FEC provides guidance following U.S. District Court decision in CREW v. FEC, 316 F. Supp. 3d 349 (D.D.C. 2018)

WASHINGTON – On August 3, the United States District Court for the District of Columbia issued a Memorandum Opinion and Order in CREW v. FEC (Case No. 16-0259). The Court vacated the Commission’s regulation at 11 CFR § 109.10(e)(1)(vi), governing reporting by persons (other than political committees) that make independent expenditures aggregating in excess of $250 with respect to a given election in a calendar year.

The Commission did not approve an appeal of the court decision by the required four votes. The defendant-intervenor appealed and filed motions for a stay pending appeal with the District Court, Court of Appeals for the D.C. Circuit, and U.S. Supreme Court. On Sept. 15, the Chief Justice of the United States ordered a stay of the district court’s order. That stay was lifted by the Supreme Court on Sept. 18. As a result, the vacatur of the regulation at 11 CFR § 109.10(e)(1)(vi) went into effect on Sept. 18, 2018, and the Commission will no longer enforce it.

The Commission offers the following guidance to the public on how to proceed consistent with the district court’s decision:

(1) Persons (other than political committees) that make independent expenditures aggregating over $250 with respect to a given election in a calendar year must continue to file reports as currently provided in 11 C.F.R. § 109.10(b),(e)(1)(i)-(v) and (e)(2). These provisions, which were not affected by the district court's decision, require such persons to:

• Report on Form 5 the following information for any quarterly period during which the reporting person or entity makes independent expenditures aggregating over $250 with respect to a given election:
  • The reporting person’s name, mailing address, occupation, and the name of his or her employer, if any;
  • The identification (name and mailing address) of the person to whom the independent expenditure was made;
  • The amount, date, and purpose of each independent expenditure;
  • A statement that indicates whether the reported independent expenditure was in support of or in opposition to a candidate, together with the candidate’s name and office sought; and
  • A verified certification under penalty of perjury that the expenditure was not made in cooperation, consultation, or in concert with, or at the request or suggestion of, a candidate, a candidate’s authorized committee, or their agents, or a political party or its agents. See 52 U.S.C. § 30104(c)(1)-(2); 11 C.F.R. § 109.10(b), (e).

(2) Except as provided below, for reports due after Sept. 18, 2018, any person (other than a political committee) that has made independent expenditures aggregating over $250 with respect to a given election in a calendar year shall:

• Report on Schedule 5-A (Itemized Receipts) of FEC Form 5 the identification[1] of each person (other than a political committee) who made a contribution or contributions to the reporting person during the reporting period whose contribution or contributions had an aggregate amount or value in excess of $200 within the calendar year, together with the date and amount of such contribution or contributions, and
• Use memo text[2] to indicate which of these persons made a contribution in excess of $200 to the reporting person for the purpose of furthering any independent expenditure.

(3) The district court explained that the applicable underlying statutory provisions, 52 U.S.C. § 30104(c)(1) and (c)(2)(C), require entities making independent expenditures of more than $250 in the calendar year to disclose information about those who contributed for political purposes anytime during the full reporting quarter. In the interests of fairness, since no one was on notice until the district court’s decision was handed down on Aug. 3, the Commission will exercise its prosecutorial discretion for the quarterly reports due Oct. 15, 2018. As a result:

• There is no change in reporting requirements for those entities that made independent expenditures only before Sept. 18, 2018
• Persons (other than political committees) that made independent expenditures on or after Sept. 18, 2018 aggregating over $250 with respect to a given election must report as follows:
  • For contributions received between July 1, 2018 (the beginning of the reporting period) and Aug. 3, 2018 (the date of the district court’s opinion), the information required by 11 C.F.R. § 109.10(e)(1)(vi), which includes the identification of each person who made a contribution in excess of $200 within calendar year 2018 to the person filing such statement which was made for the purpose of furthering the reported independent expenditure.
  • For contributions received between Aug. 4, 2018 (the date after the district court’s opinion) and Sept. 30, 2018 (the end of the reporting period), the information required by 52 U.S.C. § 30104 (c)(1) and (c)(2)(C), which includes:
    • the identification of each person (other than a political committee) whose contribution or contributions to the reporting person had an aggregate amount or value in excess of $200 within calendar year 2018, together with the date and amount of any such contribution(s); and
    • the identification of each of these persons whose contribution(s) in excess of $200 to the reporting person was made for the purpose of furthering any independent expenditure.

(4) In accordance with the district court’s interpretation of the reporting requirements at 52 U.S.C. § 30104(c)(1) and (c)(2)(C), the Commission will enforce the statute for independent expenditures made on or after Sept. 18, 2018 by persons (other than political committees) as follows:

• “[S]ubsection (c)(1) applies to ‘all contributions received by such’ reporting not-political committee, 52 U.S.C. § 30104(c)(1) (emphasis added), and . . . requires disclosure of donors of over $200 annually making contributions ‘earmarked for political purposes,’ Buckley, 424 U.S. at 80, 96 S.Ct. 612, which contributions are ‘intended to influence elections,’ MCFL, 479 U.S. at 262, 107 S.Ct. 616; see also 52 U.S.C. § 30101(8)(A)(i) (defining a ‘contribution’ as any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office’).” CREW v. FEC, 316 F. Supp. 3d 349, 389 (D.D.C. 2018).
• “[S]ubsection (c)(2)(C) requires reporting not-political committees to identify those donors of over $200 who contribute ‘for the purpose of furthering an independent expenditure.’ Id. § 30104(c)(2)(C) (emphasis added). These donors are a subset of those contributors required to be identified in subsection (c)(1). Consequently, subsection (c)(2)(C) does not require that a reporting not-political committee disclose information about the date or amount of the contributions covered by this paragraph, as that information about the donors is already required to be reported under (c)(1).” CREW v. FEC at 389.
• “[S]ubsection (c)(2)(C) is properly read to cover contributions used by the not-political committee for express advocacy for or against the election of a federal candidate, whereas subsection (c)(1) covers contributions used for other political purposes in support or opposition to federal candidates by the organization for contributions directly to candidates, candidate committees, political party committees, or super PACs.” CREW v. FEC at 392.

(5) 24- and 48-hour independent expenditure reports required under 11 C.F.R. §§ 109.10(c) and (d) need not include the information required by 11 C.F.R. § 109.10(e)(1)(vi) (vacated effective Sept. 18, 2018). Neither the statutory provision at 52 U.S.C. § 30104(g) requiring 24- and 48-hour independent expenditure reports nor any other regulatory provision relating to 24- and 48-hour independent expenditure reports were affected by the district court’s decision.

Entities with specific questions regarding their reporting obligations may contact the Reports Analysis Division at 800-424-9530 (at the prompt, press 5). Reporters may contact the Press Office at 202-694-1220. Others may contact the Information Division at 800-424-9530 (at the prompt, press 6).

[1] “Identification” is defined in the case of an individual as that person’s name, mailing address, occupation, and name of his or her employer; and in the case of any other person as the person’s full name and address. 52 U.S.C. § 30101(13); 11 C.F.R. § 100.12.

[2] Filers use memo text to provide additional information about a particular transaction. Most electronic filing software packages include a memo text field, and paper filers may provide this additional text next to the applicable transaction(s) on Schedule 5-A, or as an attachment to the Form 5. See 52 U.S.C. § 30104(c)(2)(C).