Federal Election Commission Main Page
June 25, 1980
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1980-46
J. Curtis Herge
Sedam & Herge
7600 Old Springhouse Road
McLean, Virginia 22102
Dear Mr. Herge:
This responds to your letter dated April 18, 1980,
requesting an advisory opinion on behalf of the National
Conservative Political Action Committee ("NCPAC") with regard
to application of the Federal Election Campaign Act of 1971,
as amended, ("the Act") and Commission regulations to a
proposed mass mailing by NCPAC.
You state that NCPAC is a multicandidate political committee
which as part of its activities makes independent
expenditures expressly advocating the election of certain
clearly identified candidates. NCPAC proposes to pay the
expenses associated with a mass mailing advocating the election
of a clearly identified candidate. The contemplated mailing
would contain a suggestion that a contribution, presumably
in the form of a check drawn to the order of the candidate's
campaign committee, be mailed to NCPAC. Upon receiving such
contributions, NCPAC proposes to compile a list of names
and addresses of the contributors and then forward the contributions
to the candidate's principal campaign committee
as required by 11 CFR 102.8, as amended at 45 Fed. Reg.
15106 (March 7, 1980), effective April 1, 1980.
Specifically, you ask:
(1) Whether, assuming that no communication
occurred between NCPAC and the candidate or
his agents and that all other indicia of 11
CFR 109.1 were satisfied, the proposed activity
constitutes an independent expenditure by NCPAC?
(2) Is NCPAC required to report the proposed
activity in accordance with 11 CFR 110.6(c)?
(3) Are the provisions of 11 CFR 110.6(d)(1)
or 11 CFR 110.6(d)(2) applicable to the proposed
activity by NCPAC?
As you are aware, the Act defines the term "independent
expenditure" as "an expenditure by a person expressly advocating
the election or defeat of a clearly identified candidate
which is made without cooperation or consultation with any
candidate, or any authorized committee or agent of such candidate,
and which is not made in concert with, or at the request
or suggestion of, any candidate, or any authorized committee
or agent of such candidate." 2 U.S.C. SS 431(17); see also 11
CFR 109.1, id. at 15118. For an expenditure to be independent,
each element of the definition must be satisfied. With respect
to your first question, the Commission concludes that expenditures
made by NCPAC to pay the expenses of the described mass
mailing would not constitute independent expenditures, but
rather would constitute in-kind contributions to the candidates.
Because NCPAC's proposed solicitation, while directing that
the contributions be made in the form of checks payable to
the candidates, specifically asks that the checks be forwarded
to NCPAC for gathering and transmittal to the candidates,
the acceptance of the checks by the candidate constitutes
acceptance of the costs incurred by NCPAC in connection with
the solicitation. This situation in analogous, for example,
to the printing of campaign materials by an individual or
multicandidate committee advocating the election or defeat
of a candidate.1/ If those materials are distributed by the
multicandidate committee, no in-kind contribution results.
On the other hand, if the multicandidate committee provides
the materials to the campaign committee, acceptance of the
materials constitutes an in-kind contribution in the amount
of the costs of their production.
The plan as outlined by NCPAC in distinguishable from the
situation, under 11 CFR 110.6(c) and (d), in which a conduit or
intermediary receives a contribution which has been earmarked for
a specific candidate and merely passes on that contribution.
Under those circumstances, there is no cost on the part of the
1/An additional analogy is contained in the Commission's regulations
on Allocation of polling expenses at 11 CFR 106.4. See in
particular SS 106.4(b).
conduit for a specific solicitation directing that checks
be transmitted to the conduit, and, therefore, no in-kind
contribution results. In the situation which you have described,
the costs of NCPAC's solicitation would be an in-kind
contribution limited to $5,000, and reportable as such.
2 U.S.C. SS 434; 11 CFR Part 104. However, for purposes of
transmittal of the checks once NCPAC receives them, NCPAC
would be a conduit or intermediary. Thus, the individual
contributor's check would not count against NCPAC's $5,000
contribution limitation.
Your second question concerns NCPAC's potential reporting
requirements under the provisions of 11 CFR 110.6(c).2/ As an
intermediary or conduit with respect to contributions, earmarked
for a specific candidate, NCPAC would be required to report the
original source and intended recipient of the contributions to
the Commission in accordance with 11 CFR 110.6(c). That section
provides that if the contributions were passed on in the
form of the contributor's check, which appears to be the
factual situation presented here, the conduit or intermediary
must disclose each contribution on a separate schedule attached
to the conduit's next report required to be filed after
receipt of the contribution. 11 CFR 110.6(c)(1)(ii). Further,
the conduit is required by 11 CFR 110.6(c)(2) to report
each contribution to the intended recipient candidate when
the contribution in passed on to the intended recipient.3/
The conduit's reports to the Commission and to the intended
recipient with respect to each earmarked contribution must
contain all information contained in 11 CFR 110.6(c)(4)(i),
(ii), and (iii).
With regard to your final question concerning the applicability
of 11 CFR 110.6(d)(1) and/or 110.6(d)(2) to the proposed
activity, the Commission concludes that the cited sections of the
regulations do not apply to the factual situation presented by
your request. The general rule with regard to the receipt of
earmarked contributions by a conduit provides that a conduit's
contribution limits are not affected by passing on earmarked
contributions, except where the conduit exercises any direction
or control over the choice of the recipient candidate. 11
2/Portions of this regulation were amended at 45 Fed. Reg. 15119.
3/The Commission notes that under its recently amended regulations,
SS 102.8(c) at id. 15106, NCPAC would be under a duty as a conduit to
forward earmarked contributions for an authorized candidate
committee no later than 10 days after receipt.
CFR 110.6(d)(1); also see Advisory Opinion 1975-10 and the
Commission's Response to Advisory Opinion Request 1976-92 4/
(copies enclosed). If the conduit exercises any direction or
control over the choice of the recipient candidate, the contribution
is considered a contribution by both the original contributor
and by the conduit. Moreover, the conduit is required
to report each contribution as required by 11 CFR 110.6(d)(2).
It appears that although the proposed mailing contains a
clear suggestion that the individual receiving the communication
make a contribution to a specific candidate through NCPAC
as an intermediary, the individual contributor, not NCPAC,
makes the choice whether to make a contribution to the specified
candidate. The fact that a potential contributor may decide
against making a contribution indicates lack of control over the
choice of the recipient candidate by NCPAC. Nor does NCPAC
have any significant control over the time when the contributions
are forwarded to the candidates, see footnote 3 above.
Moreover, it appears that NCPAC would have no control over the
amount of the contribution nor the intended recipient of the
contribution, since the request contemplates the receipt by
NCPAC of contributions in the form of personal checks drawn
to the order of the candidate or the candidate's principal
campaign committee. Since the factual situation as described
does not indicate "direction or control" by NCPAC within the
meaning of 11 CFR 110.6(d), contributions (in the form of checks
made payable by the original donor to a specific candidate or
principal campaign committee thereof) received by NCPAC as a
result of the proposed solicitation, and subsequently transmitted
to the campaign committee of the intended recipient, would not
be considered contributions by NCPAC to the identified candidate;
nor would they count against NCPAC's contribution limitations
under 2 U.S.C. SS 441a(a)(2) and 11 CFR 110.2. Such contributions
would only count against the contribution limitations of those
persons making their contributions through NCPAC as an intermediary.
2 U.S.C. SS 441a(a) and 11 CFR 110.1.
This response constitutes an advisory opinion concerning
application of the Act, or regulations prescribed by the Commission,
to the specific transaction or activity set forth in
your request. See 2 U.S.C. SS 437f.
4/A significant difference in Re: AOR 1976-92 is that the
contribution plan there discussed was treated as the separate
segregated fund of a corporation. NCPAC is not a separate
segregated fund.