AO 2008-20: Non-profit corporation may reimburse its PAC for advertising expenses

The National Right to Life Committee, Inc. (NRLC) may reimburse its separate segregated fund for expenses the separate segregated fund incurred in broadcasting a radio advertisement. NRLC’s separate segregated fund paid for the ad as a legal precaution while NRLC awaited an advisory opinion from the Commission. Because the Commission has since issued an advisory opinion that stated NRLC could have paid for the ad with its general treasury funds, NRLC may reimburse its separate segregated fund for those advertising costs.

Background

NRLC is a non-stock, not-for-profit corporation. The National Right to Life Political Action Committee (NRLCPAC) is NRLC’s separate segregated fund.

In AO 2008-15, issued November 24, 2008, the Commission determined that NRLC could use general treasury money to finance the broadcast of one of two ads, titled “Waiting for Obama’s Apology #1” (Apology #1). The Commission could not approve a response regarding the second ad, titled “Waiting for Obama’s Apology #2.” See the January, 2009, Record, page 8.

On October 28, 2008, NRLCPAC began broadcasting the Apology #1 ad. While awaiting the Commission’s decision in AO 2008-15, NRLCPAC paid for the broadcast out of legal precaution. NRLCPAC paid a total of $69,271.56 to broadcast the ad between October 28 and November 24, the date the Commission issued AO 2008-15. NRLC then asked the Commission whether it could reimburse NRLCPAC for the money the separate segregated fund spent broadcasting the Apology #1 ad during that time period.

Analysis

In the unique circumstances presented by this situation, NRLC may reimburse NRLCPAC for the cost of this ad, which NRLC was allowed to pay for under the Federal Election Campaign Act (the Act).

NRLC used funds from NRLCPAC, its separate segregated fund, to pay for the advertisements as a precaution against legal liability while NRLC awaited the Commission’s advisory opinion. Thus, NRLC should not be penalized for taking these precautionary measures to comply with the law.

The Commission has previously allowed a reimbursement in a similar situation. In AO 1979-33, a labor organization’s separate segregated fund paid for a banquet that the labor organization mistakenly believed to constitute political campaign activity. The money, instead, was to be used for non-partisan get-out-thevote activities, and thus was exempt from the Act’s definition of “contribution or expenditure” in 2 U.S.C. §441b(a). The Commission allowed the labor organization to reimburse the SSF because the labor organization could have financed the dinner directly without violating the Act. Although the SSF initially paid for the dinner, the Commission concluded that it did not change the characterization of the money as a payment for an exempt activity under section 441b. In this situation, NRLC, like the labor organization in AO 1979- 33, could have financed the activity with general treasury funds without violating the Act.

Therefore, the Commission concluded that NRLC may reimburse NRLCPAC for the costs involved in broadcasting the Apology #1 radio advertisement between October 28 and November 24, 2008.

Date Issued: January 30, 2009; Length: 4 pages.