The type of nonconnected PAC you form depends on what you want to do: make contributions to federal candidates, donate funds to state and local candidates and/or make independent expenditures to support or oppose federal candidates.
A “traditional” nonconnected PAC may make contributions to candidates.
If a federal PAC wants to donate funds to state and local candidates, it may use the federal PAC to make contributions on both federal and state levels (and subject to both sets of laws), or it can also form a nonfederal PAC for making contributions on a state and local level (subject to state laws).
In addition to contributions and other financial assistance, a traditional nonconnected PAC may also distribute communications that support candidates and parties, including making independent expenditures.
There are several types of traditional nonconnected PACs:
- A federal PAC without a corporate/labor sponsor that makes contributions to federal candidates.
- A leadership PAC formed by a candidate or officeholder.
- A federal PAC sponsored by a partnership or an LLC (or any other type of unincorporated business entity) that makes contributions to federal candidates.
Group without corporate or labor sponsor
If individuals act together as a group to conduct activities to influence a federal election, the group may become a “political committee.” In general, a group that raises or spends over $1,000 per year to influence federal elections must register, keep records on financial transactions and file reports on the committee’s activities.
Members of Congress and other political leaders often establish nonconnected committees, generally known as “leadership PACs,” to support candidates for various federal and nonfederal offices. A leadership PAC is defined as a political committee that is directly or indirectly established, financed, maintained or controlled by a candidate or an individual holding federal office, but is not an authorized committee of the candidate or officeholder and is not affiliated with an authorized committee of a candidate or officeholder. Leadership PACs do not include political party committees.
While these PACs may be associated with a candidate for federal office, they remain legally unaffiliated with the candidate’s principal campaign committee (also known as the candidate’s authorized committee) and operate under the same rules as other nonconnected committees. Any financial support to the leadership PAC from a candidate’s authorized committee is a contribution to the leadership PAC. Likewise, any support from the leadership PAC that could be paid by the candidate’s authorized committee is a contribution from the leadership PAC to the candidate.
Additional requirements apply to leadership PACs that do not apply to other nonconnected committees. Due to restrictions on the types of funds that federal candidates may raise and spend, any PAC that is directly or indirectly established, financed, maintained or controlled by a federal candidate may not solicit, receive, direct, transfer, spend or disburse funds in connection with an election for federal office, including federal election activity as defined in 11 CFR 100.24, outside the limits and prohibitions of the Federal Election Campaign Act (the Act). Such a PAC may solicit, receive, direct, transfer, spend or disburse funds in connection with a nonfederal election, but only if the amounts and sources are consistent with state law, and the Act’s contribution limits and source prohibitions are observed.
In addition to making direct contributions, a partnership may participate in federal elections by sponsoring a nonconnected political action committee (PAC).
A partnership is limited in the amount of unreimbursed support it may give to its nonconnected PAC (for example, office space and phones) because such support is considered a contribution.
Independent expenditure-only political committees or “Super PACs” are committees that may receive unlimited contributions from individuals, corporations, labor unions and other political action committees for the purpose of financing independent expenditures and other independent political activity.
Political committees with non-contribution accounts or “Hybrid PACs” solicit and accept unlimited contributions from individuals, corporations, labor organizations, and other political committees to a segregated bank account for the purpose of financing independent expenditures, other ads that refer to a federal candidate, and generic voter drives in federal elections, while maintaining a separate bank account, subject to all the statutory amount limitations and source prohibitions, that is permitted to make contributions to federal candidates.