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CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1995-25
David A. Norcross, General Counsel
Republican National Committee
310 First Street SE
Washington, DC 20003
Dear Mr. Norcross:
This responds to your letters dated August 9 and June
27, 1995, requesting an advisory opinion on behalf of the
Republican National Committee ("RNC"), concerning the
application of the Federal Election Campaign Act of 1971, as
amended ("the Act"), to costs incurred by the RNC in
connection with certain activities to be undertaken in 1995.
You state that the RNC plans to produce and air media
advertisements on a series of legislative proposals being
considered by the U.S. Congress, such as the balanced budget
debate and welfare reform. The purpose of the ads will be to
inform the American people on the Republican and Democratic
positions on these issues, as well as to attempt to influence
public opinion on particular legislative proposals. The ads
are intended to gain popular support for the Republican
position on given legislative measures, and thereby influence
the public's positive view of Republicans and their agenda.
You further state that your request is predicated on the
following assumptions: (1) There may or may not be a
reference to a Federal officeholder who has also qualified as
a candidate for Federal office. (2) If there is reference to
a Federal officeholder who is also a Federal candidate, there
will not be any express advocacy of that officeholder's
election or defeat, nor will there be any "electioneering
message" or reference to Federal elections.(1) (3) If there
is a "call to action," it will be to urge the viewer or
listener to contact that Federal officeholder urging support
for, or defeat of, a particular piece of legislation. (4)
The appropriate Federal Communications Commission disclaimer
identifying the RNC as sponsor will be included within each
advertisement. (5) The RNC will allocate the salaries of
employees associated with this media effort based upon 11 CFR
106.5. (6) The RNC will report this media activity and its
associated expenses, as appropriate, on financial disclosure
reports filed with the Commission.
In response to the Commission's request for the text of
one or more advertisements that have been or may be
disseminated as part of this series, you have provided the
texts for three such ads--one urging support for the Balanced
Budget Amendment and the other two urging that the Medicare
program be saved and restructured. Two ads do not mention a
Federal candidate, and all three urge support for the
Republican position on the issues discussed. The third
advertisement (titled "Too Young To Die") mentions President
Clinton's name six times, although only in the context of
Medicare policy; there is no reference to any election. You
state that none of these ads served as the basis for this
advisory opinion request, and that this material may or may
not be comparable to other such advertisements which the RNC
may air in the future.
You further state that it is impossible to determine
what effect these types of advertisements have on the
electability of candidates at the Federal, state and local
level. You believe the costs incurred in connection with
these ads should be considered "administrative expenditures"
under the Commission's rules on allocation of certain
expenditures between Federal and non-federal accounts.(2)
If so considered, the regulations provide that the costs
should be allocated at least 60% to the RNC's Federal
campaign account and 40% to its non-federal account. See
11 CFR 106.5(a) and (b)(2)(ii).
The Act requires that contributions accepted and spent
to influence any Federal election be received subject to
certain limitations and prohibitions. See 2 U.S.C. §§441a,
441b, 441c, 441e, 441f, and 441g. Most of these restrictions
do not apply to funds raised and spent to influence only
state and local elections.(3)
Commission regulations set forth the procedures to be
followed by party committees that make disbursements in
connection with both Federal and non-federal elections.
11 CFR 106.5. Under section 106.5(a), party committees(4)
may make such disbursements in one of two ways: They may
make them entirely from funds raised subject to the
prohibitions and limitations of the Act; or, if they have
established separate Federal and non-federal accounts
pursuant to 11 CFR 102.5, they may allocate them between
these accounts according to various formulas set forth in
section 106.5.
The allocation formulas for national party committees to
allocate their administrative expenses and generic voter
drive costs are found at 11 CFR 106.5(b)(2). The Explanation
and Justification to these rules notes that these formulas
reflect the national party committees' primary focus on
presidential and other Federal candidates and elections,
while still recognizing that such committees also participate
in party-building activities at state and local levels of the
party organizations. 55 Fed. Reg. 26058, 26063 (June 26,
1990).
After reviewing the additional material provided by the
requester, the Commission concludes that legislative advocacy
media advertisements that focus on national legislative
activity and promote the Republican Party should be
considered as made in connection with both Federal and
non-federal elections, unless the ads would qualify as
coordinated expenditures on behalf of any general election
candidates of the Party under 2 U.S.C. §441a(d). See
Advisory Opinions 1991-33, 1985-14, and 1984-15. Thus, such
costs should be allocated in accordance with 11 CFR 106.5.
The Supreme Court in Buckley v. Valeo, 424 U.S. 1, 79 (1976),
noted that the major purpose of political committees is the
nomination or election of candidates, so their expenditures
are, by definition, campaign related. Similarly, the
Internal Revenue Code defines the "(tax) exempt function" of
a political organization, including a political party or
committee, as "the function of influencing or attempting to
influence the selection, nomination, election or appointment
of any individual to any Federal, State, or local public
office . . . or the election of Presidential or Vice
Presidential electors." 26 U.S.C. §527(e).
Section 106.5(a)(2) establishes four categories of costs
to be allocated under these rules: administrative expenses;
the direct costs of a fundraising program or event; the cost
of activities that are exempt from the definitions of
contribution and expenditure because they relate to specific
state and local party activity; and generic voter drive
costs.
You state that you believe the costs of the
advertisements should be characterized as administrative
expenses, which are defined in a non-inclusive listing at 11
CFR 106.5(a)(2)(i) to include such expenses as rent,
utilities, office supplies, and salaries. The Commission
notes that, depending on content, the costs of some
advertisements may also be characterized as generic voter
drive costs, which are defined at 11 CFR 106.5(a)(2)(iv) to
include, inter alia, costs of "activities that urge the
general public to register, vote or support candidates of a
particular party or associated with a particular issue,
without mentioning a specific candidate." Although you state
that the advertisements in question will not reference
Federal elections or contain an electioneering message, their
stated purpose--to gain popular support for the Republican
position on given legislative measures and to influence the
public's positive view of Republicans and their
agenda--encompasses the related goal of electing Republican
candidates to Federal office. This result is also
contemplated by the Commission's regulations at 11 CFR
110.8(e), which recognize that certain party-building
activities under specific conditions can feature the
appearance of the party's candidates at a "bona fide party
event or appearance." Advocacy of the party's legislative
agenda is one aspect of building or promoting support for the
party that will carry forward to its future election
campaigns.
For purposes of the allocation rules, however, it is
immaterial whether these costs are characterized as
administrative costs or as generic voter drive costs. Under
11 CFR 106.5(b)(2), the costs of both types of activities are
allocated 60% to the Federal account and 40% to the
non-federal account in non-presidential election years, and
65% to the Federal account and 35% to the non-federal account
in presidential election years. FEC Schedules H3 and H4, on
which joint activity is reported, similarly do not
distinguish between administrative and voter drive costs.
Rather, they classify them jointly as "administrative/voter
drive" costs.
Since 1995 is a non-presidential election year, the
Commission concludes that the proper allocation for these
expenditures is at least 60% to the Federal account, with a
corresponding allocation to the non-federal account.(5)
Should the RNC continue these activities into 1996, a
presidential election year, the Federal share will rise to at
least 65% of these costs.
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,
Danny Lee McDonald
Chairman
Enclosures (AOs 1991-33, 1985-14, 1984-57, and 1984-15)
1 The Commission relies on your statement that those
advertisements that mention a Federal candidate or
officeholder will not contain any electioneering message. In
view of this representation, the Commission does not express
any opinion as to what is or is not an electioneering message
by a political party committee. The courts and the
Commission have addressed the issue of what constitutes an
electioneering message by a political party in other
circumstances. See Advisory Opinions 1984-15 and 1985-14;
Federal Election Commission v. Colorado Republican Federal
Campaign Committee, Nos. 93-1433 and 93-1434, 1995 WESTLAW
372934 (10th Cir. (Colo.), June 23, 1995).
2 Your letter makes reference to past conduct of the
Democratic National Committee ("DNC"). The Commission
stresses that this advisory opinion does not address those
issues or imply any opinion whether the DNC's conduct was
permitted or not permitted under the Act and Commission
regulations. Commission regulations state that requests
regarding the activities of third parties do not qualify as
advisory opinion requests. 11 CFR 112.1(b).
3 The prohibitions on contributions by national banks, by
corporations organized by authority of Federal statute, and
by foreign nationals, apply to contributions made in
connection with any election whether Federal, state or local.
2 U.S.C. §§441b(a), 441e.
4 The Commission notes that this opinion applies only to
covered activity by national party committees. It does not
apply to legislative issue advocacy by other entities, such
as lobbying expenditures by corporations and their separate
segregated funds. See Advisory Opinion 1984-57.
5 The Commission notes that, while committees are free to
allocate a higher percentage of the disbursement to their
Federal accounts (the language in section 106.5(b)(2)(i)
reads at least 60%)(emphasis added), they may not so allocate
less than the specified percentages. See Explanation and
Justification to the Final Rules on Methods of Allocation
Between Federal and Non-Federal Accounts, 55 Fed. Reg. 26058,
26063 (June 26, 1990).