On August 26, 2010, the Commission approved final rules and Explanation and Justification regarding coordinated communications. These rules comply with the decision of the U.S. Court of Appeals for the District of Columbia Circuit in Shays v.FEC, 528 F.3d 914 (D.C. Cir. 2008) (“Shays III Appeal”). See the July 2008 Record. The new rules take effect December 1, 2010.
The new rules add to the existing definition of coordinated communications a content standard for communications that are the “functional equivalent of express advocacy.” The new rules also create a safe harbor for certain business and commercial communications and provide further explanation and justification for two “conduct standards” in the existing regulations
Commission regulations implementing the Bipartisan Campaign Reform Act of 2002 (BCRA) established a three-prong test for determining whether a communication is coordinated with a candidate, a candidate’s authorized committee, a political party committee or the agents of any of these. Coordinated communications generally result in an in-kind contribution. The test includes a payment prong, a content prong and a conduct prong. The content and conduct prong each include several standards, and satisfying any one of the standards within a prong satisfies that prong of the test. 11 CFR 109.21(a)(1)-(3).
Various aspects of the coordinated communications test were challenged in court. The new regulations respond to the decision by the U.S. Court of Appeals for the District of Columbia Circuit in Shays III Appeal. In that decision, the court held that the Commission’s decision to have an “express advocacy” standard as the only content standard that applies outside of 90-day and 120-day windows before an election runs counter to the purpose of BCRA and the Administrative Procedure Act. The court noted that the FEC “must demonstrate that the standard it selects ‘rationally separates election-related advocacy from other activity falling outside [the Act’s] expenditure definition.’” In addition, the court invalidated the 120-day period used in the existing conduct prong to determine whether a common vendor or former campaign employee’s relationship with a candidate committee or party committee would satisfy the prong. 11 CFR 109.21(d) (4) and (d)(5). The court found that the Commission failed to justify its decision to apply a 120-day window.
New content standard
Functional equivalent of express advocacy. The Commission is revising the content prong by adding a new standard to cover public communications that are the “functional equivalent of express advocacy.” See new 11 CFR 109.21(c)(5). A communication is the functional equivalent of express advocacy if it is “susceptible of no reasonable interpretation other than as an appeal to vote for or against a clearly identified Federal candidate.” This new standard applies without regard to the timing of the communication or the targeted audience.
In its application of the functional equivalent of express advocacy test, the Commission will be guided by the Supreme Court’s reasoning and application of the test to the communications at issue in Wisconsin Right to Life v. FEC (WRTL) 551 U.S. 449 (2007) and Citizens United v. FEC, 130 S. Ct. 876 (U.S. Jan 21, 2010). The new content standard is an objective, well-established standard. The functional equivalent of express advocacy test has been developed by the Supreme Court to apply to a wide range of speakers as a standalone test for separating election-related speech that is not express advocacy from non-election related speech.
The new content standard applies to all speakers subject to the coordinated communications rules at 11 CFR 109.21, including individuals and advocacy organizations, without regard to when a communication is made or its intended audience. As required by Shays III Appeal, the new content standard also captures more communications than the express advocacy content standard outside of the 90-day and 120-day time windows.
The “common vendor” and “former employee/independent contractor” standards of the conduct prong were challenged in Shays III Appeal.
Current Commission regulations provide that the “common vendor” standard of the conduct prong is satisfied if the person paying for the communication had contracted or employed a commercial vendor who provided certain specified services to the candidate clearly identified in the communication, the candidate’s authorized committee, the candidate’s opponent, the opponent’s authorized committee or a political party committee during the previous 120 days. Also, the commercial vendor must use or convey to the person paying for the communication information about the plans, projects, activities or needs of the candidate, the candidate’s opponent or political party committee, and that information must be material to the creation, production or distribution of the communication. 109.21(d)(4).
The former employee/independent contractor conduct standard is satisfied if the communication is paid for by a person or by the employer of a person who was an employee or independent contractor of the candidate clearly identified in the communication, or the candidate’s authorized committee, the candidate’s opponent, the opponent’s authorized committee or a political party committee during the previous 120 days. Additionally, the former employee or independent contractor must use, or convey to the person paying for the communication, information about the plans, projects, activities or needs of the candidate or political party committee that is material to the creation, production or distribution of the communication. 109.21(d)(5).
The Commission is not revising the common vendor or former employee conduct standards at this time. In order to comply with the Shays III Appeal decision, the Commission has decided to provide a more detailed explanation and justification for the 120-day period.
Based on the record, 120 days has been shown to be a sufficient time period to prevent circumvention of the Act. Many commenters, in written and oral testimony, agreed that campaign information must be both current and proprietary (i.e., nonpublic) to be subject to the coordinated communications regulation. The information in the rulemaking record shows the widespread has become problematic in the time the 120-day period has been in effect. The Commission concludes that it is extremely unlikely that a common vendor or former employee may possess information that remains material when it is more than four months old. public availability of certain types of campaign information that used to remain confidential for much longer in years past. The record also demonstrates that changes in technology have significantly reduced the duration of the news cycle, further decreasing the time that campaign information remains relevant. There is no information in the rulemaking record showing that use or conveyance by common vendors and former employees of information material to public communications outside of the 120-day period
Safe harbor for certain business and commercial communications
The Commission is also adopting a safe harbor to address certain commercial and business communications. The new safe harbor excludes from the definition of a coordinated communication any public communication in which a federal candidate is clearly identified only in his or her capacity as the owner or operator of a business that existed prior to the candidacy, so long as the public communication does not promote, attack, support or oppose (PASO) that candidate or another candidate who seeks the same office, and so long as the communication is consistent with other public communications made by the business prior to the candidacy in terms of the medium, timing, content and geographic distribution. New 11 CFR 109.21(i). The new safe harbor is meant to exclude communications that have bona fide business and commercial purposes from the definition of coordinated communication.
The final rules and Explanation and Justification were published in the Federal Register on September 15, 2010. The full text of the Federal Register notice is available on the Commission's website.