Federal Election Commission Main Page
July 17, 2001
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2001-10
The Honorable Jesse L. Jackson, Jr.
P.O. Box 490286
Chicago IL, 60649-9906
Dear Mr. Jackson:
This refers to your letter dated June 8, 2001,
requesting advice on the application of the Federal Election
Campaign Act of 1971, as amended ("the Act") and Commission
regulations to your proposal to have your principal campaign
committee hire your wife, Ms. Sandi Jackson, as a
consultant.
FACTS
You state your principal campaign committee, Jesse L.
Jackson, Jr. for Congress ("the Committee"), plans to employ
your wife as a consultant. You explain that, in her
capacity as a consultant, Ms. Jackson would provide critical
fundraising and administrative support and services for your
campaign organization and operations, which you are now in
the process of restructuring. It is your view that your
wife's considerable experience and expertise would be of
great assistance to your re-election and fundraising
efforts.
You explain that throughout your wife's career, she has
worked in various positions in both campaigns and
government. In addition to past employment as chief of staff
for former Congressman Cleo Fields and press secretary for
the late Representative Mickey Leland, Ms. Jackson has
worked in national campaigns, including both the 1988
Dukakis and 1996 Clinton Presidential bids. Most recently,
Ms. Jackson has served as Vice President of Congressional
and External Affairs for the Export-Import Bank of the
United States.
Considering her considerable qualifications and
your interest in employing Ms. Jackson, you desire the
guidance and counsel of the Commission.1 You affirm
that you want to be certain that all the terms of any
future contract between your wife and your campaign
committee comply with the Act and Commission
regulations. In this regard, you ask whether the
hiring of your wife raises any conflicts of interest.
You ask what documentation and disclosure are necessary
to support such a contractual arrangement between your
wife and the Committee. Further, you wish to know what
other issues should be considered to avoid any problems
in the future.
ACT AND COMMISSION REGULATIONS
The Commission has historically recognized that
candidates have wide discretion in making expenditures to
influence their election. However, the Act prohibits the
conversion of campaign funds to personal use. 2 U.S.C.
439a; 11 CFR 113.2(d); see also Advisory Opinions 2001-
03, 2000-40, 2000-37, 2000-12. Commission regulations at
11 CFR 113.1(g) define personal use for the purposes of
this prohibition. Generally, personal use is "any use of
funds in a campaign account of a present or former
candidate to fulfill a commitment, obligation or expense
of any person that would exist irrespective of the
candidate's campaign or duties as a Federal
officeholder." 11 CFR 113.1(g). The rules list certain
uses of campaign funds that will be considered per se
personal use. 11 CFR 113.1(g)(1)(i).
Under this regulation, personal use includes the use
of funds in a campaign account for the following
purposes: household food items or supplies; funeral,
cremation or burial expenses; clothing; tuition payments
not associated with training campaign staff; mortgage,
rent or utility payments for the personal residence of a
candidate or his family; admission to sporting events,
concerts, or other forms of entertainment, unless part of
a specific campaign or officeholder activity; dues, fees
or gratuities to a country club, recreational facility,
or other nonpolitical organization, unless they are part
of the costs of a specific fundraising event on the
organization's premises; and salary payments to family
members, unless they are fair market value payments for
bona fide, campaign-related services.2 If a family
member is providing bona fide services to the campaign,
any salary payment in excess of the fair market value of
the services provided is personal use. 11 CFR
113.1(g)(1)(i)(H).
APPLICATION TO PROPOSAL
The Commission concludes that your proposal is
permissible under the Act and Commission regulations. The
regulations specifically permit salary payments to family
members where they are payments for "bona fide, campaign
related services." 11 CFR 113.1(g)(1)(i)(H). Regarding the
terms of any contract the Committee may enter into with your
wife, the Commission notes that as part of the Committee's
requirement to pay family members no more than the fair
market value of bona fide services, the contract should
contain terms customarily found in agreements entered into
between paid campaign consultants and candidate committees.
It should conform to the standard industry practice for this
type of contract. Beyond this, no special obligation is
imposed by the Act or Commission regulations.
Your subsequent communications by telephone with the
Office of General Counsel indicate that the contract is in
writing. To satisfy the record keeping requirements of 11
CFR 104.14(b), the Committee would be required to preserve
the contract and other documentation relating to Ms.
Jackson's employment for a period of not less than 3 years
after the filing of any report to which those records may
relate.3 See also 11 CFR 102.9(b)(1) and Advisory Opinion
2001-03.4
You also ask what are the disclosure requirements that
are necessary under the Act and Commission regulations for
the contractual arrangement. Salary payments are considered
operating expenditures and would have to be itemized and
reported as any other type of committee operating
expenditure. See 11 CFR 104.3(b)(2)(i) and 104.3(b)(4)(i).
The Act and Commission regulations do not impose additional
disclosure requirements for salary payments made to family
members for bona fide campaign work.
The Commission expresses no opinion regarding
application of any rules of the House of Representatives, or
the Ethics in Government Act to the described activities,
because these issues are not within its jurisdiction. 5 For
the same reason, the Commission does not express any views
as to any Federal or other tax ramifications.
This response constitutes an advisory opinion
concerning the application of the Act, or regulations
prescribed by the Commission, to the specific transaction or
activity set forth in your request. See 2 U.S.C. 437f.
Sincerely,
(signed)
Danny L. McDonald
Chairman
Enclosures (AOs 2001-03, 2000-40, 2000-37, 2000-12)
_______________________________
1 In a July 3, phone conversation you further stated that
while your wife will be working full-time for the campaign,
it is possible that she will still handle, and be paid for,
occasional consulting work for her current non-political
clients.
2 Other uses of campaign funds are to be examined on a case-
by-case basis using the general definition of personal use.
11 CFR 113.1(g)(1)(ii). These include, but are not limited
to, legal expenses, costs of meals, travel, and vehicle
expenses. Id.
3 Records to be maintained include bank records, receipts,
bills, vouchers and worksheets which provide in sufficient
detail the necessary information and data. Id.
4 Under 11 CFR 102.9(b)(1), the Committee is required to
maintain an account of all disbursements made by or on
behalf of the political committee including (among other
information) the name and address of every person to whom
any disbursement is made; the date, amount and purpose of
the disbursement.
5 You specifically ask in your request whether the hiring
of your wife "would raise any conflicts of interest." The
Commission notes that its response to any advisory opinion
request, again, is strictly limited to the application of
the Act and Commission regulations. In this request, its
conclusions are limited to whether your proposal is
permissible under the personal use regulations discussed
above.