Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
February 9, 2007
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2006-38
Marc E. Elias, Esq.
Caroline P. Goodson, Esq.
Perkins Coie LLP
607 Fourteenth St., N.W.
Washington, DC 20005
Dear Mr. Elias and Ms. Goodson:
We are responding to your advisory opinion request on
behalf of Senator Robert P. Casey, Jr. and his State
campaign committee (the "State Committee") concerning the
application of the Federal Election Campaign Act of 1971, as
amended (the "Act"), and Commission regulations to the use
of funds remaining in the State Committee's campaign
account. The Commission concludes that the State Committee
must use a reasonable accounting method to identify the
portion of its surplus that consists of federally
permissible funds. Once it does so, the State Committee may
donate its federally permissible funds to State and local
candidates or State and local Democratic party
organizations. It may also use those funds for travel
expenses solely in connection with State and local campaign
events.
Background
The facts presented in this advisory opinion are based
on your letter received on December 12, 2006.
Senator Casey was elected on November 7, 2006 to
represent the Commonwealth of Pennsylvania in the United
States Senate. Before then, Senator Casey was the State
Treasurer of Pennsylvania. He was elected to that position
in November of 2004 and became a candidate for the United
States Senate on March 11, 2005. Senator Casey filed a
Statement of Candidacy for re-election in 2012 on December
21, 2006.
The State Committee was established by Senator Casey
when he was a candidate for State Treasurer in the 2004
State-wide election. The State Committee has surplus funds
in its non-Federal campaign account that it wishes to
disburse to State and local candidates in Pennsylvania and
for other related purposes, as described more fully below.
While the State Committee's surplus funds are from
sources and in amounts permitted under Pennsylvania law,
some of those funds are from sources that are prohibited by
the Act's source restrictions, and some of those funds were
received in amounts in excess of the Act's amount
limitations. See 2 U.S.C. 441a, 441b, 441c, 441e, and 441f.
The State Committee intends to use a reasonable accounting
method to identify the portion of its surplus that consists
of donations of federally permissible funds.1 Once it has
identified its federally permissible funds, the State
Committee intends to use those funds for any or all of the
following purposes, as permitted by Pennsylvania law. The
State Committee may donate the funds to State or local
candidates or to the nonfederal account of a State or local
Democratic party organization. It may also use the funds to
pay for travel by Senator Casey or one of his agents solely
in connection with campaign events for State or local
candidates or for other events that are solely in connection
with State or local elections. None of the State
Committee's funds will be used in connection with any
Federal election, including Senator Casey's 2012 re-
election.
The portion of the State Committee's remaining balance
that consists of non-federally permissible funds will also
be disbursed in accordance with Pennsylvania law, but will
not be used in connection with any Federal or non-Federal
election.
Questions Presented
1. May the State Committee use a reasonable accounting
method to identify federally permissible funds in its 2004
campaign account?
2. May the State Committee use its federally permissible
funds to make donations to State and local candidates and
the nonfederal accounts of State and local Democratic party
organizations, in accordance with State law?
3. May the State Committee use its federally permissible
funds to pay for travel by Senator Casey or one of his
agents that is undertaken solely in connection with campaign
events for State or local candidates or for other events
that are solely in connection with State or local elections,
as permitted by State law?
Legal Analysis and Conclusions
Question 1: May the State Committee use a reasonable
accounting method to identify federally permissible funds in
its 2004 campaign account?
The State Committee must use a reasonable accounting
method to identify federally permissible funds in its 2004
campaign account.
In two recent advisory opinions, the Commission has
identified certain accounting methods as reasonable. In
Advisory Opinion 2006-6 (Busby), the Commission identified
the method described in 11 CFR 110.3(c)(4), which is known
as the "first in, first out" method, as a reasonable
accounting method. In Advisory Opinion 2004-45 (Salazar),
the Commission determined that the "last in, first out"
accounting method was reasonable.
Question 2: May the State Committee use its federally
permissible funds to make donations to State and local
candidates and the nonfederal accounts of State and local
Democratic party organizations, in accordance with State
law?
Yes, the State Committee may use its federally
permissible funds to make donations to State and local
candidates and the nonfederal accounts of State and local
Democratic party organizations, in accordance with State
law.
As amended by the Bipartisan Campaign Reform Act of
2002 ("BCRA"),2 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, 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 those subject to section 441i(e)
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 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 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 the soliciting, receiving,
directing, transferring, spending, or disbursing of such
funds to be consistent with State law. 11 CFR 300.62.
Senator Casey is a Federal officeholder and candidate,
and the State Committee is an entity directly established,
financed, maintained, or controlled by him. Donating to a
State or local candidate or to the non-Federal account of
any State or local Democratic party organization would
involve transferring, spending, or disbursing funds in
connection with a non-Federal election. Therefore, any
funds that are transferred, spent, or disbursed must be
federally permissible - they must not have been received by
the State Committee in amounts in excess of those permitted
with respect to contributions to Federal candidates and must
not be from prohibited sources. See 2 U.S.C. 441i(e)(1)(B)
and 11 CFR 300.62; see also Advisory Opinion 2005-5
(LaHood). The Act and Commission regulations permit the
State Committee to use the accounting method described in
Question 1 to determine which funds already raised by the
State Committee are federally permissible. Once that is
determined, the Committee may donate any amount of such
funds to State and local candidates or to the non-Federal
accounts of State and local Democratic 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 Pennsylvania law. Thus, because the Commonwealth of
Pennsylvania allows unlimited donations from one State
candidate committee to another, the State Committee may
donate any amount of federally permissible funds remaining
in its 2004 campaign account to State candidates.
Question 3: May the State Committee use its federally
permissible funds to pay for travel by Senator Casey or one
of his agents that is undertaken solely in connection with
campaign events for State or local candidates or for other
events that are solely in connection with State or local
elections, as permitted by State law?
Yes, the State Committee may use its federally
permissible funds to pay for travel by Senator Casey or one
of his agents that is undertaken solely in connection with
campaign events for State or local candidates or for other
events that are solely in connection with State or local
elections, as permitted by State law.
As explained above in the answer to Question 2, the
State Committee may only use federally permissible funds in
connection with non-Federal elections. See 2 U.S.C.
441i(e)(1)(B) and 11 CFR 300.62. In addition, such use of
funds must comply with applicable State law. See 11 CFR
300.62. You have represented that the State Committee would
use federally permissible funds to pay for any travel
expenses incurred by Senator Casey or any of his agents
solely in connection with campaign events or other events on
behalf of State and local candidates and that, in doing so,
the State Committee would comply with Pennsylvania law. You
have also represented that none of the State Committee's
funds will be used in connection with any Federal election.
Accordingly, the State Committee may use the federally
permissible funds remaining in its 2004 campaign account for
the travel expenses you describe.
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. All cited
advisory opinions are available on the Commission's web site
at www.fec.gov. 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
Chairman
_______________________________
1 Federally permissible funds are funds that do not exceed
the amounts permitted with respect to contributions to
Federal candidates 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 U.S.C. 441i(e)(1)(B); 11 CFR 300.62; see also 2
U.S.C. 441a, 441b, 441c, 441e, and 441f. As currently
adjusted for inflation, the Act limits contributions from
individuals and non-multicandidate political committees to
Federal candidates to $2,300. The amount limitation on
contributions from multicandidate Federal political
committees to Federal candidates is $5,000. See 2 U.S.C.
441a(a)(1)(A) and (2)(A).
2 Pub. L. No. 107-155, 116 Stat. 81 (Mar. 27, 2002).