Federal Election Commission Main Page
December 18, 2000
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2000-38
Eudaldo Baez-Galib, Chair
Democratic Party of the Commonwealth of
Puerto Rico
P.O. Box 195634
San Juan, Puerto Rico 00919-5634
Dear Mr. Baez-Galib:
This responds to your letters dated October 24 and
November 24, 2000, requesting an advisory opinion concerning
the application of the Federal Election Campaign Act of
1971, as amended ("the Act"), and Commission regulations to
the political committee status of the Democratic Party of
the Commonwealth of Puerto Rico ("DPPR").
You are the Chair of the DPPR. You state that the DPPR
is the equivalent of a State party within the Democratic
Party of the United States, according to the national
Democratic Party rules. Neither the DPPR nor the local
Republican Party nominates candidates for public office in
Puerto Rico. Other parties, namely the Popular Democratic
party, the New Progressive Party, and the Independence Party
are the legal, recognized entities that participate in
Puerto Rican general elections. You assert that neither the
national Democratic nor national Republican parties, nor
their local affiliates, "have any participation whatsoever
in Commonwealth electoral processes."
Since Puerto Rico is not one of the 50 States, the
presidential general election is not held there, and the
only election for Federal office is for the Resident
Commissioner to Congress. Although candidates for that
office may identify themselves for Federal Election
Commission records as Democrat, Republican, or Independent,
they are not supported by the local national parties. The
above-referenced Commonwealth parties support them.
You state that the DPPR's political activities consist
of involvement in the Democratic National Convention, the
Democratic National Committee (by the DPPR chair and vice
chair, and national committee persons), and the Association
of State Democratic Chairs (the DPPR chair). In addition,
you explain that the Democratic and Republican parties in
Puerto Rico "are basically committees fostering
relationship[s] with Congress and the Executive Branch, and
although segments of the Puerto Rican electorate express
their affinity to either of the parties, there is no
structure, either Democratic or Republican, to embrace
them."
You describe the actual and possible future financial
activities of the DPPR. First, you refer to expenses
related to the presidential nominating process. You state
that the Commonwealth has established a presidential
primary. The primary is to be financed by the Commonwealth
but, if the Commonwealth does not finance them, the national
party affiliates (e.g., the DPPR) must finance them. You
indicate that the DPPR spent no funds with respect to a
presidential primary or caucus.1
You state that DPPR has received donations totaling
$40,000. These donations came solely from individuals and
the maximum donation was $5,000. The funds were solicited
orally at a breakfast sponsored by the DPPR. You explain
that, in soliciting the donations, DPPR made no reference to
Federal elections and made no statements supporting
candidates for President, Resident Commissioner, or other
Federal office, or supporting the election of delegates to
the national convention. (The breakfast was held on a date
after the delegates had been selected.) The DPPR did state,
however, that some of the funds could be used to pay for the
cost of delegates and other party members to attend the 2000
Democratic National Convention. It also stated that most of
the funds would be used for the administration of the party
and for funding a Federal court case challenging the
constitutionality of a Puerto Rican law that provides that
U.S. citizens residing in Puerto Rico could vote in
presidential elections. You state that, ultimately, funds
were not spent with respect to the court case.2
You further explain that, other than for administrative
costs, the donations received were used for costs related to
the attendance of five individuals at the Democratic
National Convention. These individuals were the DPPR's
chair, vice chair, and executive director, all of whom were
convention delegates, another delegate, and a secretary who
was not a delegate or committee member. The delegates had
full voting rights at the convention. Funds were used for
the air fare, lodging, and food for these individuals.
Funds were also used for administrative expenses including
car rentals, office space in the hotel, a photocopy and fax
machine, telephone service, coffee service, and expenses for
the secretary. You indicate that these services were
strictly to enable the delegates to communicate with their
businesses and families and for "the coordination of their
entertainment activities in Los Angeles." You state that
the DPPR funded two events at the convention, a breakfast
and a dinner at the delegation's hotel. Attendance was
strictly for the Puerto Rican delegates, various other
delegates, the delegates' families, and some members of the
Puerto Rican press in attendance at the convention. You
further explain that it was a "social and very private
event" and no speeches or comments were made to attendees on
behalf of candidates or a group of candidates. DPPR funds
were also used to print polo shirts and stickers for the
convention that alluded to the Commonwealth of Puerto Rico.
You ask the Commission to confirm that, since the DPPR
does not spend funds to elect candidates and does not
contribute "in any way" to the presidential candidates or to
the Democratic Party, the DPPR does not have to register
with the Commission as a political committee and report the
above described donations and disbursements.
The Act and Commission regulations define a political
committee to include, in pertinent part, "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);
11 CFR 100.5(a). A committee that qualifies as a political
committee must file a statement of organization with the
Commission within 10 days after becoming a political
committee. 2 U.S.C. 433(a); 11 CFR 102.1(d). As a
political committee, it must file reports of its receipts
and disbursements in accordance with the requirements of 2
U.S.C. 434(a) and (b) and 11 CFR Part 104.
The term "contribution" is defined as any gift,
subscription, loan, advance, or deposit of money or anything
of value made by any person for the purpose of influencing
any election for Federal office, and the term "expenditure"
is defined as any 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. 2 U.S.C. 431(8)(A)(i) and
431(9)(A)(i); 11 CFR 100.7(a)(1) and 100.8(a)(1).
The Act and regulations include in the definition of
election a caucus or convention of a political party if the
caucus or convention has the authority to select a nominee
for Federal office on behalf of that party. 2 U.S.C.
431(1)(B); 11 CFR 100.2(e). Commission regulations on
Federal funding of national nominating conventions define a
nominating convention as a convention, caucus, or other
meeting which is held by a political party at the national
level and which chooses the party's presidential nominee
through selection by delegates to that convention or through
other similar means. 11 CFR 9008.2(g).
The DPPR is a political party committee that solicited
funds for its operations. You note that it did not donate
to, or make disbursements on behalf of, any candidate for
Resident Commissioner or any other candidate for the U.S.
House of Representatives or Senate or the presidency and did
not refer to candidates for those offices in its
solicitation of funds. However, in those solicitations the
DPPR stated that it would use some of the solicited funds to
pay for the cost of delegates and other party members to
attend the Democratic National Convention. Such expenses
would therefore be used for the support of persons at the
convention who would cast votes for the nomination of a
presidential candidate. In other words, such funds would be
used to enable them to attend and participate in the
convention and thus could be considered as for the purpose
of influencing an election.
Commission regulations at 11 CFR 110.14 address
contributions to, and expenditures by, delegates and
delegate committees. They provide that funds received and
disbursements made for the purpose of furthering the
selection of delegates to a national convention are
contributions or expenditures for the purpose of influencing
a Federal election. 11 CFR 110.14(c).3 Such receipts and
disbursements must be made from funds permissible under the
Act, and the limitations on contributions to political
committees at 11 CFR 110.1 and 110.2 apply to contributions
made to and by a delegate committee.
11 CFR 110.14(c)(2) and (g); see also 11 CFR 110.1(m) and
110.2(j). Although contributions to delegates (as opposed
to delegate committees) are not subject to the limits at 2
U.S.C. 441a(a)(1)(A) and (2)(A) because delegates
themselves are not "candidates" under 2 U.S.C. 431(2),
contributions from an individual to a delegate are subject
to the individual's annual limit on contributions at 2
U.S.C. 441a(a)(3) because "the aggregate annual limit
applies generally to all contributions made for the purpose
of influencing a federal election." 11 CFR 110.14(d)(1);
Explanation and Justification, Contributions to and
Expenditures by Delegates to National Nominating
Conventions,
52 Fed. Reg. 35530, 35531 (September 22, 1987). 4
The regulations include payments by a delegate or a
delegate committee for the travel and subsistence of a
delegate or delegates at the national convention as
expenditures. 11 CFR 110.14(e)(1) and (h)(1). Although the
regulations at 11 CFR 110.14 provide that such expenditures
(along with any other expenditures by a delegate or delegate
committee that advocate only the selection of one or more
delegates) are neither contributions to a particular
candidate nor chargeable to the expenditure limits of a
publicly funded candidate, they are nevertheless
expenditures and, if expended by a delegate committee, must
be reported by that committee. 11 CFR 110.14(h)(2). The
Commission has applied 11 CFR 110.14(c) and (e) to conclude
that the use of campaign funds by a Member of Congress for
travel and subsistence expenses in his capacity as a
delegate at a national convention were permissible under 2
U.S.C. 439a because those regulations "indicate that such
costs would be for the purpose of influencing a Federal
election." Advisory Opinions 1996-20, n.2, 1996-19, n.5,
and 1995-47, n.4. Moreover, the Commission has applied the
delegate regulations to conclude that donations by a labor
organization for the travel and subsistence expenses of
delegates would be prohibited. Advisory Opinion 1980-64.
Although the regulations do not specifically address
disbursements by a party committee for the expenses of a
delegate at a national convention, it appears from the
definitions of contribution and expenditure, and the
treatment of such spending with respect to delegates and
delegate committees, that disbursements for the expenses of
the delegates at the national convention would be
expenditures or in-kind contributions to the delegates.
Thus, amounts received in response to solicitations stating
that the funds would be used for the support of delegates at
the national nominating convention would be contributions to
the party. Although other purposes were also mentioned in
the solicitations, there is no method for dividing the
receipts resulting from such a solicitation where there has
been no procedure for the contributor to split the
contribution into various parts (e.g., some funds for
delegate expenses and some funds for other purposes). Thus,
the receipt of $40,000 in contributions exceeded the
threshold for political committee status and the DPPR was
obligated to register as a political committee within ten
days of the date it received contributions in response to
the solicitation that, taken together, exceeded $1,000. 2
U.S.C. 433(a); 11 CFR 102.1(d). The DPPR was obligated to
file the reports due after that point in time (e.g.,
quarterly reports). 2 U.S.C. 434(a)(4); 11 CFR 104.5(c).
In the reports, the DPPR should report the $40,000 in
contributions from the individuals on line 11a and itemize
each contribution from individuals contributing above $200.
2 U.S.C. 434(b)(2)(A) and (3)(A); 11 CFR 104.3(a)(2)(i) and
(4)(i). Your disbursements appear to be limited to expenses
related to the travel, subsistence, and activities of the
delegates and their support staff at the national
convention, and administrative expenses of the DPPR.
Expenses for the travel, lodging, food, and convention-
related entertainment (e.g., events with delegates from
other States), as well as other DPPR administrative expenses
(whether related to the convention or not) should be
reported as operating expenditures while expenses related to
polo shirts and stickers and the personal, non-convention
related expenses of the delegates and the secretary should
be reported as other disbursements. 2 U.S.C. 434(b)(4)(A),
(4)(H)(v), (5)(A), and (6)(B)(v); 11 CFR 104.3)(b)(1)(i)(A)
and (ix), 104.3(b)(3)(i) and (ix). The DPPR should file a
Statement of Organization (FEC Form 1) and any reports (FEC
Form 3X) previously due within thirty days of its receipt of
this opinion.
After the DPPR files all the reports that were due
after the date it qualified as a political committee, it may
consider filing a termination report and requesting a
termination of its status as a political committee. The
DPPR may terminate if it will no longer receive any
contributions or make any disbursements that will otherwise
qualify it as a political committee and it has no
outstanding debts or obligations. The termination report
shall contain a final report of receipts and disbursements
and shall include a statement as to the purpose for which
its residual funds will be used. 11 CFR 102.3(a)(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.
Sincerely,
(signed)
Darryl R. Wold
Chairman
Enclosures (AOs 1996-20, 1996-19, 1995-47, and 1980-64)
_______________________________
1 You also state that the reorganization process to select
the officers of the DPPR was held by convention and that no
funds were spent for that purpose.
2 You indicate that the DPPR had intended to use the funds
for public notices to advise voters that the law was ruled
unconstitutional by the United States Court of Appeals in
the event that the State Elections Commission proceeded with
the voting process.
3 A delegate committee is defined as a group of delegates,
a group of individuals seeking election as delegates, or a
group of individuals supporting delegates that receives
contributions or makes expenditures for the sole purpose of
influencing the selection of one or more delegates. It
qualifies as a political committee, obligated to register
and report, if it meets the dollar threshold of 11 CFR
100.5(a). 11 CFR 100.5(e), 110.14(b)(2).
4 Moreover, the regulations provide that contributions to a
delegate made by an authorized committee of a presidential
candidate count against the candidate's expenditure limit.
11 CFR 110.14(d)(2).