Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
June 10, 2005
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2005-05
Mr. Rex Linder
Friends of Ray LaHood
4238 N. Knoxville Avenue
Peoria, Illinois 61614
Dear Mr. Linder:
We are responding to your advisory opinion request on
behalf of Representative Ray LaHood regarding the
application of the Act and Commission regulations to
proposed uses of funds remaining in the account of a State
committee that was created to finance Representative
LaHood's "recent interest in exploring his candidacy for
Governor of the State of Illinois." The Commission
concludes that if Representative LaHood decides not to
become a gubernatorial candidate, he or his State
exploratory committee may use the remaining funds in the
exploratory committee's account to make donations to State
and local candidates and to the non-Federal accounts of
State and local Republican party organizations.
Additionally, Representative LaHood or his State exploratory
committee may make refunds to donors, and may make donations
to entities organized under section 501(c)(3) of the
Internal Revenue Code of 1986 that do not engage in any
election activity.
Background
The facts of this request are presented in your letter
received on April 21, 2005 and in your e-mail communications
dated April 26 and 29, 2005.
Representative Ray LaHood is the U.S. Representative
from the 18th District of Illinois and a candidate for re-
election to the U.S. House of Representatives in 2006. His
principal campaign committee for re-election is Friends of
Ray LaHood.
Representative LaHood is also currently interested in
exploring a candidacy for Governor of Illinois.1
Accordingly, Representative LaHood has established Ray
LaHood for Illinois ("LaHood State Committee"). The LaHood
State Committee is registered with the State of Illinois and
has raised funds to finance his exploratory campaign. You
represent that all funds raised by, and for, the LaHood
State Committee have been in amounts and from sources that
are in compliance with the limitations and prohibitions of
the Federal Election Campaign Act of 1971, as amended (the
"Act").
Questions Presented
If Representative LaHood decides not to announce a
candidacy for Governor of Illinois, may he use the remaining
funds raised and deposited into the LaHood State Committee
account for:
1. Donations to State and local candidates;
2. Donations to the non-Federal accounts of State and
local Republican party organizations;
3. Refunds to donors; or
4. Donations to 501(c)(3) organizations that do not engage
in any election activity?
Legal Analysis and Conclusions
As amended by the Bipartisan Campaign Reform Act of
2002 ("BCRA"), Pub. L. No. 107-155, 116 Stat. 81 (March 27,
2002), the Act regulates certain actions of Federal
candidates and officeholders, their agents, and entities
directly or indirectly established, financed, maintained, or
controlled by, or acting on behalf of, Federal candidates or
officeholders (collectively "covered persons"), when they
raise or spend funds in connection with either Federal or
non-Federal elections. 2 U.S.C. 441i(e); 11 CFR 300.60
through 300.65. In pertinent part, BCRA, and the Commission
regulations implementing BCRA, prohibit covered persons from
soliciting, receiving, directing, transferring, spending, or
disbursing funds in connection with any non-Federal election
unless the funds do not exceed the amounts permitted with
respect to contributions to Federal candidates and political
committees under 2 U.S.C. 441a(a)(1), (2), and (3), and are
not from sources prohibited by the Act from making
contributions in connection with an election for Federal
office.2 2 U.S.C. 441i(e)(1)(B); 11 CFR 300.62; see also 2
U.S.C. 441a, 441b, 441c, 441e, and 441f. Commission
regulations also require such funds to be in amounts and
from sources that are consistent with State law. 11 CFR
300.62.
Representative LaHood is both a Federal candidate and a
Federal officeholder. Additionally, the LaHood State
Committee is an entity that is directly established,
financed, maintained, or controlled by him. Therefore, if
any of the proposed uses for these funds are in connection
with a non-Federal election, then these funds must be raised
and spent in accordance with 2 U.S.C. 441i(e)(1)(B), or the
exception found in section 441i(e)(2). See also 11 CFR
300.62 and 300.63.
Questions 1 and 2
May Representative LaHood use the remaining funds in
the LaHood State Committee account to make donations to
State and local candidates and to the non-Federal accounts
of State and local Republican Party organizations?
Yes, Representative LaHood may use those funds to make
donations to non-Federal candidates and to these non-Federal
accounts, provided such donations are consistent with
Illinois law.
Donations to a State or local candidate or to the non-
Federal account of any State or local Republican party
organization would include transfers, spending, or
disbursements of funds in connection with a non-Federal
election, which under 2 U.S.C. 441i(e)(1)(B) and 11 CFR
300.62 must consist only of funds that are not in excess of
the amounts permitted with respect to contributions to
Federal candidates and political committees and are not from
prohibited sources.
You have represented that the LaHood State Committee
has accepted donations only in accordance with the Act's
limitations and prohibitions and therefore are not in excess
of the amounts permitted with respect to Federal candidates
and are not from prohibited sources. Accordingly, all the
funds in the LaHood State Committee account are in
compliance with the restrictions found in 2 U.S.C.
441i(e)(1)(B) and 11 CFR 300.62, and Representative LaHood
or the LaHood State Committee may donate such funds to State
and local candidates or to the non-Federal accounts of State
and local Republican party organizations without further
restriction under 2 U.S.C. 441i(e)(1)(B) and 11 CFR 300.62,
provided that such donations are consistent with Illinois
law.
Question 3
May Representative LaHood use the remaining funds in
the LaHood State Committee account to make refunds to
donors?
Yes, Representative LaHood may use those funds to make
refunds to donors, provided such refunds are consistent with
Illinois law.
As discussed above, the funds in the LaHood State
Committee consist only of donations that were raised in
amounts permitted with respect to Federal candidates and are
not from prohibited sources. Therefore, any such refund
would be of funds that are already in compliance with
section 441i(e)(1)(B) of the Act. Accordingly,
Representative LaHood or the LaHood State Committee may use
the unexpended funds in the LaHood State Committee account
to make refunds, provided that such refund is consistent
with Illinois law.
Question 4
May Representative LaHood use the remaining funds in
the LaHood State Committee account to make donations to
section 501(c)(3) organizations that do not conduct any
election activity?
Yes, Representative LaHood may use those funds to make
donations to section 501(c)(3) organizations that do not
conduct any election activity, provided such donations are
consistent with Illinois law.3
Donations to section 501(c)(3) organizations that
conduct no election activity of any kind do not involve
transfers, spending, or disbursements of funds in connection
with a Federal or non-Federal election and therefore do not
fall within the restrictions found in 2 U.S.C. 441i(e)(1).
See Advisory Opinion 2003-32.
The Commission expresses no opinion regarding the tax
ramifications, if any, of the proposed activities under the
Internal Revenue Code because those issues are not within
its jurisdiction.
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)
Scott E. Thomas
Chairman
Enclosure (AO 2003-32)
_______________________________
1 The Illinois gubernatorial primary election will take
place on March 21, 2006. 10 ILCS (Illinois Compiled
Statutes) 5/2A-1.1 (2005) (Illinois even-numbered year
primaries are held on the third Tuesday in March). The
earliest candidates can qualify to have their names placed
on the primary ballot is December 2005. 10 ILCS 5/7-12
(2005) (Illinois petitions for nomination must be filed no
earlier than 99 and no later than 92 days prior to the date
of the primary).
2 Although, as indicated above, the requestor has
represented that all funds raised by, and for, the LaHood
State Committee have been in amounts and from sources that
are in compliance with the limitations and prohibitions of
the Act, section 441i(e)(2) of the Act specifically provides
an exception that permits Federal candidates or
officeholders who are also candidates for a State or local
office to solicit, receive, and spend funds outside the
limitations and prohibitions of the Act if the funds are
solicited, received and spent solely in connection with
their State or local campaigns and refer only to themselves,
their opponents, or both. 2 U.S.C. 441i(e)(2). Under
Commission regulations at 11 CFR 300.63, this exception is
applicable if the solicitation, receipt or spending of funds
is permitted under State law.
3 The Commission notes that the requestor only asked about
501(c)(3) organizations that do not conduct any election
activity.