Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
March 1, 2007
CERTIFIED MAIL RETURN
RECEIPT REQUESTED
ADVISORY OPINION 2007-03
Robert F. Bauer, Esq.
Rebecca Gordon, Esq.
Perkins Coie LLP
607 Fourteenth St., NW
Washington, DC 20005
Dear Mr. Bauer and Ms. Gordon:
We are responding to your advisory opinion request on
behalf of Senator Barack Obama and Obama for America,
formerly known as the Obama Exploratory Committee (the
"Committee"),1 requesting whether Senator Obama may, under
the Presidential Election Campaign Fund Act (the "Fund
Act"), as amended, the Federal Election Campaign Act of
1971, as amended ("FECA"), and Commission regulations,
solicit and receive private contributions for the 2008
presidential general election while retaining the option of
refunding the contributions and receiving public funds for
the general election if he receives his party's nomination
for President.2
The Commission concludes that Senator Obama may solicit
and receive private contributions for the 2008 presidential
general election without losing his eligibility to receive
public funding if he receives his party's nomination for
President, if he (1) deposits and maintains all private
contributions designated for the general election in a
separate account, (2) refrains from using these
contributions for any purpose, and (3) refunds the private
contributions in full if he ultimately decides to receive
public funds.
Background
The facts presented in this advisory opinion are based
on your letter received on February 1, 2007, your telephone
conversation with Commission staff on February 6, 2007, and
the Obama Website.
Senator Barack Obama is a United States Senator from
Illinois, elected in 2004, who is a candidate seeking the
nomination of the Democratic Party for the office of
President of the United States in the 2008 election. The
Committee is his principal campaign committee.
Press reports indicate that certain candidates and
potential candidates for the 2008 presidential election have
decided that, if they become their parties' nominees, they
will choose not to receive public funds in the general
election but will, instead, fund their campaigns exclusively
with private contributions within the confines of FECA.
Accordingly, the Committee has begun soliciting
contributions via the Obama Website,3 not only for the
primary election but also for the general election.
Nevertheless, if he receives the Democratic nomination for
President, Senator Obama has represented that he will
consider opting to receive public funds for his general
election campaign if the Republican candidate agrees, or
independently decides, to receive public funds.
To retain the option of accepting public funds for his
general election campaign, Senator Obama proposes to deposit
all private contributions designated for the general
election in a separate account immediately upon receipt.
You represent that only the Committee's treasurer and its
chief operating officer will have access to the account.
Funds in the account would not be commingled with funds from
other accounts and would not be used for any purpose
whatsoever, including operating expenses, unless and until
Senator Obama decides not to receive public funds for the
general election. If he decides to receive public funds,
Senator Obama would immediately refund all private
contributions designated for the general election in full.
Question Presented
May Senator Obama solicit and receive contributions
for the 2008 presidential general election without losing
his eligibility to receive public funds for the general
election if he receives his party's nomination for
President?
Legal Analysis and Conclusions
Yes, Senator Obama may solicit and receive private
contributions for the 2008 presidential general election
without losing his eligibility to receive public funding if
he receives his party's nomination for President, if he (1)
deposits and maintains all private contributions designated
for the general election in a separate account, (2) refrains
from using these contributions for any purpose, and (3)
refunds the private contributions in full if he ultimately
decides to receive public funds.
Candidates may accept contributions that are
specifically designated by contributors for the general
election before the candidates have won their primary
elections, or in the case of presidential elections, before
the candidates have received their parties' nomination. See
11 CFR 110.1(b)(2)(i) and 110.2(b)(2)(i). Upon receiving
such contributions, a candidate's authorized committee must
employ an acceptable accounting method to distinguish
between contributions designated for the primary election
and contributions designated for the general election.4 See
11 CFR 102.9(e)(1).
To be eligible to receive payments of public funds from
the Presidential Election Campaign Fund for the general
election under 26 U.S.C. 9003, however, the presidential
candidate of a major party must certify that the candidate
and the candidate's authorized committee have not accepted
and will not accept any contributions to defray qualified
campaign expenses, with certain limited exceptions not
relevant here. See 26 U.S.C. 9003(b)(2); 11 CFR
9003.2(a)(2).
Here, Senator Obama wishes to raise contributions
designated for the 2008 presidential general election before
receiving his party's nomination, without waiving his
eligibility to receive public funds for the general
election. Under your proposal, Senator Obama would deposit
all private contributions designated for the general
election in a separate account, would restrict access to the
account, and would refrain from using any funds in that
account until he has decided whether to receive public funds
for the general election. If Senator Obama becomes a
candidate in the general election and decides to receive
public funds, he would refund all private contributions from
the separate account in full.
The proposed arrangement is in some respects similar to
the permissible practice of fundraising for the general
election by Federal candidates who have not yet won their
primary elections or, in the case of presidential
candidates, received their parties' general election
nomination, as discussed above. If a candidate fails to
qualify for the general election, any contributions
designated for the general election that have been received
from contributors who have already reached their
contribution limit for the primary election would exceed
FECA's contribution limits. See Advisory Opinion 2003-18
(Bob Smith for U.S. Senate)5 (a candidate failing to qualify
for the general election must not treat contributions
received during the primary election period that were
specifically designated for the general election as
permissible campaign funds). The knowing acceptance of
excessive contributions is prohibited. See 2 U.S.C.
441a(f); 11 CFR 110.9. A candidate in these circumstances
is not considered to have accepted excessive contributions,
however, so long as the candidate refunds the contributions
designated for the general election within 60 days of the
date such funds become impermissible.6 See 11 CFR
102.9(e)(3), 103.3(b)(3), 110.1(b)(3)(i), (b)(5),
110.2(b)(3)(i), (b)(5), and Advisory Opinion 2003-18. Thus,
a candidate who fails to run in the general election may
avoid a violation of FECA's contribution limits by refunding
all contributions designated for the general election.
Just as Senator Obama would not be considered to have
accepted excessive contributions if he failed to qualify for
the general election and refunded the full amount of any
contributions designated for the general election, he will
also not be considered to have accepted private
contributions, which otherwise would have resulted in a
waiver of his eligibility to receive public funds under 26
U.S.C. 9003(b)(2) and 11 CFR 9003.2(a)(2), so long as he
refunds the full amount of contributions designated for the
general election and implements fully and completely the
other safeguards and procedures included in your proposal.
Accordingly, the Commission concludes that Senator
Obama may solicit and receive private contributions for the
2008 presidential general election without waiving
eligibility to receive public funds for the general election
under the facts presented here, in which (1) all
contributions designated for the general election will be
kept in a separate account in the Committee's designated
campaign depository, (2) only the Committee's treasurer and
its chief operating officer will have access to this
account, and (3) the funds in this account will not be used
for any purpose.
The procedures described above will permit Senator
Obama to solicit and receive general election contributions
while remaining eligible for public funding under the
conditions described. However, these are not the only
procedures a candidate could adopt that would permit them to
raise funds conditionally for the general election while
preserving eligibility for public funding. Candidates who
would like to use different procedures or whose campaigns
present different factual patterns than those presented here
are encouraged to seek an advisory opinion from the
Commission.
If Senator Obama decides to receive public funding for
the presidential general election, then he must refund all
contributions designated for the general election in full
within 60 days after Senator Obama certifies his eligibility
to receive public funds under 11 CFR 9003.2(a)(2). See 11
CFR 103.3(b)(3), 110.1(b)(3)(i), (b)(5), 110.2(b)(3)(i),
(b)(5), and Advisory Opinion 2003-18, n.3 ("The time limit
for the redesignation or refund of contributions is 60 days
from the date the funds become impermissible."). If Senator
Obama is unable to process a refund for any reason, the
unrefunded funds must be promptly disgorged to the U.S.
Treasury. Additionally, if any contributions designated for
the general election are deposited in an interest-bearing
account, but Senator Obama later opts to receive public
funds for the general election and refunds those
contributions, then all interest earned on such funds must
be disgorged to the U.S. Treasury within 60 days after
Senator Obama certifies his eligibility to receive public
funds under 11 CFR 9003.2(a)(2).7
This response constitutes an advisory opinion
concerning the application of FECA, the Fund Act, and
Commission regulations to the specific transaction or
activity set forth in the request for an advisory opinion.
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
Chairman
_______________________________
1 Since filing the request for an advisory opinion, the name
of Senator Obama's principal campaign committee has been
changed to Obama for America. See Obama for America Amended
Statement of Organization, FEC Form 1, available at
http://query.nictusa.com/cgi-bin/fecimg/?C00431445 (filed
Feb. 12, 2007); see also http://www.barackobama.com (the
"Obama Website") (last visited 02/15/07).
2 For purposes of this Advisory Opinion, references to
financial activity by Senator Obama include references to
the activity by the Committee. With certain limited
exceptions not relevant here, the presidential candidate of
a major party must certify that he or she has not accepted
and will not accept any private contributions in order to
receive payments of public funds from the Presidential
Election Campaign Fund for the general election under 26
U.S.C. 9006. See 26 U.S.C. 9003(b)(2); 11 CFR 9003.2(a)(2).
3 See
https://donate.barackobama.com/page/contribute/main?source=h
omenavbar (last visited 02/15/07).
4 Presidential candidates must regularly disclose the
receipt of all contributions on FEC Form 3-P.
5 A copy of this advisory opinion may be found on the
Commission's website at www.fec.gov.
6 Candidates may also obtain redesignations of those
contributions for a different election in accordance with 11
CFR 110.1(b)(5) and 110.2(b)(5), or a combination of
reattributions to other joint contributors and
redesignations of the contributions in accordance with 11
CFR 110.1(k)(3). The request for an advisory opinion
represents that if Senator Obama becomes a candidate in the
general election and decides to receive public funds, he
will not seek to redesignate or reattribute any of the
private contributions but will refund all private
contributions in full.
7 Interest earned may be used for any bank or merchant fees
related specifically to the general election account(s).