AO 2014-19: Nonconnected PAC may establish earmarking program for female candidates

ActBlue, a nonconnected political action committee, may establish separate “draft funds” and “nominee funds” to accept contributions earmarked for candidates and prospective candidates who are women. Since the contributor will choose whether to contribute and to whom the contributions will be made, ActBlue is acting only as a conduit and is not exercising direction or control over the choice of candidates. As a result, the contributions ActBlue forwards to the designated candidates will not count against the PAC’s limits to those candidates.

Background
ActBlue serves as a conduit for specific candidates and political committees by receiving earmarked contributions via its website and forwarding them to the intended recipients. ActBlue allows users to contribute to “nominee funds,” where the contributions are earmarked for party nominees who are not yet known (i.e., the Democratic nominee for President in 2016), and to “draft funds” where contributions are earmarked for specific individuals who may become candidates for specific offices, but who have not yet established campaign committees.

Now, ActBlue wants to offer new nominee and draft funds that will “cater to the public’s strong desire to see a woman run for President on the Democratic ticket in 2016.” The new nominee and draft funds will permit donors to earmark contributions, respectively, for the Democratic Party’s eventual nominee for President in 2016 and for women who may become Presidential candidates in 2016 but who have not yet formed authorized Presidential campaign committees.

ActBlue will forward contributions made to the nominee fund only if the nominee is a woman. If the nominee is not a woman, ActBlue will forward the contributions to a default recipient, such as the Democratic National Committee (DNC). The default recipient will be determined at the time the nominee fund is created and will be disclosed to potential contributors before they make their contributions.

Contributors to the draft fund will earmark contributions to one of the potential candidates listed on ActBlue’s website. ActBlue will forward any earmarked contributions to that individual if she forms an authorized presidential campaign committee by a deadline established by ActBlue. If a potential draft candidate does not form an authorized campaign committee, ActBlue may name a series of other default potential candidates (rather than a single default recipient) who would then receive the earmarked contributions. ActBlue would state at the time the draft fund is established who the potential default candidates are and the order in which they would be eligible to receive contributions.

Analysis
The Federal Election Campaign Act and Commission regulations permit a person to make contributions to a federal candidate through a conduit or intermediary; however, if the intermediary exercises any “direction or control” over the choice of recipient candidate, then the contribution is treated as a contribution both from the conduit and the original contributor. 52 U.S.C. § 30116(a)(8) and 11 CFR 110.6(a) and (d). The Commission has previously determined that a conduit or intermediary does not exercise direction or control in cases where the contributor has the ultimate say over whether to make a contribution to a given recipient and the amount of any contribution made. See AO 2014-13 (ActBlue). Similarly, in AO 2003-23 (WE LEAD), the Commission concluded that because contributions made by persons were earmarked for the “presumptive Democratic Presidential nominee” in 2004 (which had not been determined at the time), the intermediary did not exercise any discretion over which candidate would ultimately receive the earmarked contributions.

ActBlue’s proposed nominee fund introduces gender as a criterion to identify the recipient of earmarked contributions and notifies potential contributors in advance that their contributions will go to a designated default recipient if the Democratic nominee for president in 2016 is not a woman. Accordingly, contributions made through this fund will be considered contributions from the original contributor to the recipient, and since the determination of which candidate receives the contributions is at the discretion of the contributor, the earmarked funds will not count against ActBlue’s contribution limits.

With respect to ActBlue’s draft fund proposal, the Commission has previously concluded that ActBlue may act as an intermediary for contributions that are earmarked for specific prospective candidates. In AO 2006-30 (ActBlue), the Commission required ActBlue to state clearly in its solicitations how it would distribute earmarked contributions if a prospective candidate did not register a presidential campaign committee by a pre-determined deadline. Since the proposed draft fund meets that requirement, it is likewise permissible.

Date issued: January 15, 2015; Length: 6 pages.

Resources:

• Advisory opinion 2014-19 [PDF]
• Commission discussion of advisory opinion request 2014-19