Federal Election Commission Main Page
December 6, 1991
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1991-34
Trent R. Benzo
Acting Executive Director
West Virginia Republican State Committee
P.O. Box A
Charleston, WV 25362
Dear Mr. Benzo:
This responds to your letter of September 6, 1991, as
supplemented by your letter dated October 16, 1991,
requesting an advisory opinion on behalf of the West Virginia
Republican State Committee ("the Committee") concerning the
application of the Federal Election Campaign of 1971, as
amended ("the Act"), to the sale by the Committee of access
to a data base of registered voters in West Virginia.
You state that the Committee, using funds from its
Federal account, has recently purchased a computer system and
leased a data base. The data base, which you describe as
"extremely valuable," consists of all registered voters in
West Virginia. According to the information you have
provided, it was leased from Aristotle Industries for $5,000
with updates provided at least once a year.F
According to the Political Resource Directory, National
Edition (1991), Aristotle Industries is a company
specializing in campaign software voter lists, diskettes and
campaign seminars.
F The data base,
you state, is to be part of the Committee's direct mail
program, both for fundraising and candidate support. While
the computer system has been used to keep track of
fundraising and other matters, you state that, once the
political campaigns are in "full swing" next year, the
primary use of the system will be for running the data base
itself.
During the interim period before the political campaigns
reach intensity or, as you describe it, "the off-year," the
Committee wishes to sub-lease the data base to individuals,
PACs, corporations and other groups. Because of a clause in
the Committee's contract with Aristotle Industries, the
Committee is unable to provide an electronically formatted
copy of the data base. However, the Committee plans to
supply customers with lists, letters, labels and addressed
envelopes. The cost the Committee intends to charge is a
maximum of $5,000 for statewide use and a lesser amount for
smaller areas. You state that this charge represents the
Committee's costs to lease the data base for one year. You
state that this fee schedule is justified both by the expense
to prepare and package the information in the above manner,
and by the small demand for the information that exists at
this time.
You state that, while the Committee does not anticipate
a profit from these transactions, the income generated would
be used as an offset to operating expenditures. These funds
would be used only in conjunction with the computer system
and data base. You state that you would primarily use the
money to pay salaries of the people running the system. The
Committee offers to open a separate Federal account for these
purposes and you affirm that no candidate, Federal or
non-Federal, would benefit from this account.F
You indicate that funds from the account would also be
used to buy supplies such as labels, stationary, envelopes,
upgrading the system, laser-jet printer cartridges, as well
as any other costs associated with the operation of the
system.
F
Generally, the Commission has viewed the sale or
commercial use of committee assets by a political committee
to be fundraising for political purposes, resulting in
contributions subject to the limitations and prohibitions of
the Act. See Advisory Opinions 1990-3, 1989-4, 1988-12 and
1983-2. The Commission has reached this conclusion with
respect to the proposed sale of campaign fundraising items,
or unique political campaign materials without a genuinely
independent market value. See Advisory Opinions 1990-3 and
1980-70. The Commission has further reviewed situations
where a committee seeks to use its assets to generate income
through ongoing business or commercial ventures. The
Commission has found these to be merely fundraising in
another form. See Advisory Opinions 1990-3, 1988-12 and
1983-2.
In certain circumstances, the Commission has concluded
that contributions do not result. The Commission has
specifically permitted isolated sales of political committee
assets without inherent contribution consequences, however,
when the assets had been purchased or developed for the
committee's own particular use, rather than for sale in a
campaign fundraising activity, and such assets had
ascertainable market value. Advisory Opinions
1989-4 (mailing lists and computer hardware), 1986-14
(campaign van), 1981-53 (mailing list) and 1979-24 (yard sign
material and office equipment). The above has been allowed
in isolated sales of political committee assets including
where termination of the committee has not been contemplated.
Advisory Opinions 1990-26 and 1985-1.F
The various advisory opinions dealing with contributor
lists have followed these same general principles. For
example, in Advisory Opinion 1981-53, the Bill Frazier for
Congress committee wished to sell a contributor list to a
data processing corporation. The list was created by the
committee itself and included all of its contributors.
Further, the transaction was a final sale in which the
committee retained no copy of the list. In another
situation, Advisory Opinion 1988-12, the Commission concluded
that proposed ongoing transactions by the Erie County [New
York] Democratic committee to sell access to a list of all
county registered Democrats to a savings bank for use in the
bank's credit card program, which would generate income for
the committee's administrative expenses, was fundraising
activity under the Act.
F
The Commission notes that your transaction differs from
the above factual patterns. Your request instead presents a
situation similar, in certain respects, to that considered by
the Commission in Advisory Opinion 1983-2. In that opinion,
following purchase of computer equipment, the Citizens for
Emery Committee wished to provide use of the computer on a
"fee for services basis" to state committees, political
candidates and private businesses. The funds realized from
these continuing transactions were to be used to pay
remaining committee debt. The Commission concluded that this
enterprise would be fundraising and that all the funds
generated would be contributions under the Act. In the same
way, rather than an isolated sale or disposal of a committee
asset, the Committee proposes to engage in an ongoing
enterprise involving the use of a mailing list and computer
equipment in order to generate funds to maintain the computer
system during the non-election year. Therefore, under the
facts presented in your request and in accordance with
Commission precedent, the Commission concludes that the
Committee's sale of access to its registered voters data
base, and the printing of letters, labels, addressed
envelopes, and lists using that data base, would be
fundraising. Funds generated by the transaction would be
considered contributions under the Act unless they were
deposited in a separate non-Federal account and used only for
purposes other than influencing any Federal election or the
payment of the Federal share of administrative and
fundraising costs. See 11 CFR 102.5(a)(1) and Advisory
Opinion 1986-40.
In this regard, the Commission notes your statement that
the Committee intends to market the list to corporations.
The Act prohibits the acceptance by political committees of
contributions made from corporate treasuries. 2 U.S.C.
§441b. While the transaction you wish to engage in is not
prohibited by the Act or Commission regulations, the funds
received from the "purchasers" must be treated as
contributions for the purposes of the Act and regulations.
This means that the prohibitions, limitations, and disclosure
requirements of the Act apply to the funds raised to same
extent as if the Committee was engaging in another form of
political fundraising. Therefore, the Commission cautions
you that the receipt of funds from corporations in relation
to your proposed transaction would be prohibited under the
Act unless, again, the funds were placed in a separate
non-Federal account with the use restricted as described
above. See Advisory Opinions 1990-3, 1988-12 and 1983-2.
The Commission expresses no opinion as to the possible
application of West Virginia state law to the described
activity, nor as to any tax ramifications, since those issues
are outside its jurisdiction.
This response constitutes an advisory opinion concerning
the 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. §437f.
Sincerely,
(signed)
John Warren McGarry
Chairman for the
Federal Election Commission
Enclosures (AOs 1990-26, 1990-3, 1989-4, 1988-12, 1986-14,
1986-40, 1985-1, 1983-2, 1981-53, 1980-70 and
1979-24)