The separate segregated funds (SSFs) for Rayonier Inc. (Rayonier) and Rayonier Advanced Materials Inc. (RYAM) are not affiliated because the companies’ overall relationship reflects independence post-spin-off.
RYAM, a company specializing in the manufacturing and sale of “performance fibers,” was formed via a spin-off from Rayonier in June 2014. Prior to that spin-off, the performance fibers business had been a wholly owned business unit of Rayonier, which also operated (and continues to operate) other, distinct business units. RYAM stock began being publicly traded on June 30, 2014.
RYAM and Rayonier asked whether their SSFs are considered affiliated under the Federal Election Campaign Act (the Act) and Commission regulations.
Legal analysis and conclusions
Political committees, including SSFs, are “affiliated” if they are established, financed, maintained, or controlled by the same corporation, labor organization, person, or group of persons. See 52 U.S.C. § 30116(a)(5) (formerly 2 U.S.C. §441a(a)(5)); 11 CFR 100.5(g)(2), 110.3(a)(1)(ii)). For instance, SSFs established by a corporation and its subsidiaries are per se affiliated. The relationship between Rayonier and RYAM does not meet any of those criteria.
Absent per se affiliation, the Commission considers the overall relationship between the sponsoring organizations and between the committees themselves to determine whether SSFs are affiliated. FEC regulations provide a non-exhaustive list of 10 affiliation factors for consideration in the overall context of the relationship. These include governance, hiring authority, common officers or employees and ongoing financial or material support. See 11 CFR 100.5(g)(4)(i)-(ii), 110.3(a)(3)(i)-(ii).
Neither Rayonier nor RYAM owns stock in the other, controls the day-to-day operations of the other, provides financing to the other, or has overlapping directors or officers with the other. While the two companies entered into a number of agreements as part of their separation process, RYAM has been financially and administratively independent of Rayonier since the spin-off. Based on these facts, the Commission concluded the companies’ SSFs are not affiliated.
Date Issued: 12/22/2014; Length 10 pages.