Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
October 10, 2006
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2006-20
John J. Duffy, Esq.
Steptoe & Johnson LLP
1330 Connecticut Avenue, NW
Washington, DC 20036-1795
Dear Mr. Duffy:
We are responding to your advisory opinion request on
behalf of Unity 08, concerning the application of the
Federal Election Campaign Act of 1971, as amended (the
"Act"), and Commission regulations to Unity 08's status as a
political committee. The Commission concludes that Unity
08 will have to register as a political committee once it
makes expenditures in excess of $1,000, and therefore will
be subject to the amount limitations, source prohibitions,
and reporting requirements of the Act.
Background
The facts presented in this advisory opinion are based
on your letter received on May 30, 2006, your comments
received on July 19, supplemental submissions received on
August 16, September 18 and 22, telephone conversations with
you, and information from Unity 08's website.1
Unity 08 is organized under the laws of the District of
Columbia as a not-for-profit corporation and under Section
527 of the Internal Revenue Code. Unity 08 describes itself
as a "nascent political party" that "will act to assure that
an alternative ticket is presented to the American voters in
2008." Unity 08 was founded by individuals who have been
involved in political campaigns at the State and national
levels, including political consultants and media advisors,
and by individuals who have served in high government
positions, including a former State Senator, former White
House Chief of Staff, former White House communications
director, former State Governor, and former heads of State
agencies. Unity 08 aims to build a "solidly-funded movement
of up to 20,000,000 Americans . . . in order to nominate a
Unity Ticket of their choice for 2008."
Unity 08 states that it has three goals: (1) "to elect
a Unity Ticket for President and Vice-President of the
United States" in 2008; (2) "for the American people to pick
that Unity Ticket in the first half of 2008" through an
online nominating convention; and (3) a "minimum goal" of
"effect[ing] major change and reform in the 2008 national
elections" by "organizing a group of voters who comprise at
least 20% of the national electorate" and whose commitment
to the Unity 08 agenda will have to be accounted for by the
major parties if they are to be successful in the 2008
presidential election. (Emphasis in the original). The
Unity 08 nominees may consist of candidates from either or
both of the two major political parties, or of independent
candidates. Although Unity 08 may support the candidates
offered by one of the two major parties, it plans to hold an
online nominating convention in the summer of 2008, during
which Unity 08 delegates will vote via the Internet to
nominate candidates for the Unity 08 ticket.2 Unity 08 does
not intend to support or oppose candidates in the 2006
elections or in any congressional, State, or local election
at any time.
Unity 08 will finance its activities with solicitations
of funds and sales of t-shirts, mugs, pens, bumper stickers,
and other similar items. Unity 08 is currently soliciting
funds using the Internet and intends to make solicitations
using telephone banks and mass mailings. Unity 08's website
proposes that supporters give specific monetary amounts
ranging from ten dollars to $5,000, with an option to give
any amount of the supporter's choosing. Unity 08's online
solicitation form includes the following language: "To
succeed we don't have to match the massive war chests of
either party. And, like other successful citizens'
movements before us, we can raise the funds we need to build
a lean and effective movement if each of us simply does our
part. . . . Please do your part. The stakes for our country
have never been higher." The movement for which Unity 08 is
soliciting money is to "Select and Elect a Unity Ticket in
the 2008 Presidential Race," which also appears as the
header on the online solicitation form. Elsewhere on the
website, this language is repeated: "Unity 08 is a
citizens' movement to get our country back on track by
nominating and electing a Unity Ticket in the '08
presidential election to promote leadership, not
partisanship. Every day - with your support - we're making
progress toward this goal." The phrase "with your support"
is a hyperlink to the online solicitation form. A
disclaimer was recently added to Unity 08's online
solicitation form, stating that: "Donations made on this
website will not be used to support or oppose any federal
candidates, but will be used to support Unity08's
organizational building efforts."
Unity 08 does not accept money or any other thing of
value from "any `prohibited source,'" including
corporations, foreign nationals, or government contractors.
Although Unity 08 did not initially place a limit on the
amount of donations it solicits or accepts, it recently
imposed a $5,000 limitation on donations from individuals.
In attempting to elect presidential and vice-
presidential candidates in 2008, Unity 08 plans to purchase
access to mass media and commission polls, and to "qualify
for ballot positions in certain key states for the offices
of President and Vice President of the United States through
petitions, and if required, litigation." Specifically,
Unity 08 plans to obtain "ballot access as a `party'" in
approximately 37 States.
Questions Presented
1. Will Unity 08 make "expenditures"such that Unity 08
must register as a political committee?
2. May Unity 08 incorporate for liability purposes only?
Legal Analysis and Conclusions
Question 1: Will Unity 08 make "expenditures" such that
Unity 08 must register as a political committee?
Yes, for the reasons stated below, Unity 08 will make
"expenditures" as defined under the Act and Commission
regulations, and Unity 08 must register as a political
committee when it makes more than $1,000 in expenditures.3
I. Expenditures
Monies spent by Unity 08 to obtain ballot access
through petition drives will be expenditures. An
"expenditure" is a "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." 4 2 U.S.C. 431(9)(A)(i); 11
CFR 100.111(a).
The Commission has previously determined that expenses
incurred in gathering signatures to qualify for a ballot for
Federal office are expenditures. See Advisory Opinion 1994-
05 n.1 (White) ("[E]xpenditures to influence your election
would include amounts you spend . . . to promote yourself
for the general election ballot by seeking signatures on
nomination petitions"); see also Advisory Opinion 1984-11
(Serrette) (determining that expenses made to collect
petition signatures for the general election ballot are
expenditures, and therefore are, "qualified campaign
expenses," which are expenses made in connection with a
candidate's campaign for nomination, see 11 CFR 9032.9).
Although Unity 08 plans to qualify for ballot access
for itself as an organization, but not yet for any named
candidates, Unity 08 is, in effect, using its name as a
placeholder for its candidates' names on the ballot.
Moreover, unlike organizations that secure ballot access for
themselves in order to field a slate of Federal and non-
Federal candidates, Unity 08 has announced that it will
field only two candidates - for the offices of President and
Vice President - in the 2008 election only. Thus, in
promoting itself through petition drives to obtain ballot
access, Unity 08 is promoting its presidential and vice-
presidential candidates, and any payments by Unity 08 for
these activities will constitute expenditures.5
II. Political Committee Status
The Act and Commission regulations, with certain
exceptions, define a "political committee" as "any
committee, club, association, or other group of persons
which receives contributions aggregating in excess of $1,000
during a calendar year or which makes expenditures
aggregating in excess of $1,000 during a calendar year." 2
U.S.C. 431(4)(A); 11 CFR 100.5(a). Under the Act and
Commission regulations, political committees are subject to
certain registration and reporting requirements, as well as
limitations and prohibitions on contributions received and
made, and on expenditures made. As the Commission stated
previously, "[a]ny funds that are `contributions' by
operation of new section 100.57 are contributions for
purposes of the `political committee' definition in 2 U.S.C.
431(4)(A) and 11 CFR 100.5(a) . . . ." Political Committee
Status Final Rules, 69 Fed. Reg. at 68058. Once Unity 08
receives over $1,000 in contributions, or makes over $1,000
in expenditures, it will satisfy the statutory definition of
"political committee," see 2 U.S.C. 433.
The Supreme Court has held that, "[t]o fulfill the
purposes of the Act," and to avoid "reach[ing] groups
engaged purely in issue discussion," only organizations
whose major purpose is campaign activity can be considered
political committees under the Act. See e.g., Buckley v.
Valeo, 424 U.S. 1, 79; FEC v. Massachusetts Citizens for
Life, Inc., 479 U.S. 238, 262 (1986). An organization's
"major purpose" may be established
through its own public statements. See e.g., FEC v.
Malenick, 310 F. Supp. 2d 230, 234-36 (D.D.C. 2004) (finding
the organization evidenced its "major purpose" through its
own materials which stated the organization's goal of
supporting the election of Republican Party candidates for
Federal office and through efforts to get prospective donors
to consider supporting Federal candidates); FEC v. GOPAC,
Inc., 917 F. Supp. 851, 859 (D.D.C. 1996) (finding that the
"organization's [major] purpose may be evidenced by its
public statements of its purpose or by other means. . . .").
Unity 08's self-proclaimed major purpose is the
nomination and the election of a presidential candidate and
a vice-presidential candidate.6 Unity 08 clearly states
this goal in its advisory opinion request and on its
website. While Unity 08 has a subsidiary objective of
influencing the major parties to adopt, in connection with
the 2008 national elections, the core positions of Unity 08
supporters, your letters of May 30 and August 16, as well as
Unity 08's website, state that Unity 08's first goal is the
election "of a Unity Ticket for President and Vice-President
of the United States in 2008."
Therefore, given that Unity 08 is making "expenditures"
under the Act and Commission regulations, Unity 08 will
become a political committee once it makes more than $1,000
in expenditures.7 Unity 08 must register with the
Commission by filing a statement of organization within ten
days after becoming a political committee, and it will be
subject to the provisions of the Act and Commission
regulations applicable to political committees.8 See 2
U.S.C. 433, 11 CFR 102.1 and 102.2.
Question 2: May Unity 08 incorporate for liability purposes
only?
Yes, Unity 08 may incorporate for liability purposes
only, once it becomes a political committee. Under
Commission regulations, a political committee may
incorporate for liability purposes only without running
afoul of the Act's prohibitions on corporate contributions
and expenditures. See 11 CFR 114.12. Thus, Unity 08 may
incorporate for liability purposes without being subject to
the corporate prohibitions in
2 U.S.C. 441b and 11 CFR part 114.
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)
Robert D. Lenhard
Vice Chairman
Enclosures (Advisory Opinions 2004-34, 1994-05, and 1984-11)
_______________________________
1 See <http://www.unity08.com> (last visited 9/18/06).
2 In your supplemental submission, you indicated that Unity
08 will hold the online nominating convention only if
necessary, and if it does become necessary you will file
another advisory opinion request. Accordingly, the
Commission does not address Unity 08's activities regarding
an online nominating convention.
3 Unity 08 does not ask and the Commission does not address
whether Unity 08 qualifies as a "political party" under the
Act and Commission regulations. The Commission notes,
however, that to be a "political party," an organization
must "actually obtain ballot access for one or more Federal
candidates." Advisory Opinion 2004-34 (Libertarian Party of
Virginia); see 2 U.S.C. 431(16) and 11 CFR 100.15.
4 The only exception in the Act from the definition of
"expenditure" for ballot access costs applies to "payments
received by a political party committee as a condition of
ballot access which are transferred to another political
party committee or the appropriate State official." 2
U.S.C. 431(9)(B)(x); see also
11 CFR 100.150. The purpose of this exception is to prevent
a candidate or a candidate's authorized committee from
having to exceed the limits on contributions to a State
party committee in order to gain ballot access. See FECA
Amendments: Hearing Before the Committee on Rules and
Administration, United States Senate, 96th Cong. 4-25, app.
at 21 (July 13, 1979) (Statement of Robert Tiernan,
Chairman, Federal Election Commission).
5 The Commission's conclusion is restricted to the facts
presented here: Unity 08 intends to support only two
candidates, one for the office of President of the United
States and one for the office of Vice President; it "does
not intend to support or oppose candidates for Congress or
State and local elections at any time"; and it is "not
looking to build a new and permanent party."
6 See Buckley v. Valeo, 424 U.S. 1, 79 (the term "political
committee" encompasses organizations "the major purpose of
which is the nomination or election of a candidate").
7 The Commission notes that Unity 08 must also register as a
political committee if it accepts more than $1,000 in
contributions. The Commission has made no determination as
to whether Unity 08 will accept contributions under the
facts presented here.
8 In its advisory opinion request, Unity 08 cites FEC v.
Machinists Non-Partisan Political League, 655 F.2d 380 (D.C.
Cir. 1981), to support its assertion that Unity 08 is not a
political committee. In Machinists, the Court of Appeals
for the D.C. Circuit held that so-called "draft groups" were
not political committees under the Act. 655 F.2d at 392.
Unity 08, however, is not a draft group. Draft groups do
not promote the election of certain candidates for Federal
office, but have the more limited aim of convincing
individuals who are not yet candidates to run for office.
By contrast, the declared purpose of Unity 08 is not to
"draft" candidates but to get its chosen presidential
candidate and vice-presidential candidate on the ballot, and
to raise and spend funds in support of its two candidates.
Moreover, Machinists expressly left open the question of
whether draft groups could be treated as political
committees for purposes of the Act's contribution limits
after Congress's 1979 amendments to the Act. 655 F.2d at
395-96.