AO 2006-01: Committee may accept discount in normal course of business

A nonconnected political action committee may purchase bulk copies of a candidate’s book at a discount if the publisher offers the same rate to others who buy books in bulk.

Background

Pac for a Change plans to purchase from a publishing company numerous copies of Senator Barbara Boxer’s book A Time to Run. The publisher would sell the books to the committee at a bulk rate price, which is below the suggested retail price. The committee would then offer signed copies of the books to any person who raises at least $100 for the committee within a certain time period.

Analysis

The Federal Election Campaign Act (the Act) and Commission regulations define a “contribution” to include anything of value given for the purpose of influencing a federal election. 2 U.S.C. 431(8)(A)(i) and 11 CFR 100.52(a). “Anything of value” includes the provision of goods or services at less than the usual and normal charge. The usual and normal charge of goods means the market price of those goods at the time of the contribution.

In past advisory opinions, the Commission has concluded that discounts offered in a vendor’s ordinary course of business do not result in contributions. (See AOs 2004-18, 2001-08, 1996-02, 1995-46, 1994- 10, and 1993-20.) Since books bought in bulk normally are offered at discounted price, the publisher would not be making an in-kind contribution to the committee if the price Pac for a Change pays is the usual and normal price paid by other bulk book purchasers.

Length: 3 pages; Date: February 28, 2006