Federal Election Commission Main Page
April 17, 1984
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1984-10
Mr. James F. Fitzpatrick
Mr. John M. Quinn
Arnold & Porter
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
Dear Messrs. Fitzpatrick and Quinn:
This responds to your letters of February 9 and February 27,
1984, requesting an advisory opinion concerning application of
the Federal Election Campaign Act of 1971, as amended ("the
Act"), and Commission regulations to the establishment and
operation of a political contribution plan.
According to the information provided by you, Arnold &
Porter ("the Partnership") is a law firm organized as a
partnership under the laws of the District of Columbia. The
Partnership has contracted to provide legal services to an agency
of the United States, and is consequently a "Federal contractor"
as defined at 11 CFR 115.1(a)(1). The Partnership wishes to
establish a voluntary political contribution plan under which
participating partners could make contributions to candidates for
Federal office.
Under the plan, contributions would be made by checks drawn
on the general partnership account used by the firm for its
day-to-day operations. Individual partners are not authorized to
issue checks drawn on this account to pay personal expenses.
Rather, check-issuing authority is vested in a limited number of
persons such as the firm's Comptroller and Administrative
partner. The amount of any contribution made in the name of a
participating partner would be charged against his or her
personal firm account and an equivalent sum would be deducted
from the partner's subsequent quarterly income distribution. The
plan does not involve use of personal checks by participating
partners.
Partnerships receive special treatment under the Act and
Commission regulations. On one hand, a partnership is a "person"
under SS 431(11). Consequently, partnerships may make
contributions for the purpose of influencing any election for
Federal office, if not otherwise unlawful under the Act. On the
other hand, partnership contributions are attributed to each
individual partner pursuant to SS 110.1(e) of Commission
regulations.
The Commission has approved partnership political
contribution plans similar to the one you seek to establish. See
Advisory Opinions 1981-50, 1982-13 (copies enclosed). These
approved plans differ, however, in one crucial respect from the
plan proposed in your request in that these partnerships did not
indicate their "Federal contractor" status and, accordingly, the
Commission did not address that issue. Because your partnership
is a Federal contractor, the availability of such a plan must be
determined by reference to 2 U.S.C. SS 441c and SS 115.4 of
Commission regulations. Section 441c(a)(1) makes it unlawful for
any person:
who enters into any contract with
the United States or any department
or agency thereof...directly or
indirectly to make any contribution
... to any political party, committee,
or candidate for public office or to any
person for any political purpose or use....
As previously stated, a partnership is expressly included in
the Act's definition of "person." The use of the general
partnership checking account for transmitting contributions under
your proposed plan violates the SS 441c prohibition against direct
or indirect contributions by Federal contractors.
Commission regulations parallel SS 441c(a)(1). In particular,
SS 115.4(a) provides that "the assets of a partnership which is a
Federal contractor may not be used to make contributions or
expenditures in connection with Federal elections." Individual
partners may, however, make contributions in their own names from
their personal assets. 11 CFR 115.4(b). The account from which
the Partnership proposes to make contributions is inaccessible to
individual partners and cannot be used for their personal
expenses. The Commission is of the opinion that the funds paid
from such an account must be characterized as Partnership assets.
Consequently, those funds would not constitute personal assets
from which contributions could be made under SS 115.4(b).
Moreover, it should be noted that SS 115.4(b) incorporates the
Commission's position expressed in Advisory Opinion 1975-31.
Explanation and Justification of Part 115, 1 Fed. Election Camp.
Fin. Guide (CCH) 1937 (Sept. 11, 1980). Advisory Opinion 1975-31
(copy enclosed) sets forth two requirements that, when met,
enable a partner of a Federal contractor partnership to make a
contribution. First, the contribution must be made in his or her
own name. Second, the contribution must be made out of the
partner's personal funds on a personal check. Your proposed plan
fails to satisfy these requirements.
Accordingly, the Commission concludes that the Partnership
may not establish a political contribution plan under which
contributions are paid by checks drawn on any Partnership
checking account because of the firm's Federal contractor status.
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.