NPRM on federal candidates' and officeholders' participation in nonfederal fundraising
On November 19, 2009, the Commission approved a Notice of Proposed Rulemaking (NPRM) concerning federal officeholders' and candidates' participation at nonfederal fundraising events. The proposed rules respond to the part of the decision in Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008) (Shays III) that invalidated Commission regulations permitting federal candidates and officeholders to attend, speak and appear as featured guests at state, district and local party committee fundraising events "without restriction or regulation." 11 CFR 300.64(b).
Background
The Bipartisan Campaign Reform Act of 2002 (BCRA) amended the Federal Election Campaign Act (the Act) to restrict fundraising by federal candidates, officeholders, their agents and entities directly or indirectly established, financed, maintained or controlled by, or acting on behalf of, them. 2 U.S.C. §441i(e). According to BCRA, those persons may not "solicit, receive, direct, transfer or spend" funds in connection with an election for federal office unless the funds are subject to the limitations, prohibitions and reporting requirements of the Act or in connection with any election other than an election for federal office unless the funds are not in excess of the amount limitations and not from sources prohibited by the Act. 2 U.S.C. §§441i(e)(1)(A) and (e)(1)(b); 11 CFR 300.61 and 300.62. Additionally, state, district and local party committees are prohibited from accepting or using as Levin funds any funds solicited, received or transferred by or in the name of federal candidates and officeholders. 2 U.S.C. §441i(b)(2)(C)(i); 11 CFR 300.31(e).
BCRA does, however, permit federal candidates and officeholders to "attend, speak, or be a featured guest at a fundraising event for a state, district, or local committee of a political party." 2 U.S.C. §441i(e) (3). The Commission had interpreted this provision to allow federal candidates and officeholders to speak at state, district and local party committee events "without restriction or regulation." See 11 CFR 300.64(b). In addition, the Commission, through the advisory opinion process, laid out guidelines for federal candidate and officeholder activity at non-party, nonfederal fundraising events as well as their involvement in pre-event publicity for both types of events. For example, the Commission has clarified that federal candidates and officeholders may attend, speak or be a featured guest at non-party, non-federal fundraising events. And, if a federal candidate or officeholder solicits funds at such an event, the solicitation much be expressly limited—orally or in writing—to funds subject to the limitations and prohibitions of the Act. See, e.g., AOs 2003-03 and 2003-36; see also 2007-11 (regarding federal candidate and officeholder participation in pre-event publicity for nonfederal fundraising events).
In Shays III, the U.S. Court of Appeals for the District of Columbia Circuit concluded that the Commission's interpretation of 2 U.S.C. §441i(e)(3) as a total exemption from the general solicitation ban was not consistent with BCRA.
Proposed revisions to 11 CFR 300.64
To comply with the Shays III decision, the Commission proposes revising 11 CFR 300.64. The Commission offers three alternative proposals for public comment. Alternative 1 addresses only nonfederal fundraising events for state, district and local party committees, while Alternatives 2 and 3 address participation at all nonfederal fundraising events, including those for state and local candidates.
Alternative 1
Alternative 1 would delete paragraph (b) of 11 CFR 300.64, which permits federal candidates and officeholders to speak at state, district and local party committee fundraising events "without restriction or regulation." This alternative provides that federal candidates may attend state, district and local party committee fundraisers at which funds outside the limits and prohibitions of the Act or Levin funds are raised and that those who solicit funds at such events must do so within Commission regulations. Furthermore, Alternative 1 provides that state, district and local party committees may publicize federal candidates' and officeholders' participation in such events.
Scope of Alternatives 2 and 3
Proposed Alternatives 2 and 3 would involve a more extensive revision of 11 CFR 300.64 and provide additional guidance on federal candidates' and officeholders' participation at any fundraiser where funds are raised outside the Act's limits and prohibitions. Both Alternatives 2 and 3 would revise 11 CFR 300.64(a) to establish a more comprehensive scope than the present 11 CFR 300.64, by addressing federal candidate and officeholder participation at nonfederal fundraising events, as well as their participation in the pre-event publicity for such events.
Both Alternatives 2 and 3 would be limited in three ways. First, both proposals cover only participation by federal candidates and officeholders in nonfederal fundraising events. They would not cover fundraising events at which only federal funds are raised or fundraising events in connection with any nonfederal election at which only federally permissible funds are raised. Second, the proposals would cover only nonfederal fundraising events that are "in connection with any election for federal office or any non-federal election." Third, nothing in either proposal is intended to alter the fundraising exception for federal candidates and officeholders who are also state candidates (see 11 CFR 300.63), or the exceptions for certain tax-exempt organizations (see 11 CFR 300.65).
Alternative 2
Alternative 2 would permit federal candidates and officeholders to:
- Attend, speak at and be featured guests at nonfederal fundraising events;
- Solicit funds in compliance with the Act at such events; and
- Be featured—within certain limits—in pre-event publicity for such events.
This alternative does not distinguish between state, district and local party events and other nonfederal fundraising events. Alternative 2 is premised upon the idea that attending, speaking at or being a featured guest at nonfederal fundraising events does not constitute a solicitation and is therefore not subject to the Act's restrictions on federal candidates and officeholders. If a solicitation is made by a federal candidate or officeholder at such an event, it must be accompanied by a clear and conspicuous notice, either written or oral, that the solicitation is limited to funds permitted under the Act.
Paragraph (c) of Alternative 2 addresses the extent to which federal candidates and officeholders may participate in pre-event publicity associated with nonfederal fundraising events, including advertisements, announcements and pre-event invitations, regardless of form. The proposal differentiates between publicity that solicits funds outside the limits and prohibitions of the Act and publicity that does not. Under this proposal, so long as the publicity does not contain a solicitation, federal candidates and officeholders may approve, authorize, agree to or consent to the use of their names or likenesses in publicity for nonfederal fundraising events without limitation. Depending upon whether the solicitation is made by a federal candidate or officeholder or by another person or entity associated with the event, proposed paragraph (c)(2) establishes two standards for participation by federal candidates or officeholders in pre-event publicity that contains a solicitation for either Levin funds or funds outside the limitations and prohbitions of the Act.
Under proposed paragraph (c)(2)(i), federal candidates and officeholders would be prohibited from authorizing the use of their names or likenesses in publicity that constitutes a solicitation by them of impermissible funds under the Act. This includes a solicitation letter that is signed by a federal candidate as well as publicity identifying the candidate as serving in a fundraising capacity, such as being a member of the event’s "host committee." Alternatively, identifying a federal candidate or officeholder as a "featured speaker" or "honorary chairperson" would not constitute an impermissible solicitation under the terms of Alternative 2.
By contrast, proposed paragraph (c)(2)(ii) would permit federal candidates and officeholders to authorize the use of their names or likenesses in pre-event publicity that contains a solicitation of funds outside the limits and prohibitions of the Act so long as the solicitation is made by and clearly attributable to someone other than the federal candidate or officeholder. Such solicitations must also include a "clear and conspicuous" notice that the solicitation of funds outside the limitations and prohibitions of the Act is not being made by the named or pictured federal candidate or officeholder.
Alternative 3
Alternative 3 treats participation by federal candidates at nonfederal fundraising events for state, district and local party committees differently from participation by those individuals at all other nonfederal fundraising events. Under proposed paragraph (c) of this alternative, a federal candidate or officeholder may attend and speak (without solicitation) at a non-party, nonfederal fundraiser; however, the candidate or officeholder may not consent to the use of his or her name or likeness in publicity for those events.
Proposed paragraph (b)(1)(i) provides that federal candidates or officeholders may attend, speak at or be featured guests at nonfederal fundraising events for state, district or local party committees; however, they may only solicit funds at such events if the solicitation is not for Levin funds and is limited to funds that do not exceed the Act's contribution limits or come from prohibited sources under the Act. Under proposed paragraph (b)(2) of this alternative, candidates and officeholders may consent to the use of their names or likenesses for event publicity announcing their attendance or speech only if the publicity does not solicit funds outside the limits and prohibitions of the Act or Levin funds.
Comments
The Commission seeks comments on the proposed rules described in the NPRM, which was published in the Federal Register on December 7, 2009, (74 FR 64016) and is available on the FEC website at http://www.fec.gov/pdf/nprm/solicitationshays3/notice_2009-26.pdf. Comments must be received by February 8, 2010. Reply comments must be limited to the issues raised in the initial comments and must be received by February 22. The Commission will hold a hearing on March 10, 2010. Anyone wishing to testify at the hearing must file written comments by the due date and must include a request to testify.
All comments must be submitted in writing and addressed to Ms. Amy L. Rothstein, Assistant General Counsel. Commenters are strongly urged to submit their comments electronically to SolicitationShays3@fec.gov. Faxed comments may be sent to (202) 219-3923, with a hard copy follow-up. Hard copy comments and follow-up of faxed comments should be sent to the FEC at 999 E St., NW., Washington, DC 20463. All comments must include the full name and postal address of the commenter or they will not be considered. Comments will be posted to the FEC website at the close of the comment period.