Federal Election Commission Main Page
September 19, 1997
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1997-16
Nancy DenDooven, Treasurer
ONRC Action Federal PAC
5825 North Greeley
Portland, OR 97217-4145
Dear Ms. DenDooven:
This responds to your letters dated July 24, and July
3, 1997, on behalf of the Oregon Natural Resources Council
Action ("ONRC Action") and Oregon Natural Resources Council
Action Federal PAC ("the Committee") regarding the
application of the Federal Election Campaign Act of 1971, as
amended ("the Act"), and Commission regulations to proposed
methods of making the Committee's Federal candidate
endorsements available to its restricted class.
The information provided in your request indicates that
ONRC Action is a 501(c)(4) tax-exempt corporation, organized
under the laws of Oregon, and is the connected organization
of the Committee.1 Your request also includes ONRC Action's
By-laws, its governing document.
ONRC ACTION MEMBERSHIP STRUCTURE
The membership of ONRC Action consists only of
individuals.2 Your request indicates that ONRC Action has
approximately 5,000 members at the present time. Membership
in the organization is open to those individuals whose
annual dues are paid current, and membership may be
suspended or terminated by the Board of Directors for cause
or for violation of the organization's ideals or purposes.
ONRC Action Bylaws, Article II, Sections 1 and 6. Each
member of ONRC Action is required to pay annual dues, the
amount of which is determined by the Board of Directors.
ONRC Action Bylaws, Article II, Section 2.3
Under its bylaws, ONRC Action's Board of Directors
oversees the general management of the organization. ONRC
Action Bylaws, Article III, Section 5. This Board is
elected at the annual meeting of the members. Each paid
member is entitled to one vote. ONRC Action Bylaws, Article
III, Section 3. The Board consists of a maximum of fifteen
members who serve for two year terms. ONRC Action Bylaws,
Article III, Section 1.
The Board selects from its membership all of the
officers of the organization including its chief executive
officers: the President, a Secretary and a Treasurer. ONRC
Action Bylaws, Article IV, Section 1. These officers form
the Executive Committee, which exercises all the powers of
the Board in the management of the property and business of
the organization when the Board is not in session.
ONRC ACTION'S PROPOSED COMMUNICATIONS
You state that the Committee and ONRC Action wish to
modify the way in which they currently communicate the list
of Federal candidates endorsed by the organization to its
qualified members, the restricted class. You state that the
Committee's endorsements are presently mailed to the
organization's restricted class members and faxed to its
usual media contacts.4 The release of endorsements has
resulted in many requests for additional information, both
from its members and the general public.5 You explain that
your three areas of concern all have the same basic concept.
You would like to make your endorsements available to ONRC
Action's restricted class through inexpensive and available
technology, but you understand that there is no simple or
certain method to limit access to the restricted class only.6
Your request proposes three methods to making
endorsements available.
1. ONRC Action has a web site on the Internet that
members regularly access for various purposes related to its
work. You propose having the Committee's endorsements made
available on this web site. Printed copies of the
information available on the web site have been included in
your request. You explain that this web site is maintained
by a volunteer staff and, since it is not restricted in any
manner, it is accessible to the public.
2. You explain that your press releases regarding the
Committee's endorsements are distributed to your normal list
of media contacts. Given the amount of public interest that
these endorsements generate, you state that media reporting
of the endorsements results in a large volume of phone calls
asking for the complete endorsements.7 You wish to know if
you can provide this information, if the caller is not a
member. In cases where a caller responds affirmatively to
your inquiry as to whether he/she is a member, you ask if
relying on the caller's response would constitute sufficient
identification verification before releasing the endorsement
information.
3. Finally, you state that, due to the large volume of
calls and because you have no permanent receptionist (phones
are answered by all staff or the position is filled by
volunteers), the organization would like to record a voice
mail box with the complete list of endorsements. You
explain that the voice mail computer system was purchased
several years ago and has the capacity for approximately
1000 voice mail boxes. With less than 20 employees, there
is excess capacity on the system that the organization would
like to use. Any time spent setting up the box, or
recording the message, would be paid by the Committee.
ACT AND COMMISSION REGULATIONS
The Act prohibits corporations from making any
contribution or expenditure in connection with Federal
elections. 2 U.S.C. 441b. Contributions include direct or
indirect payments or gifts of money or any services, or
anything of value, to any candidate for Federal office. 2
U.S.C. 441b(b)(2); 11 CFR 114.1(a)(1). This general
prohibition also has an exception that allows a corporation,
including an incorporated membership organization, to
communicate with its "restricted class" (its stockholders,
executive and administrative personnel, and their families),
but not the general public, on "any subject" including
messages containing express advocacy of the election or
defeat of Federal candidates. 2 U.S.C. 441b(b)(2)(A) and
11 CFR 114.1(j), 114.3(a). See also United States v. United
Auto Workers, 352 U.S. 567 (1957) and United States v.
Congress of Industrial Organizations et al., 335 U.S. 106
(1948). For purposes of these communications, the
restricted class of an incorporated membership organization
also includes its membership. Id.
Communications containing express advocacy which may be
made to the restricted class include, but are not limited
to, publications. For example, printed material expressly
advocating the election or defeat of one or more clearly
identified candidate(s) or candidates of a clearly
identified political party may be distributed by a
corporation or by a labor organization to its restricted
class provided that: (i) the material is produced at the
expense of the corporation or labor organization; and (ii)
the material constitutes a communication of the views of the
corporation or the labor organization, and is not the
republication or reproduction, in whole or in part, of any
broadcast, transcript or tape or any written, graphic, or
other form of campaign materials prepared by the candidate,
his or her campaign committee, or their authorized agents.
A corporation or labor organization may, under this section,
use brief quotations from the speeches or other materials of
a candidate that demonstrate the candidate's position as
part of the corporation's or labor organization's expression
of its own views. 11 CFR 114.3(c)(1)(i) and (ii).
A corporation or labor organization also may endorse a
candidate and communicate the endorsement to its restricted
class through the publications described above or during
permissible candidate appearances, as otherwise described in
11 CFR 114.3(c)(2). However, Commission regulations provide
that no more than a de minimis number of copies of the
publication, which includes the endorsement, may be
circulated beyond the restricted class. 11 CFR 114.4(c)(6).
The corporation or labor organization may publicly announce
the endorsement through a press release or press conference,
or both. Disbursements for the press release or press
conference must be de minimis.
11 CFR 114.4(c)(6)(i). The disbursements will be considered
de minimis if the press release and notice of the press
conference are distributed only to the representatives of
the news media that the corporation or labor organization
customarily contacts when issuing non-political press
releases or holding press conferences for other purposes.
Id. In addition, the public announcement of the endorsement
may not be coordinated with the candidate, or the
candidate's authorized committee(s). 11 CFR 114.4(c)(6).
A separate segregated fund may, using voluntary
contributions, communicate with the general public on any
subject, including express advocacy messages supporting or
opposing Federal candidates. However, communications to the
public may not solicit contributions to the separate
segregated fund itself. 11 CFR 114.5(I).
Under Commission regulations, a membership organization
must possess certain attributes. It must (i) expressly
provide for "members" in its articles and bylaws; (ii)
expressly solicit members; and (iii) expressly acknowledge
the acceptance of membership, such as by sending a
membership card or inclusion on a membership newsletter
list. 11 CFR 100.8(b)(4)(iv)(A), 114.1(e)(1).
On the question of what constitutes membership for
purposes of the Act, the Supreme Court has suggested that
members of non-stock corporations are to be defined, at
least in part, by analogy to stock holders of business
corporations and members of labor unions. See FEC v.
National Right to Work Committee, 459 U.S. 197, 202 (1982),
see also Chamber of Commerce v. FEC, 69 F. 3rd 600 (D.C.
Cir. 1995); petition for rehearing denied, 76 F. 3d 1234
(1996).8
MEMBERSHIP STATUS OF ONRC ACTION
The facts and background to this request indicate that
ONRC Action is a membership association for purposes of the
Act.9 The Commission further concludes that ONRC Action's
Board of Directors, rather than the Executive Committee, is
the highest governing body of ONRC Action for purposes of
the Commission regulations.10 Lastly, the Commission
concludes, in the situation presented here, that the
membership of ONRC Action would be considered "members" for
purposes of the Act and Commission regulations.11
APPLICATION TO ONRC ACTION'S COMMUNICATIONS
The Committee, as the separate segregated fund of ONRC
Action, can make contributions and expenditures with regard
to Federal elections, subject to the Act's limits and
disclosure requirements. The cost of making public the
Committee's candidate endorsements, if paid for by the PAC,
and depending on whether the distribution activity was
coordinated with the various candidates endorsed, would be
considered either an independent expenditure on behalf of
the candidates endorsed or an in-kind contribution to them.
See 11 CFR 109.1 and 114.2(c). However, the facts of your
request indicate that ONRC Action's funds, facilities and
personnel would be used for this purpose, except for setting
up voice mail messages. Therefore, the endorsement
distribution proposals would be viewed as corporate, rather
than PAC activity. Because of the general availability of
access to the Internet, communication via a web site would
be considered a form of communication to the general public.
See Advisory Opinions 1996-16 and 1995-35. As distinguished
from its communications to its own restricted class, a
corporation's endorsement communications to the general
public are limited by the Act and Commission regulations.
Endorsements containing express advocacy of a candidate may
be incorporated into a press release distributed to the news
media representatives customarily contacted for these
purposes and may be announced through a press conference
that complies with the de minimus rule. See 11 CFR
114.4(c)(6)(i). However, your first proposal, to make the
Committee's Federal candidate endorsements available on ONRC
Action's web site, without any limitation on access, is
prohibited.
Your request emphasizes the de minimus cost of an
expansion of the web site for this purpose. However, de
minimus expense is only one element of an analysis under
section 114.4(c)(6). The regulation also discusses de
minimus circulation outside the restricted class of
corporate or labor organization publications which include
candidate endorsements. Relevant to your request is
Advisory Opinion 1984-23, which is cited in the Explanation
and Justification of the current regulations on corporate
and labor endorsements. See 60 Fed.Reg. 64260, 64270
(December 14, 1995). In that opinion, a membership
organization (also a trade association) wished to publicize
its endorsements of candidates in its newsletter and trade
journal. The Commission concluded that the list of
endorsements could be published in the newsletter because
the number of non-members who received the association
newsletter was de minimus (less than 1%). However, the
Commission determined that use of the trade journal for the
same purpose was prohibited by section 441b since the
circulation beyond the membership class was over 10% and was
not de minimus. Similarly, communication of the list of
endorsed candidates in the organization's web site, without
some limit on access, could not be viewed as only a de
minimus corporate communication by electronic means outside
the restricted class.
However, if ONRC Action uses a method to limit access
to the list of endorsements to members only, then such
endorsements could be placed on its web page. Although your
request states there is no simple or certain way to
completely limit access, certain methods may limit
circulation of the endorsements to a de minimus group
outside the restricted class.12 Of course, if the Committee
were to pay (and disclose) the costs of the modification and
maintenance of the web site associated with releasing the
candidate endorsements on the site, your proposal would be
permissible under section 114.5(I).
The above discussion applies to the second and third
parts of your proposal. Again, section 114.4(c)(6)
delineates permissible methods for transmitting endorsement
information outside the restricted class to the general
public. The Commission concludes that giving such
information over the phone to non-members, even if the call
is not solicited, is prohibited by 11 CFR 114.4(c)(6) and 2
U.S.C. 441b. As with its web site, ONRC Action is required
to use some meaningful identification system to screen out
non-members. In these circumstances, it would be sufficient
if the caller gives his or her name and ONRC Action verifies
that the name given is on ONRC's membership list. Your
proposal to use a voice mail box system similarly may not be
permissible unless non-members are screened out. However,
if all the costs associated with the PAC's use of the voice
mail system are assumed by the PAC, this proposal would be
permissible.13 Otherwise, if appropriate safeguards are not
taken, your proposed activity could result in an unlawful
corporate expenditure, or, depending on the circumstances, a
prohibited, in-kind corporate contribution to the candidates
involved.
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
Enclosures (AOs 1996-16, 1995-35, 1995-33 and 1984-23)
_______________________________
1 The purpose of ONRC Action, according to its bylaws, is
to "aggressively defend natural resources throughout the
Greater Oregon Ecosystem from environmental destruction."
Among the goals of the organization are "[to] establish
policies that encourage environmental sustainable practices
by business, governments and individuals," "[to] work to
eliminate government subsidies which cause environmental
degradation" and "[to] involve its members and
environmentalists...in advocacy, education and other
activities to achieve its goals." See ONRC Action bylaws,
Article I, Section 1.
2 Non-profit organizations and businesses may contribute to
ONRC Action and receive recognition for their support, but
they are explicitly barred from actual membership in the
organization. ONRC Action Bylaws Article II, Section 8.
3 The solicitation materials included with your request
indicate that the minimum, annual membership dues payment is
$35.
4 Your request states that the Committee makes endorsements
for most Federal races that meet its selection criteria:
"greenness," electability, and statesmanship. The
endorsement policy does not require an endorsement in every
race. You state that the Committee makes endorsements in
primary and general elections, and in special elections as
well. You explain that there is no selection criteria
difference for the primary, as opposed to general elections.
5 You further explain that a separate state PAC, Oregon
Natural Resources Council Action State PAC, makes all the
endorsements of state and local candidates. Thus, for the
purposes of this advisory opinion, you are only interested
in making your Federal candidate endorsements more
accessible to your members and callers.
6 For example, you explain that should an access code be
used to limit the ability to connect to a special "members
only" section of the organization's Internet web site, any
person from the general public who has the correct code will
also be able to obtain the Committee's endorsements.
7 You assert that these calls do not originate with the
organization. Instead, they are from its members and
interested non-members who call its main phone number
regarding the Committee's endorsements.
8 In 1993, the Commission revised its membership
regulations to further define the term "members." However,
the court in Chamber determined that portions of those
regulations were invalid, concluding that they defined the
term "member" in an unduly restrictive fashion. See Chamber
at 604. (There were not four votes at the Commission to
seek further judicial review of this decision.) The
regulation at 11 CFR 114.1(e)(2), now invalid in the
District of Columbia Circuit, had defined members to mean:
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:
(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.
9 For example, Article II of ONRC Action's Bylaws meets the
requirements of the regulations at 11 CFR
100.8(b)(4)(iv)(A)(i) and 114.1(e)(1) by expressly providing
for membership. Your request includes materials which
illustrate the organization's solicitation of members. See
11 CFR 100.8(b)(4)(iv)(A)(ii) and 114.1(e)(1). The request
materials indicate that members receive a monthly newsletter
and other conservation related or recreational materials.
Therefore, the requirement that membership be expressly
acknowledged is also met. Id.
10 This conclusion is based on the limitations on the power
of the Executive committee and the delegated nature of the
powers from the Board.
11 The Commission notes that all members of ONRC Action pay
dues and all have the right to vote for the highest
governing body, or for those who choose the members of that
body. Thus, the membership criteria of ONRC Action would
have satisfied even the more restrictive standard struck
down in Chamber. See footnote 8. For a discussion of the
application of the Chamber decision by the Commission to one
particular type of organization, a commodity trading
exchange, see Advisory Opinion 1997-5.
Following the Chamber decision, the Commission has
published an advance notice of proposed rulemaking which may
lead to regulation changes concerning the definition of
membership. See FEC Advanced Notice of Proposed Rulemaking,
published in the Federal Register on July 31, 1997, at pages
40982 through 40985. The conclusion of this opinion
regarding membership could be modified or superseded by the
adoption of any new regulations on membership criteria, but
the opinion may be relied upon until any change is made. If
a change is made, it will become effective on a specific
date announced in the Federal Register. In addition, the
Commission's written explanation and justification for any
new rules will identify each past advisory opinion that is
modified or superseded.
12 For example, each member could be provided with an
individual, unique identification number or password to
enter the portion of the web site containing the
endorsements. This method is used by various web
organizations and Internet services.
The Commission notes that the membership application
forms included in your request ask that a member provide an
e-mail address. A further option open to ONRC Action and
the Committee, is to send the list of endorsements by e-mail
to members only. See Advisory Opinion 1995-33.
13 You state that the Committee would pay for any time spent
adjusting the voice mail system and that no additional costs
would be assumed by ONRC Action. However, your request is
not sufficiently clear regarding any apportioning between
ONRC Action and the Committee of any other costs such as,
for example, usage and maintenance costs associated with the
voice mail system. For this reason, the Commission cannot
determine whether the third part of your proposal is
permissible under the Act and Commission regulations.