NPRM on reporting bundled contributions
On October 30, 2007, the Commission approved a Notice of Proposed Rulemaking (NPRM) requesting comments on proposed rules requiring the disclosure of information about lobbyists, registrants and political action committees (PACs) established or controlled by lobbyists and registrants that bundle contributions to certain types of political committees. The proposed rules would require authorized committees, leadership PACs and political party committees to report certain information when lobbyists and registrants, or their PACs, provide bundled contributions aggregating in excess of a certain amount during a specific period of time. These rules would implement provisions of the Honest Leadership and Open Government Act of 2007 (HLOGA).
HLOGA amends the Federal Election Campaign Act (the Act) to require certain political committees to disclose information about each lobbyist, registrant and political committee established or controlled by a lobbyist or registrant that forwards, or is credited with raising, two or more bundled contributions aggregating in excess of $15,000 during a "covered period." Reporting committees must disclose the name and address of the lobbyist/registrant or lobbyist/registrant PAC, the lobbyist/registrant's employer (for individual persons) and the aggregate amount of contributions bundled to the committee within the covered period. New 2 U.S.C. §434(i). These reporting requirements are in addition to existing reporting and recordkeeping requirements for contributions that are received and forwarded, and the Commission does not propose to change any of these existing rules. 2 U.S.C. §432(b) and §441a(a)(8); 11 CFR 102.8 and 110.6.
The NPRM proposes rules requiring the reporting of, and recordkeeping for, information about lobbyists/registrants and lobbyist/registrant PACs that bundle contributions. Specifically, the new law requires the disclosure of information about a person who forwards, or is credited with raising, bundled contributions if the person is "reasonably known" by the reporting committee to be a lobbyist/registrant or lobbyist/registrant PAC. The NPRM proposes rules to provide guidance about how a reporting committee can determine whether a person identified on a filing qualifies as a lobbyist, a registrant or a political committee established or controlled by a registrant or lobbyist. The Commission seeks comments on this proposal and also specifically requests comments on proposed rules to define the terms used in HLOGA, as discussed below.
Definitions
"Lobbyist/registrant PAC." The Commission proposes to define the term "lobbyist/registrant PAC" as "any political committee established or controlled" by a lobbyist/registrant. Political committees that meet this definition would have to identify themselves on their Statements of Organization. The Commission anticipates revising FEC Form 1, Statement of Organization, to allow committees to identify themselves as lobbyist/registrant PACs, and requests comments on how best to allow for this disclosure.(1) The Commission also asks for comments on when a nonconnected committee would be considered "controlled" by a lobbyist/registrant and whether an SSF should be considered to be controlled by a lobbyist/registrant, by definition, when the SSF's connected organization employs in-house lobbyists.
"Covered period." HLOGA defines "covered period" as January 1 through June 30, July 1 through December 31 and "any reporting period applicable to the committee" under 2 U.S.C. §434 during which a lobbyist, registrant or one of their PACs provided more than two bundled contributions that aggregate over $15,000. 2 U.S.C. §434(i)(2). HLOGA gives the Commission authority to require monthly filers to disclose this information on a quarterly basis, rather than monthly. The NPRM includes a proposed and an alternative definition of "covered period," both of which would place monthly filers on the same schedule as quarterly filers.
Under the proposed definition, "covered period" would mean the semi-annual periods of January 1 through June 30 and July 1 through December 31. In addition, in any calendar year in which a reporting committee files monthly or quarterly reports, January 1 through March 31 and July 1 through September 30 would also be covered periods if during those periods a lobbyist/registrant or lobbyist/registrant PAC provided two or more bundled contributions that aggregated over $15,000. Thus, under the proposed rule, a committee that received such contributions during the first or third calendar quarter would have to disclose information about the bundler twice: once for the report covering the quarter during which the committee received the contributions and again at the end of the appropriate six-month period. Reporting for the six-month period would be cumulative, so that reports filed at mid-year and at year's end would show the aggregate amount bundled for each six-month period.
As an alternative, the Commission proposes to define "covered period" separately for years in which a committee files quarterly or monthly and for years in which a committee files semi-annually. Thus, for a committee filing quarterly or monthly the covered periods would be defined as January 1 through March 31, April 1 through June 30, July 1 through September 30 and October 1 through December 31. For a committee filing semi-annually, the covered periods would be the semi-annual periods of January 1 through June 30 and July 1 through December 31. Thus, a committee might file two reports under this requirement in a year that it filed semi-annually, but could be required to file four reports in a year when it filed monthly or quarterly. The Commission requests comments on these proposals.
The Commission also intends to create a new form for disclosing information about lobbyists and lobbyists PACs that provide bundled contributions. The form would be filed along with the committee's next regularly scheduled filing of Form 3, Form 3P or Form 3X, as appropriate, following the covered period. As with other disclosure reports, House and Presidential committees, and PACs that support them, would file with the FEC. Senate committees and PACs that support only Senate candidates would file with the Secretary of the Senate.
"Bundled Contributions." Proposed 11 CFR 104.22(a)(4)(i) and (ii) would implement new 2 U.S.C. §434(i)(8)(A) by defining the term "bundled contribution" as any contribution that a lobbyist/registrant or lobbyist/registrant PAC forwards to the reporting committee from the contributor or that the reporting committee receives from the contributor but credits to the lobbyist/registrant or lobbyist/registrant PAC through records, designations or other means of recognizing that a certain amount of money has been raised by the lobbyist/registrant or lobbyist/registrant PAC. Thus, forwarded contributions would satisfy the proposed definition of "bundled contributions" regardless of whether the bundler receives credit from the reporting committee.
In addition, under this proposed rule, a contribution must be both received by the reporting committee and credited to a lobbyist/registrant or lobbyist/registrant PAC in order to be considered a "bundled contribution." A contribution credited to a lobbyist/registrant or lobbyist/registrant PAC would not fit this definition unless the contribution was actually received by the reporting committee. The Commission asks if the amount credited should instead control whether or not the contribution counts as a bundled contribution and also seeks comments on whether these rules should apply to in-kind contributions.
The Commission additionally asks if the new law covers bundled contributions provided by employees and agents of organizations that are registrants, even if the individuals are not lobbyists themselves. Can an organization that is a registrant but is also prohibited from making contributions (such as a corporation or labor organization) be credited with having raised contributions?
"Candidate involved." Proposed 11 CFR 104.22(a)(5) provides that the term "candidate involved" means, for authorized committees, the candidate for whom the committee is authorized and, for leadership PACs, the candidate or individual holding federal office who directly or indirectly establishes, maintains, finances or controls the leadership PAC. The Commission seeks comments on this proposed definition.
"Designations." Proposed 11 CFR 104.22(a)(6) would provide that "designations or other means of recognizing" a lobbyist/registrant or lobbyists/registrant PAC's fundraising would include "titles based on levels of fundraising, access to events reserved exclusively for those who generate a certain level of contributions, or similar benefits provided as a reward for successful fundraising." The Commission seeks comments on this approach and asks whether there are other examples of records, designations or other means of recognizing such fundraising.
Comments
The complete text of the NPRM was published in the November 6, 2007, Federal Register (72 FR 62600) and is available on the FEC website at https://www.fec.gov/resources/legal-resources/rulemakings/nprm/bundling_hloga/notice_2007-23.pdf. Comments must be received on or before November 30, 2007, and the Commission will announce the hearing date for this rulemaking at a later date. Anyone seeking 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 to Ms. Amy L. Rothstein, Assistant General Counsel, by email, fax or paper copy form. Commenters are strongly encouraged to submit comments by email or fax to ensure timely receipt and consideration. Email comments must be submitted to bundling07@fec.gov, and faxed comments must be sent to 202/214-3923, with a paper copy follow-up. Send paper comments and paper copy follow-ups of faxed comments to the Federal Election Commission, 999 E St., NW., Washington, DC 20463. All comments must include the commenter's full name and address.
1) 1 This same identification requirement would apply to political committees that meet the definition of leadership PAC, and amendments to FEC Form 1 will include amendments to include "leadership PAC" as a type of committee. See 11 CFR 100.5(e)(6).