AO 2012-15: American Physical Therapy Association may use payroll deduction

Corporations owned by members of the American Physical Therapy Association (APTA) may provide payroll deduction to enable member-employees to contribute to the association’s political action committee, but APTA must pay the corporations in advance for their services.

By paying corporations ahead of time for all costs incurred to administer payroll deductions, APTA’s planned fundraising model would not violate the prohibitions on making or accepting corporate contributions, nor would it violate the ban on corporate facilitation of contributions.

Background

APTA is a membership organization that represents physical therapists, physical therapy assistants and students who anticipate entering these fields. 11 CFR 114.1(e)(1). APTA also qualifies as a trade association, which is one kind of membership organization. 11 CFR 114.8(a). It is the connected organization for the APTA Physical Therapy Political Action Committee (PT-PAC), the association’s separate segregated fund (SSF).

Under the Federal Election Campaign Act (the Act) and Commission regulations, membership organizations (including trade associations) may pay their SSFs’ administrative and solicitation costs, and may solicit voluntary contributions to their SSFs from their individual members. 11 CFR 114.5(b), 114.7(a). Trade associations may also, with prior approval, solicit voluntary contributions to their SSFs from the executives and stockholders of their member corporations. 11 CFR 114.8.    

APTA has no corporate members, but some of its individual members practice through corporations that they wholly or partly own. Some of those corporations employ other individuals who are also APTA members. APTA asks whether these member-owned corporations could provide payroll deduction as a means for member-employees to contribute to PT-PAC. The association or PT-PAC would pay in advance all of the corporations’ costs to administer the payroll deductions.

Analysis

The Act and Commission regulations prohibit corporations from making contributions in connection with a federal election. See 2 U.S.C. § 441b(a); 11 CFR 114.2(b)(1). In addition, Commission regulations prohibit corporations from facilitating the making of contributions to candidates or political committees, other than to the SSFs of the corporations themselves. See 11 CFR 114.2(f)(1).

Neither APTA nor the member-owned corporations would violate these prohibitions by implementing the payroll deduction system as described.  As a membership organization, APTA may use any method to facilitate the making of voluntary individual contributions to its SSF. 11 CFR 114.7(f). Given that fact, if APTA or PT-PAC pays the corporations in advance for all of the administrative costs associated with the payroll deductions, no corporate resources will be used for fundraising, and no prohibited corporate facilitation or corporate contribution will occur.

Additionally, in compliance with 2 U.S.C. § 441b(b)(6), APTA has indicated that participating corporations will provide payroll deduction at cost to any labor organization that represents their employees and requests the service. See also AO 1990-25 (Community Psychiatric).

Date issued: May 24, 2012; 10 pages.

Resources:

• Advisory opinion 2012-15 [PDF; 2 pages]
• Commission discussion of AOR 2012-15