AO 2022-21: National party may allocate costs of Legal Proceedings Account solicitations that feature candidates
DSCC may pay for television advertisements that feature federal candidates and solicit donations to its Legal Proceedings Account subject to a reasonable cost allocation among the committee’s accounts. The candidate committees may coordinate the communications with the national party committee provided those costs not reasonably allocable to the Legal Proceedings Account are either within the national party committee’s coordinated expenditure limits or treated as in-kind contributions to the candidate with whom the advertisement is coordinated.
Background
The Federal Election Campaign Act (the Act) authorizes a national party committee to establish a Legal Proceedings Account to defray the costs of election recounts, contests and other legal proceedings. The requestors – DSCC, Bennet for Colorado and People for Patty Murray – provide two alternate proposals under which the DSCC would use their Legal Proceedings Account to pay for television advertisements soliciting donations to that account, which would feature Senators Michael Bennet and Patty Murray and other federal candidates.
Proposed Solicitation 1. Advertisements featuring one or more federal candidates would air in states across the country and may air in the jurisdiction in which the featured federal candidate(s) are seeking reelection. The advertisements would include a clear solicitation for donations to the Legal Proceedings Account, focus on the issue of voter suppression and not mention any political party. The advertisements would also not contain express advocacy or publish any candidate materials, but they would be coordinated with the candidates appearing in the ad.
Proposed Solicitation 2. Ads would feature a single candidate seeking reelection in the jurisdiction where the advertisement is disseminated and would be coordinated with the Senate candidate featured in the ad. Each ad would focus on policy issues central to the general election in the jurisdiction of distribution and either discuss a Democratic candidate’s policy positions or discuss a Republican candidate and attack or oppose that candidate and their policy positions. In some circumstances, these ads might expressly advocate the election or defeat of a clearly identified federal candidate and not mention the Legal Proceedings Account, but would include a link to an online page that would clearly state the funds accepted are allocated to the DSCC’s Legal Proceedings Account.
Analysis
The Commission determined the DSCC may allocate the cost of its proposed solicitation ads among its accounts on a reasonable basis to the extent the ads serve more than one purpose. Ads that qualify as both a solicitation to the Legal Proceedings Account and a party coordinated communication must be reasonably allocated between the Legal Proceedings Account and other accounts from which coordinated communications may be financed.
Although the Commission has not previously addressed the issue of payment for solicitations in the context of a Legal Proceedings Account, Commission regulations generally permit (and in some cases require) the proceeds of fundraising activities to be used to defray the cost of those activities. Also, Commission regulations generally permit (and in some cases require) the allocation of expenses attributable to more than one purpose.
The Commission concluded in Advisory Opinion 2010-14 that the DSCC could allocate expenses attributable to both recount activities and campaign activities and could not allocate costs for campaign activities to its recount account. The Commission explained that its allocation regulations “stand generally for the proposition that allocation is an appropriate way to fund activities with multiple purposes[,]” and the ads could or would serve two purposes.
Commission regulations provide that a party coordinated communication must be treated as either an in-kind contribution to the candidate with whom it is coordinated or a coordinated party expenditure in connection with the general election campaign of the candidate. Accordingly, Bennet for Colorado and People for Patty Murray may coordinate with the DSCC on both sets of ads provided that the DSCC treats costs not allocable to the Legal Proceedings Account as either in-kind contributions or coordinated party expenditures subject to the Act’s limits on such contributions and coordinated expenditures.
Date Issued: October 20, 2022; Length: 11 pages
Citations
Statutes
52 U.S.C. § 30116(a)(9)(C)
Legal proceedings accounts
Regulations
11 CFR § 109.21
What is a “coordinated communication”?