Federal Election Commission Main Page
February 24, 1983
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1983-3
John J. O'Connell, Chairman
J. William Siefert, Treasurer
Philadelphia Electric Company
Political Action Committee
2301 Market Street
P.O. Box 8699
Philadelphia, Pennsylvania 19101
Dear Messrs. O'Connell and Siefert:
This responds to your letter of January 11, 1983, requesting
an advisory opinion concerning application of the Federal
Election Campaign Act of 1971, as amended ("the Act"), and
Commission regulations to a proposed transfer of funds from a
committee that supports state candidates to a registered
political committee supporting Federal candidates.
Your letter states that on July 26, 1982, the Philadelphia
Electric Company ("the company") established two committees for
political purposes: the Philadelphia Electric Company State
Political Action Committee ("State PAC") and the Philadelphia
Electric Company Federal Political Action Committee ("Federal
PAC"). The Federal PAC registered as a political committee with
the Commission on August 2, 1982. The State PAC is not a
registered political committee under the Act.
You state that the Federal PAC and the State PAC operate
under separate sets of bylaws. You further state that the first
eight members of each committee were appointed by the Chief
Executive Officer of the company, and that the individuals
appointed to serve on the State PAC were also appointed to serve
on the Federal PAC. Finally, you note that while the two
committees are known collectively to employees as "PECoPAC," the
company has emphasized to employees the separateness of the PACs
for the purpose of donations. Having presented these facts, you
ask several questions:
(1) Whether the State PAC and the Federal
PAC are "affiliated committees" under
the Act;
(2) Whether the State PAC may make unlimited
transfers to the Federal PAC; and
(3) Whether the State PAC is required to
disclose to its potential contributors
that transfers will be made to the
Federal PAC.
Assuming the State PAC actually transfers funds to the
Federal PAC and thus becomes a political committee (see
discussion below), the Commission answers the first question in
the affirmative. If, on the other hand, no such transfers occur,
the committees would not be considered "affiliated committees"
under the Act as the State PAC would not be a political
committee. See 11 CFR 100.5(g)(2).
With respect to your second question, Commission regulations
state that transfers of funds may be made without limit between
affiliated committees. 11 CFR 102.6(a). For this reason, the
State PAC would be permitted to make unlimited transfers to the
Federal PAC. The Commission notes, however, that, as a
consequence of transferring any funds from the State PAC to the
Federal PAC, the State PAC would become a political committee
under 2 U.S.C. SS 431(4) and 11 CFR 100.5. See Advisory Opinion
1982-46, copy enclosed. Under the Act, a separate segregated
fund becomes a political committee whether it contributes or
transfers $1 or $1,000 to another "political committee." See
Advisory Opinion 1982-46; see also, Explanation and Justification
of 11 CFR 102.6, 45 Fed. Reg. 15084 (March 7, 1980). Thus,
because there is no monetary threshold triggering political
committee status for separate segregated funds, any amount
transferred to the Federal PAC from the State PAC would cause the
latter to become a political committee. See Advisory Opinion
1981-6, copy enclosed. As a political committee, it would be
required to register with the Commission and file periodic
reports of receipts and disbursements. 1/ 2 U.S.C. SS 433(a) and
SS 434(a)(4). Furthermore, in its first report the State PAC would
1/ If the State PAC were established and operated solely for the
purpose of financing activity in connection with state and local
elections, and were to make no transfers to the Federal PAC, no
such registration and reporting obligations would apply. 11 CFR
102.1(c).
be required to disclose amounts (as cash on hand) received prior
to becoming a political committee, even if such amounts were not
received during the current reporting period. Advisory Opinion
1982-46; 11 CFR 104.3(a) and 104.12.
Finally, if the State PAC makes the contemplated transfers
to the Federal PAC and thereby becomes a political committee, it
must comply with all of the requirements regarding contributions
and solicitations set forth at 11 CFR 102.5 and 114.5. With
respect to contributions, this means that the State PAC must
either: 1) establish a separate Federal account which is treated
as a separate political committee and must comply with the
requirements of the Act; or 2) establish a single political
committee which may receive only contributions subject to the
prohibitions and limitations of the Act, regardless of whether
such contributions are for use in connection with Federal or
non-Federal elections. 11 CFR 102.5. In addition, regardless of
which of the foregoing options is chosen, the State PAC must
comply with the solicitation requirements set forth at 11 CFR
114.5, including the requirement that if a contribution guideline
is used, the persons solicited be informed that any such
guideline is merely a suggestion, and the requirement that the
persons solicited be informed of the political purposes of the
fund and of their right to refuse to contribute. Since your
request does not indicate that the State PAC has already made any
solicitations for funds or accepted any donations, the Commission
does not reach the question whether any remedial measures would
be necessary to correct solicitations made prior to the possible
transfer of funds from the State PAC to the Federal PAC. See
Advisory Opinion 1982-40 copy enclosed; compare Advisory Opinion
1981-34, copy enclosed.
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.
2/ In Advisory Opinion 1981-34, an incorporated membership
organization with funds that were originally collected from
members for use in a lobbying effort was permitted to transfer
the funds to its political action committee only after informing
each original donor of the proposed transfer and providing him or
her an opportunity to disapprove any transfer of the unspent
portion of his or her donation.