AO 2006-08: Corporation collecting and forwarding contributions from individuals to political committees
A for-profit corporation may collect and forward contributions from individual clients to political committees and candidates. Also, the corporation may provide information about candidates and solicitations from political committees and candidates to its clients at their request.
Background
Mr. Matthew Brooks intends to form a for-profit corporation that would provide individual “subscribers” interested in making political contributions with information about candidates and committees that fit the subscriber’s political giving profile. The corporation plans to accept funds from subscribers who will, at a later date, direct those funds as contributions to candidates and political committees or as donations to other non-profit organizations. Subscribers will pay a fee to the corporation, which will be deposited into the corporation’s treasury. The money allocated by the subscriber for future contributions will be kept in a separate merchant account until the subscriber designates a recipient of the funds or asks for the funds to be returned. When the subscriber indicates a certain candidate or committee as a recipient, the corporation will forward the designated amount within 10 days. In addition, the corporation will screen subscribers and their contributions to ensure that all the monies forwarded to candidates and political committees are within the limits and prohibitions of federal law. Other than refusing to forward contributions that do not comply with federal law, the corporation will not place any limits on how a subscriber disburses his or her funds. Furthermore, the corporation will not advocate on behalf of any causes, nor will it engage in any federal election activity.
The corporation will be funded entirely from subscriber service fees. The recipient committees and organizations will not pay a fee to the corporation, nor will they have any contractual relationship with the corporation.
The corporation also intends to provide commentary and analyses regarding various officeholders, candidates, organizations and events to its subscribers. This information may include biographical sketches, voting records, ratings of a candidate by different organizations, reelection percentages, campaign contribution position, party loyalty and any relevant media articles. The corporation will forward information and solicitations from candidates, committees and organizations relevant to the subscriber’s stated interests and preferences. The corporation will not author any of the information or analyses forwarded to its subscribers.
Analysis
The Commission determined that the corporation may collect and forward contributions for its subscribers to political committees, candidates and other organizations. In doing so, the corporation would be providing a service for its subscribers analogous to corporations that provide delivery services, bill paying services, or check writing services. The subscribers would compensate the corporation as an incidental cost in making contributions.
The corporation may also forward information and analyses regarding candidates and committees to its subscribers at their request for an additional fee. This service is a part of the corporation’s overall business plan to assist subscribers in the making of contributions. In order to prevent a contribution by the corporation to any political committee or candidate, it must use a separate merchant account for funds that will be dispersed as contributions. See 2 U.S.C. §441b; 11 CFR 114.2(b). The merchant account must be entirely segregated from the corporation’s general treasury to ensure that the funds are not commingled.
The corporation may forward contribution suggestions from political committees to its subscribers so long as the cost is paid for entirely by the subscribers’ fees. The corporation will not exercise any discretion in determining which contribution suggestions to forward, but will only match the contribution suggestions to the subscriber’s stated interests and pattern of giving.
The corporation may recruit individuals to serve on its Board of Directors who may also be officers of political committees. If these individuals are acting on behalf of a candidate or committee while participating on the corporation’s Board, the corporation might be considered affiliated with a federal candidate, officeholder or party committee and thus be subject to the applicable limitations and prohibitions. 2 U.S.C. §§ 441i(a) and (b), and 441i(e)(1)(A) and (B); see AOs 2005-2 and 2003-10.
Date: May 5, 2006; Length: 6 pages