AO 2014-10: Commission approves use of campaign funds to purchase book
A principal campaign committee may use campaign funds to purchase copies of the candidate’s book without the purchase resulting in personal use or an in-kind contribution from the publisher.
Background
Joan Farr is a candidate for the U.S. Senate in Oklahoma. In 2003, Ms. Farr wrote a book entitled Ten Secrets You Must Know before Hiring a Lawyer, which was published by the Association for Honest Attorneys (AHA), a non-profit corporation that Ms. Farr founded. Ms. Farr’s principal campaign committee, Joan Farr for U.S. Senate (the Committee), would like to purchase up to 200 copies of her book from AHA at a standard, discounted price of $5 per book, a price that would be available to any other person purchasing the same number of books. Ms. Farr states that the books will be distributed to contributors to her committee and that she will not receive any direct or indirect royalties from AHA as a result of the Committee’s purchase of the book. Ms. Farr asks whether the Committee may purchase the books at the discounted rate and whether the purchase would result in an in-kind contribution from AHA.
Analysis
The Federal Election Campaign Act (the Act) and Commission regulations permit authorized committees to spend campaign funds to finance activities in connection with the candidate’s campaign for federal office; however, such spending must not result in the conversion of campaign funds to “personal use.” 2 U.S.C. §§439a(a)(1), 439a(b); 11 CFR 113.1(g) and 113.2(e). Under the Act, “a contribution or a donation shall be considered to be converted to personal use if the contribution or amount is used to fulfill any commitment, obligation or expense of a person that would exist irrespective of the candidate’s election campaign or individual’s duties as a holder of Federal office.” 2 U.S.C. §439a(b)(2); 11 CFR 113.1(g). The Act and Commission regulations provide a non-exhaustive list of uses of campaign funds that would constitute per se personal use, but for uses not on this list, the Commission will determine on a case-by-case basis whether they constitute personal use. See 2 U.S.C. §439a(b)(2); 11 CFR 113.1(g)(1)(i)-(ii).
In previous advisory opinions, the Commission determined that an authorized committee’s use of campaign funds to purchase copies of the candidate’s book was not personal use since the purchase would defray an expense that would not have existed irrespective of the campaign. See Advisory Opinions 2014-06 (Ryan), 2011-02 (Brown) and 2001-08 (Specter). In these cases, the Commission considered whether the books were purchased solely for distribution to the committee’s contributors and supporters (and thus would be used only for the purpose of influencing the candidate’s election to federal office) and whether the candidate would receive any royalties as a result of the purchase.
In this case, the Commission determined that the Committee’s purchase of the books would be “in connection with” Ms. Farr’s election since the purchase would be solely for distribution to contributors and supporters. Also, Ms. Farr would not receive any royalties resulting from the Committee’s purchase of the book. Therefore, the Commission concluded that the purchase would not be personal use since it will defray an expense that would not exist irrespective of Ms. Farr’s campaign. However, in a footnote to its opinion, the Commission noted that the reason that Ms. Farr was not receiving a salary as CEO of AHA was due to insufficient donations and sales of the book. A change in these facts could affect the Commission’s analysis—“[I]f the Publisher were to use the funds generated from Ms. Farr’s campaign’s purchase of your book to pay your salary as C.E.O., such payments could present a personal use issue.”
Finally, the Commission concluded that the Committee’s purchase of Ms. Farr’s book from AHA at a discounted rate that would be available to any other purchaser of the same quantity of the book would not result in an in-kind contribution from AHA to the Committee. The term “contribution” includes “anything of value” given for the purpose of influencing an election or given by a corporation to a political committee in connection with a federal election. 2 U.S.C. §431(8)(A)(i), 441b(b)(2); 11 CFR 100.52(a), 114.1(a). However, the sale of goods at a discount does not result in a contribution when the discount is made available in the ordinary course of business and on the same terms and conditions available to the vendor’s other customers that are not political organizations or committees. In this case, the Committee will pay AHA a standard, discounted price that would be available to any other person wishing to purchase the same quantity of the book from AHA. Therefore, the Committee’s payment of this standard, discounted rate will not result in a contribution from AHA.
Date issued: August 14, 2014; Length: 4 pages.
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