

The Detaled Summary Page

58

4. Itemzed Dsbursements: Schedule B

60

5. Reportng Dsbursements:

The Detaled Summary Page

63

6. Investments

64

7. Independent Expendtures

65

8. Reportng Loans

67

9. Reportng Debts Other Than Loans

69

10. The Summary Page

71

11. Flng Amendments

72

CHAPTER 8 Termination and Debt Settlement

73

1. Commttees wth No Outstandng Debts

73

2. Commttees wth Outstandng Debts:

Debt Settlement

73

v

3. Commttees wth Outstandng Debts:

Admnstratve Termnaton

74

CHAPTER 9 Communications

77

1. Introducton: Basc Terms

77

2. Payng for Communcatons to the Restrcted Class

81

3. Canddate and Party Appearances

81

4. Publcatons

85

5. Endorsements

87

6. Regstraton and Get-Out-the-Vote Drves

88

7. Voter Educaton

88

8. Excepton: Independent Expendtures by Qualfied Nonprofit Corporatons

89

CHAPTER 10 Use of Resources and Facilities

91

1. Indvdual Volunteer Actvty

91

2. Use n Fundrasng

91

3. Use of Offices and Equpment

93

4. Meetng Rooms

93

5. Transportaton

93

6. Producton of Campagn Materals

94

CHAPTER 11 Other Uses of Treasury Funds

95

1. Legal and Accountng Servces

95

2. Donatons to Nonfederal Canddates and Commttees

95

3. Donatons for Party Office Buldng

95

4. Corporate Vendor Dscounts 95

5. Employee Partcpaton Plans

96

6. Donatons by Busnesses for Presdental Conventons

96

7. Donatons by Commercal Vendors for Presdental Conventons

97

APPENDIX A. Shared Federal and Nonfederal Activities

98

1. Usng One SSF Account

98

2. Usng Two Accounts

98

3. Allocaton

Between Accounts

99

4. Allocaton Ratos

100

5. Reportng Allocated Admnstratve, Generc Voter Drve and Generc Publc Communcatons Expenses

100

6. Allocatng Commttee Fundrasng Expenses

101

7. Allocatng Costs of Fundrasng for Canddates 102

8. Allocatng Costs of Publc Communcatons

103

and Voter Drves

APPENDIX B. Twice-Yearly Solicitations

105

1. Who May Be Solcted Twce Yearly

105

2. Custodal Arrangement

105

3. Collecton Methods

106

4. Requrements for Corporatons

106

5. Requrements for Labor Organzatons

106

APPENDIX C. Solicitations by Trade Associations

107

1. Request for Corporate Approval

107

2. Approval by Corporate Member

107

3. Who May Be Solcted

108

4. Solctatons at Conventon

108

5. Member-Provded Assstance 109

6. Trade Assocaton Federatons

109

APPENDIX D. Earmarked Contributions

111

1. Conduts

111

2. Contrbuton Lmts

111

3. Forwardng Earmarked Contrbutons

112

4. Reportng Condut Actvty

112

5. Earmarkng Va Payroll Deducton

113

APPENDIX E. Contributions from Partnerships/LLCs

115

1. Contrbuton Lmts

115

2. Attrbuton Among Partners

115

3. Prohbted Partnershp/LLC Contrbutons

115

4. Reportng Partnershp/LLC Contrbutons

116

APPENDIX F. Compliance with Other Laws

117

1. Tax Laws

117

2. Communcatons Act

117

3. Hatch Act

117

APPENDIX G. Definitions

118

INDEX

125

Gettng Started

Gettng Started

CHAPTER 1

Getting Started

1. Registering with the FEC

Registration Form

The regstraton form s FEC Form 1, the Statement of Organzaton. Blank forms can be obtaned from the FEC. 102.2.

Initial Registration

Who Must Register

All SSFs must regster wth the FEC, regardless of the sze of the fund. 102.1(c).A commttee estab- lshed exclusvely for state and local (.e., nonfed- eral) actvty, however, does not need to regster or file reports wth the FEC.

When to Register

An SSF must regster wth the FEC wthn 10 days of the date of ts establshment—for example, wthn 10 days of the date when:

• The board of drectors (or comparable govern- ng body) votes to create the SSF;

• Officers are selected to admnster the fund; or

• The SSF’s ntal operatng expenses are pad.

102.1(c).

Electronic Registration

If a commttee rases or spends more than $50,000 n a calendar year, or expects to do so, t must file electroncally. For more nformaton on electronc filng, see page 49.

2.Treasurer

Treasurer Required

An SSF must appont a treasurer wthn 10 days of ts establshment and may not rase or spend any funds when there s a vacancy n that office. Only a desgnated treasurer or assstant treasurer may sgn FEC reports and statements.The Commsson urges every commttee to name an assstant treasurer who may assume the treasurer’s dutes when he or she s unavalable. 102.7(a) and (b).

If the SSF does not already have an assstant treasurer and the treasurer s unavalable to sgn a report, the commttee may appont an assstant treasurer to sgn the report.An amended Statement of Organzaton dentfyng the assstant treasurer may be filed smultaneously, but t must be filed wthn 10 days of the appontment. 102.2(a)(2). See Secton 6 of ths chapter.

Treasurer’s Duties

The treasurer (or regstered assstant treasurer) s responsble for:

• Flng complete and accurate reports and state- ments on tme. 104.14(d).

• Sgnng all reports and statements. 102.2(a)and

104.14(a).

• Depostng recepts n the commttee’s desg- nated bank wthn 10 days. 103.3(a).

• Authorzng expendtures or appontng an agent (ether orally or n wrtng) to authorze expendtures. 102.7(c).

• Montorng contrbutons to ensure complance wth the Act’s lmts and prohbtons. 103.3(b) and 110.1(k)(3).

• Keepng the requred records of recepts and dsbursements for three years after the transac- ton s last reported n FEC filngs. 102.9(c) and

104.14(b).

Treasurer’s Liability

Treasurers are personally responsble for carryng out the dutes lsted above and should understand these responsbltes, as well as ther personal l- ablty for fulfillng them. 1 When the Commsson brngs an enforcement acton aganst a political committee, the treasurer s usually named as a respondent along wth the com- mttee tself. In December 2004, the Commsson approved a Statement of Polcy 2 to clarfy when, n the course of an enforcement proceedng, a trea- surer s subject to Commsson acton n hs or

1 Lablty for payment of debts s generally governed by state law. See, generally,AOs 1990–11, 1989–2 and 1975–102.

2 70 FR 3 (January 3, 2005).

Campagn Gude for Corporatons and Labor Organzatons

her offical or personal capacty, or both.The polcy explans that n an enforcement acton where a political committee s a respondent, the commttee’s treasurer wll typcally be subject to Commsson acton only n hs or her offical capacty. However, when nformaton ndcates that a treasurer has knowngly and wllfully volated the Act, recklessly faled to fulfill dutes specfically mposed by the Act, or ntentonally deprved hmself or herself of facts gvng rse to the volaton, the Commsson wll consder the treasurer subject to acton n a personal capacty and make findngs accordngly. If a commttee changes treasurers, the Comms- son may substtute the new treasurer as a respon- dent n the enforcement proceedng n hs or her offical capacty because an offical capacty acton s an acton aganst the treasurer’s poston. If an out- gong treasurer s personally lable, the Commsson may pursue that predecessor treasurer ndvdually (therefore not substtutng the ncomng succes- sor n a personal capacty).The successor treasurer would, however, be named n the offical capacty.

Vacancy in Office

The SSF may not receve contrbutons or make ex- pendtures when the treasurer’s office s vacant and the commttee has no assstant treasurer. 102.7(b). Thus, when vacant, the treasurer’s job must be filled as soon as possble. Changes n the treasurer’s office must be dsclosed wthn 10 days on an amended Statement of Organzaton. 102.2(a)(2). See Secton 6.

3. Naming the SSF

Include Full Name of Sponsor

The offical name of an SSF must nclude the full name of the connected organization (ncludng “Inc.” or “Corp.” f applcable).An SSF’s connected organiza- tion—often called the sponsorng organzaton—s the organzaton that establshes, admnsters, or financally supports the SSF. 100.6(a) and 102.14(c). In the SSF name, standard abbrevatons for “Com- pany,” “Assocaton” and smlar words are accept- able.The full commttee name may also nclude the acronym “PAC.”

Thus, an acceptable name for an SSF sponsored

by Acme Industres Corp. would be “Acme Indus-

tr es Corp. PAC.” See AOs 2000-34, 1999-20 and

1993-7.

Joint SSFs

If an SSF s jontly sponsored by two or more orga-

nzatons, the full names of both organzatons must appear n the name of the SSF. See AOs 1988–42 and 1988–14. (If a connected organization has a parent company or several subsdares, however, the names of those corporatons do not need to be ncluded n the name of the SSF, unless more than one company s sponsorng the SSF. 102.14(c).)

Abbreviated Name

An SSF may use a shortened form of ts offical name on ts checks and letterhead.The shortened name must nclude a clearly recognzable acronym or form of the connected organization’s name. The SSF must nclude the abbrevated name, along wth the full name, on:

• The Statement of Organzaton;

• All reports and notces filed by the commttee; and

• Any dsclamer notces used by the commt- tee n publc poltcal advertsements. 102.14(c) and 110.11;AOs 2004-4, 2000-34, 1980-23 and

1980-10.

EXAMPLES: In AO 2000-34, the Commsson ruled that SAPPI PAC was an acceptable abbreva- ton for SAPPI Fne Paper North Amerca/S.D.War-

ren Company PAC because the acronym “SAPPI” was used n varous well-known financal reference sources, thus establshng that t was a clearly recog- nzed acronym by whch the connected organization was known. In AO 1980-23, “Md–Am PAC” was not

a permssble abbrevaton for Md-Amercan Dary-

men, Inc.’s SSF because t dd not clearly dentfy the assocaton sponsorng t.

4. Filling Out the Statement of Organization

Lne-by-lne nstructons for fillng out the State- ment of Organzaton appear below. See the adja- cent example of a correctly completed Form 1.

Gettng Started

Registration Form STATEMENT OF ORGANIZATION FEC FORM 1 Office Use Only 1. NAME OF COMMITTEE
Registration Form STATEMENT OF ORGANIZATION FEC FORM 1 Office Use Only 1. NAME OF COMMITTEE

Registration Form

STATEMENT OF

ORGANIZATION

FEC

FORM 1

Office Use Only 1. NAME OF COMMITTEE (in full) (Check if name is changed) Example:If
Office Use Only
1.
NAME OF
COMMITTEE (in full)
(Check if name
is changed)
Example:If typing, type
over the lines.
12FE4M5
Critical Reason
Inc.
PAC
101
Apriori Street
ADDRESS (number and street)
(Check if address
is changed)
Alexandria
VA
00000
CITY
STATE
ZIP CODE
COMMITTEE'S E-MAIL ADDRESS
creasonpac@creason.com
COMMITTEE'S WEB PAGE ADDRESS (URL)
www.creasonpac.com
COMMITTEE'S FAX NUMBER
M
M
/
D
D
/
Y
Y
Y
Y
2.
DATE
08
09
2005
C
3.
FEC IDENTIFICATION NUMBER

4. IS THIS STATEMENT

x NEW (N)

OR

AMENDED (A)

I certify that I have examined this Statement and to the best of my knowledge and belief it is true, correct and complete.

Type or Print Name of Treasurer

Signature of Treasurer

Immanuel Kant
Immanuel Kant

Date

M M / D D / Y Y Y Y 01 09 2005
M
M
/
D
D
/
Y
Y
Y
Y
01
09
2005

NOTE: Submission of false, erroneous, or incomplete information may subject the person signing this Statement to the penalties of 2 U.S.C. §437g. ANY CHANGE IN INFORMATION SHOULD BE REPORTED WITHIN 10 DAYS.

Use

Federal Election Commission To ll Free 800-424-9530 Local 202-694-1100

Only

Ofce

For further information contact:

FEC FORM 1

(Revised 02/2003)

FE3AN042

Local 202-694-1100 Only Of fi ce For further information contact: FEC FORM 1 (Revised 02/2003) FE3AN042

Line 1. Name and Address of the Committee

Name

Enter the full, offical name of the SSF. 102.14(c). Also enter any abbrevated name that the commt- tee plans to use to dentfy tself. See “Namng the SSF,” above, for more gu dance.

Electronic Address

In addton to provdng the malng address of the commttee, all filers (whether electronc or paper) must nclude the URL for ther web ste, f they mantan one. Electronc filers must also nclude ther e-mal address, f they have one.

102.2(a)(1)(v).

Fax Number

The commttee s encouraged to provde a facsmle number, but s not requred to do so.

to provde a facsmle number, but s not requred to do so. Line 2. Date When

Line 2. Date

When regsterng for the first tme, enter the commttee’s date of es- tablshment (not the date when the form s filled out). 102.1(c). When filng an amended Statement of Organzaton, enter the date on whch the new nformaton took ef- fect (e.g., the date when a new trea- surer took office). See 102.2(a)(2).

Line 3. FEC Identification Number

The FEC assgns an ID number to a new SSF after the Commsson receves the first Statement of Orga- nzaton. Leave ths space blank f the commttee s filng ts first Statement. Always nclude the ID number on reports, statements and other com- muncatons sent to the FEC after

the ntal regstraton. 102.2(c).

Line 4. Is This Statement an Amendment?

Check “new” f the commttee s regsterng for the first tme. Check “amended” f the commttee s up- datng nformaton.

Line 5. Type of Committee

Check box (e),“Separate Segregated Fund.”

Line 6. Connected Organization and Affiliated Committees

Lst the names and addresses of the connected or- ganization and any affiliated commttees, along wth ther relatonshp to the regsterng commttee (.e., “connected” or “affilated”).

Connected Organization

In addton to provdng the name and malng ad- dress of the connected organization, check the box

Campagn Gude for Corporatons and Labor Organzatons

ndcatng the type of organzaton that s sponsor- ng the SSF—.e., a corporation, a corporation wthout captal stock, a labor organization, a membershp as- socaton, a trade association or a cooperatve (check all boxes that apply).

Affiliated Committees

Lst poltcal commttees that are affiliated wth the SSF. An SSF set up by a parent organzaton wth several subsdares or local unts must lst any SSFs establshed by those unts.The SSF of a subsdary or subordnate unt, however, only needs to lst the SSF of the parent organzaton. It s not requred to lst other affilates. 102.2(b)(1)()(A) and (B). More nformaton on affilaton s provded n Secton 8.

Line 7. Custodian of Records

All federal poltcal commttees must keep records and accounts of ther financal actvtes and retan them for three years after the relevant transacton s last reported n FEC filngs. 102.9(a), (b) and (c) and 104.14(b). On Lne 7, enter the name and address of the person who has actual possesson of those books and records.The commttee’s treasurer, assstant treasurer or another person (such as an accoun- tant or bookkeeper) may serve as the custodan of records. 102.2(a)(1)().The recordkeepng rules are dscussed n detal n Chapter 5.

Line 8. Treasurer and Assistant

Provde the name and malng address of the treasurer on Lne 8.The Commsson also urges all poltcal commttees to name an assstant treasurer (or “desgnated agent”) on Lne 8. Only a regstered assstant treasurer may sgn FEC reports and state- ments n the treasurer’s absence. 102.7(a), 104.1(a) and 104.14(a). The treasurer’s responsbltes are dscussed n detal n Secton 2 of ths chapter.

Line 9. Designated Campaign Depository

Lst the name and address of each bank where the commttee deposts funds.The commttee must have at least one checkng account. 103.2. Note that affiliated SSFs may not share the same bank account, though they may establsh separate bank accounts at the same financal nsttuton.AOs 1986–33 and 1979–53.

Signing and Dating the Form

The treasurer or desgnated assstant treasurer must sgn and date the form on the bottom lne.

104.14(a).

The sgner’s name must also be typed or prnted where ndcated.

5. Filing the Form

Send the completed Statement of Organzaton to the approprate filng office (usually the FEC; see “Where to Fle” on page 51). Only commttees based n Puerto Rco and Guam are requred to file copes of FEC reports and statements wth the approprate officer of the terrtory n whch they are headquartered.All other states, terrtores, and the Dstrct of Columba have receved a waver from the requrement to mantan copes of FEC statements and reports. See page 51 for detals.

6. Updating Registration Information

Whenever any of the nformaton dsclosed on the Statement of Organzaton (Form 1) changes, the commttee must report the change wthn 10 days by filng an amended Form 1 or, f the commttee s not an electronc filer, by letter. 102.2(a)(2).

Amending Form 1

Electronic Filers

Commttees filng electroncally must make amend- ments to Form 1 electroncally.The commttee must complete the entre report, not just the sec- tons requrng amendments.

Paper Filers

Commttees filng on paper may ether submt an amended Form 1 or report the changes by letter as descrbed below.

Submitting the Amended Form 1

When submttng an amended Form 1, the commt- tee needs to provde only:

• The full name and address of the SSF;

• The FEC ID number;

Gettng Started

• The changed nformaton;

• The date the change took effect; and

• The treasurer’s name and sgnature.

The rest of the form may be left blank.

Reporting Changes by Letter

Instead of filng a new Form 1, a commttee that files on paper may amend ts Statement of Organ- zaton by sendng the FEC a letter contanng the nformaton lsted above.The treasurer or assstant treasurer must sgn the letter.

7. Notification of Multicandidate Status

As the next chapter explans, a qualfied multican- didate committee may gve a candidate up to $5,000 per election (rather than $2,300). 110.2(b).An SSF generally qualfies as a multicandidate committee once t has:

• Receved contrbutons from at least 51 per- sons;

• Been regstered for at least 6 months; and

• Made contrbutons to at least five federal can- ddates. 100.5(e)(3). An SSF that s affiliated wth a commttee that has met these crtera s automatcally qualfied to share that commttee’s $5,000 per-candidate lmt.AOs 2001-18, 1997-25, 1997-13, 1986–42 and 1980–40. See below for more nformaton on affilaton. Once a commttee qualfies as a multicandidate committee, the treasurer must file FEC Form 1M, “Notficaton of Multcanddate Status” wthn 10 days of satsfyng the crtera for multcanddate status. 3 100.5(e)(3) and 102.2(a)(3). It s mportant to note that the commttee must operate under the contribution lmts for a multicandidate commit- tee as soon as the crtera for multcanddate status are met.The treasurer must also ndcate that the commttee has qualfied as a multicandidate commit- tee on the Summary Page of each report filed (see page 71).

When makng contrbutons to canddates, a multcanddate SSF must gve the recpent candi- date or campagn commttee a wrtten notficaton that t has qualfied as a multicandidate committee.

3 Commttees that notfied the Commsson of ther multcan- ddate status on Form 3X pror to January 1, 1994, do not have to file Form 1M.

110.2(a)(2). For convenence, the statement may be pre-prnted on the commttee’s checks, letterhead or other approprate materals.

8. Affiliation

Definition

Under FEC rules, affilaton between SSFs results when commttees are establshed, financed, man- taned or controlled by the same organzaton.

100.5(g)(2).

Why Important

Contribution Limits

When two or more commttees are affiliated, they share a sngle lmt on the contrbutons they make to canddates and to other poltcal commttees.A sngle lmt also apples to the aggregate contrbu- tons a person makes to commttees affiliated wth each other. 110.3(a)(1). (Applcaton of the contribu- tion lmts to affiliated commttees s explaned n Chapter 2.) See also AOs 2004-32, 2004-23, 2001- 18, 1999-40, 1997-25, 1997-13 and 1996-38. EXAMPLE: Pror to becomng affiliated, X PAC (a multicandidate committee) contrbuted $1,000 to a candidate’s general election campagn, whle Y PAC contrbuted $250 to the same candidate’s general election campagn and $750 to the prmary cam- pagn. After becomng affiliated, X PAC and Y PAC’s addtonal contrbutons could not exceed $3,750 for the candidate’s general election campagn and $4,250 for the prmary campagn. See AO 1985-27.

Solicitable Class

Addtonally, when two or more commttees are af- filiated, they may solct each other’s restrcted class. 114.5(g)(1).AOs 2004-32, 1999-15 and 1995-12.

Automatic Affiliation

When SSFs are establshed by dfferent parts of one

organzaton, they are automatcally affiliated. For example:

• An SSF establshed by a parent corporation s affiliated wth an SSF establshed by a subsdary corporation. 100.5(g)(3)().

• An SSF establshed by a natonal or nternaton- al unon s affiliated wth any SSFs establshed by local or regonal unts of the same unon.

100.5(g)(3)().

Campagn Gude for Corporatons and Labor Organzatons

Multicandidate Status Notification
Multicandidate Status Notification

• SSFs establshed by a federaton of natonal or nternatonal unons and the SSFs of the federaton’s state and local central bodes are affiliated (see further explanaton below).

100.5(g)(3)().

• An SSF of a natonal membershp organzaton (ncludng a natonal trade association) s affili- ated wth the SSFs establshed by ts related state and local enttes. 100.5(g)(3)(v).

Circumstances Indicating Affiliation

When commttees are not automatcally affiliated under the condtons descrbed above, the Com-

110.3(a)(3).

msson may consder the follow- ng factors to determne whether two or more commttees are affiliated. If one commttee or ts sponsorng organzaton:

• Owns a controllng nterest n the votng stock or securtes of another organzaton spon- sorng a political committee;

• Has the authorty or abl- ty to drect or partcpate n the governance of another sponsorng organzaton or commttee through ts con- sttuton, bylaws, contracts or other rules, or through formal or nformal practces or pro- cedures;

• Has the authorty or ablty to hre, appont, demote or otherwse control the offi- cers or employees of another sponsorng organzaton or commttee;

• Has a common or overlappng membershp, or common or overlappng officers or em- ployees, wth another spon- sorng organzaton or com- mttee, ndcatng a formal or ongong relatonshp between them;

• Has members, officers or employees who were mem- bers, officers or employees of another sponsorng organza- ton or commttee, ndcatng a formal or ongong relatonshp

or the creaton of a successor;

• Provdes or arranges for the provson of funds or goods n a sgnficant amount or on an ongo- ng bass to another organzaton or commttee, such as through payments for fundrasng and admnstratve costs;

• Had an actve or sgnficant role n the forma- ton of another organzaton or commttee; or

• Makes or receves contrbutons n a pat- tern smlar to that of another organzaton or commttee, ndcatng a formal or ongong relatonshp between them. 100.5(g)(4)()(A)-(J),

Gettng Started

Labor Federations and Member Unions

If a unon belongs to a natonal or nternatonal federaton of labor organzatons, the SSF of the member unon s not automatcally affiliated wth the SSF of the federaton and the SSFs of other member unons. 4 Usually, f a unon s part of the AFL-CIO, the SSFs of that unon’s natonal and state organzatons are affiliated wth each other, but they are not affiliated wth the SSFs of the natonal and state dvsons of the AFL-CIO.

Registration

An SSF must lst affiliated poltcal commttees on ts Statement of Organzaton, as explaned n Secton 4.

9. Affiliation & Corporate Restructuring

Disaffiliation

Occasonally, the restructurng of an organzaton can result n two or more affiliated SSFs becom- ng dsaffilated.The Commsson has appled the factors lsted above to determne whether two or more commttees reman affiliated. Dsaffilaton may occur when there s sgnficantly dmnshed com- monalty of mantenance, finance and control among the connected organzatons of affiliated SSFs. See AOs 2004-41, 2003-21, 2002-12, 2000-36, 2000-28, 1999-39, 1996-50, 1996-42 and 1996-23.

Impact of Disaffiliation

When SSFs become dsaffilated, they no longer share lmts on the receipt and makng of contrbu- tons, and nether of ther connected organzatons may solct SSF contrbutons from the restrcted class of the other’s organzaton. Furthermore, when makng contrbutons after dsaffilaton, SSFs must take nto account the contrbutons they made pror to dsaffilaton.To determne the amount that each SSF may contrbute to a candidate after dsaffilaton, the SSF must add the amounts gven by both SSFs before dsaffilaton and attrbute that sum to ts per-election contribution lmt for that same candidate.AOs 2004-41, 2003-21, 2002-12, 2000-36, 2000-28 and 1996-42.

4 FEC v. Sailors Union of the Pacific Political Fund, 624 F. Supp. 492 (N.D. Cal. 1986) aff d 828 F 2d 502 (9th C r. 1987). See also MUR 1605.

EXAMPLE: If, pror to dsaffilaton, X PAC (a mul- tcanddate PAC) gave $2,000 to a candidate for the general election and Y PAC gave $1,000 to the same candidate for the same election, then, after dsaffila- ton, the two PACs may each contrbute just $2,000 more to that candidate for the general election.

Mergers and Spin-Offs

When corporatons merge, ther PACs become af- filiated. Newly affiliated PACs must take nto account the contribution hstory of all of ther formerly affili- ated and newly affiliated PACs. See example above. AOs 2001-18 and 1997-25.

10. SSF and Nonconnected PAC

Nonconnected PAC Affiliated with SSF

In advisory opinion 1996-38, the Commsson de- termned that, when a nonconnected PAC became affiliated wth the SSF of a trade association, t could solct only that SSF’s restrcted class and had to follow the rules governng SSF solctatons. See also page 107,“Solctatons by Trade Assocatons.”

Joint Venture Partnerships/LLCs

The Commsson has stated that, when a PAC s sponsored by a jont venture partnershp or LLC owned entrely by one or more corporatons and affiliated wth at least one of them, the noncon- nected PAC becomes affiliated wth the SSF of any corporation affiliated wth the jont venture partner- shp.The affiliated corporation s allowed to pay the establshment, admnstraton and solctaton costs of the nonconnected committee; n that case, the nonconnected committee has to dentfy t as the con- nected organization on ts Statement of Organzaton (Form 1).AOs 2004-42, 2003-28, 2001-18, 2001-7, 1997-13 and 1996-49.

Corporate Personnel and Nonconnected PAC

Indvduals assocated wth an ncorporated entty may establsh a nonconnected PAC.To do so, the ndvduals must demonstrate that ther PAC s financally and organzatonally ndependent of the ncorporated entty by, for example:

• Rembursng the corporation for any use of facltes assocated wth the nonconnected PAC wthn a commercally reasonable tme and at the usual and normal charge;

Campagn Gude for Corporatons and Labor Organzatons

• Payng n advance for any use of corporate staff, customer/malng lsts, caterng servces and any other goods and servces that the corporation does not supply n the ordnary course of bus- ness (AO 1997-15); and

• Havng a dversfied leadershp ensurng that ndvduals affiliated wth a partcular ncorpo- rated entty wll not form the majorty of the commttee’s board. Under these crcumstances, the nonconnected PAC s not consdered to be affiliated wth the SSF of the ncorporated entty.AOs 2000-20, 1997-26 and

1997-15.

11. Operating Costs

Using Treasury Funds

The costs of runnng the SSF (operatng expend- tures) may be defrayed wth the treasury funds of the connected organization, that s, wth funds de- rved from commercal actvtes or dues payments.

114.5(b).

Treasury money can be used, for example, to pay for office space, phones, salares, utltes, supples, bank charges and fundrasng actvtes. 114.1(b). There are no dollar lmts on these dsbursements, and they are not reported to the FEC. The connected organization may ether pay these costs drectly or establsh a separate admnstratve account to be used solely for the SSF’s admnstra- tve and fundrasng expenses.The funds contaned n the admnstratve account may never be com- mngled wth the SSF’s own funds, whch are derved solely from lawful contrbutons.AOs 1981–19 and

1980–59.

Trade assocatons sponsorng SSFs can solct ther members for donatons to ther admnstratve accounts under certan crcumstances. See Appen- dx C. Regardng the payment of operatng costs generally, see 114.5(b).

Using the SSF’s Own Funds

Although the law permts the connected organiza- tion to pay start-up, admnstratve and fundrasng expenses for an SSF, the commttee may use ts own funds to pay those costs. (The SSF may also pay only some expenses, such as bank servce charges that are automatcally deducted from ts account,

whle the connected organization pays others.) All dsbursements by the SSF for these purposes are reportable as operatng expendtures, as explaned n Chapter 7. Note that the connected organization may rem- burse the SSF for those operatng expendtures, provded that the rembursement s made wthn 30 days of the SSF’s dsbursement.These remburse- ments are reportable. 114.5(b)(3). See also AOs 2000-3 and 1983–22.

12. Incorporating the SSF

An SSF may ncorporate for lablty purposes. 114.12(a). Poltcal commttees that ncorporate only for lablty purposes may make lawful contr- butons and expendtures. Note that ncorpora- ton of a political committee does not dmnsh the treasurer’s lablty for the commttee’s complance wth campagn finance law.

13. Limited Liability Companies and SSFs

Under FEC regulatons, a limited liability company (LLC) may be treated as a corporation, dependng upon ts tax status.An LLC that elects to be treated as a corporation by the Internal Revenue Servce (IRS) or that has publcly traded shares wll be treated as a corporation under FEC regulatons and, therefore, may serve as the connected organization for an SSF. 114.1-114.13. An LLC that elects to be treated as a partnershp by the IRS s treated as a partnershp under FEC regulatons and may make contrbutons and serve as the sponsorng organzaton for a nonconnected committee. 5 110.1(g)(2). LLCs that elect to be treated nether as partner- shps nor as corporatons by the IRS are treated as partnershps accordng to FEC regulatons. 110.1(g)(2). Regardng LLCs and contribution lmts, see page 10 of ths Gude and Appendx E.

5 See the Campaign Guide for Nonconnected Committees

Understandng Contrbutons

Understandng Contrbutons

CHAPTER 2

Understanding Contributions

1. What Is a Contribution

A contribution s anythng of value gven to nfluence a federal election. 100.52(a). Although corporatons and labor organzatons are prohbted from makng contrbutons n con- necton wth federal electons, ther SSFs may. SSFs must vew contrbutons from two dfferent perspectves: they both make contrbutons and receve them.The Act lmts the amounts that may be contrbuted by and to an SSF, and contrbutons from certan sources are prohbted altogether. The most common types of contrbutons are:

• Gfts of money;

• Gfts of goods and servces (n-knd contrbu- tons);

• Loans and guarantees or endorsements of loans; and

• Advances of funds.

Gifts of Money

Contrbutons exceedng $100 n the aggregate must be made by check (or other wrtten nstru- ment). 110.4(c).

In-Kind Contributions

Definition

In-knd contrbutons nclude:

• Goods and servces offered free of charge;

• Goods and servces offered at less than the usual and normal charge (dscounts are not contrbutons f they are offered n the ordnary course of busness to both poltcal and nonpo- ltcal clents.AOs 1989–14, 1987–24, 1986–22 and 1985–28);

• Payments by a thrd party for goods and servc- es rendered to a candidate or political committee. 100.52(d)(1) and 100.54.

Value

The dollar value of an in-kind contribution s subject to lmts and must be reported.The value of a par- tcular n-knd gft s determned as follows:

• Goods (such as equpment, supples, facltes and malng lsts) are valued at ther normal purchase or rental prce.

• Services (such as advertsng, prntng or con- sultng) are valued at the prevalng commercal rate at the tme the servces are rendered (.e., the amount that was pad or would have been pad for the servces).

• Discounts are valued at the amount dscounted (.e., the dfference between the usual and nor- mal charge and the amount pad by the commt- tee). 100.52(d)(1) and (2).

Proceeds from Fundraisers and Sales

The entre amount pad to attend a poltcal fund- raser or to purchase a fundrasng tem from a commttee s a contribution. 100.53.The amount of the contribution s not affected f a porton of the money was used to defray the expenses of the fundrasng program.

Loans

A loan to a candidate or political committee s a con-

tribution to the extent that t remans outstandng.

100.52(b)(2).

Repayments made on a loan reduce the amount charged aganst the lender’s contribution lmt. How- ever, a loan that exceeds the lender’s or endorser’s personal lmt s unlawful even f repad n full.

100.52(b)(1).

Loans from banks are not contrbutons f they are made under certan condtons. See page 17.

Endorsements and Guarantees of Loans

An endorsement or guarantee of a loan s a contri- bution. 100.52(b)(3).The amount guaranteed counts

aganst the endorser’s or the guarantor’s lmt only

to the extent that the loan remans outstandng.

Repayments on the loan proportonally reduce the amount charged aganst the guarantor’s contribution lmt. If a loan has more than one guarantor, and f the loan agreement does not stpulate the porton of the loan for whch each guarantor s lable, then the contribution of each guarantor s determned by dvdng the amount of the loan by the number of guarantors. 100.52(b)(3).

Campagn Gude for Corporatons and Labor Organzatons

2. Limits on Contributions Received by the SSF

$5,000 Limit

An SSF may receve up to $5,000 per year from any one contrbutor. 110.1(d).

Contributions from Spouses

A husband and wfe each have separate $5,000

lmts, even f only one spouse has an ncome.

110.1().A couple may make a joint contribution (part

of whch would be attrbuted to each), as explaned

below.

Joint Contributions

A joint contribution s a contribution that s made by

more than one person usng a sngle check or other wrtten nstrument.A joint contribution represents the personal funds of each donor, so each donor must sgn ether the check or an accompanyng statement. 110.1(k)(1). For the purposes of the contribution lmts, a joint contribution s attrbuted equally to each donor, un- less an accompanyng statement ndcates that the funds should be dvded dfferently. 110.1(k)(2). An SSF may seek a reattrbuton of an excessve contribution. See page 27 for more nformaton.

Contributions from Partnerships

Partnershps are permtted to make contrbutons accordng to specal rules. 110.1(e) and (k)(1). For further detals, see Appendx E.

Contributions from Limited Liability Companies

Corporation or Partnership Status

For purposes of contribution lmtatons and prohb-

tons, a limited liability company (LLC) s treated ether

as a corporation or a partnershp. An LLC s consdered a corporation f:

• It has chosen to file, under Internal Revenue Servce (IRS) rules, as a corporation; or

• It has publcly traded shares. 110.1(g)(3).

An LLC s consdered a partnershp f:

• It has chosen to file, under IRS rules, as a part-

nershp; or

• It has made no choce, under IRS rules, as to whether t s a corporation or partnershp.

110.1(g)(2).

If an LLC s consdered a corporation, t s prohb- ted from makng contrbutons to poltcal com- mttees, although t s permtted to establsh an SSF. (See Secton 6,“Prohbted Corporate and Labor Contrbutons”). If an LLC s consdered a part- nershp, t s permtted to make contrbutons to poltcal commttees, but t s subject to the contribu- tion lmts for partnershps outlned n Appendx E.

110.1(g).

Single Member LLC

If a sngle member LLC does not elect corporate tax treatment, t may make contrbutons; the contrbu- tons wll be attrbuted to the sngle member, not the LLC. 110.1(g)(4).

Notifying Recipient Committee

An LLC must, at the tme t makes a contribution, notfy the recpent commttee:

• That t s elgble to make the contribution; and

• How the contribution should be attrbuted among members. Ths requrement wll prevent the recpent com- mttee from nadvertently acceptng an llegal contri- bution. 110.1(g)(5).

Cash Contributions and Anonymous Contributions

Contrbutons n cash are lmted to $100 n the aggregate. 110.4(c)(1).Anonymous contrbutons are lmted to $50. 110.4(c)(3).

3. Limits on Contributions Made by the SSF

Contributions to Candidates

The lmt on contrbutons from an SSF to a candi- date or candidate’s commttee depends on whether the SSF qualfies as a multicandidate committee.

Contributions from Multicandidate SSF

An SSF that has qualfied as a multicandidate commit- tee may contrbute up to $5,000 per candidate, per election. 110.2(b). To qualfy as a multicandidate committee, an SSF must:

Understandng Contrbutons

Contribution Limits for 2007–08

 

To each candidate or candidate committee per election

To national party committee per calendar year

To state, district & local party committee per calendar year

To any other political committee per calendar year 1

 

Special Limits

         

$108,200* overall

 

bennal lmt:

Individual

$2,300*

$28,500

$10,000

$5,000

-

$42,700* to all canddates

may give

(combned lmt)

     

-

$65,500* to all

PACs and partes 2

National

       

$39,900* to Senate canddate per campagn 3

Party Committee

$5,000

No lmt

No lmt

$5,000

may give

State, District & Local Party Committee may give

$5,000

   

$5,000

 

(combned lmt)

No lmt

No lmt

(combned lmt)

 

No lmt

PAC

         

(multicandidate) 4

may give

$5,000

$15,000

$5,000

(combned lmt)

$5,000

 

No lmt

PAC (non-

         

multicandidate)

may give

$2,300*

$28,500*

$10,000

(combned lmt)

$5,000

 

No lmt

Authorized

         

Campaign

$2,000 5

No lmt

No lmt

$5,000

 

No lmt

Committee

may give

         

* These contrbuton lmts are ncreased for nflaton n odd-numbered years.

1 A contrbuton earmarked for a canddate through a poltcal commttee counts aganst the orgnal contrbutor’s lmt for that canddate. In certan crcumstances, the contrbuton may also count aganst the contrbutor’s lmt to the PAC. 11 CFR 110.6. See also 11 CFR 110.1(h).

2 No more than $42,700 of ths amount may be contrbuted to state and local party commttees and PACs.

3 Ths lmt s shared by the natonal commttees and the Senate campagn commttee.

4 A multcanddate commttee s a poltcal commttee wth more than 50 contrbutors whch has been regstered for at least 6 months and, wth the excepton of state party commttees, has made contrbutons to 5 or more canddates for federal office. 11 CFR 100.5(e)(3).

5 A federal canddate’s authorzed commttee(s) may contrbute no more than $2,000 per electon to another federal canddate’s authorzed commttee(s). 2 U.S.C. 432(e)(3)(B).

Campagn Gude for Corporatons and Labor Organzatons

• Receve contrbutons from at least 51 persons;

• Be regstered wth the FEC for at least sx months; and

• Contrbute to at least five federal canddates.

100.5(e)(3).

As to the thrd qualficaton, there s no mnmum amount that must be contrbuted to each of the five canddates; the five qualfyng contrbutons may

be made over more than one election cycle. An SSF that s affiliated wth another SSF that has met these crtera also qualfies as a multicandidate committee and shares that commttee’s $5,000 per- candidate lmt.

Contributions from Nonmulticandidate SSF

Durng the 2007-08 election cycle, an SSF may contrbute up to $2,300 per candidate, per election, unless t qualfies as a multicandidate committee, as explaned above. 110.1(b)(1).

How the Candidate Limits Work

House and Senate Candidates

The lmts on contrbutons to House and Senate

canddates apply separately to each election n whch

a candidate partcpates. In House and Senate races,

each prmary election, general election, runoff and

special election s consdered a separate election wth

a separate lmt. 100.2; 110.1(j)(1); 110.2()(1).

Party Caucus or Convention

A party caucus or conventon consttutes a sepa-

rate election only f t has the authorty under state law to select a nomnee for federal office. Otherwse, there s no separate lmt for a caucus or conven- ton; t s consdered part of the prmary election. 1 100.2(c)(1) and (e);AOs 2004-20, 1986–21 and

1986–17.

Candidates Not Running in an Election

A

candidate s enttled to receve contrbutons for

a

partcular election only f he or she seeks office

n

that election.Thus, a candidate who loses the

prmary (or otherwse does not partcpate n the general election) does not have a separate lmt for the general. 102.9(e); 110.1(b)(3)(); 110.2(b)(3)().

1 For example, the states of Utah and Connectcut have con- venton lmts, as do certan dstrcts n Texas and Vrgna.

Unopposed Candidates

A candidate has a separate contribution lmt for an

election n whch he or she s runnng even f:

• The candidate s unopposed;

• A prmary election s not held because the candidate was nomnated n an earler caucus or conventon. 110.1(j)(4);

• A prmary or general election for a partcular office s not held because the candidate s unop- posed; or

• The general election s not held because the candidate receved a majorty of votes n the prevous election. (The date on whch the elec- tion would have been held s consdered the date of the election.) AO 1978-65. 110.1(j)(2) and (3); 110.2()(2) and (3).

Presidential Elections

All Presdental prmary electons held durng an election year are consdered one election for the purposes of the contribution lmts. 110.1(j)(1);

110.2()(1).A multcanddate SSF, therefore, may gve only $5,000 to a Presdental candidate’s prmary campagn, regardless of how many separate state Presdental prmares the candidate partcpates n. In the general election, contrbutons to major par-

ty (Republcan and Democratc) Presdental cam-

pagns are not permtted f the canddates receve publc funds. (An excepton: SSFs may contrbute to a publcly funded Presdental nomnee’s “compl- ance fund.” A complance fund s used solely for le- gal and accountng expenses ncurred n complyng wth the election law. Gfts to complance funds are consdered contrbutons and are subject to usual per-candidate, per-election lmts. 9003.3(a)(1)(B).)

Contributions to Noncandidate Committees

Contrbutons to poltcal commttees other than candidate commttees are subject to calendar-year lmts.

Contributions to National Party Committees

An SSF that qualfies as a multicandidate committee may gve up to $15,000 per year to a national party committee. If an SSF s not a multicandidate commit- tee, t may gve up to $28,500 per year to a national party committee durng the 2007-08 election cycle. The Republcan and Democratc partes each have three natonal party commttees subject to

Understandng Contrbutons

these lmts.Thus, there s a separate $15,000 or $28,500 lmt for each natonal commttee, House campagn commttee and Senate campagn commt- tee. 110.1(c) and 110.2(c).

Contributions to Delegates and Delegate Committees

An SSF may make unlmted contrbutons to a dele- gate (or an ndvdual seekng to become a delegate) attendng a natonal party conventon or to a state, dstrct or local conventon held to select delegates to a natonal conventon. Contrbutons by the SSF to a delegate committee (a commttee formed by a group of delegates or a group of people seekng to become delegates) are lmted to $5,000 per calen- dar year. 110.1(m), 110.2(j), 110.14(d)(1) and (g).

Contributions to Other Political Committees

Any multcanddate SSF may make contrbutons of up to $5,000 per year to any other type of political committee (e.g., a state party committee). 110.2(d).A non-multicandidate committee may make contrbu- tons of up to $5,000 per year to another PAC and $10,000 to a state party committee and ts regstered local affilates. 110.1(d) and 110.1(c)(5).

Candidate Limits May Apply

A contribution from an SSF to a commttee that s

not a candidate’s authorzed commttee may never- theless count aganst the SSF’s lmt for that candi- date f:

• The recpent commttee s an unauthorzed sngle-candidate committee (.e., a political commit- tee that supports only one candidate);

• The SSF knows that a substantal porton of ts contribution wll be gven to or spent on behalf of a partcular candidate; or

• The SSF retans control over the funds after makng the contribution. 110.1(h); 110.2(h).

4. Designation

Designated Contributions

The Commsson encourages SSFs, when contrbut- ng to canddates, to desgnate ther contrbutons

n wrtng for a partcular election (for example,

prmary or general).The desgnaton may be made ether on the contribution check or n a sgned statement accompanyng the contribution. Only the

contrbutor—not the recpent candidate commit-

tee—may desgnate a contribution for a partcular election. 110.1(b)(2)() and (b)(4); 110.2(b)(2)() and

(b)(4).

Undesignated Contributions

An undesgnated contribution automatcally counts aganst the SSF’s lmt for the next scheduled elec- tion. 110.1(b)(2)() and 110.2(b)(2)().Therefore, f an SSF wshes to make a contribution for any election other than the next one, the contribution must be desgnated n wrtng, as explaned below.

When Designation Is Required

Future Elections

A wrtten desgnaton s requred when an SSF

wants a contribution to apply toward a future election other than the next one. For example, an SSF may make a contribution to a candidate’s general election campagn before the prmary election has taken place, but the SSF’s check (or an accompanyng statement) must say “General” n order to count toward the general election lmt.

Past Elections (Debt Retirement)

When makng a contribution to retre a candidate’s debts from a past election campagn, an SSF must desgnate the contribution for the approprate elec- tion.The SSF should also be certan that the contribu- tion, when aggregated wth other contrbutons from the SSF for that same election, does not exceed the commttee’s per-election lmt. The candidate committee may accept the contribu- tion only f the campagn has net debts outstandng wth respect to the desgnated election on the day t receves the contribution. 110.1(b)(3)(), () and (); 110.2(b)(3)() and ().

Effect of Date Made For Contributions Made by SSF

Designated Contributions

A candidate may always accept a desgnated contri-

bution f t s made before the desgnated election, regardless of whether the candidate has outstand- ng debts from that election. However, a desgnated contribution s subject to the net debts outstandng rule, descrbed above, f t s made after the election for whch t s desgnated. 110.1(b)(3)(), () and (); 110.2(b)(3)() and ().

Campagn Gude for Corporatons and Labor Organzatons

Undesignated Contributions

An SSF may make an undesgnated contribution on or before the day of the election regardless of whether the candidate has debts, even f the candidate does not receve the check untl after the election has passed. See “Determnng the Date Made” below.An undesgnated contribution made after the election has passed, however, must be appled to the donor’s lmt

for the next election. 110.1(b)(2)(); 110.2(b)(2)(). For the purposes of the per-election lmts, then, t

s mportant to dstngush the date a contribution s

made from the date t s receved by a candidate.

Effect of Date Made For Contributions Received by SSF

Determining the Date Made

The date a contribution s made s the date when the contrbutor relnqushes control of the funds. In practce ths means that:

• An in-kind contribution s made on the date that the goods or servces are provded to the recp- ent commttee.

• A maled contribution s made on the date of the postmark.

• A hand-delvered contribution s consdered made on the date t s delvered to the political commit- tee or to an agent of the commttee. 110.1(b)(6); 110.2(b)(6). The date made s sgnficant for determnng what contribution lmt apples. For nstance, f a contribu- tion s postmarked 12/31/2007 but receved on 1/3/2008, the contribution would count aganst the contrbutor’s 2007 lmt.

Redesignation of Contributions Made by SSF

Request by Recipient

A candidate committee may ask an SSF to redesgnate

a contribution (or a porton of t) for a dfferent elec- tion. Redesgnaton permts the donor to remedy an excessve contribution so that the excessve porton counts aganst a dfferent election lmt. 110.1(b)(5). An SSF may comply wth a request for redesgna- ton by returnng a sgned statement redesgnat-

ng the contribution.The candidate committee must receve the redesgnaton wthn 60 days of ts receipt of the orgnal contribution. Otherwse, the candidate must refund the excessve porton to the SSF. 110.1(b)(5)() and 110.2(b)(5)().

The SSF may always request a refund from the candidate nstead of provdng the redesgnaton. 103.3(b)(3); 110.1(b)(5)()(A)(1); 110.2(b)(5)().

Automatic Redesignation By Recipient Committee

When a non-multicandidate committee makes an ex- cessve contribution to a candidate’s authorzed com- mttee, the recpent commttee may automatcally redesgnate excessve contrbutons to the general election f the contribution:

• Is receved before that candidate’s prmary elec- tion;

• Is not desgnated n wrtng for a partcular elec- tion:

• Would be excessve f treated as a prmary elec- tion contribution; and

• As redesgnated does not cause the con- trbutor to exceed any other contribution lmt.

110.1(b)(5)()(B)(1)-(4).

Also, an undesgnated excessve contribution receved after the prmary, but before the general election may be automatcally appled to the prmary f the campagn commttee has more net debts outstandng from the prmary than the excessve porton of the contribution. 110.1(b)(5)()(C). Note that multcanddate commttees do not have the opton of automatc redesgnaton.

5. Affiliation and Contribution Limits

Two or more affiliated commttees are treated as a sngle commttee for the purposes of the contribution lmts.Ths means that all contrbutons made or re- ceved by several affiliated commttees count aganst the same lmts. 110.3(a)(1).

Affiliation and Multicandidate Status

Because affiliated commttees are treated as one commttee for the purposes of the lmts, two or more affiliated commttees may collectvely satsfy the requrements for multicandidate committee sta- tus. AO 1980–40.

Monitoring Limits

To facltate reportng and to avod exceedng contri- bution lmts, affiliated SSFs must set up a centralzed recordkeepng system to ensure that contrbutons made and receved by all the affilates comply wth the lmts.

Understandng Contrbutons

The treasurers of each affilate are personally re- sponsble for montorng contribution lmts. 103.3(b). See “Affilaton & Corporate Restructurng” on page 7.

6. Prohibited Corporate and Labor Contributions

As explaned on page , the election law prohbts corporatons and labor organzatons from makng contrbutons and expendtures n connecton wth federal electons. 114.2(a) and (b).Ths prohbton apples to all types of ncorporated organzatons, except poltcal commttees (such as SSFs) that ncorporate for lablty purposes. 114.12(a). The stuatons and actons descrbed below result n prohbted corporate or labor contrbutons and therefore must be avoded.

General Treasury Funds

Corporatons and labor organzatons may not use

ther general treasury funds to make contrbutons to ther SSFs or to other types of poltcal commt- tees or canddates.

In addton, natonal banks and federally char-

tered corporatons may not make contrbutons n connecton wth any U.S. election—federal, state or

local. 2 114.2(a) and (b). See also AO 1997-19. (Na- tonal banks and federally chartered corporatons may establsh SSFs, however.)

A narrow excepton to the general rule prohbt-

ng the use of treasury funds to make expendtures has been drawn for certan types of corporatons. See “Independent Expendtures by Qualfied Non- profit Corporatons,” page 35.

Commingling of Funds

Corporatons and labor organzatons may not commngle ther treasury funds wth the funds of ther SSFs. Any corporate or labor funds ntended to pay the administrative expenses of an SSF must be pad drectly to vendors or deposted n a specal admnstratve account used only to pay the SSF’s establshment, solctaton and admnstraton costs. See page .

2 The prohbton does not apply to referendum-related actv- tes. See First National Bank of Boston v. Bellotti, 435 U.S. 765

(1978).

As an excepton to the commnglng prohbton, when a connected organization functons as a collect- ing agent for ts SSF (e.g., when collectng contr- butons va payroll deducton), t may temporarly depost contrbutons n a general account before transmttng them to the SSF. 102.6(c)(4) and (5). See Collectng Agents, page 28.

Reimbursements of Contributions

A connected organization may not remburse ndvd-

uals who make contrbutons to an SSF or another political committee. 114.5(b)(1). See also AO 1986-41.

Compensation for Services

If a corporation or labor organization pays for servces

rendered to a political committee or candidate, a pro- hbted contribution results. 100.54. See also Incden- tal Use, page 91. Note, however, two exceptons to ths general rule:

SSF Establishment, Administration and Fundraising Costs

A corporation or labor organization may pay expenses

assocated wth settng up, admnsterng and rasng money (.e. operatng expendtures) for ts own SSF 114.1(a)(2)(). Other organzatons affiliated wth the connected organization (e.g., corporate subsdar- es) may help to pay the admnstratve costs of the SSF.AOs 1997-13, 1996-29 and 1983-19.

Legal and Accounting Services

A corporation or labor organization may provde a

party committee wth free legal and accountng ser-

vces.The person renderng the servces must be a regular employee of the corporation or labor organi- zation payng for the servces.The actvty may not further the election of any candidate. 100.85. Free legal and accountng servces may also be provded to authorzed candidate commttees, or any other political committee, for the lmted purpose

of helpng those commttees comply wth the Act

and FEC regulatons.The ndvdual provdng the legal and accountng servces must be a regular em- ployee of the corporation or labor organization payng for the servces. 100.86.

Use of Corporate/Labor Facilities

Under lmted crcumstances, corporatons and labor organzatons may allow ther food servces

and malng lsts to be used for fundrasng purposes

n connecton wth a federal election, and they may

drect ther employees to work on these fundras-

Campagn Gude for Corporatons and Labor Organzatons

ers, provded the corporation or labor organization re- ceves advanced payment of the far market value of the goods or servces and otherwse comples wth FEC regulatons.Ths concept s explaned further on page 91. 114.2(f) and 114.3(c)(2).

Extensions of Credit

A corporate vendor may not extend credt to a

political committee for a longer perod of tme than

s

normally practced n the credtor’s trade. (Credt

s

permssble only f t s extended n the ordnary

course of busness.) When a political committee fals to pay a debt owed to a corporate vendor wthn the tme spec-

fied by the vendor, a prohbted contribution by the vendor may result f:

• The vendor fals to make a commercally reasonable attempt to collect a debt from a political committee; or

• The terms of the credt were not substantally smlar to smlar extensons of credt by the vendor to nonpoltcal clents. 100.55 and 116.3(b). Any settlement of a debt between a credtor and

a political committee for less than the full amount owed must comply wth the debt settlement proce- dures prescrbed by FEC rules. See Chapter 8.

Discounts

If a corporation or labor organization sells goods or

servces to a political committee at a prce below the usual and normal charge, a prohbted contribution

results n the amount of the dscount. 100.52(d)(1).

A reduced prce s not consdered a prohbted

dscount, however, f t s offered by the vendor as a regular busness practce to poltcal and nonpolt- cal clents alke. See, e.g., AO 1989 14. As an excepton to ths general rule on dscounts, vendors of food and beverages may offer dscounts on food and beverages sold to candidate commt- tees and party commttees (but not SSFs). 100.78. See page 93 for detals.

Liability of Corporate/Labor Officers

An officer of a corporation or labor organization per- sonally volates the law f he or she consents to the makng of a prohbted corporate or labor contribu- tion. 114.2(e).

7. Other Prohibited Contributions

Federal Government Contractors

Commttees and canddates may not accept con- trbutons from federal government contractors. 115.2.The prohbton apples to contrbutons from:

A

partnershp wth a government contract;

An ndvdual under contract wth the federal government; and

• Sole propretors wth government contracts. 115.4 and 115.5. Corporatons that are government contractors may establsh separate segregated funds. 115.3. See also AO 1985-23.

Foreign Nationals

An SSF may not solct or accept a contribution from

a foreign national. Federal law prohbts contrbu- tons, donatons, expendtures and dsbursements

solcted, drected, receved or made drectly or ndrectly by or from foregn natonals n connecton wth any election federal, state or local.Accordngly,

t s a volaton of federal law to knowngly provde

substantal assstance to foregn natonals n the makng of contrbutons, donatons, expendtures, ndependent expendtures and dsbursements n connecton wth federal and nonfederal electons. 110.20.Ths prohbton ncludes, but s not lmted to, actng as a condut or ntermedary for foreign national contrbutons and donatons. 110.20(h).

Definition of Foreign National

A foreign national s:

An ndvdual who s (1) not a ctzen of the Unted States and (2) not lawfully admtted for permanent resdence; or

A

foregn prncpal, as defined n 22 U.S.C.

§611(b). Secton 611(b) defines a foregn prn- cpal as an entty organzed under the laws of a foregn country or havng ts prncpal place of busness n a foregn country.The statute spe- cfically ncludes foregn governments, poltcal partes, partnershps, assocatons and corpora- tons. 3 110.20(a)(3).

3 Corporatons and labor organzatons that qualfy as foregn prncpals are prohbted from makng contrbutons n connecton wth state and local electons n states where corporate and labor contrbutons would otherwse be permtted.

Understandng Contrbutons

Immigrants

An mmgrant s elgble to make a contribution f the mmgrant has a green card ndcatng that he or she has been lawfully admtted for permanent resdence. See 8 U.S.C. §1101(a)(20)

Domestic Subsidiaries of Foreign Corporations

In advisory opinions, the Commsson has sad that

a Unted States corporation that s a subsdary of a foregn corporation may make contrbutons to non- federal canddates (to the extent permtted by state law) and may establsh an SSF to make contrbutons

to federal canddates as long as:

• The foregn parent does not finance these actv- tes (such as the payment of the SSF’s estab- lshment, admnstraton or fundrasng costs) through the subsdary;

• No foreign national (ncludng the foregn parent) partcpates n the operatons or admnstraton of the commttee (such as the appontment of officers) or n any decsons to make contrbu- tons or expendtures n connecton wth any federal or nonfederal election (see 110.20() and AO 2000-17); and

• Nether the subsdary nor the commttee solc- ts or accepts contrbutons from foregn naton- als. (See 110.20(g).) Regardng domestc subsdares of foregn corpo- ratons generally, see AOs 2006-15, 2000-17, 1999- 28, 1995-15, 1992-16, 1990-8 and 1989-29.

Contributions in the Name of Another

Contrbutons by one person n the name of another person are prohbted.Ths means that no one may make or assst someone to make a contribution n the name of another. It s also prohbted to knowngly

accept a contribution n the name of another. 110.4(b).

A prohbted contribution n the name of another

could result, for example, f the connected organiza-

tion remburses an employee’s contribution through a bonus, an expense account, or other means. (See also Rembursements of Contrbutons, above).

8. Bank Loans

Unlke other loans, loans to SSFs from banks are not consdered contrbutons, provded that they satsfy the condtons set forth below. If a loan fals to meet any of these condtons, then a prohbted contribution from the lendng nsttuton results.

Conditions

A commttee may obtan a loan from a bank (nclud-

ng a lne of credt), provded that the loan:

1. Bears the bank’s usual and customary nterest rate for the category of loan nvolved;

2. Is evdenced by a wrtten nstrument;

3. Is subject to a due date or amortzaton schedule; and

4. Is made on a bass whch assures repayment (see below). 100.82(a)(1) through (4).

Methods of Assuring Repayment

A loan s made on a bass whch assures repayment

f t s obtaned usng one or more of the followng authorzed methods of securng the loan:

Traditional Methods

A

commttee may use one of the followng tradton-

al

methods of securng the loan, or a combnaton of

the two:

Collateral.A loan may be secured usng assets

of the commttee, such as real estate, personal

property, negotable nstruments and stocks, among other thngs.The far market value of the assets pledged must, on the date of the loan, equal or exceed the amount of the loan and any senor lens.

100.82(e)(1)().

The commttee must ensure that the bank has establshed a perfected securty nterest n the collateral (that s, taken steps to legally protect ts nterest n the collateral n the event that the com- mttee defaults on the loan.) 100.82(e)(1)(). Guarantees or Endorsements.An endorse- ment or guarantee of a bank loan s consdered a contribution by the endorser or guarantor and s thus subject to the law’s prohbtons and lmts on contrbutons. 100.82(e)(1)().

Pledge of Future Receipts

If the commttee pledges ts future recepts as securty for the loan, then the amount loaned by the bank may not exceed a reasonable estmate of antcpated recepts, based on documentaton pro- vded by the commttee (such as cash flow charts or fundrasng plans). 100.82(e)(2)() and (). Future recepts mght nclude, for example, antcpated contrbutons or nterest ncome. The commttee must also set up a separate account for the receipt of funds pledged for the repayment of the loan.The account may be es- tablshed wth ether the lendng nsttuton or a

Campagn Gude for Corporatons and Labor Organzatons

dfferent depostory. If the account s establshed at

a depostory other than the lendng nsttuton, then

the commttee must execute an assgnment of the account’s funds to the lendng nsttuton and notfy

the depostory of the assgnment.The loan agree- ment must requre the commttee to depost the pledged funds nto the account establshed for ths purpose. 100.82(e)(2)() and (v).

Other Methods of Assuring Repayment

The Commsson may, on a case-by-case bass, ap- prove methods of assurng repayment other than those descrbed above. 100.82(e)(3).A commttee should request an advisory opinion from the Com- msson before enterng nto an alternatve repay- ment agreement.

9. Other Receipts

Lke bank loans, certan other SSF recepts are spe- cfically excluded from the definton of contribution and thus are not subject to the lmts and prohb- tons affectng contrbutons. Regardless of whether they are contrbutons, however, all SSF recepts are reported. Reportable recepts that are not subject to contri- bution lmts nclude:

Transfers-In from Affiliated SSFs

An SSF may receve unlmted transfers of permis- sible funds from other affiliated SSFs. 110.3(c)(1).

Interest and Dividend Income

Interest and other earnngs on nvested funds are not contrbutons. See AOs 1999-8, 1997-6 and 1990-2 n.3. See also 104.3(a)(1), (a)(3)(x) and

(a)(4)(v).

Loan Repayments

Whle not a contribution, a repayment on a loan must come from a permssble source. 100.52(b)(5).

For example, although an SSF may loan money wth- out lmt to ts connected organization, the organza- ton may not use ts general treasury funds to repay

a loan to an SSF.

Fundrasng for the SSF

Fundrasng for the SSF

CHAPTER 3

Fundraising for the SSF

1. General Rules on Solicitations

The followng general rules governng SSF solcta- tons are explaned n ths secton:

• Contrbutons to the SSF must be voluntary;

• The SSF may not knowngly accept prohbted or excessve contrbutons;

• Only a lmted class of ndvduals may be solc- ted;

• Solctaton of the general publc s prohbted; and

• Specal notces must be ncluded.

Voluntary Contributions Only

Contrbutons to an SSF must be voluntary; that s, they must meet the followng condtons:

No Use of Force or Threats

Contrbutons may not be secured by the use or threat of physcal force, job dscrmnaton or finan- cal reprsal. 114.5(a)(1).

No Fees or Dues

An SSF may not use dues or fees obtaned as a condton of membershp or employment n the connected organization, even f the dues or fees are refundable upon request. 114.5(a)(1). See also AO

1987–23.

No Commercial Activities

The SSF may not use money obtaned as the result of a commercal transacton. 114.5(a)(1).

No Knowing Acceptance of Prohibited or Excessive Contributions

An SSF may not accept contrbutons from persons who are prohbted by law from makng contrbu- tons. 114.2(d). An SSF also may not accept contrbutons of more than $5,000 per calendar year from any one contrbutor. 110.9. Informaton on handlng contrbutons that appear to be llegal can be found n Secton 8.

Limited Solicitees

An SSF or connected organization may solct only a restrcted class of persons assocated wth the con-

nected organization.The general publc may not be solcted. See Sectons 2, 3 and 4 below. An SSF may accept an unsolcted contribution that s otherwse lawful, but the commttee may not nform ndvduals outsde the restrcted class that unsolcted contrbutons are acceptable. 114.5(j). Provdng that nformaton amounts to a solctaton. See, e.g., AO 1983–38.

Accidental or Inadvertent Solicitation

If an SSF or connected organization accdentally or

nadvertently solcts a person not elgble for solc- taton, no volaton wll result f the SSF or connected organization:

• Makes ts best efforts to comply wth the re- strctons on who may be solcted; and

• Corrects the method of solctaton mmed- ately.

114.5(h).

Special Notices

Purpose and Rights

When the SSF or the connected organization solcts

ndvduals for contrbutons, the solctees must be nformed of:

• The SSF’s poltcal purpose; and

• Ther rght to refuse to contrbute wthout reprsal.

114.5(a)(3)–(5).

Suggesting a Contribution Amount

An SSF or connected organization may wsh to sug-

gest to a potental contrbutor that he or she gve a specfied amount.When makng such a suggeston, the solctaton must also say that:

• The suggested amount s only a suggeston;

• More or less than the suggested amount may be gven (.e., no mnmum contribution can be specfied); and

• The amount gven by the contrbutor, or the refusal to gve, wll not benefit or dsadvantage the person beng solcted. 114.5(a)(2) and (5). (SSFs and ther connected organzatons may offer premums or other ncentves to contrbutors who gve specfied mnmum amounts. See Secton 6.)

Campagn Gude for Corporatons and Labor Organzatons

“Best Efforts” Rules

When makng solctatons, SSFs and ther treasur- ers must make “best efforts” to obtan and report the name, address, occupaton and employer of each contrbutor who gves more than $200 n a calendar year. In order to show that the commttee has made “best efforts,” solctatons must specfi- cally request that nformaton and nform contrbu- tors that the commttee s requred by law to make ts best efforts to obtan and report t. 104.7. For detals, see “Treasurer’s Best Efforts” on page 43.

Disclaimer Not Required

Because SSF solctatons are drected to a restrct- ed class, and not to the general publc, they do not need to carry a dsclamer notce concernng who pad for the solctaton and whether t was autho- rzed by a candidate. 110.11(f)(2). See page 37 for more nformaton about dsclamer notces.

2. Corporations: Solicitable Personnel

Restricted Class

A corporation or ts SSF may solct ts restrcted

class at any tme.The restrcted class of a corpora- tion conssts of:

• The corporation’s executve and admnstratve personnel;

• The stockholders; and

• The famles of the above two groups.

An SSF may also solct, at any tme, the restrcted class of any parent, subsdary, branch, dvson or affilate of the connected organization. 114.5(g)(1).

Executive and Administrative Personnel

Who Is Included

Executve and admnstratve personnel nclude employees who are pad on a salary (rather than

hourly) bass and who have polcymakng, manage- ral, professonal or supervsory responsbltes. 114.1(c).The restrcted class generally ncludes ndvduals who:

• Devote the majorty of ther work week to executve or admnstratve dutes nvolved n runnng the corporation’s busness (e.g., plant,

dvson and secton managers, officers and executves); or

• Follow the recognzed professons, such as lawyers, physcans, nurses and engneers. 114.1(c)(1)(). AO 2004-23. The followng groups mght also qualfy as solc- table personnel:

• Consultants and commssoned employees, f they have polcymakng, manageral or superv- sory responsbltes and f the organzaton de- ducts federal ncome tax from ther paychecks under the Internal Revenue Code. 114.1(c)(3). AO 1999-20.

• Members of a board of drectors who are not shareholders or employees but who receve regular compensaton. AO 1985–35.

• Executve and admnstratve personnel of fran- chsees, lcensees and agents. See AOs 1992–7, 1990–22, 1988–46 and 1985–31.

• Executve and admnstratve personnel of a partnershp or LLC controlled by, or control- lng, a corporation or ts domnant shareholders. See AOs 2004-32, 2001-18 and 1989–8. None of the ndvduals lsted above are automat- cally solctable. SSFs should consult the cted advi- sory opinions and, f approprate, request an opnon addressng ther relatonshp wth the partcular ndvduals they wsh to solct. See page for nfor- maton on how to request an opnon. Also, consult the Far Labor Standards Act and the regulatons ssued pursuant to that Act, 29 CFR §541, for gudelnes regardng whether ndvdu- als have polcymakng, manageral, professonal or supervsory responsbltes.

Who Is Not Included

• Professonal employees represented by a labor unon.

• Lawyers, consultants and other personnel em- ployed by firms retaned by the corporation and who are not employees of the corporation. AO

1984–55.

• Members of the board of drectors who are not also executve and admnstratve personnel and who receve no compensaton. AO 1977–18.

• Salared foremen and others who supervse hourly employees.

• Former or retred personnel.

114.1(c)(2).

Excepton: If any of the persons mentoned above are stockholders or family members of stockhold- ers, then they would be ncluded n the restrcted

class. 114.5(g)(1).

Fundrasng for the SSF

Stockholders

Who Is Included

In order to be consdered a solctable stockholder, a

person must have:

• A vested benefical nterest n the stock;

• The power to drect how the stock wll be voted, f t s votng stock; and

• The rght to receve dvdends. 114.1(h).

Employee Stockholders

Indvduals who partcpate n an employee stock ownershp plan (ESOP) are solctable as stock- holders, as long as they have the rghts lsted n the prevous paragraph. In cases where partcpants’ dvdends are auto- matcally renvested under the ESOP, partcpants are solctable only f they actually wthdraw stock or have the rght to wthdraw at least one share of stock wthout a suspenson of rghts or penalty. See AOs 1998-12, 1996-10, 1994-36 and 1994-27.

Expanded Class

Twce a year, a corporation or ts SSF may solct employees who do not qualfy as executve and admnstratve personnel, such as professonals rep- resented by a labor unon.Twce-yearly solctatons may also extend to the famles of those workers. 114.6. See Appendx B for more nformaton on twce-yearly solctatons.

3. Labor Organizations:

Solicitable Personnel

Restricted Class

A labor organization or ts SSF may solct ts re-

strcted class at any tme.The restrcted class ncludes the unon’s members, ts executve and admnstratve personnel and the famles of both groups. 114.5(g)(2). Note that a member of a local unon s also con- sdered a member of:

• Any natonal or nternatonal unon that the lo- cal unon belongs to; and

• Any labor federaton to whch the local, naton- al or nternatonal unon belongs.

114.1(e)(5).

For more nformaton on affilaton between labor organzatons, see page 5.

Expanded Class

Twce n each calendar year, a labor organization or ts SSF may solct nonmember employees of a cor- poration where members of the unon are employed (ncludng executve and admnstratve personnel, stockholders and the famles of both groups).The unon or the SSF may also solct the unon’s own nonexecutve and nonadmnstratve personnel who are not members and ther famles on a twce- yearly bass. 114.6(b); AO 1979–50. Specal rules apply to twce-yearly solctatons. See Appendx B.

4. Membership Organizations:

Solicitable Personnel

Restricted Class of Membership Organization

A membershp organzaton or ts SSF may solct

ts restrcted class at any tme.The restrcted class

ncludes:

• Noncorporate members (such as ndvduals and partnershps) of the organzaton;

• The organzaton’s executve and admnstratve personnel; and

• The famles of both groups. 114.7(a).

A member may be solcted only f the followng two requrements are met:

• The organzaton qualfies as a membershp organzaton, as defined below; and

• Those t labels as “members” qualfy as mem- bers, as defined by the Act and Commsson regulatons.

Definition of Membership Organization 1

A membershp organzaton s a trade association, a

cooperatve, a corporation wthout captal stock or a

local, natonal or nternatonal labor organization that meets the followng qualficatons:

• It s composed of members who have the au- thorty to admnster the organzaton accordng

1 For purposes of nternal communcatons, the definton of membershp organzaton s broader. See “Communcatons,” p. 77.

Campagn Gude for Corporatons and Labor Organzatons

Who May Be Solicited

Who May Be Solicited a By Labor By Corporation Organization By Incorporated Membership Organization c
Who May Be
Solicited a
By Labor
By Corporation
Organization
By Incorporated
Membership
Organization c
By Incorporated
Trade
Association
Executve and
Admnstratve
Personnel and Famles
Executve and
Executve and
Executve and
Admnstratve
Admnstratve
Admnstratve
Personnel and
Noncorporate
Members and Famles
Personnel and
Personnel and
Famles
Famles
Famles
Noncorporate
Stockholders and
Members and
Members and
Famles
Famles
Famles
Wth Pror Approval,
Corporate Members’
Executve and
Admnstratve
Personnel,
Stockholders and
Famles of Both
Nonexecutve and
Nonadmnstratve
Personnel and
Famles
Nonexecutve and
Nonexecutve and
Assocaton’s
Nonadmnstratve
In Corporatons
that Employ
Members of
the Labor
Organzaton,
Nonmember
Employees,
Stockholders and
Famles of Both
Nonadmnstratve
Nonexecutve and
Personnel and
Personnel and
Nonadmnstratve
Famles
Famles
Personnel

a. A connected organzaton or ts SSF may also solct the executve and admnstratve personnel, stockholders and members (and the famles of those persons) of the connected organzaton’s subsdares, branches, dvsons, affilates and state or local unts.

b. Organzatons other than trade assocatons may also send communcatons contanng express advocacy to persons n ths category. See Chapter 9 for more nformaton.

c. These rules apply, as approprate, to corporatons wthout captal stock and ncorporated cooperatves.

d.Indvduals who may be solcted at any tme may also be ncluded n twce-yearly solctatons.

to the organzaton’s bylaws; 2

• Its bylaws state the qualficatons for member- shp;

• It makes ts bylaws avalable to ts members;

• It expressly solcts persons to become mem- bers;

2 Bylaws ncludes any formal organzatonal document.

• It expressly acknowledges new members by, for example, sendng a membershp card or nclud- ng the member’s name on a newsletter lst; and

• It s not organzed prmarly for the purpose of nfluencng the nomnaton for election, or the election, of any ndvdual to federal office.

114.1(e)(1).

Fundrasng for the SSF

Definition of Member

Regular Member

A member of a membershp organzaton s an nd- vdual or other entty that:

• Satsfies the requrements for membershp as specfied by the membershp organzaton;

• Affirmatvely accepts the organzaton’s nvta- ton to become a member; and

• Mantans a relatonshp wth the organzaton n one of the followng ways:

− It has a sgnficant financal attachment, such as a sgnficant nvestment or ownershp stake; − It pays dues at least annually as predeter- mned by the organzaton; or − It has a sgnficant organzatonal attachment, whch s demonstrated by annual affirma- ton of membershp and drect partcpatory rghts n the governance of the organzaton, for example:

• The rght to vote drectly or ndrectly for at least one ndvdual on the membershp organzaton’s hghest governng board;

• The rght to vote drectly for organzaton officers;

• The rght to vote on polcy questons where the hghest governng body s obl- gated to abde by the results;

• The rght to approve the organzaton’s annual budget; or

• The rght to partcpate drectly n smlar aspects of the organzaton’s governance.

114.1(e)(2).

AOs 2003-13, 2000-15, 2000-4 and 1999-40.

Students, Lifetime Members & Retirees

The Commsson wll determne, on a case-by- case bass through the advisory opinion process, the membershp status of ndvduals who do not meet the above requrements but who have a relatvely endurng and ndependently sgnficant financal or organzatonal attachment to the membershp organzaton (e.g., students, lfetme members and retrees). 114.1(e)(3).

Multitiered Organizations

When an organzaton has a natonal federaton structure or has affilates at several levels (e.g., natonal, state, regonal, local), a person who qual- fies as a member of one affilate wll also qualfy as

a member of all affilates wthn that organzaton. 100.134(), 110.3(a)(2)(v) and 114.1(e)(5).AOs 2002-11 n.2 and 1998-19. See also, 100.5(g)(2), (3), and (4)

State Law Inapplicable

Whether or not an organzaton has members (for purposes of the election law) wll be determned by FEC regulatons and not by the defintons of state law. 114.1(e)(6).

Corporate Members of Trade Associations

A trade association or ts SSF must get permsson

from a member corporation n order to solct that member’s restrcted class for contrbutons to the assocaton’s SSF. 114.8(d). (A trade association may also solct ts own restrcted class at any tme.) See Appendx C for more nformaton about trade as- sociation solctatons.

Expanded Class

Twce a year, a membershp assocaton or ts SSF may solct the assocaton’s non-executve and non- admnstratve personnel and ther famles. 114.6(a). See Appendx B for more nformaton.

5. Solicitation Methods

The most common methods of solctng SSF con- trbutons from the restrcted class are descrbed below.Whchever method s used, the general rules on solctatons (see page 19) must be observed. 114.5. Moreover, the requred recordkeepng n- formaton on contrbutors must be obtaned when acceptng contrbutons, as explaned n Chapter 5.

Oral Solicitations

SSF solctatons may be made orally—for example,

n a speech, a meetng, or over the phone. Ltera-

ture about the SSF may be offered when requestng

contrbutons.

Solicitations by Mail

The SSF or connected organization may also mal ts requests for contrbutons.A pre-addressed, stamped return envelope may be ncluded wth the solctaton.

Campagn Gude for Corporatons and Labor Organzatons

Solicitations in Internal Publications

If a connected organization’s n-house publcaton s

crculated to persons outsde the restrcted class, the organzaton may generally not nclude an SSF solctaton n that publcaton. See 114.5(g)(1) and

AO 1979-13. EXCEPTION:A solctaton n an n-house publ-

caton that s crculated outsde the restrcted class may be permssble under the followng condtons:

• The artcle ncludes an explct caveat statng that contrbutons wll be screened and those from persons outsde the restrcted class wll be returned; and

• Both the number and the percentage of unso- lctable persons recevng the publcatons are ncdental. As for what s consdered “ncdental,” the Com- msson has sad n advisory opinions that three

percent of the crculaton (representng 1,000 persons outsde the restrcted class) was ncdental, whereas 10 percent of the crculaton (representng 8,000 persons outsde the restrcted class) was not. In the latter case, the newsletter could not publsh

a solctaton. See AOs 1999-6, 1994-21, 1980–139, 1979–50, 1979–15 and 1978–97.

What Constitutes a Solicitation

In addton to a straghtforward request for con-

trbutons, an artcle about the SSF publshed n an n-house publcaton could also consttute a solcta- ton f t:

• Publczes the SSF’s rght to accept unsolcted contrbutons from any lawful contrbutor;

• Provdes nformaton on how to contrbute to the SSF; or

• Encourages support for the SSF. AO 1984–55, n. 2; AOs 1979–66 and 1979–13. For example, an artcle that commends employ-

ees who have contrbuted to the SSF s consdered

a solctaton because t encourages support.

What Is Not a Solicitation

In advisory opinions, the Commsson has concluded that a communcaton concernng the SSF s not a solctaton f t:

• Does not encourage support for the SSF; and

• Does not facltate the makng of contrbutons to the SSF. See, e.g.,AOs 2003-14, 2000-7, 1991–3, 1988–2, 1983–38 and 1982–65. But see also,AOs 1999-6 and 1979-13.

Outsde of ts restrcted class, for example, an SSF or ts connected organization could:

• Announce the exstence of the SSF and explan the legal requrements that apply to ts actv- tes;

• Provde nformaton about how much the SSF has rased, the number of contrbutors and the number of canddates supported;

• Identfy federal canddates who have been sup- ported by the SSF, as long as the communca- ton does not suggest that support for the SSF would help elect or defeat those canddates; and

• Have a publc relatons web ste, statng the con- nected organization’s operatonal support for the SSF and provdng nformaton that mght lead to an nqury about the SSF.AOs 2000-10 and

2000-7.

Solicitations Through the Internet

In several advisory opinions, the Commsson ap-

proved proposals for usng a corporate web ste to provde nformaton about the SSF or to solct contrbutons for t.The varous plans ncluded mea-

sures to ensure that the web ste would not solct persons outsde the restrcted class.The connected organization or the SSF:

• Confined the solctaton to areas of the web ste accessble only to the restrcted class;

• Ensured that any part of the web ste accessble to those outsde the restrcted class ncluded a statement that Federal law prohbts solctng contrbutons from outsde the restrcted class and that such contrbutons would be returned to the donor; and

• Closely montored contrbutons to prevent the receipt of contrbutons from outsde the restrcted class. AOs 2000-10, 2000-7 and 1995-33.

Solicitations at Conventions

Trade assocatons may make solctatons at a con- venton or annual meetng. For more nformaton, see Appendx C.

Payroll Deduction

A corporate payroll deducton system can be used

to collect contrbutons to the company’s own SSF, to an affiliated SSF, or to the SSF of a labor organi- zation representng the company’s employees, as explaned n Secton 7 of ths chapter.

Fundrasng for the SSF

Written Authorization Required

In a payroll deducton plan, an employee authorzes the perodc deducton of SSF contrbutons from hs or her paycheck.A wrtten authorzaton for the deductons must be obtaned before makng the de- ductons.The SSF s advsed to retan a copy of the wrtten authorzaton for three years from the date of the report dsclosng the employee’s last deduc- ton. Other evdence of authorzaton, such as re- cords of the transmttal of funds from employers or collectng agents n the form of spreadsheets, wre transfer records or other wrtten electronc re- cords wll satsfy the recordkeepng requrement for payroll deducton authorzaton. (See “No Reverse Checkoff,” below.) AOs 2000-15, 2000-11, 1999-33, 1999-31, 1999-6, 1999-3, 1997-25 and 1996-42.The FEC publshed a Statement of Polcy on ths subject n the Federal Register. 71 FR 38513 (7/7/06).

Electronic Signature Acceptable

Electronc sgnatures may be used by employees to

authorze the deducton of contrbutons from ther pay, and the connected organization or the SSF may confirm the employees’ request va e-mal subject to the followng condtons:

• An employee must be able to use the electronc sgnature or a wrtten sgnature to revoke or modfy the amount of the authorzaton at any tme; and

• A record of the electronc sgnature, nclud- ng verficaton that the sgnature came from a partcular employee, must be mantaned n a retrevable form avalable to the Commsson n the event of an audt or nvestgaton. See AOs 2001-4 and 1999-3.

Combined Dues and Solicitation Payments

Under a payroll deducton or checkoff plan, an ndvdual may smultaneously authorze deductons of membershp dues or fees and SSF contrbutons. The rules governng such combned payments are explaned on page 29.

Deductions from Annuity Payments

Membershp organzatons may conduct checkoff plans n whch retrees nstruct the organzaton to regularly deduct PAC contrbutons from ther an- nuty payments, along wth other deductons. Such plans must follow the same restrctons as payroll deducton plans. AO 1999-6.

No Reverse Checkoff

When collectng SSF contrbutons, a connected or- ganization may not use a reverse checkoff plan—.e., a collecton system whereby the contrbutons are automatcally deducted from an ndvdual’s pay- check wthout hs or her pror approval. Such a system results n an nvoluntary contribution, even f the ndvdual can subsequently request a refund of the amount deducted. See, e.g. AO 2001-4 n.4. See generally 114.5(a)(1).

Cooperative Shareholder Payment Deductions

In AO 1986–7, the Commsson ruled that non-

corporate members of an agrcultural cooperatve could authorze deductons for SSF contrbutons from the cooperatve’s payments to members for crop proceeds.

Trade Association SSFs

A trade association may use payroll deducton to

collect contrbutons from the assocaton’s own executve and admnstratve personnel and ther famles.Also, corporate members may use a payroll deducton system to collect contrbutons for the SSF of a trade association. Permssble solctaton and collecton methods for trade assocatons are dscussed n Appendx C.

Credit Cards

Indvduals may contrbute to an SSF usng credt cards. See, e.g., AO 1990–4.Treasurers should note the recordkeepng requrements that apply to credt card recepts on page 41.

6. Fundraising Events and Special Promotions

Ths secton descrbes rules applcable to specal events and promotons commonly used to rase money for an SSF. Organzatons usng these events

must follow the general solctaton rules descrbed

n Secton 1.

Price Paid = Contribution Amount

The full prce of a fundrasng tem purchased (such as a T-shrt, a tcket to a fundrasng event or a chance at a raffle) counts as the purchaser’s contribution, even f part of the prce pad s used to defray the costs of the fundrasng program. 100.53.

Campagn Gude for Corporatons and Labor Organzatons

Use of Treasury Funds

Fundraising Events

A corporation or labor organization may generally use

ts treasury funds to pay all costs assocated wth fundrasng events, such as dnners, luncheons, re- ceptons, dances and concerts. Note, however, that a porton of the costs of entertanment (other than food and drnk) pad by the connected organization

may need to be rembursed by the SSF. See “The ‘One-Thrd Rule,’” below. AO 1980-50.

Promotional Items, Entertainment and Raffles

A connected organization may also provde tangble

premums to encourage SSF contrbutons, through raffles and other promotons.The aggregate cost

of the przes, however, may not be dsproporton-

ately numerous or valuable n comparson wth the contrbutons rased by the raffle. 114.5(b)(2). If the cost of the przes offered s hgh n comparson wth the amount of money rased, then the SSF wll have to remburse the connected organization for a porton of ts costs, as explaned below. See AOs 1989–18 and 1981–7. An SSF may not accept przes donated by corpo- ratons other than the connected corporation. See, for example, AO 1991-23.

Reimbursement

The “One-Third Rule”

Accordng to the “One-Thrd Rule,” an SSF must remburse ts sponsorng organzaton for that porton of the cost of przes or entertanment that exceeds one-thrd of the amount rased n contr- butons. 114.5(b)(2); See AOs 2003-33, 1999-31, 1995-17, 1989–18 and 1981–7. (FEC rules provde the “One-Thrd Rule” as a reasonable standard

for decdng whether an SSF must remburse the connected organization for fundrasng costs.The Commsson may approve other methods through advisory opinions.) EXAMPLE:A trade association spends $300 n treasury funds to purchase a TV set as a raffle prze. Sales of raffle tckets rase $600 n SSF contrbu- tons. Snce one-thrd of the amount rased ($200)

s less than the cost of the prze ($300), then the

SSF should remburse the assocaton for the $100 dfference.

On the other hand, f the SSF rases $900 n con- trbutons, then one-thrd of that amount ($300) s equal to what the assocaton spent on the prze, so no rembursement s necessary.

No Reimbursement for Usual Solicitation Costs

The “One-Thrd Rule” apples only to fundrasng wth promotonal tems, przes and entertanment

(other than food and drnk), not to the other types

of SSF fundrasng actvty dscussed n ths secton.

See AOs 1980–50 and 1979–72.

Matching Contributions with Gifts to Charity

A connected organization may encourage contrbu-

tons to the SSF by pledgng to match all or a por- ton of a contrbutor’s gft to the SSF wth a dona- ton to charty.The employee or member makng the SSF contribution may desgnate a charty that s tax-exempt under 26 U.S.C. §501(c)(3) to receve the matchng gft from the connected organization, but he or she may not personally receve any finan-

cal or tangble benefit (such as a tax deducton or

a premum from the recpent charty) as a result of

the connected organization’s gft. Note that the connected organization may make chartable donatons to match contrbutons to ts SSF from both the restrcted class and other em- ployees (durng specal “twce-yearly solctatons” — See Appendx B) as long as all regulatons are fol- lowed for solctng the two groups. See Fundrasng for the SSF, p.19;Appendx B,Twce-Yearly Solcta-

tons, p. 105; and AOs 2003-39, 2003-33, 2003-4, 1994-7, 1994-6 and 1994-3. See also AOs 1989–9, 1989–7, 1988–48, 1987–18 and 1986–44.

7. Corporate Collection Methods Used by Labor Organizations

General Rule

Any lawful method of solctng and collectng SSF contrbutons (such as payroll deducton) that s used by a corporation may also be used by a labor organization that represents the corporation’s em- ployees. 114.5(l). Moreover, upon wrtten request by

a labor organization, a corporation and ts subsdares must provde the unon wth the same method used

Fundrasng for the SSF

by the corporation for solctng and collectng con- trbutons for ts own SSF or for a trade association’s SSF. 114.5(k) and 114.8(e)(4).

Reimbursement

If the unon wants to use the corporation’s solcta- ton and collecton system, t must remburse the corporation for costs ncurred n provdng t to the unon.The rembursement may not be waved, snce that would result n the corporation’s absorpton of the labor organization’s solctaton costs—a pro- hbted contribution. 114.5(b).The Commsson has consdered alternatve methods by whch a labor organization can defray costs of payroll deducton n AOs 1981–39 and 1979–21.

Exception

If nether a parent corporation nor ts subsdares sponsor an SSF, they are not requred to make any solctaton or collecton method avalable to any labor organization, though a corporation may agree to make some system avalable at cost. 114.5(k)(4).

8. Handling Illegal Contributions

Depositing Questionable Contributions

If an SSF receves a contribution that appears to be excessve or prohbted, the commttee may have to refund t to the donor. Wthn 10 days, the treasurer must ether return the questonable check to the donor or depost t. 103.3(a) and(b)(1). Once the contribution s depos- ted, the treasurer must:

• Avod spendng the questonable funds by keep- ng enough money n the commttee’s account to cover all potental refunds.

• Keep a wrtten record explanng why the con- tribution may be llegal and nclude ths explana- ton on Schedule A f the contribution has to be temzed before ts legalty s establshed.

• If a check appears to exceed a contrbutor’s annual lmt, seek a reattrbuton of the exces- sve porton, followng the nstructons below, or return t.

• If a check appears to come from a prohbted source, confirm ts legalty, as explaned below, or return t. 103.3(b)(1), (4) and (5).

Excessive Contributions: Reattributions

Presumptive Reattribution

In some cases, an SSF may correct an excessve con-

tribution by presumptvely reattrbutng the exces- sve porton as descrbed below. When an SSF receves an excessve contribution made va a wrtten nstrument wth more than one ndvdual’s name mprnted on t, but only one sg- nature, the SSF may attrbute the permssble por- ton to the sgner.The SSF may make a presumptve reattrbuton of the excessve porton to the other ndvdual whose name s mprnted on the wrtten nstrument wthout obtanng a second sgnature, so long as the reattrbuton does not cause the con- trbutor to exceed any other contribution lmt. The SSF s requred to notfy the contrbutors of the reattrbuton wthn 60 days of the treasurer’s receipt of the contribution, and must offer the con- trbutors the opton to receve a refund nstead.

110.1(k)(3)()(B)(1)-(3).

Requested Reattribution

In other stuatons, the treasurer may request a

reattrbuton by askng:

• Whether the contribution was ntended to be a joint contribution from more than one person; or, alternatvely,

• Whether the amounts attrbuted to partc- pants n a joint contribution should be adjusted. (The amount s splt equally between the donors unless they ndcate a dfferent dvson n wrtng.)

• In ether case, the treasurer must nform the contrbutor that he or she may nstead request a refund of the excessve porton.The treasurer should also nform donors that a reattrbuton must, wthn 60 days of the treasurer’s receipt of the contribution, be sgned by each partcpat- ng contrbutor and provded to the treasurer.

110.1(k)(3)()(A).

Receive Reattribution or Make Refund

A contribution s properly reattrbuted f the treasur-

er receves a statement sgned by all contrbutors ndcatng the amount attrbutable to each donor. 110.1(k)(2) and (3)()(B).The treasurer must obtan the proper reattrbuton or refund the excessve porton wthn 60 days of the receipt of the orgnal contribution. 103.3(b).

Campagn Gude for Corporatons and Labor Organzatons

Retain Records

A commttee must retan copes of reattrbutons

for three years. 102.9(c) and (f); 110.1(l)(3) and (6). Rules for reportng reattrbutons are explaned n Chapter 7. EXAMPLE:A mutlcanddate SSF receves a $6,000 check that s drawn on a jont account but sgned by only one account holder.The treasurer deposts the contribution and seeks a reattrbuton by askng the account holders whether they ntended the contri-

bution to be a jont one, partally attrbutable to the second account holder, or whether the treasurer should refund the excessve $1,000.Wthn 60 days

of recevng the orgnal contribution, the treasurer

receves a statement, sgned by both contrbutors, reattrbutng $1,000 to the second account holder. The commttee may now keep the full $6,000. If the SSF had not receved the reattrbuton, the treasurer would have had to refund the excessve amount wthn the 60-day perod.

Prohibited Contributions

Questionable Source

If a commttee treasurer deposts a contribution that appears to come from a prohbted source, he or she has 30 days to:

• Confirm the legalty of the contribution; or

• Refund the contribution.

103.3(b)(1).

As evdence of legalty, the treasurer should obtan a wrtten statement from the contrbutor explanng why the contribution s legal.Alternatvely, the treasurer may obtan an oral explanaton by telephone and keep a record of the conversaton.

103.3(b)(1).

Contributions from Incorporated Practices of Professional Members

In advisory opinions, the Commsson has permtted

a membershp organzaton, under certan crcum-

stances, to use corporate contrbutons to pay for the expenses of operatng the organzaton’s SSF.

In these cases, ndvdual members who had estab-

lshed corporatons for ther professonal practces made contrbutons to the SSF from ther corporate practce accounts.These corporate (.e., prohb- ted) contrbutons were endorsed to the connected organization, whch deposted them nto a general treasury account or a separate admnstratve ac- count for the SSF. (See “Operatng Costs” on page 8.) See, e.g.,AOs 1992–20 and 1990–4.

When depostng SSF contrbutons nto an ad- mnstratve account under these crcumstances, the commttee may wsh to nform contrbutors of ths use of ther funds and gve them an opportunty to ask for a refund. See AO 1992–20.

Late Discovery of Prohibited Contribution

If the treasurer dscovers that a prevously depos- ted contribution came from a prohbted source, he or she must refund the contribution wthn 30 days of makng the dscovery.Ths stuaton mght arse, for example, f the treasurer learned that a past con- tribution was made by a foreign national. 103.3(b)(2). See also 110.20. If the SSF does not have sufficent funds to refund the contribution to the donor when the llegalty s dscovered, the treasurer must use the commttee’s next recepts. 103.3(b)(2).

9. Collecting Agents

When a connected organization rases money for ts SSF, t s actng as the commttee’s collecting agent and has certan responsbltes under the election law. Other enttes may also act as collectng agents, such as affiliated commttees. As ths secton explans, a collecting agent has no reportng oblgatons under the law, but nonetheless the agent must:

• Comply wth the solctaton restrctons ex- planed earler n ths chapter;

• Forward the contrbutons to the SSF on tme; and

• Keep records on contrbutors and provde the nformaton to the SSF for dsclosure purposes.

Who Is a Collecting Agent

The collecting agent must be connected to, or affili- ated wth, the SSF.The followng types of organza- tons may functon as collectng agents:

• The SSF’s connected organization;

• A parent, subsdary, dvson, branch or local unt of the connected organization; and

• An affiliated commttee (federal or nonfederal).

In addton, a local, state, natonal or nternatonal

unon belongng to a federaton of unons (such as the AFL-CIO) may act as a collecting agent for the federaton’s SSF.Also, local, state or natonal chapters of membershp organzatons may serve as collectng agents for the natonal organzaton’s SSF. 102.6(b)(1)()-(v). See also AOs 2003-39 and

1998-19.

Fundrasng for the SSF

Who Is Not a Collecting Agent

The collecting agent rules descrbed n ths secton do not apply to the followng:

• Indvduals

• Partnershps, or

• Commercal fundrasng firms.

102.6(b)(3).

Whle these persons are not consdered collect- ng agents, they must stll observe the forwardng deadlnes descrbed on the next page when they accept contrbutons on behalf of an SSF.They also may not commngle SSF contrbutons wth ther own funds. 102.8 and 102.15.

SSF’s Responsibility

Regardless of whether the SSF uses the connected organization or another commttee as ts collecting

agent, the SSF remans responsble for seeng that the agent follows the rules for solctng and depost- ng contrbutons and forwardng records.The SSF

s also responsble for reportng the contrbutons.

102.6(c)(1).

Solicitations by Collecting Agent

Lawful Contributions Only

Lke any person who solcts contrbutons for an SSF,

a collecting agent may solct only those ndvduals

who are elgble for solctaton under the law (.e., the restrcted class) and must comply wth the other

rules on solctatons explaned n Secton 1 of ths chapter. 102.6(c)(2).

Payment of Solicitation Expenses

A collecting agent may pay the expenses of solct- ng and transmttng contrbutons to the SSF.These payments are not consdered contrbutons or expendtures and do not need to be reported unless the collecting agent s a regstered political committee. 102.6(c)(2)(). AO 2000-4.

Reimbursements

If the SSF pays for the solctaton costs or other

expenses whch the collecting agent may pay as an admnstratve expense, the collecting agent may rem- burse the SSF, but the rembursement must be made wthn 30 days. 102.6(c)(2)() and 114.5(b)(3).

Combined Payments