AO 2010-23: Contributions by text message

CTIA–The Wireless Association (CTIA), a trade association representing the wireless communications industry, may not proceed with its plan to allow wireless users to contribute to political committees by text message, because the plan does not satisfy all of the requirements of the Federal Election Campaign Act (the Act) and FEC regulations. 

Background 

Under CTIA’s proposal, a wireless user who wants to contribute to a political committee texts a predetermined word or phrase to a Common Short Code. The Codes are five- or six-digit numbers– administered by CTIA—to which wireless users may send text messages to access mobile content such as sweepstakes or opinion polls, or to make charitable donations to various causes such as disaster relief. Before accepting the user’s contribution pledge, a connection aggregator sends reply messages to confirm compliance with the Act; specifically, that payment will come from personal funds, rather than corporate or labor organization funds; that the user is not a prohibited source; and that the total contributions by text message to the recipient committee will not exceed $50 in a calendar year. User confirmation completes the pledge, and a charge appears on the next bill associated with that user’s phone number. 

In keeping with normal business practices, the wireless service provider forwards payments to the connection aggregator between seven and 10 days after it receives payment. The connection aggregator collects all funds designated for specific recipients from all wireless service providers over a 30-day period, before forwarding proceeds to the recipients. Along the way, the wireless service providers and connection aggregators also deduct their standard fees. 

Generally, wireless providers impose a $10 limit on transactions like these, and most cap the monthly aggregate at $100. Additionally, while wireless providers maintain records of subscribers’ names, addresses and phone numbers, they may not know whether subscribers or other users on the account are foreign nationals. 

CTIA asks if it may establish the program as described to enable service providers and connection aggregators to process contributions to political committees by Code. CTIA also asks whether the proposed services are considered to fall into the “ordinary course of business for the usual and normal charge.” CTIA asks whether it must require that wireless service providers and connection aggregators forward contributions pledged by Codes to political committees within 10 or 30 days through separate merchant accounts or whether their ordinary business practice is acceptable. Finally, CTIA asks if the $10 limit per transaction satisfies the $50 anonymous contribution limit, and if not, if it must ensure that service providers and aggregators develop a way to ensure that contributions are not impermissible and do not aggregate in excess of the $50 limit. CTIA asks if the series of text messages asking for confirmation from users who have pledged contributions to political committees is sufficient to accommodate this requirement. 

Analysis 

The Act and Commission regulations prohibit corporations from making contributions in connection with federal elections; however, a corporation acting as a commercial vendor, providing goods and services at the usual and normal charge, does not make a contribution. 2 U.S.C. § 441b(a); 11 CFR 114.2(b); 11 CFR 114.2(f)(1). In this case, CTIA and its member companies plan to adhere to normal business practices and to charge committees the usual and normal charge, thus no prohibited contribution will result. See AOs 2010-21, 2010-06, 2004-19, and 2002-07. 

The proposed collection process, however, does not comply with the contribution transmittal requirements of the Act, and could result in prohibited contributions. 

The Act and Commission regulations require all persons who receive a contribution for an authorized political committee to forward it to the committee treasurer within ten days of receipt. 2 U.S.C. § 432(b)(1); 11 CFR 102.8(a). Contributions received for other political committees must be forwarded to the committee within 30 days if the contribution is less than $50, and within 10 days for contributions of $50 or more. 2 U.S.C. § 432(b)(2) (A); 11 CFR 102.8(b); AO 2009-32. Under CTIA’s plan, the wireless service provider takes seven to 10 days to forward contributions to the connection aggregator, which then waits to collect all contributions for the committee over a 30-day period before forwarding them. This 37- to 40-day transmittal period exceeds the statutory limits. 

Additionally, the Act and Commission regulations limit anonymous contributions to $50 and require anyone who receives a contribution in excess of $50 to forward to the recipient committee the name and address of the contributor, as well as the date and contribution. 2 U.S.C. §§ 432(b)(1) and (b)(2). CTIA’s $10 per-transaction limit does not, on its own, satisfy the $50 anonymous contribution limit in all circumstances. The proposed messages to confirm compliance offer a safeguard similar to those approved by the Commission in prior advisory opinions. See AOs 2010-21, 2010-06, 2007-04, 2006-34, 2004-19, 2002-07, 1995-09. It is possible, however, that a wireless subscriber could make repeated pledges during a single billing cycle, or that the monthly bill indicates that the subscriber is a corporation or has a foreign address. In circumstances such as these, when the donor confirmations are contradicted by evidence found in the monthly bill, the wireless service providers would be required to forward to the recipient committee the name, address and date of contribution. 2 U.S.C. §§ 432(b) and (c). Although it is ultimately the responsibility of the recipient committee to obtain the identity of contributors and prevent excessive or prohibited contributions, when presented with information that indicates a potentially prohibited contribution, it is incumbent upon the service provider to forward the appropriate information. AO 1991-20; AO 1991-26. 

Finally, in past advisory opinions, the Commission has—based upon the Act’s prohibition on corporate or labor contributions—required that corporate funds be segregated from political funds using separate accounts for political contributions that are to be dispersed to candidates. 2 U.S.C. § 441b; 11 CFR 114.2(b); AOs 2007-04, 2006-34, 2004-19, 2002-07, 1999-22. CTIA’s proposal does not provide for this.

AO 2010-23: Date issued: November 19, 2010; Length: 10 pages.