Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
October 21, 2004
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2004-37
Joseph M. Birkenstock, Esq.
Smith Kaufman LLP
777 S. Figueroa Street
Suite 4050
Los Angeles, CA 90017-5864
Dear Mr. Birkenstock:
This responds to your letters dated September 27 and October
7, 2004, on behalf of (1) Representative Maxine Waters, (2)
Citizens for Waters (the "Waters Committee"), which is
Representative Waters' principal campaign committee, and (3)
People Helping People ("PHP"), which is Representative Waters'
"leadership PAC" and is a multicandidate committee, requesting an
advisory opinion concerning the application of the Federal
Election Campaign Act of 1971, as amended (the "Act"), and
Commission regulations to the production and distribution by
either committee of a brochure1 listing and expressly advocating
the election of certain Federal and non-Federal candidates.
Your request raises two principal issues. The first is
whether the proposed brochure would constitute support of, or be
an in-kind contribution to, the authorized committees of the
Federal candidates listed in the brochure, where each Federal
candidate listed in the brochure will reimburse whichever
committee produces and distributes the brochure for the full
costs attributable to that candidate. The second issue is
whether reimbursements by the Federal candidates constitute
support of, or would be contributions to, the Waters Committee or
PHP, subject to the Act's applicable contribution limits.
The Commission concludes that the proposed brochure would
not constitute support of, or be an in-kind contribution to, the
Federal candidates listed in the brochure, provided that the
Federal candidates provide reimbursements in the appropriate
amount in a timely manner. The Commission also concludes that
reimbursements by the Federal candidates for their attributable
portion of the costs would not constitute support of, or be
contributions to, the Waters Committee or PHP. Additionally,
this advisory opinion discusses how the Waters Committee or PHP
should determine the cost attributable to each candidate and
should report both the initial payments for production and
distribution of the brochure and the reimbursements by the
Federal candidates. Finally, this advisory opinion sets forth
the disclaimer requirements for the proposed brochure.
Background
Representative Waters is the U.S. Representative from the
35th Congressional District of California and a candidate for re-
election to that office in the November 2, 2004, general
election. You state that, through either the Waters Committee or
PHP, Representative Waters intends to produce and distribute a
brochure that will expressly advocate the election of clearly
identified Federal and non-Federal candidates in the November 2,
2004, general election. The brochure will be distributed by U.S.
Mail.
The brochure will feature a prominent picture or likeness of
Representative Waters on the front page. It will be promoted as
Representative Waters' "official sample ballot" and will contain
brief quotes, which convey her opinions and endorsements of the
Federal and non-Federal candidates listed.
You anticipate that the brochure will include Presidential
candidate Senator John Kerry, Vice-Presidential candidate Senator
John Edwards, U.S. Senator Barbara Boxer, U.S. Representatives
Juanita Millender-McDonald and Diane Watson, perhaps other U.S.
House candidates, and candidates for various non-Federal offices.
You represent that Federal candidates will be included in the
brochure only if their principal campaign committees reimburse
for the full production and distribution costs of the brochure
attributable to them.
You state that candidates will be given space and prominence
in the brochure in rough proportion to their prominence on the
Democratic ticket. Senators Kerry and Edwards will be portrayed
very prominently, statewide candidates and U.S. House candidates
less so, and local candidates generally will only be listed on a
ballot line resembling an actual voting ballot. The listings of
the candidates will be accompanied by endorsements of varying
lengths. All endorsements will be printed in Representative
Waters' handwriting.
You indicate that several different versions of the brochure
will be produced and distributed in order to reflect accurately
the actual ballot within the recipient's voting precinct.
Accordingly, any candidate other than Representative Waters will
only be included in brochures that are mailed to precincts where
he or she is on the actual ballot on November 2, 2004. More than
500 pieces of each version of the brochure will be mailed and the
total distribution of all versions will be approximately 200,000
pieces.
Finally, you state that you are not requesting the
Commission's opinion regarding the application of the Act and
Commission regulations to any arrangements with, or payments by,
non-Federal candidates or their committees, but instead you limit
your advisory opinion request to the arrangements with, and
payments by, any Federal candidates who will be included in the
proposed brochure.
Legal Analysis and Conclusions
1. Would the proposed brochure constitute support of, or be an
in-kind contribution to, the authorized committees of the Federal
candidates listed in the proposed brochure where all Federal
candidates listed in the brochure will reimburse the Waters
committee or PHP for their attributable portion of the brochure's
production and distribution costs?
Depending on which committee pays for the production and
distribution of the proposed brochure, your request implicates
two separate sections of the Act and Commission regulations.
First, if the Waters Committee pays for the production and
distribution of the proposed brochure, it would implicate the
limits that the Act and Commission regulations place on the
support that a principal campaign committee or authorized
committee of a Federal candidate may provide to other Federal
candidates or their committees. See 2 U.S.C. 432(e)(3)(A) and
(B); 11 CFR 102.12(c)(1) and (2); 11 CFR 102.13(c)(1) and (2).
Second, if PHP (which has only a Federal account) pays for the
brochure, it would implicate the limits that the Act and
Commission regulations place on contributions to candidates by
multicandidate committees. See U.S.C. 441a(a)(2)(A) and
110.2(b)(1). Both the limits on support by principal campaign
committees and the contributions limits on multicandidate
committees would be triggered if the proposed brochure were an in-
kind contribution to the Federal candidates listed in the
brochure. The brochure would be an in-kind contribution if it
were a coordinated communication under
2 U.S.C. 441a(a)(7)(B)(i) and 11 CFR 109.21.
The Act defines as an in-kind contribution an expenditure
made by any person "in cooperation, consultation, or concert,
with, or at the request or suggestion of, a candidate, his
authorized political committees, or their agents." 2 U.S.C.
441a(a)(7)(B)(i). The Commission's "coordinated communication"
regulation at 11 CFR 109.21 specifies that a payment for a
communication is made for the purpose of influencing a Federal
election, and is an in-kind contribution to the candidate or
authorized committee with whom or which it is coordinated if it
satisfies the following three-pronged test: (1) the communication
must be paid for by a person other than the Federal candidate or
authorized committee in question; (2) one or more of the four
content standards set forth in 11 CFR 109.21(c) must be
satisfied; and (3) one or more of the six conduct standards set
forth in 11 CFR 109.2l(d) must be satisfied. See 11 CFR
109.21(a), (b)(1).
In the present case, because you represent that each Federal
candidate will be included in the brochure only if he or she
reimburses the Waters Committee or PHP for the full production
and distribution costs attributed to him or her, the proposed
brochure would not satisfy the payment prong of the coordinated
communication test. Accordingly, the Commission determines that
the payments by either the Waters Committee or PHP for the
brochure would not constitute support of, or in-kind
contributions to, any Federal candidate appearing in the
brochure, so long as the authorized committee of that Federal
candidate reimburses the Waters Committee or PHP within a
reasonable period of time. See Advisory Opinions 2004-1
(concluding that communications produced and distributed by one
candidate's authorized committee and coordinated with a second
candidate's authorized committee would not result in an in-kind
contribution to the second authorized committee so long as the
second committee reimbursed the first committee for the
attributed portion of the coordinated communications) and 2004-29
(reaching a similar conclusion with respect to a coordinated
communication by a State ballot committee and the authorized
committee of a Federal candidate). Thus, because the proposed
brochure would not be an in-kind contribution to any of the
Federal candidates listed in it, the production and distribution
of the brochure would not be subject to the limits of either 2
U.S.C. 432(e)(3) or 441a(a)(2)(A).
You represent in your October 7 letter that "federal
candidates who do not pay a proportionate share of the expenses
of the ballot under 11 C.F.R. 106.1 will not be included in the
ballot." The Commission assumes that if PHP produces and
distributes the sample ballot, the Waters Committee, like the
authorized committees of all the other Federal candidates listed,
will reimburse PHP for the full costs attributable to
Representative Waters.
2. Would reimbursements by the authorized committees of the
Federal candidates listed in the brochure constitute support of,
or be contributions to, the Waters Committee or PHP and thus be
subject to the Act's applicable contribution limits?
This question implicates the same sections of the Act and
Commission regulations as your first question. The Commission
concludes that reimbursements by the authorized committees of the
Federal candidates listed in the brochure in amounts equal to the
attributable costs associated with each candidate's listing would
not constitute support of the Waters Committee or contributions
to PHP because, in this situation, mere reimbursement of the
costs associated with the production and distribution of the
proposed brochure within a reasonable period of time would not
constitute "anything of value" to the Waters Committee or PHP
under
2 U.S.C. 431(8)(A)(i) and 11 CFR 100.52. See Advisory Opinion
2004-1. Therefore, such reimbursements would not be subject to
the Act's limits at 2 U.S.C. 432(e)(3) and 441a(a)(2)(A). To the
extent that any reimbursement by a candidate's authorized
committee exceeds the costs attributed to that candidate, such
excess reimbursement would constitute a contribution either to
the Waters Committee or PHP and would be subject to the Act's
applicable contribution limit. See 2 U.S.C. 432(e)(3)(B); 2
U.S.C. 441a(a)(1)(C); 11 CFR 102.12(c)(2); 11 CFR 110.1(d).
3. How should the Waters Committee or PHP calculate the amount
of the brochure's production and distribution costs attributable
to each candidate listed in the brochure?
Commission regulations provide for the attribution of the
expenses of a communication that is for the purpose of
influencing the election of more than one candidate. Under 11
CFR 106.1, expenditures made on behalf of more than one clearly
identified Federal candidate shall be attributed to each such
candidate according to the benefit reasonably expected to be
derived. In the case of a publication such as the proposed
brochure, the attribution shall be determined by the proportion
of space devoted to each candidate as compared to the total space
devoted to all candidates. 11 CFR 106.1(a)(1). The regulation
makes clear that this attribution method also applies to payments
involving both expenditures on behalf of one or more clearly
identified Federal candidates and disbursements on behalf of one
or more clearly identified non-Federal candidates. 11 CFR
106.1(a). Thus, attribution is determined by the proportion of
space devoted to each candidate, as compared to the total space
devoted to all candidates, whether Federal or non-Federal.
Your proposed brochure will feature a prominent picture or
likeness of Representative Waters, will be promoted as her
official "sample ballot," and will expressly advocate the
election of each of the other identified candidates. The
Commission concludes that the costs of a particular version of
the brochure must be attributed to each Federal or non-Federal
candidate, including Representative Waters, according to the
space devoted to such candidate in proportion to the space
devoted to all candidates. Given that different versions of the
brochure will be distributed, and not every candidate will appear
in all versions, the calculation of the costs attributable to a
particular Federal or non-Federal candidate must also take into
account the varying shares and costs attributable to each version
of the brochure.
4. How should the Waters Committee or PHP report (a) the
initial payments for the production and distribution of the
brochure and (b) the reimbursements by the candidates listed in
the brochure for their attributed portion of these costs?
The Waters Committee (on FEC Form 3) or PHP (on FEC Form 3X)
must report all the production and distribution costs of the
proposed brochure as operating expenditures and, likewise, report
reimbursements by each authorized committee of the individual
candidates listed in the brochure as offsets to operating
expenditures. 2 U.S.C. 434(b)(2)(I) and (4)(A); 11 CFR
104.3(a)(2)(vii) and (3)(ix); 11 CFR 104.3(b)(1)(i) and (2)(i).
Assuming that the costs attributable to each candidate will
exceed $500, either the Waters Committee or PHP must disclose the
costs attributable to each of the candidates as a debt owed to it
on Schedule D of the 30-Day Post General Election Report and
future reports, unless a candidate's complete reimbursement
occurs on or before November 22, 2004, the closing date of the
Post General Election Report.2 2 U.S.C. 434(b)(8); 11 CFR
104.11(a) and (b).
With the itemized entries under "operating expenditures,"
the Waters Committee or PHP should include a notation stating:
"Exp. for mailing - see AO 2004-37." For each of the entries
under "offsets to operating expenditures," the notation should
read: "Reimb. for mailing - see AO 2004-37." Moreover, any
related entries on Schedule D should state "For mailing - see AO
2004-37."
5. What are the disclaimer requirements for the proposed
brochure?
Because more than 500 pieces of each version of the proposed
brochure will be distributed by U.S. Mail, each version of the
brochure will be a "mass mailing"3 and therefore will constitute
a public communication.4 Under the Act and Commission
regulations, public communications that are paid for by
candidates, or their authorized committees or agents of either,
must also include a disclaimer that clearly states that the
communication has been paid for by the authorized political
committee. 2 U.S.C. 441d(a); 11 CFR 110.11(a)(1) and (b)(1).
Accordingly, the proposed brochure must include a disclaimer
stating that the brochure has been paid for by the authorized
committees of each Federal candidate appearing in the brochure.
The Commission has previously allowed for some flexibility in
listing candidate names in a disclaimer notice. See Advisory
Opinion 1994-13 and MUR 2216. In this case, the Commission
determines that, instead of listing each Federal candidate's
committee in the disclaimer, the Waters Committee or PHP would
also satisfy the Act's disclaimer requirements by marking each
paying candidate with an asterisk and including a statement on
the mailing declaring that the brochure was "paid for by the
authorized committees of the candidates marked with an asterisk."
This response constitutes an advisory opinion concerning the
application of the Act and Commission regulations to the specific
transaction or activity set forth in your request. See
2 U.S.C. 437f. The Commission emphasizes that, if there is a
change in any of the facts or assumptions presented, and such
facts or assumptions are material to a conclusion presented in
this advisory opinion, then the requestor may not rely on that
conclusion as support for its proposed activity.
Sincerely,
(signed)
Ellen L. Weintraub
Vice Chair
Enclosures (AOs 2004-29, 2004-1 and 1994-13)
_______________________________
1 Although you describe the document you plan to produce as a
"sample ballot," because certain candidates will be featured more
prominently than others and because the document will include
brief commentary by Representative Waters about the candidates
listed, the document is not simply a sample ballot. Accordingly,
this advisory opinion will refer to the document as a "brochure."
2 The debt will no longer have to be disclosed after the report
covering the period in which the debt is completely extinguished.
3 A "mass mailing" is defined at 11 CFR 100.27 as "a mailing by
United States mail or facsimile of more than 500 pieces of mail
matter of an identical or substantially similar nature within any
30-day period."
4 "Public communication" is defined in 2 U.S.C. 431(22) and 11
CFR 100.26 as "a communication by means of any broadcast, cable
or satellite communication, newspaper, magazine, outdoor
advertising facility, mass mailing or telephone bank to the
general public, or any other form of general public political
advertising."