Federal Election Commission Main Page
April 21, 1995
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1995-9
Matt Dorsey
Treasurer
NewtWatch PAC
1837 16th Street, N.W.
Washington, D.C. 20009
Dear Mr. Dorsey:
This responds to your letter dated March 8, 1995, and
supplementary materials received on March 24, requesting an
advisory opinion on behalf of NewtWatch PAC ("the Committee")
concerning the application of the Federal Election Campaign
Act of 1971, as amended ("the Act"), and Commission
regulations to contributions to the Committee.
You state that the Committee's mission is to "provide a
forum for publicly available information on selected public
officials, most notably Speaker of the House Newt Gingrich"
and that it "exists principally as a 'virtual PAC' on the
World Wide Web." Anyone who has the necessary computer
equipment can access the information the Committee provides
through the Internet by using the uniform resource locator
http://www.cais.com/newtwatch/. Materials available on the
Committee's World Wide Web site about Speaker Gingrich
include his voting record on selected issues, information
about the Ethics Committee and FEC complaints, contribution
data from political action committees and individuals,
personal finances, honoraria, and his sponsorship of
commemorative bills. The Committee filed a statement of
organization on February 22, 1995.
You present several questions regarding the Committee's
use of the Internet and the World Wide Web to solicit and
accept contributions.1
Question 1
You ask the Commission to confirm that the Committee's
use of the Internet, specifically a World Wide Web site, to
distribute its communications regarding Speaker Gingrich and
to solicit contributions constitutes general public political
advertising under 11 CFR 110.11(a)(1)2.
The term "general public political advertising" is not
defined in the Act or Commission regulations, but may be
applied on a case-by-case basis to forms of communication not
specifically listed in 11 CFR 110.11. In recent years, there
has been a rapid expansion of services available on the
Internet, a sizable increase in the number of persons using
it, increased ease of accessing the Internet, and a decline
in the costs of hardware and software needed to do so. The
Commission concludes that the combination of these factors
means that use of the World Wide Web site operated by the
Committee should be viewed as a form of general public
political advertising under 11 CFR 110.11.
The materials available on the Committee's World Wide
Web site on and after March 14, 1995 include the following
disclaimer: "Paid for by NewtWatch and not authorized by any
candidate or candidate's committee." The Commission
concludes that the wording of this disclaimer complies with
2 U.S.C. 441d(a)(3) and 11 CFR 110.11(a)(1)(iv)(A).3
Disclaimers are located at the end of the home page4 and
immediately following the request for contributor
information. They are printed in the same size type as much
of the body of the communication. Accordingly, the
disclaimers are presented in a clear and conspicuous manner,
as required by 11 CFR 110.11(a)(1).
Question 2
You ask whether the Committee may use the Internet, the
World Wide Web and related technology to accept contributions
"using credit cards, electronic fund transfers and
potentially other electronic means." You state that you wish
to use the service of First Virtual Holding Company ("FVHC"),
a financial services company specifically created to enable
on-line commerce via the Internet. Included in your request
is part of the on-line information provided by FVHC to
sellers and purchasers describing its services. Contributors
would need to have accounts with FVHC and provide FVHC with
their credit card number. Contributors then complete the
Committee's solicitation form and provide their FVHC Account
ID number (which is not the same as their credit card
number). The Committee will then notify FVHC of the
transaction. Before the transaction is actually processed,
however, FVHC sends the contributor an e-mail message
requesting confirmation of the transaction. The contributor
has the option of either approving or disapproving the
transaction. From time to time, the contributor's credit
card would be billed for accrued charges and the Committee's
checking account would be credited with payment.
The Commission has not previously considered this type
of procedure. The Commission has, however, recognized that
the Act and regulations allow lawful contributions to be made
not only by personal check, but also in other ways, including
properly documented use of contributors' credit cards
(Advisory Opinions 1978-68 and 1984-45), automatic fund
transfers from contributors' bank accounts to a committee
account (Advisory Opinion 1989-26) and telephone calls to 900
line services (Advisory Opinions 1991-20 and 1990-1). The
situation you present involves the use of credit cards and
appears to be very similar to these situations. Accordingly,
the Commission concludes that nothing in the Act or
Commission regulations precludes the implementation of your
proposed contribution system, provided the recordkeeping and
reporting requirements described below are followed.
Under Commission regulations, a contribution is
considered "made" when the contributor relinquishes control.
11 CFR 110.1(b)(6). In the situation you propose, the
Commission would view the date the contributor sends the
electronic confirmation to FVHC as the date the contribution
is made. This situation is similar to the transactions
presented in Advisory Opinion 1990-4. The date your
committee receives the contribution will be the date on which
the Committee receives notice that the contributor has
confirmed the charge to his or her FVHC account.
The expenses incurred by FVHC, which is a corporation,
in providing services facilitating this program would be a
prohibited contribution by FVHC if uncompensated. 2 U.S.C.
441b(a); 11 CFR 114.2(b). You state that FVHC charges a 2%
commission on all transactions, and that the Committee
intends to pay and report this normal and customary
commission as an operating expenditure pursuant to 11 CFR
104.3(b)(1)(i) and (3)(i). In a subsequent communication,
you provided materials indicating that FVHC also charges a
$10 registration fee, a 29-cent fee per transaction, and a $1
processing fee each time a payment is made by FVHC to your
account.
The Commission concludes that these amounts are
operating expenditures of the Committee and are reportable by
it pursuant to the Act. 2 U.S.C. 432(c)(5) and
434(b)(5)(A); 11 CFR 102.9(b) and 104.3(b)(3) and (4). The
2% charge, and the other fees to be paid by the Committee,
appear to be the usual and normal charge for the services to
be provided by FVHC. 11 CFR 100.7(a)(1)(iii)(A). See
Advisory Opinions 1989-26 and 1978-68. Note that the
Committee must treat the full amount of a donor's
contribution as the contributed amount for purposes of the
limits and reporting provisions of the Act, even though the
Committee will receive a lesser amount because of FVHC's
fees.
Your request recognizes your obligation to comply with
the recordkeeping and reporting requirements of the Act.
2 U.S.C. 432 and 434. The documentation required under
2 U.S.C. 432(c) and regulation sections 102.9 and 104.14
must be preserved and available for audit, inspection or
examination by the Commission for at least three years after
the filing of the report to which the documentation relates.
See 2 U.S.C. 432(d) and 11 CFR 102.9(c) and 104.14(b)(3).
When applying the requirements of these regulations, the
Commission has previously permitted the maintenance of
certain types of committee records in non-paper form. See
Advisory Opinions 1994-40 and 1993-4. Electronic
transactions of this nature must entail the creation and
maintenance of a complete and reliable "paper trail" for
recordkeeping, disclosure and audit purposes. In addition to
the records FVHC will provide to you regarding contributions,
you have indicated in a subsequent communication that the
contributor information, confirmation records and
attestations (see discussion below) will be sent
electronically to a computer file containing a log of
contributor data.5 The Committee should take steps to ensure
that the contributor data is backed up in a form that enables
the Committee to maintain either machine readable or paper
copies of these records for three years after the date on
which it reports the contributions.
Question 3
You ask whether the Committee, using the Internet and
related technology, can adequately ensure that it makes best
efforts to obtain, maintain and submit contributor
information required by the Act. This includes the name and
address of any individual whose previous contributions to the
Committee in the same calendar year aggregate over $200,
together with the date and full amount of the individual's
contribution, as well as his or her occupation and employer.
2 U.S.C. 432(c)(1) and (c)(3) and 434(b)(3)(A); 11 CFR
102.9(a)(2) and 104.3(a)(4)(i). For contributions in excess
of $50 that aggregate to $200 or less for the calendar year,
a record of the same information must be kept minus the
occupation and employer's name. 2 U.S.C. 432(c)(2) and
11 CFR 102.9(a)(1). See Advisory Opinion 1980-99 with
respect to contributions of $50 or less.
You have provided a sample of the on-line contributor
response form you propose to use to obtain this information.
You explain that if a potential contributor fails to supply
this information, he or she will receive an immediate message
asking again for the information.6
The Commission notes that 11 CFR 104.7(b)(2) requires
you to make one oral or written follow-up attempt to obtain
the information for any contribution you receive that exceeds
$200 and lacks the contributor's identification. The request
must be made no later than thirty days after the Committee
receives the contribution. In the unique situation you
present, the follow-up request may consist of an electronic
message sent to the contributor's E-mail address. However,
such request must be made after the committee receives notice
of the donor's confirmation and must meet the specific
requirements of 11 CFR 104.7(b)(2). Accordingly, if the
above steps are taken, your method would appear to satisfy
the Act's recordkeeping and reporting requirements.
Question 4
Your request raises a question as to whether you can
adequately ensure that contributions from prohibited sources
are not made or accepted, given the unique global nature of
the Internet and the unrestricted access to your World Wide
Web site. You have described in detail the methods you
intend to employ to safeguard against the receipt of
excessive contributions, contributions in the name of
another, and contributions from corporations, labor
organizations, national banks, federal government contractors
and foreign nationals, which are prohibited by the Act.
2 U.S.C. 441b, 441f, 441e, and 441a(a)(1)(A). The sample
solicitation materials you submitted include a form on which
contributors are asked to attest that they are making the
contribution from their own funds and not those of another.
They are also asked to attest that the contribution is not
from the general treasury funds of a corporation, labor
organization or national bank. The sample form also requests
attestations that contributors are not Federal government
contractors and are not foreign nationals who lack permanent
resident status in the United States.
You have also included samples of the on-line responses
would-be contributors will receive if any of these boxes are
checked "no" or left blank. The proposed responses state in
large type: "Sorry, Federal law prevents us from accepting
contributions from a foreign national who lacks permanent
resident status in the United States;" "Sorry, Federal law
prevents us from accepting contributions from a Federal
government contractor;" "Sorry, Federal law prevents us from
accepting contributions from general treasury funds of a
corporation, labor organization or national bank;" and
"Sorry, Federal law prevents us from accepting contributions
from funds other than those of the donor." In smaller type,
each of these responses to potential contributors also says
"If you think you may have filled out the contribution form
incorrectly you should try again."
The following cautionary language should be substituted
instead of your proposed language, to let potential
contributors know that the Act may affect not only the
ability of the Committee to accept their contributions, but
also their ability to contribute: "Sorry, Federal law
prohibits foreign nationals who lack permanent residence
status from contributing to NewtWatch;"7 "Sorry, Federal law
prohibits corporations, labor organizations or national banks
from contributing general treasury funds to NewtWatch;"
"Sorry, Federal law prohibits any person from contributing
another person's funds to NewtWatch;" and "Sorry, Federal law
prohibits government contractors from contributing to
NewtWatch."
The Commission notes that the Committee may receive
responses to its solicitation from minor children (persons
under 18 years of age) who have access to the Internet and
the Committee's World Wide Web site. The Committee may
accept these contributions if the minor makes the decision to
contribute knowingly and voluntarily, and the child
contributes his or her own funds, and the contribution is not
controlled by another individual or made from the proceeds of
a gift given to provide funds to be contributed. 11 CFR
110.1(i)(2). Accordingly, to ensure that contributions from
minors meet these standards, you should revise your
attestation to inform potential contributors of these
requirements.
Other Issues
A. Committee and Project Names
You state that as Treasurer of the Committee it is your
intention to fully comply with the Act and regulations. The
Commission notes that the following issues are also raised by
your proposed activity.
First, the Committee, which is not the authorized
committee of any candidate, and the World Wide Web site are
both named "NewtWatch." Reports filed by Speaker Gingrich's
authorized committee, Friends of Newt Gingrich, show that the
Speaker's authorized committee received over $5000 in
contributions after the 1994 general election and reported no
debts or obligations, thereby qualifying him as a candidate
for 1996. 2 U.S.C. 431(2).
The Act and Commission regulations prohibit an
unauthorized committee from including the name of any
candidate in its committee name. 2 U.S.C. 432(e)(4); 11 CFR
102.14(a). This restriction applies to the use of a
candidate's first name where the first name clearly conveys
the identity of the candidate. See, Buckley v. Valeo, 424
U.S. 1, 43 fn. 51 (1976) (candidate is clearly identified
where his or her name, nickname, initials, photograph, or
other unambiguous reference appear as part of a
communication). The Commission concludes that the term
"NewtWatch" may not be used as part of the Committee's name.
In contrast to the committee name restrictions, a
candidate's name may be used in the title of a special
project operated by an unauthorized committee if the project
title clearly and unambiguously shows opposition to the named
candidate. 11 CFR 102.14(b)(3). The operation of a World
Wide Web site would be considered a project of the Committee.
Here, the Commission notes that under the regulations,
phrases showing clear and unambiguous opposition to a
candidate are not limited to specific words such as "defeat"
or "oppose." The use of the term "watch," when coupled with
a candidate's name, conveys clear and unambiguous opposition
to the candidate being watched. "NewtWatch" connotes your
view that Speaker Gingrich needs to be kept under careful and
constant close scrutiny, and your view that users need to be
on the alert or to be on their guard with respect to Speaker
Gingrich. Accordingly, the Act and Commission regulations do
not prohibit the Committee from using the name "NewtWatch" as
a project name.
B. Use of FEC Contributor Data
Second, a perusal of the materials available through the
World Wide Web site includes lists of contributors who gave
$200 or more to Speaker Gingrich's authorized committee.
These lists include the contributors' cities and states but
do not include their street addresses or telephone numbers.
The lists are preceded by the statement, "While FEC data is
public information, use of this data for fundraising purposes
is prohibited by federal law."
The Act requires the Commission to make available for
public inspection and copying committee reports containing
the name and mailing address of individual contributors
giving over $200 per calendar year. The Act further provides
that "any information copied from such reports or statements
may not be sold or used by any person for the purpose of
soliciting contributions or for commercial purposes, other
than using the name and address of any political committee to
solicit contributions from such committee." 2 U.S.C.
438(a)(4).
Based on the legislative history of the Act, the
Commission has previously stated that the principal purpose
of restricting the sale or use of information copied from
reports is to protect individual contributors from having
their names sold or used for commercial purposes. See
Advisory Opinions 1995-5, 1989-19, 1984-2 and 1980-101. The
sponsor of the amendment creating this restriction stated
that the purpose was the protection of the privacy of the
"very public-spirited citizens" who make contributions to
campaigns. 117 Cong. Rec. 30057-58 (1971) (remarks of
Senator Bellmon). In Federal Election Commission v.
Political Contributions Data, Inc., 943 F.2d 190 (2d Cir.
1991) ("FEC v. PCD"), the Second Circuit concluded that where
a similar list lacked mailing addresses and phone numbers,
and contained a caveat against solicitation and commercial
use, there is little risk, if any, of solicitation or
harassment of contributors. The court stated that it was
"virtually certain that these reports will be used for
informative purposes (similar to newspapers, magazines, and
books ...)."
The Commission concludes that the inclusion of the lists
of contributors to the Friends of Newt Gingrich committee
does not violate 2 U.S.C. 438(a)(4). The lists do not
appear to contain sufficient information to generate
solicitations to Speaker Gingrich's contributors. Moreover,
the public posting of contributor information on the World
Wide Web site appears similar to the situation in FEC v. PCD.
Nevertheless, the Commission cautions you that the
statement you include in the communications available on the
World Wide Web site should be amended to reflect that the
statutory prohibition applies to the sale or use of
contributors' names copied from FEC reports for commercial
purposes, as well as sale or use for purposes of soliciting
contributions.
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. 437f.
Sincerely,
(signed)
Danny L. McDonald
Chairman
Enclosures (AOs 1995-5, 1994-40, 1993-4, 1991-20, 1990-4, 1990-1,
1989-26, 1989-19, 1984-45, 1984-2,
1980-101, 1980-99 and 1978-68)
_______________________________
1 Because your committee is not the
authorized committee of any
presidential candidate, this advisory
opinion does not address the separate
and additional issues raised by 26
U.S.C. 9031 -- 9042 and related
Commission regulations at 11 CFR
Parts 9031-9039 regarding the use of
the Internet by a presidential
candidate to solicit or accept
contributions.
2 You also ask whether the use of
the Internet constitutes political
advertising in a general public
communication under 11 CFR
100.7(b)(15)(i) and 100.7(b)(17)(i).
These provisions are applicable only
to state and local committees of
political parties, and thus do not
appear to be implicated by the
activities of your committee.
3 The materials attached to your
advisory opinion request included a
different formulation of the
disclaimer, which does not need to be
addressed given that the previous
disclaimer was updated as of March
14th.
4 A home page is the first page a
user will see when accessing a
particular World Wide Web site. It
functions as a combination of an
introduction, a table of contents and
an advertisement for the Web site.
5 The "server" is a computer that
stores and distributes the pages for
a particular World Wide Web site. It
also records the contributor data
log.
6 As discussed below, a revised
committee name should be substituted
for the name "NewtWatch."
7 The Commission suggests that you
modify the reference "(Required for
First Virtual)" so as to make clear
that it applies to the FVHC
identification number rather than the
occupation and employer information.