Notice of proposed rulemaking on candidate travel and definition of leadership PAC

On October 18, 2007, the Commission approved a Notice of Proposed Rulemaking (NPRM) proposing rules to implement the new statutory provisions of the Honest Leadership and Open Government Act of 2007 (HLOGA). The NPRM outlines proposed regulations governing the rates and timing of payment for campaign travel on non-commercial aircraft and the definition of leadership PAC.

Background

HLOGA amends section 2 U.S.C. §439a(c) of the FECA to prohibit Senate and Presidential candidates, and their authorized committees, from spending campaign funds for travel on non-commercial aircraft, unless they pay their pro-rata share of the charter rate. House candidates, and their authorized committees and leadership PACs, are prohibited from spending any campaign funds for travel on private, non-commercial aircraft. There are exceptions for travel on government aircraft and aircraft owned by candidates or members of their immediate families, but the new provisions make it clear that candidates will no longer be permitted to pay the first-class or coach airfare for travel on a private plane. These provisions took effect when President Bush signed HLOGA into law on September 14, 2007.

HLOGA also defines the term "leadership PAC." Therefore, the Commission proposes adding the term to its regulations at 11 CFR 100.5, the section listing examples of "political committees." In addition, the Commission proposes revising its regulations to conform its existing exception to the definition of "contribution" for non-commercial travel aboard aircraft by, or on behalf of, federal candidates and authorized committees if the aircraft provider is reimbursed at a specific rate. 11 CFR 100.93.

Definition of leadership PAC

In HLOGA, Congress defined a leadership PAC as "a political committee that is directly or indirectly established, financed, maintained or controlled by [a] candidate [for federal office] or [an] individual [holding federal office] but which is not an authorized committee of the candidate or individual and which is not affiliated with an authorized committee of the candidate or individual, except that such term does not include a political committee of a political party." New section 2 U.S.C. §434(i)(8)(B). The Commission proposes to incorporate a definition of leadership PAC into the general definition of "political committee," rather than within the travel rules themselves, since the new definition will affect several regulations. 11 CFR 100.5.

Non-commercial travel for Presidential, Vice-Presidential and Senate candidates

New 2 U.S.C. §439a(c)(1)(B) requires candidates for President, Vice-President and Senate to pay the pro-rata share of the fair market value of flights on non-commercial aircraft. The pro-rata share is determined by dividing the fair market value of the normal and usual charter fare or rental charge for a comparable plane of comparable size by the number of candidates on the flight. The Commission proposes to define the pro-rata share based upon the number of candidates represented on the flight. A candidate would be represented on a flight if a person is traveling on behalf of that candidate or his or her authorized committee or leadership PAC. The entire charter rate would be split between the various candidates represented on the flight. The reimbursement rate would not apply when the candidate or his or her representative is traveling on behalf of another committee rather than on behalf of the candidate's own campaign.

The NPRM also outlines three other alternative methods for determining the pro-rata share. The alternatives include applying reimbursement:

• Based upon the number of represented committees, rather than the number of candidates or candidate committees (i.e., includes reimbursement by a representative traveling on behalf of a PAC);
• Reflecting the number of candidate representatives as a percentage of all aircraft passengers; or
• At a rate for an aircraft of sufficient size to seat the committee's own campaign travelers (as outlined in the current rules).

Non-commercial travel for House candidates

New 2 U.S.C. §439a(c)(2) provides that House candidates (including candidates for the office of Delegate or Resident Commissioner) and their authorized committees and leadership PACs may not make expenditures for non-commercial air travel. HLOGA provides an exception from this prohibition for payments for travel on government airplanes and aircraft owned by the candidate or members of the candidate's family. Note that the new provision would also apply to persons traveling on behalf of a House candidate, the candidate's authorized committee or the candidate's Leadership PAC.

Exception for aircraft owned by candidates and family members

The amendments to the statute include an exception for travel aboard aircraft owned or leased by a candidate or candidate's immediate family member, including an aircraft owned or leased by an entity in which the candidate or a member of candidate's immediate family has an ownership interest. 2 U.S.C. §439a(c)(3)(A). While the new exception relieves the restrictions on expenditures, it does not relieve candidates of the obligation to reimburse the service provider to avoid receiving an in-kind contribution for the use of the aircraft. The Commission proposes that the reimbursement rates follow those set forth in the Commission's existing rules—where the payment rate depends upon whether the travel is between cities served by regularly scheduled commercial airline service and whether that service is available at the first-class or coach rate. See 11 CFR 100.93 (a)(3)(i) and 100.93(c). The Commission also sought comments on alternatives that would only require reimbursement for the incremental costs for the flight, or the actual value of the flight determined by any charge that the candidate or family member must pay for the use of the aircraft.

Exception for government aircraft

HLOGA also excepts travel on government aircraft from its general restrictions and prohibitions on payments for air travel, but it does not specify any particular rate of reimbursement for travel aboard government aircraft. The Commission proposes rules where campaign travelers must reimburse the appropriate government entity for the travel at one of two rates: the pro rata share reimbursement rate for an aircraft of sufficient size to accommodate all campaign travelers, or a reimbursement rate specified by the government entity providing the aircraft.

Non-commercial travel by other campaign travelers

While a non-candidate reimbursement rate is not addressed in the new law, the Commission proposes changes intended to promote uniformity in the regulations. The NPRM presents a proposed air travel reimbursement rate for non-candidate travelers (i.e., individuals traveling on behalf of party committees, separate segregated funds or nonconnected PACs): the pro-rata share of the fair market value of such travel, calculating the pro-rata share in the same manner used for travel on behalf of Presidential, Vice-Presidential and Senate candidates. This rate would not apply when the travel is shared with a candidate or person traveling on behalf of a candidate because the candidate would be responsible for the entire cost of the flight. The Commission also proposed an alternative in which it would retain the existing reimbursement rates for non-candidate travel—at the first-class or coach rate based upon whether the travel is between cities served by regularly scheduled commercial airline service.

Additional proposed revisions

The NPRM outlines additional proposed revisions to assist in implementing HLOGA.

Members of the media. Currently, the candidate's committee is ultimately responsible for paying the service provider for costs of media travel, but may seek reimbursement for the media's portion of the travel expenses. The proposed rule would insure that the media would not be permitted to relieve the candidate of the responsibility for paying the service provider the full normal and usual charter rate or rental charge for travel on aircraft. 11 CFR 100.93(b)(1)(iii).

Security personnel. Under current rules, security personnel are not necessarily considered campaign travelers, but could qualify as such depending upon the nature of any additional services that they provide for the candidate. The proposed rule would make the candidate committee responsible for the full cost of travel for security personnel traveling with a candidate or candidate's committee. However, for travel on a government aircraft, security personnel would not be included in the calculation of the size of a comparable aircraft. 11 CFR 100.93(c)(1) and (e)(1).

"Comparable plane of comparable size." For the purposes of calculating the appropriate charter rate in the proposed rules, the Explanation and Justification clarifies the Commission's interpretation of "comparable size" as an aircraft with similar physical dimensions that is able to carry a similar number of passengers, and "comparable plane" as an aircraft of similar make and model as the airplane that actually makes the trip, with the same amenities as that airplane.

Travel on behalf of Senate candidate leadership PACs. While the new law does not address leadership PACs of Senate candidates, the Commission proposes to extend the new reimbursement rates that apply to Senate candidates and authorized committees to travel on behalf of a Senate candidate's leadership PACs.Commercially reasonable time frame. The statutory provisions for non-commercial travel by Presidential and Senate candidates require reimbursement within a "commercially reasonable time frame." The Commission proposes to define the term as a "seven-day time frame beginning on the first day of the flight."

Use of campaign funds for non-commercial travel

In addition to the revisions to the travel reimbursement regulations at 11 CFR 100.93, the Commission also proposes adding a new section to its regulations on the use of campaign funds at Part 113 to directly implement the limit on expenditures for non-commercial air travel. The proposed rules in this section outline the new prohibition on expenditures for non-commercial campaign travel for federal candidates and their authorized committees and Leadership PACs and provide that the unreimbursed value of transportation provided to any campaign traveler is an in-kind contribution from the service provider to the candidate or authorized committee on whose behalf the travel was taken.

Additional information

The full text of the NPRM was published in the October 23, 2007, Federal Register and is available on the FEC web site at https://www.fec.gov/resources/legal-resources/rulemakings/nprm/cand_travel_hloga/notice_2007-20.pdf.