MURs 5577 and 5620: prohibited contributions and failure to register as a political committee

On June 19, 2007, the Commission announced a settlement with the National Association of Realtors 527 Fund (NAR 527) in connection with violations of the Federal Election Campaign Act (the Act) during the 2004 election cycle. NAR 527, which is associated with the Chicago-based National Association of Realtors (NAR), will pay $78,000 to settle charges that it failed to register and file disclosure reports as a federal political committee and accepted contributions in violation of federal limits and source prohibitions.

Background

During the 2004 election cycle, NAR 527 received $2.9 million from NAR and received no other funds. NAR 527 spent approximately $2.8 million to create and distribute various public communications that clearly identified nine federal candidates, including direct mail pamphlets and newspaper ads. The Commission concluded that certain of these public communications expressly advocated the election of federal candidates and that NAR 527's spending indicated that its sole purpose was to advocate the election of federal candidates.

The Act and Commission regulations require a group whose major purpose is to influence federal elections to register with the Commission as a political committee within ten days of receiving contributions or making expenditures that exceed $1,000 per calendar year. All political committees must file regular reports disclosing the committee's receipts and disbursements, and such committees may not accept any contributions from corporations and may accept no more than $5,000 per calendar year from an individual or another PAC.

NAR 527 registered with the Internal Revenue Service as a "Section 527" organization—a tax exempt group whose function is to influence the selection, nomination, election or appointment of any individual to federal, state or local public office or office in a political organization, or the election Presidential electors. However, NAR 527 failed to register as a political committee with the FEC, even though it met the statutory threshold for political committee status and had federal campaign activity as its major purpose.

NAR 527 agreed to pay the civil penalty, register as a political committee and disclose its activities to the public in reports filed with the Commission.