AO 2008-09: Application of loan repayment provision
A provision of the Bipartisan Campaign Reform Act of 2002 (BCRA) dealing with the repayment of personal loans a candidate makes to his or her campaign committee is not affected by the Supreme Court’s finding that the so-called “Millionaires’ Amendment” is unconstitutional. Therefore, candidates who loan their campaign committees personal funds can still only be repaid up to $250,000 of the loan amount using contributions raised after the date of the election. 2 U.S.C. §441a(j) and 11 CFR 116.11 and 116.12. and 116.12.
Background
On June 26, 2008, the Supreme Court ruled that sections 319(a) and 319(b) of the BCRA, known as the “Millionaires’ Amendment” (2 U.S.C. §441a-1), unconstitutionally burden the First Amendment rights of self-financed candidates for the House of Representatives. Davis v. Federal Election Commission, 554 U.S.__, 128 S. Ct. 2759 (2008). Section 304(a) of BCRA imposes analogous limitations on candidates for the Senate. In addition to the Millionaires’ Amendment provisions, section 304(a) also includes a provision that limits to $250,000 the amount of a personal candidate loan that can be repaid by the candidate’s committee with contributions made after the date of the election. 2 U.S.C. §441a(j); 11 CFR 116.11, 116.12. This loan repayment provision applies equally to all candidates, regardless of whether they or their opponents have triggered the increased campaign contribution limits.
New Jersey Senator Frank Lautenberg loaned his principal campaign committee, Lautenberg for Senate (the Committee), $1.65 million in connection with his June 3, 2008, primary election campaign. The Committee has not yet repaid those loans to Senator Lautenberg. The Committee asked whether the loan repayment provision would apply to Senator Lautenberg and the Committee in light of the Supreme Court’s ruling in Davis v FEC.
Analysis
The Supreme Court did not address the constitutionality of the loan repayment provision. Under the BCRA, the invalidation of one BCRA provision, such as the Millionaires’ Amendment, does not affect the validity of any other provisions. The Commission determined that the loan repayment provision of the BCRA is not inextricably tied to the Millionaires’ Amendment and the increased contribution limits. Therefore, the loan repayment provision applies to Senator Lautenberg and the Committee’s proposal to repay his loans.
Date Issued: August, 22, 2008; Length: 3 pages.