AO 2007-14: Trade associations’ sponsorship of joint telephone conferences to restricted classes

The Associated Builders and Contractors, the National Federation of Independent Business and the National Restaurant Association (the Trade Associations) may pay for a series of jointly sponsored telephone conferences featuring Presidential candidates, which will be made available simultaneously to the three Trade Associations’ restricted classes. The Trade Associations must split the costs of the conferences on a pro rata basis determined by restricted class participation (or by another reasonable method if it is not possible to track participation) to ensure that no trade association pays the costs of candidate appearances to a restricted class other than its own.

Background

The Trade Associations plan to host telephone conferences open to the restricted class members of each association. The three restricted classes will have access to the conferences either by dialing in and providing a password or by receiving a phone call connecting them to the conference. The Trade Associations will invite several Presidential candidates to participate, and the candidates will be free to solicit contributions and campaign volunteers by asking conference participants to visit a web site or call a phone number. The Trade Associations will split the costs of the conferences, and may be able to track restricted class participation in order to split costs based on the number of restricted class members from each trade association participating in the conferences.

Analysis

The Federal Election Campaign Act (the Act) prohibits corporations from using their general treasury funds to make contributions and expenditures in connection with a federal election, including giving “anything of value” to a campaign. 2 U.S.C. §441b(a); 11 CFR 114.2(b). Under an exception to this general prohibition, an incorporated trade association may sponsor candidate campaign appearances, but only if:

• The audience is limited to the trade association’s restricted class and to employees who are necessary to administer the meeting; or
• The audience is limited to the trade association’s employees and their families.

Other guests of the corporation who are being honored or speaking or participating in the event, and representatives of the news media, may also attend. 2 U.S.C. §441b(b) (2)(A); 11 CFR 114.3(c)(2) and 11 CFR 114.4(b)(1).

In this case, each trade association would use its general treasury funds to sponsor candidate appearances to its own restricted class. Because the Trade Associations would sponsor the same candidate to address their restricted classes simultaneously, each trade association must pay only the portion of the costs of the conferences incurred because of its restricted class’s participation. So long as the Trade Associations split the costs of the conferences on a pro rata basis according to the participation of each trade association’s restricted class, or on another reasonable method calculated to closely approximate the pro rata participation, the proposed conferences will come within the exemptions from the definitions of “contribution” and “expenditure” for corporate-sponsored candidate campaign appearances to the restricted class.¹

Date Issued: September 25, 2007; Length: 4 pages.

¹ The situation presented here is similar to that considered by the Commission in AO 1984-13, where the Commission concluded that a corporation could host candidates as speakers at a conference for its restricted class and jointly sponsor the conference with another entity