AO 2006-30: Contributions earmarked for potential candidates

ActBlue, a nonconnected political committee, may solicit and accept earmarked contributions on behalf of potential candidates for the Democratic Party’s nomination for president in 2008, even though the individuals have not formally declared their candidacy with the Commission. If those individuals do not become candidates by a certain date, ActBlue may forward the contributions to the Democratic National Committee (DNC) instead, provided that the contributor is clearly informed of this possibility. In either case, ActBlue must report all earmarked contributions on its reports to the Commission and must provide all necessary information to the recipient potential candidate or party committee.

Background

ActBlue proposes to solicit and forward earmarked contributions to prospective candidates for the Democratic Party nomination for president in 2008. If the individual does not register a campaign committee with the Commission by a certain date, ActBlue instead proposes to forward any contributions earmarked to that individual to the DNC.

ActBlue would provide the recipient campaign committee (or party committee) with all information required by Commission regulations and would also report the earmarked contributions to the Commission on its next regularly-scheduled report. ActBlue’s solicitations would inform potential contributors that any contributions received would be subject to the limitations and prohibitions of the Act, and that contributions earmarked for individuals who do not become candidates would be forwarded to the DNC.

Analysis

The Act and Commission regulations allow for earmarking and forwarding of contributions to candidates through a conduit. A conduit is described as “any person who receives and forwards an earmarked contribution to a candidate or a candidate’s authorized committee.” 11 CFR 110.6(b)(2). Typically, a conduit must forward earmarked contributions to the designated candidate within ten days of receipt. 11 CFR 102.8.

In Advisory Opinion 2003-23 (WE LEAD), the Commission concluded that a committee could solicit, collect and hold contributions earmarked for the “presumptive” Democratic presidential nominee until the DNC could certify that he or she had enough delegates to win the nomination. At that point, the committee would have ten days to forward the contributions to the candidate. In this case, the Commission similarly concludes that ActBlue’s ten-day forwarding requirement does not begin until the intended recipient registers a presidential campaign committee with the Commission.

Contributions earmarked for a candidate through a conduit or intermediary are contributions from the original contributor to the designated candidate, unless the conduit exercises “direction or control” over the contributor’s choice of candidate. In that case, the contribution would count against the limit of both the original contributor and the limits of the conduit or intermediary. 11 CFR 110.6(d).

While ActBlue plans to list on its web site and accept contributions earmarked only for individuals that ActBlue considers to be “serious” prospective candidates, that alone would not constitute “direction or control,” because the potential contributor is free to choose whether or not to make a contribution to a given individual. Accordingly, ActBlue’s contribution limits would not be affected by the earmarked contributions; only the contributor’s limit would be affected.

ActBlue must forward the contributions to the candidate along with a transmittal report containing the contributor’s name, mailing address, the amount of the contribution, the date the contribution was received by ActBlue, the name of the designated recipient, the date the contribution was forwarded, and whether the earmarked contribution was forwarded in cash, by contributor’s check, or by ActBlue’s check. 11 CFR 110.6(c)(iv). For each earmarked contribution in excess of $200, ActBlue would also have to provide the contributor’s occupation and the name of the contributor’s employer.

If a prospective candidate does not register a presidential campaign committee with the Commission before 11:59 EDT on the seventh day before the first day of the 2008 Democratic National Convention or otherwise chooses not to accept the earmarked contributions, ActBlue may forward those contributions instead to the DNC, provided that ActBlue clearly states in its solicitations how it will distribute earmarked contributions under such circumstances.

Any transmittal report forwarded to the DNC would include the same information as above, but ActBlue would have to provide contributor information to the DNC only for contributions in excess of $50. 11 CFR 102.8(b)(2). See also AO 2003-23.

Date Issued: November 9, 2006 Length: 7 pages.