Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
August 30, 2006
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2006-21
Matthew S. Butler
Campaign Manager
Cantwell 2006
PO Box 12740
Seattle, WA 98111
Dear Mr. Butler:
We are responding to your advisory opinion request on
behalf of Cantwell 2006, concerning the application of the
Federal Election Campaign Act of 1971, as amended (the
"Act"), and Commission regulations to expenditures from
personal funds made by another candidate, Michael S.
McGavick, before the State of Washington's primary election
and whether such spending triggers the application of the
Millionaires' Amendment for Senator Cantwell. The
Commission concludes that Mr. McGavick is not Senator
Cantwell's "opposing candidate" in the primary election, so
Mr. McGavick's expenditures from personal funds made before
the primary election will not trigger the provisions of the
Millionaires' Amendment for Senator Cantwell or Cantwell
2006. However, any personal funds that were contributed by
Senator Cantwell or Mr. McGavick to either of their
respective authorized committees before the primary
election, and that are retained by either committee for use
in the general election campaign, will be expenditures from
personal funds in connection with the general election.
Senator Cantwell and Mr. McGavick must use a reasonable
accounting method to determine the amount of personal funds
available for use in the general election campaign.
Background
The facts presented in this advisory opinion are based
on your letter received on July 11, 2006.
Senator Maria Cantwell is a Democratic candidate for
reelection to the U.S. Senate from Washington State in the
upcoming election. Cantwell 2006 is Senator Cantwell's
principal campaign committee. Michael S. McGavick is a
Republican candidate seeking election to the U.S. Senate
from Washington State. The Democratic primary election and
the Republican primary election will both be held on
September 19, 2006, and the general election will be held on
November 7, 2006. There are five Democratic candidates and
six Republican candidates on the September 19 primary ballot
for United States Senator in Washington State.1
Cantwell 2006 anticipates that Mr. McGavick will spend
a significant amount of his personal funds for
"communications attacking Senator Cantwell" before the
primary election, should he choose to spend personal funds
in connection with the Senate race.
Cantwell 2006 intends to raise funds under the
increased individual contribution limits provided by the
Millionaires' Amendment,2 to the fullest extent permitted by
the Act, Commission regulations, and the Commission's
interpretation of the law.
Questions Presented
1. May Senator Cantwell consider any of Mr.
McGavick's expenditures from
personal funds made before the primary election to
be in connection with the general election?
2. If Senator Cantwell or Mr. McGavick contributes
personal funds to the
respective candidate's authorized committee before
the primary election and that committee retains
cash-on-hand for use in the general election
campaign, would those funds be expenditures from
personal funds in connection with the general
election?
Legal Analysis and Conclusions
Question 1: May Senator Cantwell consider any of Mr.
McGavick's expenditures from personal funds made before the
primary election to be in connection with the general
election?
No, Mr. McGavick's expenditures from personal funds
made before the primary election will be expenditures from
personal funds made in connection with the primary election
only, and will not trigger application of the Millionaires'
Amendment for Senator Cantwell because Mr. McGavick is not
Senator Cantwell's "opposing candidate" in the primary
election.
The increased individual contribution limits and
coordinated party expenditure limits provided by the
Millionaires' Amendment apply separately to each election
cycle as mandated by the Act. See 2 U.S.C. 431(25) ("[A]
primary election and a general election shall be considered
to be separate elections"); see also 11 CFR 400.2(b). An
"election cycle" is defined as the period beginning on the
day after the date of the most recent election for the
specific office or seat that a candidate is seeking and
ending on the date of the next election for that office or
seat. See 2 U.S.C 431(25); 11 CFR 400.2; Increased
Contribution and Coordinated Party Expenditure Limits for
Candidates Opposing Self-Financed Candidates; Interim Final
Rule, 68 Fed. Reg. 3970, 3975
(Jan. 27, 2003).3
These provisions of the Millionaires' Amendment are
triggered by expenditures from personal funds4 made by an
"opposing candidate." See 2 U.S.C. 441a(i)(1)(C) and (D);
see also 68 Fed. Reg. at 3976. Although the Act does not
define the phrase "opposing candidate," Commission
regulations define "opposing candidate" separately for
primary election cycles and general election cycles,
consistent with the Act's application of the Millionaires'
Amendment separately to each election cycle. See
2 U.S.C. 431(25); 11 CFR 400.2 and 400.3.5 In a primary
election cycle, an "opposing
candidate" is "another candidate seeking the nomination of
the same political party for election to the office of
Senator . . . that the candidate is seeking." 11 CFR
400.3(a). See also 68 Fed. Reg. at 3976. As noted in the
advisory opinion request, the Commission specifically sought
comment when it promulgated the Interim Final Rule on
whether it should define "opposing candidate" at 11 CFR
400.3(a) "to include candidates seeking another political
party's nomination for the same office." Id. (emphasis in
original). The Commission noted that this approach would
constitute an "expanded definition" of the term "opposing
candidate." Id. No changes to 11 CFR 400.3(a) have been
promulgated after the Interim Final Rule became effective.
Thus, the Commission's current rule does not permit the
interpretation of "opposing candidate" that Cantwell 2006
proposes. Accordingly, only expenditures from personal
funds made by an opposing candidate running in the same
primary, and made during that primary election cycle, affect
the application of the Millionaires' Amendment during that
primary election cycle. This classification of expenditures
as being in connection with either the primary election or
the general election based on the date the expenditures are
made is similar to the Commission's longstanding approach in
determining whether Presidential candidate expenditures are
attributed to the primary or general election. See 11 CFR
9034.4(e).
Because Mr. McGavick is not "another candidate seeking
the nomination of the same political party" as Senator
Cantwell, Mr. McGavick is not Senator Cantwell's "opposing
candidate" in the primary election. 11 CFR 400.3(a)
(emphasis added). Thus, Mr. McGavick's expenditures from
personal funds made before the primary election will not
trigger the Millionaires' Amendment for Senator Cantwell.
Accordingly, for purposes of increased contribution limits
and increased coordinated party expenditure limits, Senator
Cantwell must consider only expenditures from personal funds
made by her opposing candidates for the Democratic
nomination to determine whether the Millionaires' Amendment
is triggered for her primary election.
Question 2: If Senator Cantwell or Mr. McGavick
contributes personal funds to the respective candidate's
authorized committee before the primary election and that
committee retains cash-on-hand for use in the general
election campaign, would those funds be expenditures from
personal funds in connection with the general election?
Yes, any personal funds contributed by Senator Cantwell
or Mr. McGavick to either of their respective authorized
committees before the primary election that are retained by
either committee for use in the general election campaign
would be expenditures from personal funds in connection with
the general election.
Any portion of a candidate's expenditures from personal
funds that is not used for expenses in the primary election
campaign, and is therefore available for use in the general
election campaign, would be an expenditure from personal
funds for the general election. See Advisory Opinion 2006-
06 (Busby). The candidate's committee must use a reasonable
accounting method such as the one described in 11 CFR
110.3(c)(4), which considers transferred cash-on-hand to
consist of the funds most recently received by the
transferor committee, to determine the portion of the amount
transferred that constitutes the candidate's personal funds.
See 11 CFR 110.3(c)(4); Advisory Opinion 2006-06 (Busby).
Accordingly, if Senator Cantwell transfers any cash-on-
hand for use in the general election campaign, she must use
a reasonable accounting method, such as the accounting
method in 11 CFR 110.3(c)(4), to determine the amount, if
any, of her personal funds transferred from her primary
election campaign to her general election campaign.
Similarly, if Mr. McGavick transfers any cash-on-hand for
use in the general election campaign, he must use a
reasonable accounting method, such as the method in 11 CFR
110.3(c)(4), to determine the amount, if any, of his
personal funds transferred from his primary election
campaign to his general election campaign. Additionally,
any amount of a candidate's personal funds transferred to
the general election campaign will be used to determine if
increased contribution limits and coordinated party
expenditure limits apply for the candidate's general
election opponent.
Once either candidate determines that expenditures from
personal funds exceed the threshold amount, see 2 U.S.C.
441a(i)(1)(B) and 11 CFR 400.9(a), then that candidate's
authorized committee must file with the Commission, within
24 hours, an Initial Notification of Expenditures from
Personal Funds ("Initial Notification") on FEC Form 10. See
11 CFR 400.21(a) and 400.24(a). The authorized committee
must also send a copy of this form to each opposing
candidate and the Secretary of the Senate. See id.
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
Enclosure (Advisory Opinion 2006-06)
_______________________________
1 See Washington Secretary of State, 2006 Candidates Who
Have Filed,
http://www.vote.wa.gov/Elections/CandidatesWhoHaveFiled_Ball
otOrder.aspx (last visited August 15, 2006).
2 The Act, as amended by the Bipartisan Campaign Reform Act
of 2002, Pub. L. No. 107-155, 116 Stat. 81 (2002), contains
a set of provisions collectively referred to as the
"Millionaires' Amendment." See 2 U.S.C. 441a(i) and 441a-1.
Under the Millionaires' Amendment, a candidate may solicit,
receive, and spend contributions from individuals under
increased contribution limits if the candidate is running
against a self-financed opponent who makes "expenditures
from their personal funds" that exceed certain amounts. See
2 U.S.C. 441a(i)(1)(A)-(C) and 11 CFR 400.40(b).
Additionally, national and State party committees may make
coordinated party expenditures in excess of the normally
applicable coordinated party expenditure limit, in 2 U.S.C.
441a(d), on behalf of candidates opposing self-financed
candidates. See 2 U.S.C. 441a(i)(1)(C)(iii)(III) and 11 CFR
400.40(b)(3). The Millionaires' Amendment also requires
that candidates and/or their principal campaign committees
comply with a number of specific reporting and notification
requirements. See, e.g., 2 U.S.C. 434(a)(6)(B) and 11 CFR
400.20, 400.21, 400.22, and 400.30(b)(2).
3 The primary election cycle began on November 8, 2000, the
day after the last general election, and will end on
September 19, 2006, the date of the primary election. The
general election cycle will begin on September 20, 2006, the
day after the primary election, and will end on November 7,
2006, the date of the general election.
4 An "expenditure from personal funds" means the
aggregation of all of the following: (1) an expenditure
made by the candidate using the candidate's personal funds;
(2) a contribution or loan made by the candidate to the
candidate's authorized committee using the candidate's
personal funds; (3) a loan to the candidate's authorized
committee that is secured using the candidate's personal
funds; and (4) any obligation to make an expenditure from
personal funds that is legally enforceable against the
candidate. See 2 U.S.C. 434(a)(6)(B)(i); 11 CFR 400.4; 68
Fed. Reg. at 3976.
5 The Commission defined "opposing candidate" separately
for each election cycle because the operative provisions of
the Millionaires' Amendment are triggered by expenditure of
personal funds by "an opposing candidate," 2 U.S.C.
441a(i)(1)(D), and these operative provisions apply only
with respect to a particular election cycle. See Increased
Contribution and Coordinated Party Expenditure Limits for
Candidates Opposing Self-Financed Candidates; Interim Final
Rule, 68 Fed. Reg. 3970, 3976 (Jan. 27, 2003); see also 2
U.S.C. 441a(i)(1)(D)(ii) (opposition personal funds amount
considers "gross receipts of a candidate's authorized
committee during any election cycle"); 2 U.S.C.
441a(i)(1)(B) (threshold amount determined "with respect to
an election cycle").