Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
April 25, 2006
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2006-12
Laurence E. Gold, Esq.
Michael B. Trister, Esq.
Lichtman, Trister & Ross, PLLC
1666 Connecticut Avenue, N.W., Fifth Floor
Washington, D.C. 20009
Dear Messrs. Gold and Trister:
We are responding to your advisory opinion request on
behalf of the International Association of Machinists and
Aerospace Workers ("IAM") and the Transportation
Communications International Union/IAM ("TCU/IAM") regarding
whether, under the Federal Election Campaign Act of 1971, as
amended (the "Act"), and Commission regulations, IAM and
TCU/IAM are affiliated during the current transition period
pending a full merger of IAM and the Transportation
Communications International Union ("TCU").1 If IAM and
TCU/IAM are affiliated, you also ask a number of questions
regarding their contributions, solicitations, and separate
segregated funds ("SSFs").
The Commission concludes that, under the Act and
Commission regulations, IAM and TCU/IAM are affiliated labor
organizations during this transition period of the pending
full merger between IAM and TCU. As such, IAM's SSF, the
Machinists Non-Partisan Political league ("MNPL"), and
TCU/IAM's SSF, the Responsible Citizens Political League, a
Project of the Transportation Communications International
Union ("RCPL"), must aggregate any contributions made or
received by either SSF. Further, because IAM and TCU/IAM
are affiliated, IAM, TCU/IAM and their SSFs may undertake
all of the activities described in your request.
Background
The facts presented in this advisory opinion are based
on your letters received on February 14 and March 2, 2006,
and the attachments thereto.
1. IAM
IAM is a labor organization as defined in the Act and
Commission regulations.
2 U.S.C. 441b(b)(1); 11 CFR 100.134(b). IAM has 400,000
active members who work throughout the United States in many
industries, with significant concentrations in the
transportation, aerospace, forest products and automotive
industries, and in government. IAM is organized in an
integrated hierarchical structure, governed by an Executive
Council. Its affiliates are assigned to four geographic
territories, plus a nationwide Transportation territory that
reflects the size and national focus of that occupational
sector. Within the territories, IAM includes 62
intermediate district lodges comprised of representatives
elected by local lodges. IAM has more than 1,200 local
lodges whose officers are elected by the members they serve.
IAM established MNPL in 1947. MNPL is an SSF
registered with the Commission. MNPL and IAM solicit
contributions to MNPL from IAM members and their household
family members. IAM solicits these contributions through
various means including its national member magazine, IAM
Journal.
2. TCU
Prior to the current transition period pending a full
merger between IAM and TCU, TCU was a labor organization as
defined in the Act and Commission regulations. 2 U.S.C.
441b(b)(1); 11 CFR 100.134(b). TCU had approximately 46,000
members actively employed primarily in the railroad
industry. TCU's highest governing board was its Executive
Council with 13 intermediate boards and 254 districts and
lodges (or locals) throughout the United States.
TCU established RCPL in 1972. RCPL is an SSF
registered with the Commission. TCU and RCPL solicited
contributions to RCPL from TCU members using various means
including the TCU member magazine, Interchange.
3. Merger of IAM and TCU
On July 6, 2005, IAM and TCU entered into an agreement
("Merger Agreement") committing IAM and TCU to a "full
merger." IAM and TCU also signed two side letters
pertaining to the Merger Agreement. The merger is to be
accomplished in two phases: (1) a "transition period"
lasting until January 1, 2012, at the latest,2 and (2) a
completed "full merger." The Merger Agreement does not
permit either labor organization to unilaterally terminate
or change the agreement and resulting relationship.
Therefore, absent mutual agreement, completion of the full
merger is a certainty.
Pursuant to the Merger Agreement, IAM and TCU/IAM have
already undertaken the following actions:
1) IAM has chartered TCU/IAM as a new "affiliate." IAM
now expects to create a "Rail Division" composed of TCU/IAM
and a pre-existing IAM district that engages in collective
bargaining in the railroad industry. The Rail Division will
operate as part of IAM's Transportation Territory.
2) Effective August 1, 2005, TCU/IAM pays IAM a monthly
per capita tax of $7.00/member.3
3) IAM and TCU/IAM have embarked on a process of
integrating their governance, ending with voting rights in
IAM for TCU/IAM's members upon full merger.
4) An Integration Team has begun work to integrate the two
labor organizations' operations and resources.
5) IAM and TCU/IAM have undertaken a combined
communications program, including the merger of their two
member publications. The resulting publication, sent to all
members of IAM and all members of TCU/IAM, is a magazine
containing at least two pages of TCU/IAM news.
6) IAM and TCU/IAM have merged the TCU Staff Retirement
Plan with the IAM Grand Lodge Pension Plan.
Questions Presented
1. Are IAM and TCU/IAM affiliated for purposes of the Act
during the current transition period pending a full
merger between IAM and TCU?
2. If IAM and TCU/IAM are affiliated, (a) must MNPL and
RCPL aggregate
contributions made and received by the two SSFs for
purposes of the Act's limits; (b) may IAM pay the
administration and solicitation costs for RCPL; (c) may
IAM and MNPL solicit contributions to MNPL from
TCU/IAM's restricted class, and may TCU/IAM and RCPL
solicit contributions to RCPL from IAM's restricted
class; (d) may IAM and TCU/IAM pay for communications
to each other's restricted classes where the
communications expressly advocate the election or
defeat of a clearly identified candidate; and (e) may
MNPL and RCPL be merged into a single SSF?
Legal Analysis and Conclusions
Question 1. Are IAM and TCU/IAM affiliated for purposes
of the Act during the current transition period pending a
full merger between IAM and TCU?
Yes, IAM and TCU/IAM are affiliated labor organizations
for purposes of the Act and Commission regulations during
the current transition period.
Under the Act and Commission regulations, political
committees, including SSFs, that are established, financed,
maintained or controlled by the same corporation, labor
organization, person or group of persons, including any
parent, subsidiary, branch, division, department or local
unit thereof, are affiliated. 2 U.S.C. 441a(a)(5); 11 CFR
100.5(g)(2) and 110.3(a)(1)(ii). Political committees'
sponsoring organizations are also considered to be
affiliated with each other when such organizations are
established, financed, maintained or controlled by the same
corporation, labor organization, person, or group of
persons. 11 CFR 100.5(g)(4) and 110.3(a)(3).
In the absence of per se affiliation set out at 11 CFR
100.5(g)(3), the factors set forth at 11 CFR 100.5(g)(4) are
used to determine affiliation between political committees
or between their sponsoring organizations.4 See also 11 CFR
110.3(a)(3). These factors - which pertain to the
relationship between sponsoring organizations as to
governance; common officers, employees, or members;
financing; and the formation of the organizations - are to
be examined in the context of the overall relationship
between the sponsoring organizations. 11 CFR 100.5(g)(4)
and 110.3(a)(3).
In this instance, the Merger Agreement itself and the
actions taken by IAM and TCU (now TCU/IAM) during the
transition period, demonstrate a formal and ongoing
relationship between the two organizations. For example,
IAM played a significant role in the formation of TCU/IAM by
chartering TCU/IAM, effectively folding the former TCU into
its hierarchical structure. 11 CFR 100.5(g)(4)(ii)(I).
Additionally, the significant monthly per capita tax that
TCU/IAM currently pays to IAM is strong evidence that the
two organizations are affiliated. 11 CFR 100.5(g)(4)(ii)(G)
and (H).
Further, IAM and TCU/IAM have overlapping employees,
including TCU/IAM employees who are now shared with IAM. 11
CFR 100.5(g)(4)(ii)(E). Additionally, IAM has hired some
former TCU employees to further the integration of the two
organizations. 11 CFR 100.5(g)(4)(ii)(F).
Therefore, the Commission concludes that IAM and
TCU/IAM are currently affiliated for purposes of the Act and
Commission regulations.
Question 2. Activities of Affiliated Entities.
If IAM and TCU/IAM are affiliated, you also ask a
number of questions regarding their contributions,
solicitations, and SSFs; all of which are typical actions
undertaken by affiliated entities.
(a) Must MNPL and RCPL aggregate contributions made and
received by the two SSFs for purposes of the Act's limits?
Yes, because IAM and TCU/IAM are affiliated entities,
their SSFs (MNPL and RCPL, respectively) must share
contribution limits under the Act and Commission
regulations. 2 U.S.C. 441a(a)(5); 11 CFR 110.3(a)(1).
(b) May IAM pay the administration and solicitation costs
for RCPL?
Yes. A labor organization is permitted to use its
general treasury funds to pay for the costs of establishing,
administering, and soliciting contributions to its SSF. 2
U.S.C. 441b(b)(2)(C); 11 CFR 114.5(b). Additionally, the
payment of such expenses is explicitly excepted from the
Act's definitions of "contributions" and "expenditures."
2 U.S.C. 431(8)(B)(vi) and (9)(B)(v). Accordingly, because
IAM and TCU/IAM are affiliated, IAM may pay RCPL's
administration and solicitation costs. Cf. Advisory Opinion
2001-7 (Nuclear Management Company Political Action
Committee).
(c) May IAM and MNPL solicit contributions to MNPL from
TCU/IAM's restricted class, and may TCU/IAM and RCPL solicit
contributions to RCPL from IAM's restricted class?
Yes. The Act and Commission regulations permit a labor
organization to solicit contributions to the labor
organization's SSF from its members and executive or
administrative personnel, and their families. 2 U.S.C.
441b(b)(4)(A); 11 CFR 114.1(j) and 114.5(g)(2).
Accordingly, because IAM and TCU/IAM are affiliated labor
organizations, IAM and MNPL may solicit contributions to
MNPL from TCU/IAM's restricted class, and TCU/IAM and RCPL
may solicit contributions to RCPL from IAM's restricted
class. Cf. 11 CFR 114.5(g)(1) (corporations permitted to
solicit the restricted classes of affiliated entities); see
also Advisory Opinion 2001-18 (BellSouth).
(d) May IAM and TCU/IAM pay for communications to each
other's restricted classes where the communications
expressly advocate the election or defeat of a clearly
identified candidate?
Yes. The Act and Commission regulations permit a labor
organization to pay for express advocacy communications to
its restricted class. 2 U.S.C. 441b(b)(2)(A); 11 CFR 114.3.
Accordingly, because IAM and TCU/IAM are affiliated labor
organizations, each may pay for express advocacy
communications to the restricted classes of both
organizations. Cf. Advisory Opinion 1993-18 (Southwestern
Bell Corporation) at note 3.
(e) May MNPL and RCPL be merged into a single SSF?
Yes, MNPL and RCPL may be merged into one SSF because
they are treated as one political committee for purposes of
limits on contributions they make or receive under 2 U.S.C.
441a(a)(5) and 11 CFR 110.3(a)(1), and because they may
transfer funds to one another that are not limited in
amount. 2 U.S.C. 441a(a)(5)(C); 11 CFR 102.6(a) and
110.3(c)(1).
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)
Michael E. Toner
Chairman
Enclosures (AOs 2001-18, 2001-7 and 1993-18)
_______________________________
1 TCU/IAM is the organization resulting from a July 6,
2005, Merger Agreement between IAM and TCU.
2 TCU/IAM may accelerate the full merger upon consultation
with the IAM International President if TCU/IAM finds it
advantageous to do so.
3 For the months of August to December 2005, the combined
per capita tax amounted to nearly $1.5 million. It is
estimated that such per capita tax payments by TCU/IAM to
IAM will reach $3.86 million for 2006. On January 1 of each
year, through 2011, the per capita tax will increase to a
rate of the previous year's per capita plus an annual IAM
Grand Lodge increase/per member. In 2012, the per capita
tax will be equal to the full IAM Grand Lodge per capita
tax.
4 The same factors are also used to determine affiliation
between two SSFs, or between a sponsoring organization and
the SSF of another organization. 11 CFR 110.3(a)(3)(i).