AO 2024-11: Candidate may receive post-candidacy campaign salary and appear in ads under commercial transactions safe harbor
Utah Senate candidate Caroline Gleich’s campaign may pay her salary earned during the campaign in the 20-day period following termination of her candidacy. In addition, Ms. Gleich may continue to appear in her company’s advertisements within 90 days of her election if, when published, they qualify for the commercial transactions safe harbor for coordinated communications.
Background
Ms. Gleich intends to receive compensation from her campaign committee under the Commission’s candidate salary regulations. Because Ms. Gleich is not paid hourly or annually, it is difficult for her to determine during her candidacy the actual amount of compensation she is entitled to receive. Given that fact, Ms. Gleich plans to determine how much income she lost after the campaign and accept commensurate payments from her campaign committee during the 20-day period following her candidacy.
During the campaign, Ms. Gleich would also like to participate in paid commercial advertisements for her company, Big Mountain Dreams (BMD). The ads will be materially indistinguishable from those that ran prior to her candidacy and will appear on digital platforms and in print during the entire election cycle, including within 90 days of her election.
Candidate salary payments
The Federal Election Campaign Act (the Act) prohibits any person from converting campaign funds to “personal use.” Commission regulations provide that payments of compensation from a candidate’s campaign committee to the candidate are not personal use if certain requirements are met. First, the compensation must not exceed the lesser of 50% of the minimum annual salary paid to a Member of the United States House of Representatives, and the candidates’ average annual income during their five most recent income-earning years prior to candidacy. Second, the candidate must subtract any earned income received after filing a Statement of Candidacy from the amount of permissible campaign compensation.
The Commission determined Ms. Gleich’s plan to calculate and receive campaign compensation payments after candidacy complies with the requirement to reduce compensation for income received during candidacy. The committee, however, must continuously disclose a reasonable estimate of any payments as an outstanding debt until it is extinguished.
Candidate appearance in paid advertisements
Under the Act, expenditures that are coordinated with a candidate or political party committee are treated as contributions to that candidate or political party committee. Commission regulations set forth a three-prong test to determine whether a communication is coordinated. If all three prongs of this test (the payment prong, the content prong, and the conduct prong) are met then a communication is deemed to be a coordinated communication.
As part of that test, the content prong is met if a public communication that refers to a clearly identified House or Senate candidate is publicly distributed in that candidate’s jurisdiction within 90 days of the primary or general election. Commission regulations provide a safe harbor, however, for certain business and commercial communications that would otherwise satisfy the test. To qualify:
(1) the advertisements must clearly identify the candidate only in his or her capacity as the owner of a business that existed prior to the candidacy;
(2) the medium, timing, content, and geographic distribution of the advertisements must be consistent with the those made prior to the candidacy; and
(3) the advertisements must not promote, attack, support, or oppose (PASO) the candidate or any other candidate running for the same office.
Ms. Gleich intends to personally appear in the paid advertisements not as a clearly identified candidate but solely in her capacity as the owner of BMD. That satisfies the first element of the safe harbor test. The Commission concluded that if future paid advertisements are consistent with past public communications in terms of medium, timing, content and geographic distribution, then the second element of the test will be satisfied. Finally, future advertisements will not PASO Ms. Gleich or any other candidate running for the U.S. Senate in Utah. Meeting all three test elements when published, the ads will qualify for the commercial transactions safe harbor.
Date issued: August 29, 2024; Length: 10 pages
Citations
Regulations
11 CFR 113.1(g)(1)(i)(I)
Salary payments by a candidate’s principal campaign committee
11 CFR 109.21(i)
Coordinated communications
Statutes
52 U.S.C. 30114(b)(2)
Prohibited use of campaign funds
Advisory opinions
AO 2004-31
Darrow