An earmarked contribution is one which the contributor directs (either orally or in writing) to a clearly identified candidate or candidate’s committee through an intermediary or conduit. Earmarking may take the form of a designation, instruction or encumbrance and may be direct or indirect, express or implied. 110.6(b)(1).
Who Is A Conduit
Anyone who receives and forwards an earmarked contribution to a candidate committee is considered a conduit or intermediary. 110.6(b)(2). (The terms “conduit” and “intermediary” are interchangeable; “conduit” will be used in the remainder of this chapter.)
Political committees (such as party committees and PACs), unregistered organizations (such as party organizations), individuals and partnerships are among those who may act as conduits for earmarked contributions.
Persons Not Considered Conduits
For the purposes of the earmarking rules, certain individuals and organizations are not considered conduits even though they may participate in activities to raise money for a candidate. These persons include:
• An employee or full-time volunteer working for a candidate committee;
• An individual who occupies a significant position in a candidate’s campaign and who is expressly authorized to raise money on behalf of the candidate;
• A committee affiliated with the candidate committee;
• A fundraising representaive conducting a joint fundraiser with the candidate committee; and
• A commercial fundraising firm retained by the candidate committee. 110.6(b)(2)(i).
No corporation, labor organization or other entity prohibited from making contributions in connection with federal elections may act as a conduit for an earmarked contribution. 110.6(b)(2)(ii).
Furthermore, no individual may receive a contribution on behalf of a candidate (as a conduit or otherwise) while acting as the representative of a corporation, labor organization or other entity prohibited from making contributions. 110.6(b)(2)(i)(A) and (E). See also Advisory Opinion (AO) 1986-4.
An earmarked contribution counts against the contributor’s contribution limit for the recipient candidate. 110.6(a).
Direction or Control
The conduit’s limit is affected when the conduit exercises direction or control over the contributor’s choice of the recipient candidate. In that case, the full amount of the contribution counts against the limits of both the original contributor and the conduit, even though the candidate receives only one check. 110.6(d)(2). For examples of how the Commission has viewed the “direction or control” rule in specific situations, see AOs 1986-4, 1981-57 and 1980-46.
Solicitation Costs for Earmarked Contributions
If a committee’s solicitation is coordinated with the recipient campaign or its agents, then the direct costs of the solicitation constitute in-kind contributions to the named candidates. If the solicitation is not coordinated, however, the costs will be considered an independent expenditure. AO 2003-23 and 100.16.
Effect on Unregistered Organization
An unregistered organization acting as a conduit should be aware that conduit activity could result in contributions by the organization if it exercises direction or control over earmarked contributions or if solicitation costs for earmarked contributions result in in-kind contributions to candidates. Such contributions may trigger registration and reporting requirements. 100.5(a)–(c).
A conduit must forward an earmarked contribution, along with a transmittal report (see below), to the recipient candidate committee within 10 days of receiving the contribution. 102.8(a) and (c); 110.6(c)(1)(iii).
A conduit discloses information on earmarked contributions on two reports.
Report for Recipient Candidate Committee
A conduit must provide a transmittal report to the recipient candidate committee when it forwards an earmarked contribution. 110.6(c)(1)(i).
Report Filed with the Government
Registered Political Committee
A political committee acting as a conduit must include information on an earmarked contribution on its next regularly scheduled FEC report. 110.6(c)(1)(ii).
An individual or other unregistered entity acting as a conduit must disclose information on an earmarked contribution in a letter to the FEC within 30 days after forwarding the earmarked contribution. 110.6(c)(1)(ii).
Both conduit reports must disclose the following information:
• The name and mailing address of each contributor and, if the contribution exceeds $200, the contributor’s occupation and employer.
• The amount of each earmarked contribution and the date the conduit received it.
• The intended recipient designated by the contributor. It is suggested that the conduit also include the election for which the contribution was designated (if any), the office sought by the candidate (state and, if applicable, Congressional district) and the name and address of the recipient candidate committee.
• The date the earmarked contribution was forwarded to the recipient committee.
• How the contribution was forwarded (by cash, contributor’s check or conduit’s check).
• A statement indicating that the conduit’s limit was also affected, if applicable. 110.6(c)(1)(iv) and (d)(2).
Using Schedules A and B
A political committee acting as a conduit itemizes information on earmarked contributions in its regular FEC reports using Schedules A and B. Note that if a committee forwards earmarked contributions in the form of the contributors’ checks, without depositing them, it must itemize the earmarked contributions as memo entries on Schedules A and B. 110.6(c)(1)(v). Alternatively, instead of labeling each entry as a memo entry, the committee may itemize the contributions on Schedules A and B clearly labeled as memo entry schedules.
A conduit committee reports the following information on Schedule A for each earmarked contribution:
• Contributor information (name, address and, if applicable, occupation and employer).
• The date of receipt and amount of the contribution.
• The name of the designated candidate.
A conduit committee reports the following information on Schedule B:
• The designated candidate and, preferably, the office sought by the candidate and the name and address of the candidate committee.
• The amount of the contribution, the date it was forwarded and, preferably, the election (if any) designated by the contributor.
• A notation as to how the contribution was forwarded (cash, contributor check, committee check).
• A statement that the conduit’s limit was also affected, if applicable.
 A corporation, labor organization or separate segregated (SSF) fund may, however, solicit earmarked contributions to be collected and forwarded by the SSF as long as the earmarked contributions are treated as contributions received and made by the SSF (as well as contributions made by the individual contributors to the designated candidates) and count against the limits of both the contrubtor and the SSF. 114.2(f)(2)(iii) and (4)(iii).