AO 2007-24: Joint campaign and fundraising activities

The campaign committees of Jim Burkee for Congress and Jeff Walz for Congress may jointly engage in fundraising and campaigning activities, provided that the committees use an appropriate payment method for each type of activity, and otherwise follow the limits, prohibitions and other requirements for the Federal Election Campaign Act (the Act), as described below.

Background

Jim Burkee and Jeff Walz are Republican and Democratic candidates. Jim Burkee is the Republican candidate for the 5th Congressional District of Wisconsin, and Jeff Walz is a prospective Democratic candidate for this seat. The candidates plan to campaign together frequently "in order to promote civility and honesty in campaigns." The Burkee Committee and the Walz Committee intend to form a joint fundraising committee (the "Joint Committee") to serve as a clearinghouse for contributions received as a result of joint fundraising activity. The contributions would be divided evenly between the two committees. Mr. Burkee and Mr. Walz plan to appear jointly at campaign events and in television, radio, e-mail, web site and other ads in which each candidate will receive equal time and prominence. The costs for the joint activities will be split equally between the Burkee and Walz Committees. All fundraising and campaign activities conducted solely by, or on behalf of, one candidate will continue to be funded only by that candidate.

Legal analysis

Campaigns raising funds jointly

Commission regulations allow political committees, other than separate segregated funds, to engage in joint fundraising with other political committees. 11 CFR 102.17(a)(1)(i). Committees engaging in joint fundraising must either create a new committee or designate one of the participating committees as the joint fundraising representative, which will collect contributions, pay fundraising costs from proceeds and from funds advanced by participants and disburse net proceeds to each participant. 11 CFR 102.17(b)(1). Joint fundraising participants are required to:

• Establish a separate depository account for joint fundraising proceeds; and,
• Enter into a written agreement stating a formula for the allocation of proceeds.

In this case, Mr. Burkee and Mr. Walz's proposal meets the regulatory requirements for joint fundraising efforts. The Burkee and Walz committees intend to create and register a new political committee to serve as their joint fundraising representative, and they have entered into a written agreement establishing a formula whereby each committee will receive 50 percent of the proceeds from joint fundraising.

The Burkee Committee and Walz Committee must establish a separate depository account to be used solely for the receipt and disbursement of joint fundraising proceeds. 11 CFR 102.17(c)(3). Also, the Joint Committee must provide joint fundraising disclaimers on every solicitation for contributions.(1)

Allocation of joint fundraising expenses

Commission regulations require the joint fundraising representative to allocate proceeds according to the formula set forth in the written agreement. 11 CFR 102.17(c)(6). The joint fundraising representative must also calculate each participant's share of expenses based on the percentage of total receipts each participant had been allocated. 11 CFR 102.17(c)(7)(i) (A). The expenses from a series of fundraising events or activities must be allocated on a per-event basis. Thus, each candidate's share of the costs of fundraising events must be attributed according to the percentage of the funds received by each participating committee.

Joint advertising efforts and administrative costs

Commission regulations state that the costs for joint advertising and campaign events that do not involve the solicitation of contributions must be allocated according to the benefit reasonably expected to be derived by each participating candidate. 11 CFR 106.1(a)(1). In an ad, the attribution of "benefit" is determined by the proportion of space or time dedicated to each candidate. Accordingly, the Commission determined that if the campaign events and ads devote equal space and time to the two candidates, then the two committees must split the costs equally. Also, the proposed joint administrative costs, such as the costs of web site development and office space and equipment, would be allocated to each campaign according to the benefit reasonably expected to be derived by each committee. 11 CFR 106.1(a).

Joint personnel expenses

The Burkee and Walz Committees plan to hire the same individual to serve as campaign director for both campaigns. For work done jointly on both campaigns, the director would be paid equally by each committee. Any work the director does exclusively for one committee would be paid entirely by the benefiting committee. Any other staff members working for both committees would be paid under the same guidelines in order to ensure that the payments accurately reflect the benefit reasonably expected to be derived by each committee. The Commission approved this proposal.

Payment methods for joint campaign and fundraising activities

The Burkee and Walz Committees proposed several different methods for paying the costs of joint activities. One proposal was for one committee to advance funds to pay a joint expense in full, and to receive reimbursement from the other committee for its proportionate share of the expense.

Commission regulations allow the costs of joint fundraising expenses to be paid from funds advanced by participants; however, the amount advanced in excess of one participant committee's share of costs for the event may not exceed the amount that the other participant committee may legally contribute to it. 11 CFR 102.17(b)(3)(ii). In the case of a candidate committee contributing to another candidate committee, the amount is $2,000. Therefore, while one committee paying in full for a joint event is not prohibited, any advance from one participating committee to the other cannot exceed $2,000.

With respect to joint campaigning expenses, the rules regarding advances apply differently. In past advisory opinions, the Commission has concluded that one committee's payment for a communication that expressly advocates for another candidate does not constitute a contribution if the other candidate committee reimburses its proportional share of the total cost within a commercially reasonable time period. AO 2004-37. In this case, the Burkee and Walz Committees may each pay the entire expense of a joint campaign event, as long as the committee initially covering the expenses is reimbursed within a commercially reasonable period of time after the advance was made.

Another proposed payment method for joint activities would be for the candidates or campaign staff to advance funds and then be reimbursed by both committees. According to Commission regulations, expenses for joint fundraising activity may be paid or advanced by the participating committees or by the joint fundraising representative. 11 CFR 102.17(b), 102.17(c)(6)-(7) and 102.17(c)(7)(iii). Individual candidates and campaign staff, however, may not pay a joint fundraising expense using their personal funds.

A campaign staffer may, however, advance personal funds to pay a campaign expense, pending reimbursement. Such advances are in-kind contributions to the benefitting committees until the committees reimburse the staffer, and are subject to contribution limitations. 11 CFR 100.52(a) and 116.5.

Also, a candidate may make unlimited contributions to his or her own campaign from personal funds. While Mr. Burkee and Mr. Walz may make unlimited contributions to their own campaigns, an advance made to the campaign of another candidate would normally constitute a contribution, subject to limits. The Commission concluded, however, that a candidate advance from personal funds for joint campaign expenses would not constitute a contribution so long as the candidate making the advance is reimbursed by the other candidate's committee within a commercially reasonable period of time after the advance is made. AO 2007-37.

A third permissible payment method would involve having vendors invoice each campaign separately for 50 percent of the costs of services. Commission regulations require that each committee's share of the costs of joint fundraising events must be allocated according to the percentage of the funds received by that committee. For all other expenses, each committee must pay in proportion to the benefit reasonably expected to be derived. Billing each committee separately for 50 percent of costs is thus permissible, so long as the committees share equally in contributions from their joint fundraising activities and benefit equally from their joint campaigning activities.

AO 2007-24: Date Issued: December 6, 2007; length: 14 pages

1)In addition to the standard disclaimer required on all public communications under 11 CFR 110.11, a joint fundraising notice must include the names of all participating committees, the allocation formula for the proceeds, a statement clarifying that contributors may opt to designate their contributions for a particular participant and a statement informing contributors that the allocation formula may change if any contribution exceeds the legal limit. 11 CFR 102.17.