Federal Election Commission Main Page
June 17, 1994
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1994-12
James S. Todd, M.D.
Executive Vice President
American Medical Association
515 North State Street
Chicago, Illinois 60610
Dear Mr. Todd:
This refers to your letters of June 3, April 21, March
23 and February 23, 1994, concerning the application of the
Federal Election Campaign Act of 1971 ("the Act"), as
amended, and Commission regulations to the governing and
membership structure of the American Medical Association (the
"AMA").
You state that the AMA is an Illinois corporation
governed by the Illinois Not-For-Profit Corporation Act. It
is a federation of 50 State medical societies and the medical
societies of the District of Columbia, Guam, Puerto Rico and
the United States Virgin Islands.1/ Its membership
constitutes approximately 290,000 physicians and medical
students. The AMA is the connected organization of the
American Medical Association Political Action Committee
("AMPAC"), a separate segregated fund which you state is
registered with the Commission as a multi-candidate
committee.
Specifically, you request an advisory opinion to
determine whether the House of Delegates of the AMA (the
"House") is the highest governing body of the AMA within the
meaning of Commission regulations and whether "direct
members" of the AMA have sufficient organization and
financial attachments to the AMA to qualify as members under
the regulations.2/
You provide various AMA documents with your request
including its articles of incorporation, its Constitution,
its Bylaws, a membership brochure and various policy
statements approved by the House. These materials identify
two bodies, the House and the Board of Trustees (the
"Board"), that play a role in governing the AMA. In order to
understand which institution should be considered the AMA's
highest governing body, the main responsibilities of each is
reviewed below. The materials also provide information
regarding the membership structure of the AMA which is also
analyzed.
THE AMA GOVERNING BODIES
The House of Delegates
The House is made up of delegates from all of the
organizational members of the AMA--the State medical
associations and the special sections of the AMA. It also
has delegates specially appointed by various medical
divisions of the United States armed forces and medical
speciality organizations.3/ All House delegates must be AMA
members. AMA Bylaws 2.101.
The House of Delegates is described in Article VI of the
AMA Constitution as the "legislative and policy making body"
of the AMA. It passes policy statements and approved the
dues and assessments (AMA Constitution Art. XI) and alone has
the right to amend the AMA Constitution. It also appoints
members to all committees, elects most members of AMA
councils, elects almost all the members of the Board of
Trustees.
The Board of Trustees
The Board of Trustees consists of 17 members. These
are: 12 trustees elected by the House; the Resident Physician
Member, President and President elect, all of whom are
elected separately by the House; the immediate past
president, and the medical student member who is elected at a
business meeting of the medical student section. AMA Bylaws
3.40.4/ Members of the Board must have been AMA members for
at least two years. AMA Bylaws 3.20
According to the AMA Constitution, the Board "shall have
charge of the property and financial affairs of the
Association and shall perform such duties as are prescribed
by law governing directors of corporations or as may be
prescribed in the Bylaws." AMA Constitution Art. VIII. The
Bylaws, in turn, delineate this power further, by giving the
Board veto power over any House resolution which pertains to
the expenditure of money. AMA Bylaws 2.101.
Various House resolutions have given the Board certain
limited policy prerogatives. The Board may enact policy in
emergency situations when the House is not in session and
there is no standing AMA policy. The House may, however,
reverse the Board decision. The Board may also enact policy
that differs from standing policy. In that case, the new
policy must be presented at the next House meeting for House
approval. In non-emergency situations and on specific
issues, the House may delegate policy making power to the
Board with no subsequent House approval required. However,
the House always retains the right to change the policy and
revoke the delegation.
The Board also possesses limited appointment powers.
It may appoint a limited number of committee members and
nominate some council members. It also appoints the
secretary-treasurer and the executive vice president who acts
as the AMA's chief executive officer.
THE AMA MEMBERSHIP STRUCTURE
Classes of Membership
As outlined by the AMA Bylaws, the organization's
various classes of membership are: active constituent, active
direct, affiliate and honorary. Active constituent members
are AMA members of its constituent associations (State
medical associations) who are entitled to exercise the rights
of membership in their constituent associations, including
the right to vote and hold office as determined by their
respective constituent associations. Active direct members
are individuals who chose to join the AMA directly and not
through any constituent association. Both these classes also
require identical professional credentials. AMA Bylaws 1.11
and 1.12.5/
Affiliate membership is open to four classes of
individuals: physicians in foreign countries, American
physicians located abroad, dentists holding certain degrees
and pharmacists. AMA Bylaws 1.14. Honorary membership is
open to physicians of foreign countries who have achieved
pre-eminence in medicine and who have attended an AMA
convention. AMA Bylaws 1.15. Honorary and affiliate
membership is bestowed by vote of the House, while
constituent and direct are attained through application to
the AMA.
Obligations and Benefits of Members
Constituent members and direct members are required to
pay dues and assessments. In the membership brochure
provided in your request, the range of dues varies
corresponding to one's status as a physician, resident
physician or intern, the length of time served in each
capacity, and the time duration of the membership term one
wishes to purchase.6/ Honorary and affiliate members do not
pay dues or assessments.
Constituent and direct members are both eligible to be
elected and serve as delegates or as trustees and officers.
They both may serve on various committees, if other
qualifications are met.7/ Both receive the various
newsletters and journals and may take advantage of various
AMA professional programs and insurance policies. The
distinction between constituent and direct members lies in
the ability of direct members to participate in election to
the House. Since most direct members do not belong to a
constituent society, most do not participate in the process
to elect delegates to the House.8/ Honorary and affiliate
members do not have any rights in the AMA beyond the
privilege to attend AMA meetings. They are also expressly
prohibited from holding any AMA office.
THE ACT AND COMMISSION REGULATIONS
The Act prohibits corporations from making any
contribution or expenditure in connection with a Federal
election. 2 U.S.C. §441b(a). The Act states, however, that
the term "contribution or expenditure" does not include "the
establishment, administration, and solicitation of
contributions to a separate segregated fund to be utilized
for political purposes by a corporation, labor organization,
membership organization, cooperative or corporation without
capital stock." 2 U.S.C. §441b(b)(2)(C). See also 2 U.S.C.
§431(8)(B)(vi) and (9)(B)(v).
The general prohibition of 2 U.S.C. §441b(a), however,
has the additional exception that allows an incorporated
membership organization to communicate with its members on
"any subject" including partisan electioneering messages.
2 U.S.C. §441b(b)(2)(A). See also 2 U.S.C. 431(9)(B)(iii).
Commission regulations expressly permit incorporated
membership organizations to make partisan communications to
their individual members. See 11 CFR 114.3(a)(2), 114.3(c),
and 114.7(h).
Under 2 U.S.C. §441b(b)(4)(A), a corporation, or a
separate segregated fund established by a corporation, may
only solicit contributions to such a fund from its
stockholders and their families and its executive or
administrative personnel and their families. An exception
set forth in 2 U.S.C. §441b(b)(4)(C) allows a corporation
without capital stock or a separate segregated fund
established by a corporation without capital stock, including
a trade association, to solicit contributions to the fund
from members of the nonstock corporation. A "Membership
Association," a classification which includes trade
associations and other corporations without stock is defined,
in part, under 11 CFR 100.8(b)(4)(iv) and 114.1(e)(1) as a
membership organization that (i) expressly provides for
"members" in its articles and bylaws; (ii) expressly solicits
members; and (iii) expressly acknowledges the acceptance of
membership, such as by sending a membership card or inclusion
on a membership newsletter list.
The Commission regulations provide guidance as to the
definition of the term "members." Under 11 CFR
100.8(b)(4)(vi)(B) and 114.1(e)(2), "members" means all
persons who are currently satisfying the requirements for
membership in a membership association, who affirmatively
accept the membership association's invitation to become a
member, and who meet one of the following requirements:
(i) Have some significant financial attachment to the
membership association, such as a significant investment or
ownership stake (but not merely the payment of dues);
(ii) Are required to pay on a regular basis a specific
amount of dues that is predetermined by the association and
are entitled to vote directly either for at least one member
who has full participatory and voting rights on the highest
governing body of the membership association, or for those
who select at least one member of those on the highest
governing body of the membership association; or
(iii) Are entitled to vote directly for all of those on
the highest governing body of the membership association.
The regulations also provide that the Commission "may
determine, on a case by case basis, that persons seeking to
be considered members of a membership association for
purposes of this section have significant organizational and
financial attachment to the association under circumstances
that do not precisely meet the requirements of the general
rule." See 11 CFR 100.8(b)(4)(vi)(B) and 114.1(e)(3).
APPLICATION OF MEMBERSHIP REGULATIONS TO THE AMA
The AMA as a Membership Association.
The facts and background to this request indicate that
the AMA is a membership association for purposes of the Act.
For example, Article V of the AMA Constitution and section
1.00 of the AMA Bylaws meets the requirements of 11 CFR
100.8(b)(4)(iv)(A) and 114.1(e)(1) by expressly providing for
membership. The AMA has various journals and a newsletter
which are sent to members, therefore, the requirement that
membership be expressly recognized is also met. See 11 CFR
11 CFR 100.8(b)(4)(iv)(A) and 114.1(e)(1)(iii). The facts of
the request and materials such as the membership brochure
suggest that the AMA expressly solicits members. See 11 CFR
100.8(b)(4)(iv) and 114.1(e)(2).
The AMA's highest governing body
Both the Board and the House have significant roles
regarding the governance of the AMA. However, it appears
that the power of the Board is derived from or delegated by
the House. It is significant that the House retains supreme
policy-making powers within the AMA and can overrule or
retake any policy incentive it delegates to the Board.
Further, while it appears that the House elects and can
remove members of the Board in certain instances, the Board
has no similar power to remove delegates. The one area in
which the Board enjoys a veto right over the House is in
financial matters. This power, while significant, must be
contrasted with the power of the Board to approve dues and
assessments and the ability of the House, not shared with the
Board, to amend the bylaws and alter the powers of the Board.
Therefore, after weighing these factors the Commission
concludes that the AMA House of Delegates, rather than the
AMA Board of Trustees, is the highest governing body of the
AMA for purposes of the Commission Regulations.9/
Status of AMA Direct Members
Under the membership regulations, AMA constituent
members would be considered "members" of the AMA for purposes
of the Act. Because of their obligation to pay dues and
their voting rights, these individuals could meet the
membership requirements of section 100.8(b)(4)(iv)(B)(2) and
114.1(e)(2)(ii), albeit under different clauses.10/
Similarly, direct members who are also members of AMA
constituent associations or members of AMA sections would
also be considered members of the AMA since they may
participate in the election process of delegates to the
House.11/
A different situation exists for those remaining direct
members. While these individuals pay dues and have certain
participatory rights, they do not have the right to vote for
any House delegate or any person who can vote for a House
delegate. The Commission considered the status of these
individuals, but was unable to reach a conclusion on their
membership status by the required affirmative vote of four
Commission members. See 2 U.S.C. §437c(c).
This response constitutes an advisory opinion concerning
application of the Act, or regulations prescribed by the Com-
mission, to the specific transaction or activity set forth in
your request. See 2 U.S.C. §437f.
For the Commission,
(signed)
Danny Lee McDonald
Vice Chairman
Enclosure (AO 1993-24)
ENDNOTES
1/ You state that these constituent medical associations are
organized separately from the AMA and are not bound by AMA
decisions. See AMA Bylaws 2.115.
2/ The relevant regulations are found at 11 CFR 100.8(b)(4) and
114.1(e).
3/ Of importance is the method by which delegates to the House
are selected. As you indicate in your request, the method of
election is up to each organization that belongs to the AMA.
The vast majority (79%) of House delegates are chosen by
State societies. You state that in all but two cases, California
and Oregon, the delegates are chosen by the State association's
own house of delegates. California and Oregon have direct
election of AMA House delegates by a secret ballot among all AMA
members of those two associations. You have informally provided
information that the specialty organizations which provide the
next largest bloc of delegates (19%) have their delegates
appointed by each head of the organization. The various surgeon
generals of the armed forces also appoint the House delegates
(1%) allotted to the military. Finally, the last group of
delegates (1%), those allotted to the five AMA special sections
(resident physicians, medical student, hospital medical staff,
medical schools and young physicians sections) are chosen at a
business meeting of the representatives of each section. You
state that AMA section members select the representatives to the
section business meetings by direct elections.
4/ While the AMA Constitution and Bylaws are silent on whether
the House may also remove Board members, you believe that under
the Illinois Not-for-Profit Corporation Act-805 ILCS 105/108.35 &
108.55, the House could remove a Board member for cause.
5/ Hereinafter, these two classes of active constituent and
active direct members will be cited without the use of the term
"active."
6/ The highest payment is $420 for a one year regular membership
for physicians, while the lowest is $20 for a one year membership
for medical students.
7/ Membership in the House of Delegates is required for
membership on House committees. The only exceptions are special
committees of the House where non-delegate committee members may
participate in the discussions, but may not cast a vote in
committee. See AMA Bylaws 2.702.
8/ The actual number of AMA direct members who do not
participate in the election of members to the House (what you
refer to in your request as voting rights in the AMA) is
indeterminate.
You have estimated that the total number of direct members in
1993 was 89,000 (or 31% of total AMA membership). However, some
of these members do nonetheless have voting rights. You state
that 21,000 (or 24% of the direct members) are individuals who
obtained AMA membership and membership in a constituent society
at different points in time. Therefore, while they are still
apparently considered direct members, they nonetheless exercise
the same AMA voting rights as constituent members through their
current membership in a constituent association. Of the
remaining 68,000 direct members (23% of total AMA membership), a
further indeterminate amount are members of the special AMA
sections that also elect representatives to the House. Medical
students who can cross several different membership categories
also elect their own representative trustee. However, even with
all these additional subtractions, you estimate that a majority
(over 44,500) of direct members do not have voting rights.
9/ This conclusion is consistent with the Commission's advice in
Advisory Opinion 1993-24, where the Commission concluded that the
requester's board of directors, rather than its executive
committee, was the highest governing body of the organization.
The executive committee was responsible for the day to day
operations of the organization, but did not hold final power
since, among other restrictions, it was limited in its ability to
alter policy. See Advisory Opinion 1993-24.
10/ For example, AMA constituent members from California and
Oregon would qualify as members since they vote directly for at
least one delegate to the AMA House. AMA constituent members
from other state associations would qualify since they vote
directly for members of the state associations' house of
delegates which, in turn, elect the delegates to the AMA House.
11/ The Commission notes the possibility that some direct members
of the AMA may also be the members of various speciality
organizations that send delegates to the House. If direct
members have the right to elect these delegates to the AMA House,
or elect those that select the delegates, then those direct
members would also be considered members of the AMA for purposes
of the Act.