Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
November 18, 2005
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2005-16
Marc E. Elias, Esq.
Brian G. Svoboda, Esq.
Perkins Coie LLP
607 Fourteenth Street, N.W.
Washington, D.C. 20005-2011
Dear Messrs. Elias and Svoboda:
We are responding to your advisory opinion request on
behalf of Fired Up! LLC ("Fired Up"), concerning the
application of the Federal Election Campaign Act of 1971, as
amended (the "Act"), and Commission regulations to certain
Internet websites owned and operated by Fired Up.
The Commission concludes that the costs Fired Up incurs
in covering or carrying news stories, commentary, or
editorials on its websites are encompassed by the press
exception, and therefore do not constitute "expenditures" or
"contributions" under the Act and Commission regulations.
Background
The facts presented in this advisory opinion are based
on your letters received August 22, 2005, and September 13,
2005, and publicly available documents.
Fired Up is a for-profit limited liability company ("LLC")
that was formed under the laws of the State of Missouri in
March 2005. In documents filed with the Missouri Department
of Revenue and the Internal Revenue Service, Fired Up has
classified itself as a partnership, although it has not
formally elected to be classified as a partnership under
Federal tax law.
In its Articles of Organization, Fired Up states that
its purpose is "[t]o publish a website and any other lawful
purpose." Articles of Organization (March 4, 2005). Fired
Up hopes to establish and maintain a network of up to 15
State-specific websites in the coming year, depending on
available funding. Currently, Fired Up maintains three
State-specific websites (for Missouri, Maryland and
Washington), and one website aimed at national issues.1
Access to Fired Up's websites is free and available to the
public without registration or subscription. Neither Fired
Up nor any of its websites is owned or controlled by any
political party, political committee or candidate.
Fired Up's Missouri website states that Fired Up's
mission "is to keep Missourians informed and united in the
fight for responsible government, strong communities, and
secure families." See "What is the Mission of Fired Up?"
<http://www.firedupmissouri.com/whoweare>. A founding
member of Fired Up, former U.S. Senator Jean Carnahan, urges
readers of the Missouri website to "[t]hink of Fired Up! as
you would a local coffee shop--a place where we can exchange
ideas, freely and respectfully. But," she adds, "it is also
a launching pad for community action that grows out of our
discussions and concerns." See "A Message From Jean
Carnahan," <http://www.firedupmissouri.com/jean>.
Fired Up was founded by three individuals: Ms.
Carnahan, Roy Temple, and Scott Sorrell. According to
biographical information on Fired Up's Missouri website, Mr.
Temple has served as the executive director of the Missouri
Democratic Party and as chief of staff both to Ms. Carnahan
and to her late husband, former Governor Mel Carnahan.2 Mr.
Sorrell is a computer consultant and designer of POWERbase
campaign software.3
Fired Up does not have any employees, nor does it have
an editorial board or staff. It generates revenue through
the sale of buttons, bumper stickers, and T-shirts. Its
only operating expenses are payments to Mr. Sorrell's firm
for technological support. You have not identified any
expenses incurred by Fired Up in connection with the content
of its websites. Fired Up has yet to adopt an operating
agreement to apportion costs and revenues among its members,
although you state that it expects in the future to hire
employees, incur additional operating expenses, and generate
revenue through the sale of advertising on its websites.
Fired Up might also solicit funding from "various
benefactors and investors."
Mr. Temple provides most of the content on Fired Up's
websites. This content, which you describe as "unabashedly
progressive," generally consists of commentary on, quotes
from, and summaries of, news articles appearing on other
entities' websites, with hyperlinks to the quoted and
summarized articles. Fired Up does not have any written
agreements with these other entities regarding Fired Up's
posting of quotes from, and hyperlinks to, their websites.
You state that Fired Up conducts some "original news
reporting." As examples, you refer to two postings on Fired
Up's Missouri website concerning House Majority Leader Roy
Blunt.4 Each of these postings includes a headline and an
indication that it was submitted by Mr. Temple. The
postings are also specifically designated as
"FiredUpMissouri.com Exclusive[s]." In this respect, they
differ from the other postings on Fired Up's websites, which
typically only include user-created headlines and a
reference to the individuals who posted them. Consistent
with this latter approach, Fired Up's websites expressly
provide that "the posts and comments [appearing on the
websites] are the views of the authors," rather than of
Fired Up. See, e.g., <http://www.firedupamerica.com>.
You indicate that Mr. Temple exercises final editorial
and formatting control over the content of Fired Up's
websites, and that he might edit content posted by
registered users, delete it, move it, or leave it alone.
Although Mr. Temple is not compensated for his services,
Fired Up anticipates paying him as an employee once it
generates sufficient revenue.
In addition, you state that "other media outlets" have
referred to postings on Fired Up's websites. As an example,
you cite a reference to a posting on Fired Up's national
website that appeared in The Blogometer,5 the National
Journal's "daily report . . . taking the temperature of the
political blogosphere."6 You also refer to an article in
The St. Louis Post Dispatch that reported on a story "first
disclosed on the FiredUpMissouri.com Web site of Democratic
activist Roy Temple."7
Any reader of a Fired Up website can post his or her
own content directly onto the website after using a free
sign-in feature to become a "registered user" of the
website. Each registered user also receives a complimentary
weblog on the website, and can post comments directly on
other registered users' weblogs and in response to content
on the main page of the website. The placement of all posts
within the "popular content" section of the main page of
each website is determined, in part, by the popularity of
each post, based on the number of "hits" received from
readers.
In addition to commenting on and summarizing articles
appearing on other entities' websites and displaying content
posted by registered users, the Fired Up Missouri website
features "guest editorials" by Ms. Carnahan and other
individuals. Each Fired Up website also contains calls to
action, such as a posting by Mr. Temple that urged readers
to contact Wal-Mart's chief executive officer in opposition
to Wal-Mart's decision to sue an employee.8 Finally, each
Fired Up website provides hyperlinked lists of content on
other Fired Up websites, weblogs featured on a "community
blogroll," and, separate from its own headlines, a list of
headlines from (and hyperlinks to) websites maintained by
CNN and The Washington Post.9
Question Presented
Is Fired Up eligible for the press exception?
Legal Analysis and Conclusion
The Commission concludes that, in light of the facts
presented, Fired Up's disbursements for news stories,
commentary, and editorials on its websites are encompassed
by the press exception, and therefore do not constitute
"expenditures" or "contributions" under the Act and
Commission regulations.
Press Exception
The Act and Commission regulations define the terms
"contribution" and "expenditure" to include any gift of
money or "anything of value" for the purpose of influencing
a Federal election. See 2 U.S.C. 431(8)(A) and (9)(A); 11
CFR 100.52(a) and 100.111(a). However, there is an
exception for "any cost incurred in covering or carrying a
news story, commentary, or editorial by any broadcasting
station (including a cable television operator, programmer
or producer), newspaper, magazine, or other periodical
publication . . . unless the facility is owned or controlled
by any political party, political committee, or
candidate[.]" 11 CFR 100.73, 100.132; see also 2 U.S.C.
431(9)(B)(i). This exclusion is known as the "press
exception."
The Commission has applied a two-step analysis to
determine whether the press exception applies. First, the
Commission asks whether the entity engaging in the activity
is a press entity as described by the Act and Commission
regulations. See, e.g., Advisory Opinions 2004-07, 2003-34,
2000-13, 1998-17, 1996-48, 1996-41, and 1996-16. Second, in
determining the scope of the exception, the Commission
considers: (1) whether the press entity is owned or
controlled by a political party, political committee, or
candidate; and (2) whether the press entity is acting as a
press entity in conducting the activity at issue (i.e.,
whether the entity is acting in its "legitimate press
function"). See Reader's Digest Association v. FEC, 509 F.
Supp. 1210, 1215 (S.D.N.Y. 1981); FEC v. Phillips
Publishing, 517 F. Supp. 1308, 1312-1313 (D.D.C. 1981);
Advisory Opinions 2004-07, 2000-13, 1996-48, and 1982-44.
Two considerations in applying this analysis include whether
the entity's materials are available to the general public
and are comparable in form to those ordinarily issued by the
entity. See Federal Election Commission v. Massachusetts
Citizens for Life, 479 U.S. 238, 251 (1986); Advisory
Opinion 2000-13 (concluding that a website covered by the
press exception was "viewable by the general public and akin
to a periodical or news program distributed to the general
public.")
1. Press Entity Status
Fired Up qualifies as a press entity. Its websites are
both available to the general public and are the online
equivalent of a newspaper, magazine, or other periodical
publication as described in the Act and Commission
regulations.
An examination of Fired Up's websites reveals that a
primary function of the websites is to provide news and
information to readers through Fired Up's commentary on,
quotes from, summaries of, and hyperlinks to news articles
appearing on other entities' websites and through Fired Up's
original reporting. Fired Up retains editorial control over
the content displayed on its websites, much as newspaper or
magazine editors determine which news stories, commentaries,
and editorials appear in their own publications. Roy
Temple, acting on behalf of Fired Up, not only produces much
of the content but also exercises day-to-day control over
which stories are featured. Reader comments appearing on
Fired Up's websites are similar to letters to the editor and
do not alter the basic function of Fired Up. See Advisory
Opinion 1996-16 (the "use of audiences composed of non-
reporters, and subscribers and guests at computer terminals,
does not alter the basic nature" of Bloomberg LLP's
electronic town meeting featuring presidential candidates
with a moderator, a set format, and a time limit.)
According to the House report on the 1974 amendments to
the Act, the press exception made plain Congress's intent
that the Act would not "limit or burden in any way the first
amendment freedoms of the press ." and would assure "the
unfettered right of the newspapers, TV networks, and other
media to cover and comment on political campaigns." H.R.
Rep. No. 93-1239, 93d Cong., 2d Sess. at 4 (1974) (emphasis
added). Consistent with this intent, the Commission has
already expressly extended the press exception to qualified
activities that appear on the Internet. For instance, in
Advisory Opinion 2000-13 the Commission found that iNEXTV, a
company operating a network of specialized news and
information websites with limited original content,
qualified for the press exception through its Internet
activities even though it lacked a traditional "offline"
media presence. The Commission concluded that iNEXTV and
its EXBTV website were press entities "both as to their
purpose and function." Advisory Opinion 2000-13. The
Commission characterized the network of news and information
websites operated by iNEXTV as "webcast video periodicals."
Id. In finding EXBTV to be a press entity, the Commission
noted the "news function" that EXBTV provided through direct
access to news and commentary. The Commission concluded
that the website was "viewable by the general public and
akin to a periodical or news program distributed to the
general public." Id. 10 The Commission reaches the same
conclusion here with respect to the Fired Up websites
described in your request. Thus, Fired Up is a press entity
and satisfies the first step of the press exception test.
2. Ownership Criteria and Legitimate Press Function
Fired Up is a for-profit LLC11 and is not owned or
controlled by any political party, political committee, or
candidate. Given that Fired Up's operation of its websites
is at the core of its activities as a press entity, its
provision of news stories, commentary, and editorials on its
websites falls within Fired Up's legitimate press function.12
Thus, because Fired Up is a press entity, and neither it nor
its websites are owned or controlled by any political party,
political committee, or candidate, the costs Fired Up incurs
in covering or carrying a news story, commentary, or
editorial on its websites are exempt from the definitions of
"contribution" and "expenditure." The Commission notes that
an entity otherwise eligible for the press exception would
not lose its eligibility merely because of a lack of
objectivity in a news story, commentary, or editorial, even
if the news story, commentary, or editorial expressly
advocates the election or defeat of a clearly identified
candidate for Federal office. See First General Counsel's
Report, MUR 5440 (CBS Broadcasting, Inc.) ("Even seemingly
biased stories or commentary by a press entity can fall
within the media exemption.")
The Commission expresses no opinion regarding the
application of State law or the Internal Revenue Code to the
proposed activities because those questions are not within
the Commission's 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
Enclosures: Advisory Opinions 2004-07, 2003-34, 2000-13,
1998-17, 1996-48, 1996-41,
1996-16 and 1982-44.
CONCURRING OPINION
CHAIRMAN SCOTT E. THOMAS
COMMISSIONER DANNY LEE MCDONALD
ADVISORY OPINION 2005-16
In Advisory Opinion 2005-16, the Federal Election
Commission found that a series of blogs created by Fired Up!
LLC ("Fired Up"), a partnership established earlier this
year, qualifies for the press exception found at 2 U.S.C.
431(9)(B)(i). Given the facts before the Commission at this
time, we voted to approve Advisory Opinion 2005-16. We did
so, however, recognizing that only time will truly tell
whether Fired Up is actually a media entity, or an entity
controlled by a candidate or political party, or even a
"political committee" under the Act.
The Act specifically excludes certain press activities
from the definition of contribution and expenditure.
Qualification for the so-called "press exception" is
reserved for:
Any news story, commentary, or editorial
distributed through the facilities of any
broadcasting station, newspaper, magazine, or
other periodical publication, unless such
facilities are owned or controlled by any
political party, political committee, or
candidate.
2 U.S.C. 431(9)(B)(i). The Supreme Court has stated that
the press exception should be narrowly construed. In
rejecting a press exception claim by an incorporated entity13
in Federal Election Commission v. Massachusetts Citizens for
Life, Inc., 479 U.S. 238, 251 (1986)(" FEC v.
MCFL")(emphasis added), the Court stated, "A contrary
position would open the door for those corporations and
unions with in-house publications to engage in unlimited
spending directly from their treasuries to distribute
campaign material to the general public, thereby
eviscerating 441b's prohibition."
We agree with the conclusion of Advisory Opinion 2005-
16 that "Fired Up qualifies as a press entity." Advisory
Opinion 2005-16 at 5. Quoting from Fired Up's Missouri
website, the Opinion points out that:
Fired Up's mission "is to keep Missourians
informed and united in the fight for
responsible government, strong communities,
and secure families." . . .A founding member
of Fired Up, former U.S. Senator Jean
Carnahan, urges readers of the Missouri
website to "[t]hink of Fired Up! as you would
a local coffee shop-a place where we can
exchange ideas, freely and respectfully.
But," she adds, "it is also a launching pad
for community action that grows out of our
discussion and concerns."
Advisory Opinion 2005-16 at 2 (citations omitted). Based
upon these and other materials we have seen on the website
as well as the representation that Fired Up is going to have
as its sole business the distribution of news stories,
editorials and commentaries, we believe that, on balance,
Fired Up qualifies as a press entity.
Even though we voted to approve Advisory Opinion 2005-
16, this request does present several concerns. First,
under the statute, the press exception is not available if
an entity is "owned or controlled" by a political party or a
candidate. 2 U.S.C. 431(9)(B)(i). For example, the
Missouri Democratic Party cannot directly or indirectly set
up a website, print "news" about Republican Party House and
Senate candidates, and then finance the whole effort with
unlimited contributions from individuals or prohibited
corporate and labor money because it claims the website is
entitled to the press exception.
The facts of this matter reveal a number of strong
connections-historical and financial-between Fired Up and
the Missouri Democratic Party and Democratic federal
candidates in the state. According to Fired Up's website,
Roy Temple (a co-founder of Fired Up and the primary editor
of the website's content) was Executive Director of the
Missouri Democratic Party during the 2000 election cycle and
worked as an advisor to the state party in the 2004 election
cycle. See also St. Louis Post Dispatch (October 9,
2005)(Fired Up is "one of a cadre of blog sites set up in
March by veteran Democratic consultant Roy Temple, with the
support of many of the state party's top figures.")
(emphasis added). The second co-founder is Scott Sorrell,
owner/manager of CS Data Managers. In 2005, Mr. Sorrell and
his company received payments from the Russ Carnahan
congressional committee and the Missouri Democratic Party.
The third co-founder is Jean Carnahan, former Democratic
United States Senator from the State of Missouri.
Obviously, given the restrictions imposed by 2 U.S.C.
431(9)(B)(i), the Missouri Democratic Party cannot control
Fired Up either directly or indirectly through the use of
surrogates. Fired Up maintains that this has not occurred
and represents in its Advisory Opinion Request that "Fired
Up is neither owned nor controlled by any political party,
political committee or candidate." Advisory Opinion Request
2005-16 at 2 (August 22, 2005). We relied upon this
representation in considering Fired Up's Advisory Opinion
Request.
The facts presented in this matter also raise the
concern that Fired Up may cross over into political
committee status. The Act defines a "political committee"
as "any committee, club, association or other group of
persons" that receives contributions "or makes expenditures
aggregating in excess of $1,000 a calendar year."14 The
terms "contribution" and "expenditure" are defined to reach
funds given or paid "for the purpose of influencing any
election for Federal office."15 On its face, this term
"political committee" would even reach a law firm that makes
a single $2,000 contribution to a federal candidate. In
construing the statutory definition of "political
committee," however, the Supreme Court has held the term
only includes an organization "under the control of a
candidate or the major purpose of which is the nomination or
election of a candidate."16 Later, in FEC v. MCFL, the Court
affirmed this limiting construction of the term "political
committee" when it clarified that "should MCFL's independent
spending become so extensive that the organization's major
purpose may be regarded as campaign activity, the
[organization] would be classified as a political committee.
. . .As such, it would automatically be subject to the
obligations and restrictions applicable to those groups
whose primary objective is to influence political
campaigns."17 Thus, only when an organization has received
more than $1,000 in contributions or made more than $1,000
in expenditures and has met the major purpose test, does it
become a political committee pursuant to 2 U.S.C. 431.18
In its request to the Commission, Fired Up indicated
that it "intends to endorse, expressly advocate, and urge
readers to donate funds to the election of Democratic
candidates for federal, state, and local office." Advisory
Opinion Request 2005-16 at 2 (August 22, 2005)(emphasis
added). Moreover, the request states that its web site
"contains links to Democratic and progressive
organizations." Id. (emphasis added). The request
indicates that Fired Up "intends aggressively to support
progressive candidates and causes at all levels." Id. at 7.
Indeed, the launch of Fired Up and its role in Democratic
politics has been described this way:
[Jean] Carnahan is returning to politics-not
on the ballot but on the Internet. She and
longtime Democratic operative Roy Temple have
launched a new Web initiative called
www.firedupmissouri.com.
Carnahan said the site would include an
interactive blog of Democratic commentary
(former Sen. Thomas F. Eagleton is among the
first featured pundits). The site is also
seeking to sign up 10,000 Democratic loyalists
who are "fired up and fighting back," she
added.
St. Louis Post-Dispatch (March 7, 2005)(emphasis added). At
this point, though, we can see no indication from Fired Up's
activities that its major purpose has been other than to
conduct the dissemination of news and commentary over the
Internet.
Qualification for the press exception is a fact
specific determination. As the Supreme Court has warned,
the press exemption must be narrowly construed. To do
otherwise would threaten to "eviscerate" the Act. FEC v.
MCFL, 479 U.S. at 251. Without specific facts, we do not
believe it is appropriate to give some sort of blanket press
exception to any entity that sets up a website. Based upon
the present facts before us here,19 however, we conclude that
Fired Up is a press entity and is not controlled by a
political party or a candidate and is not a "political
committee" under the Act. Accordingly, we voted to approve
Advisory Opinion 2005-16.
11/29/05 / s /
________________________
___________________________________
Date Scott E. Thomas
Chairman
11/29/05 / s /
________________________
___________________________________
Date Danny Lee McDonald
Commissioner
_______________________________
1 See <http://www.firedupmissouri.com>,
<http://www.firedupmaryland.com>,
<http://www.firedupwashington.com>, and
<http://www.firedupamerica.com>.
2 See <http://www.firedupmissouri.com /bio-roy>.
3 See <http://www.firedupmissouri.com /whoweare>.
4 See "DeLay gave Roy Blunt $150,000,"
<http://www.firedupmissouri.com/delayblunt>, and "Former
Blunt Aide Paid $50,000 for Veto Insurance Effort,"
<http://www.firedupmissouri.com/vetoinsurance>.
5 See "Miscellany: This Would Be News, But, You Know . . .
,"
<http://blogometer.nationaljournal.com/archives/2005/09/99_k
atrina_katr.html>.
6 <http://blogometer.nationaljournal.com/>.
7 See "Realtors' Lobbyist Has Close Ties To Governor's
Father," St. Louis Post-Dispatch, July 12, 2005, p. A1.
8 See "Wal Mart's Shameful Lawsuit,"
<http://www.firedupamerica.com/shankwalmart>.
9 Fired Up does not have any written agreements with either
CNN or The Washington Post regarding these hyperlinks.
10 See also Advisory Opinion 2004-07 (MTV's website promotion
of "Prelection" and contemporaneous posting of candidate
materials on MTV website entitled to the press exception)
and Advisory Opinion 2003-34 (depiction of Federal
candidates on Viacom and Showtime websites entitled to the
press exception).
11 For-profit status is not essential to a determination that
an entity qualifies for the press exception.
12 You do not ask, and the Commission does not address,
whether any other activities Fired Up may wish to conduct,
whether on the Internet or not, would be within the scope of
Fired Up's press function. See, e.g., Advisory Opinion 2004-
07 (MTV's provision of election-related educational
materials at community events does not qualify as a press
function because this activity is not one typically
performed by a press entity).
13 The Act generally prohibits "any corporation whatever"
from making any contribution or expenditure from corporate
treasury funds in connection with a federal election and
further prohibits any candidate or committee from knowingly
accepting any such contribution. 2 U.S.C. 441b(a).
14 2 U.S.C. 431(4).
15 2 U.S.C. 431(8)(A), (9)(A). The term "contribution" is
defined to include "any gift, subscription, loan, advance,
or deposit of money or anything of value made by any person
for the purpose of influencing any election for Federal
office." 2 U.S.C. 431(8)(A)(i). The term "expenditure"
is defined to include "any purchase, payment, distribution,
loan, advance, deposit, or gift of money or anything of
value, made by any person for the purpose of influencing any
election for Federal office." 2 U.S.C. 431(9)(A)(i).
16 Buckley v. Valeo, 424 U.S. 1, 79 (1976)("Buckley").
17 479 U.S. at 262 (emphasis added).
18 Based upon Buckley and FEC v. MCFL, the Commission has
stated that "[w]hen determining if an entity should be
treated as a political committee, . . . the standard used is
whether an organization's major purpose is campaign
activity; that is, making payments or donations to influence
any election to public office." Advisory Opinion 1996-13,
Fed. Elec. Camp. Fin. Guide (CCH) 6199 (emphasis added).
19 Significantly, Advisory Opinion 2005-16 expressly limits
its reach: "You do not ask, and the Commission does not
address, whether any other activities Fired Up may wish to
conduct, whether on the Internet or not, would be within the
scope of Fired Up's press function." Advisory Opinion 2005-
16 at 6 n.12.