AO 2010-18: Use of recount funds from prior election cycle

A state party committee may request that donors to a recount fund redesignate their donations as contributions to the federal campaign account for the 2010 election. The party organization may also use any remaining recount funds to pay for recount activities in relation to future elections. 

Background 

The Minnesota Democratic Farmer-Labor Party (the “DFL”) is a state party committee affiliated with the national Democratic party. The DFL has $11,583.61 remaining in a recount fund raised for the 2008 recount and election contest involving Senator Al Franken and then-Senator Norm Coleman. 

The DFL wants to transfer some or all of the remaining money from the recount fund to its federal campaign account for use in connection with 2010 elections. The DFL will use the “first in, first out” accounting method to determine whose donations remain in the recount account to ensure that transfer does not cause any donor to exceed its 2010 limits for contributions to the federal account. Alternatively, it would like to ask some of the donors to the recount fund to redesignate their donations as contributions to the DFL’s federal campaign account, again making sure that no redesignation would cause any donor to exceed its 2010 limits for contributions to the federal account. It also wants to use any funds remaining in the recount account to pay for recount activities relating to the 2010 elections. 

Analysis 

The Commission could not approve a response by the required four affirmative votes with regard to whether the DFL could transfer funds remaining in its recount fund to its federal campaign account for use in connection with 2010 elections. 

The Commission determined that the DFL may ask donors to the recount fund to redesignate their donations as contributions to the DFL’s federal account. The Commission noted that there are no regulations that govern redesignations of recount donations, and that, unlike the regulations concerning redesignations of excessive contributions made to candidates and authorized committees, donations to recount funds are not required to be redesignated or refunded. The Commission concluded that while the DFL, as a state party committee, is not covered by the existing redesignation regulations and that donations to the recount fund are permissible and may remain in the recount fund for future elections, the DFL may request that donors to the recount fund redesignate their donations to its federal account. 

The Commission looked to the existing redesignation regulations for a procedure for the DFL to voluntarily request and to obtain redesignations of recount funds. It concluded that the DFL may use the written redesignation regulations at 11 CFR 110.1(b)(5)(ii)(A) as a guide, and may consider a recount donation redesignated if: 

• The treasurer of the political party committee requests that the donor provide a written redesignation of the contribution;
  
• The donor is informed that he or she may request a refund, or if the donor neither redesignates the donation nor requests a refund, that the donation will remain in the recount fund for future use; and 
  
• The donor provides the treasurer with a written redesignation of the donation as a contribution, signed by the donor. 
  

The Commission noted that any donation that is redesignated in writing as a contribution must be aggregated with any other contributions made by the same contributor during that calendar year for the purpose of adhering to the contribution limits. The Commission also noted that once donations are redesignated to the DFL’s federal account, they will be considered contributions for the purposes of the donors’ biennial limits and encouraged the DFL to notify the donors of this fact for the donors’ compliance purposes. The Commission added that since the DFL is not required to redesignate or refund the recount donations, it is not required to seek redesignations within a 60-day timeframe under 110.1(b)(5)(ii)(A)(2). 

The Commission emphasized that all redesignations must be reported within the applicable reporting period, and that committees receiving redesignated contributions must report the redesignation in a memo entry on Schedule A of the campaign finance report covering the reporting period in which the redesignation is received. The memo entry for any redesignations of recount donations as contributions must include all of the information for the recount donation as it was originally reported on Schedule A, as well as all of the information for the contribution as it was redesignated by the donor, including that the donation was redesignated as a contribution to the federal account and the date on which the redesignation was received. 

Finally, the Commission permitted the DFL to use the funds remaining in its recount fund to pay for recount activities in relation to future elections, as the use of recount funds is not restricted to recounts and election contests held in the calendar year in which donations to the recount fund are made. 

AO 2010-18: Date issued: September 23, 2010; Length: 5 pages.