Communications and other support by corporations and labor organizations
Although corporations (including incorporated trade associations and membership organizations) and labor organizations are generally prohibited from using their treasury funds to make contributions in connection with federal elections, they are permitted to:
- Sponsor communications to their "restricted class" that contain express advocacy and may be coordinated with a candidate;
- Sponsor election-related communications to other employees and/or the general public, as long as they are not coordinated with a candidate a candidate’s authorized committee, a party committee or any of their agents;
- Establish separate segregated funds (popularly referred to as PACs), which can support federal candidates;
- Provide certain free legal and accounting services to a campaign;
- Provide vendor discounts on food and beverages; and
- Allow employees, stockholders and members to make incidental use of their facilities for volunteer campaign work.
Corporations (including incorporated trade associations and membership organizations) and labor organizations may also fund independent expenditures, contribute to political committees established solely to make only independent expenditures (popularly referred to as Super PACs), contribute to the non-contribution accounts of Hybrid PACs, and establish separate segregated funds (SSFs).
A corporation’s restricted class consists of its executive and administrative personnel, its stockholders and the families of those two groups.
A labor organization’s restricted class consists of its members, executive and administrative personnel and the families of those two groups.
A membership organization’s restricted class generally includes the executive and administrative personnel of the organization, the organization’s members and the families of those two groups. Note: If a member is incorporated, a membership organization or trade association would communicate with the personnel of the member corporation with whom they normally conduct business.
Coordination with the candidate
An expenditure is coordinated if it is made in cooperation, consultation or concert with, or at the request or suggestion of, a candidate, a candidate’s authorized committee, or their agents, or a political party committee or its agents. FEC regulations provide for a three-part test to determine whether a communication is coordinated, and thus, represents an in-kind contribution (unless it is otherwise exempt under FEC regulations).
An expenditure that is coordinated between a candidate or the candidate’s campaign and a third party is considered an in-kind contribution to the candidate, which the candidate must report as a contribution received and an expenditure made. Because the Federal Election Campaign Act (the Act) prohibits corporations and labor organizations from making contributions to campaign committees, it is important to avoid coordination with corporations and labor organizations regarding communications outside the restricted class except to the extent permitted under FEC regulations at 11 CFR 114.4.
Communications to restricted class
When a corporation or labor organization communicates with its restricted class, it may issue express advocacy communications and solicitations for candidates. It may also coordinate its communications with a candidate. While this coordination does not transform the restricted class communication into an in-kind contribution, it may provide evidence that could jeopardize the independence of future communications to those outside the restricted class by the organization or its SSF. Communications to the restricted class include, but are not limited to the examples listed in this page.
Candidate appearances before the restricted class
Location of appearance
The corporation or labor organization may allow a candidate to appear at a meeting, convention, via a teleconference or at some other function of the corporation or labor organization.
Both the candidate and the corporation or labor organization may expressly advocate the election or defeat of the candidate, other candidates or the party.
Coordination with the candidate
A corporation or labor organization may confer with the candidate on the structure, format and timing of the appearance. However, coordination with the candidate may compromise the independence of future communications (such as independent expenditures or electioneering communications) to individuals beyond the restricted class by either the corporation, labor organization or its SSF.
The candidate may solicit and accept contributions from the restricted class before, during or after the appearance. This includes giving out telephone numbers and addresses, and leaving campaign materials and mailing envelopes at the appearance site. The corporation or labor organization may also suggest that its restricted class make contributions to a candidate, but may not collect any contributions before, during or after the meeting.
In addition to soliciting contributions to be sent directly to the candidate, a corporation or labor organization may solicit contributions earmarked for a particular candidate. These earmarked contributions must be collected by and forwarded through the SSF of the corporation or labor organization and must be considered contributions both to and from the SSF. The contribution will count, therefore, against the limits of both the contributor and the SSF.
Presence of people outside of the restricted class
The corporation or labor organization may allow, to a limited degree, the attendance of the following individuals who are outside of the restricted class at the appearance:
- Employees who are outside the restricted class but who are necessary to administer the meeting;
- Other guests who are being honored, are speaking or are participating in the event; and
- News media (More found in “Allowing Media Coverage”).
Appearances by other candidates or party representatives
The corporation or labor organization may grant or deny other candidates and parties the opportunity to appear, as the organization desires.
Allowing media coverage
If the corporation or labor organization allows more than one candidate for the same office to appear and permits the media to cover the appearance of one candidate, it must permit media coverage of the other candidate(s) for that office as well. Similarly, if one party’s representative is permitted media coverage, then an appearance by any other party’s representative must also be permitted media coverage.
Appearances before all employees and their families
Who may attend
A corporation or labor organization may sponsor candidate appearances that are attended by all members of the restricted class (including their families), as well as all other employees and their families, other honored guests, speakers, participants and the news media (if invited).
Location of appearance
The corporation or labor organization may allow the appearance at a meeting, at a convention or at some other function of the corporation or labor organization. Alternatively, the appearance may take the form of a teleconference.
The candidate may expressly advocate their election, but the corporation or labor organization may not do so in conjunction with a candidate appearance, nor may it encourage its employees to do so. Such communications to an audience beyond the restricted class will result in a prohibited contribution to the candidate.
Coordination with the candidate
The corporation or labor organization may coordinate with the candidate concerning the timing, structure and format of the appearance, and on the candidate’s position on issues. Coordination regarding the campaign’s plans, projects and needs, however, will result in a prohibited in-kind contribution.
A corporation (including its SSF or any employee) or labor organization (including its SSF, any official, member or employee) may not solicit, direct or control contributions in conjunction with any candidate appearance before those outside the restricted class.
While attending the event, the candidate may solicit but may not accept contributions before, during or after the appearance. The candidate may, however, leave envelopes and campaign materials for members of the audience.
The organization also must allow other candidates for the same office to appear, if they request to do so. The following guidelines apply:
- If a candidate for the House or Senate is allowed to make an appearance, all other candidates for that seat must be given a similar opportunity upon request.
- If a presidential or vice presidential candidate is allowed to make an appearance, all candidates for that office meeting the pre-established objective criteria for candidate debates under 110.13(c) must be given a similar opportunity upon request.
- If representatives of a political party are allowed to make an appearance, representatives of all political parties that either had a candidate on the ballot in the last general election, will have a candidate on the ballot in the next general election or are actively engaged in placing a candidate on the ballot in the next general election must be given a similar opportunity upon request.
- Candidates should be provided with similar amounts of time and similar locations as other candidates are provided.
A corporation or labor organization may distribute election related publications (for example, print, broadcast, video, email and web-based) to its restricted class.
Distribution of publications to restricted class
A corporation or labor organization may distribute publications to its restricted class on any subject. This includes publications expressly advocating the election or defeat of a clearly identified candidate or a party’s candidate.
Coordination with candidate
The corporation or labor organization may discuss campaign issues at length with the candidate; however, discussion concerning how to contour a communication for the benefit of the campaign would constitute coordination and may jeopardize the independence of future corporate/labor organization communications to individuals beyond the restricted class.
The publication may solicit contributions for a candidate or a party. The rules for soliciting contributions from the restricted class through a publication are the same as those for soliciting during a candidate appearance before the restricted class.
The views communicated in the publication must be those of the corporation or labor organization and must not be a republication or reproduction of the candidate’s campaign materials including broadcasts and written or graphic materials. The corporation or labor organization may, however, use brief quotations from candidate materials and speeches that demonstrate the candidate’s position as part of the corporation’s or labor organization’s expression of its own views.
A corporation or labor organization may announce its candidate endorsement at an appearance by a candidate before, or in a publication sent to, its restricted class (no more than a de minimis number of copies of the publication that includes the endorsement may be distributed beyond the restricted class). These communications may be coordinated with candidates.
Communications to those outside the restricted class
A corporation or labor organization may pay for a candidate or a candidate’s representative to appear before the general public in the following situations:
- Officeholder/professional (that is, noncampaign-related) appearances;
- Public debates; and
- Public appearances at educational institutions.
Officeholder/professional appearance at corporation or labor organization
Under certain circumstances, a corporation or labor organization may sponsor an appearance by a candidate before the general public. For example, the Commission has permitted the following appearances:
- Incumbent officeholders giving a speech to a nonprofit organization regarding its main issue (AO 1996-11); and
- A non-incumbent, who had in prior speeches to college and university audiences discussed his ideas regarding current statutes and future legislation, giving a college lecture on a topic that reflected his career as a state legislator (AO 1992-06).
In these advisory opinions, the Commission noted these important points:
- The speaker did NOT appear in his capacity as a federal candidate but rather as a current federal officeholder or as a lecturer;
- The speaker could speak about issues of interest to the sponsoring organization, including legislative issues, but was required to avoid referring to the campaign;
- Neither the speaker nor the organization would expressly advocate the election or defeat of a clearly identified candidate;
- Neither the speaker nor the organization would solicit contributions before, during or after the event; and
- Any contribution from the organization’s political committee to the speaker’s political committee would not be in consideration for the speaker’s appearance.
Payment of travel expenses
A corporation or labor organization may pay the speaker’s travel expenses as long as no part of the trip is campaign related. If any campaign related activity is conducted at a stop, the entire stop is campaign related and travel expenses must not be paid by the sponsoring organization. In AO 1996-11, the corporation sponsoring the appearances of two officeholders who were running for re-election could not pay the officeholders’ travel expenses because the organization had knowledge that the officeholders’ campaigns were planning campaign-related events at the site of the appearance. Payment of their travel expenses would have constituted a prohibited corporate contribution.
A tax-exempt nonprofit organization (a 501(c)(3) or 501(c)(4)) that does not endorse, support, or oppose candidates or parties may stage candidate debates.
Candidate debates may also be staged by a broadcaster, a bona fide newspaper, a magazine or other periodical publication as long as they are not owned or controlled by a political party, committee, or candidate.
Corporate/labor donations permitted
A corporation or labor organization may donate funds to a tax-exempt nonprofit organization that does not endorse, support, or oppose any candidate or party to defray the cost of staging a candidate debate.
The debate must include at least two candidates and must be structured so that it does not promote or advance one candidate over another.
The organization staging the debate must select the candidates based on pre-established objective criteria. For primary elections, the organization may restrict candidates to those seeking the nomination of one party. For general elections, the staging organization may not use nomination by a particular party as the sole objective criterion.
Appearance at educational institutions
Candidates or party representatives may make appearances at educational institutions (any school, college or university, including both an incorporated nonprofit tax exempt private school and an unincorporated tax exempt public school. Tax exempt nonprofit institutions advised to review the Internal Revenue Service requirements regarding the effect of political activity and continuing nonprofit status.). The institution may make its facilities available at either the usual and normal cost for campaign events, or at a discount or for free for academic events. If the institution makes its facilities available at a discount or for free, the institution must:
- Make reasonable efforts to ensure that the appearance constitutes a speech, question and answer session, or similar communication and not a campaign appearance or event;
- Not expressly advocate the election or defeat of any federal candidate or candidates of any political party in conjunction with the appearance; and
- Not favor any candidate or party in allowing the appearance.
Using facilities and resources
When using the facilities and resources of a corporation (including an incorporated trade association or membership organization) or labor organization, a campaign must pay the organization according to the rules described on this page. Otherwise, the use may result in a prohibited contribution from the corporation or labor organization.