Participation by Federal Candidates and Officeholders at Non-Federal Fundraising Events, 24375-24384 [2010-10571]
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Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Rules and Regulations
FEDERAL ELECTION COMMISSION
11 CFR Part 300
[Notice 2010–11]
Participation by Federal Candidates
and Officeholders at Non-Federal
Fundraising Events
Federal Election Commission.
Final rules.
AGENCY:
ACTION:
The Federal Election
Commission (‘‘Commission’’) is revising
its rules regarding appearances by
Federal officeholders and candidates at
State, district, and local party
fundraising events under the Federal
Election Campaign Act of 1971, as
amended. Consistent with the decision
of the U.S. Court of Appeals for the
District of Columbia Circuit in Shays v.
FEC, Federal candidates and
officeholders may no longer speak at
State, district, and local party
fundraising events ‘‘without restriction
or regulation.’’ The revised rules address
participation by Federal candidates and
officeholders at all non-Federal
fundraising events that are in
connection with an election for Federal
office or any non-Federal election and
in related publicity.
DATES: Effective Date: These rules are
effective on June 4, 2010.
FOR FURTHER INFORMATION CONTACT: Ms.
Amy L. Rothstein, Assistant General
Counsel, or Attorneys, Mr. David C.
Adkins or Mr. Neven F. Stipanovic, 999
E Street, NW., Washington, DC 20463,
(202) 694–1650 or (800) 424–9530.
SUPPLEMENTARY INFORMATION: The
Bipartisan Campaign Reform Act of
2002 1 (‘‘BCRA’’) contained extensive
and detailed amendments to the Federal
Election Campaign Act of 1971, as
amended, 2 U.S.C. 431 et seq. (‘‘the
Act’’). The Commission promulgated a
number of rules to implement BCRA,
including rules at 11 CFR 300.64
regarding Federal candidate and
officeholder solicitations at State,
district, and local party committee
fundraising events. The Court of
Appeals for the District of Columbia
Circuit found aspects of these rules
invalid in Shays v. FEC, 528 F.3d 914
(D.C. Cir. 2008) (‘‘Shays III’’). The
Commission is revising its rules at 11
CFR 300.64 to implement the Shays III
decision.
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SUMMARY:
I. Background Information
A. BCRA
In 2002, Congress amended the Act by
restricting the fundraising activity of
1 Public
Law 107–155, 116 Stat. 81 (2002).
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Federal candidates and officeholders,
their agents, and entities directly or
indirectly established, financed,
maintained, controlled by, or acting on
behalf of, Federal candidates or
officeholders. See BCRA at Section
323(e) (codified at 2 U.S.C. 441i(e)).
These persons may not ‘‘solicit, receive,
direct, transfer or spend’’ funds in
connection with an election for Federal
office or any non-Federal election
unless the funds comply with the
amount limitations and source
prohibitions of the Act.2 See 2 U.S.C.
441i(e)(1)(A) and (e)(1)(B); 11 CFR
300.61 and 300.62. Furthermore,
Congress prohibited State, district and
local party committees from accepting
or using as Levin funds 3 any funds that
have been solicited, received, directed,
transferred, or spent by or in the name
of Federal candidates and officeholders.
Thus, Federal candidates and
officeholders were effectively prohibited
from raising Levin funds. See 2 U.S.C.
441i(b)(2)(C)(i); 11 CFR 300.31(e).
As one principal BCRA sponsor
noted, ‘‘The basic rule in the bill is that
federal candidates and officials cannot
raise non-federal (or soft) money
donations—that is, funds that do not
comply with federal contribution limits
and source prohibitions.’’ 148 Cong. Rec.
H407 (daily ed. Feb. 13, 2002)
(statement of Rep. Shays). As that ban
related to party committees, another of
BCRA’s main sponsors noted: ‘‘The rule
here is simple: Federal candidates and
officeholders cannot solicit soft money
funds, funds that do not comply with
Federal contribution limits and source
prohibitions, for any party committee—
national, State, or local.’’ 148 Cong. Rec.
2 The amount limitations on contributions
depend on the type of contributor and the recipient.
See 2 U.S.C. 441a(a)(1), (2), and (3). For example,
an individual and a non-multicandidate PAC may
each contribute up to $2,400 per election to a
candidate, up to $5,000 per calendar year to a PAC,
and up to $10,000 per year to a State party
committee (or to a State party’s respective district
and local party committees, which share the State
party committee’s combined limit). A
multicandidate PAC, by contrast, may contribute up
to $5,000 per election to a candidate, up to $5,000
per calendar year to a PAC, and up to $5,000 per
calendar year to a State party committee (or to a
State party’s respective district and local party
committees, which share the State party
committee’s combined limit). Sources prohibited
from making contributions under the Act include
national banks, corporations, labor organizations,
and foreign nationals. See 2 U.S.C. 441a, 441b, and
441e; see also 2 U.S.C. 441c (government
contractors) and 441f (contributions made in the
name of another). Furthermore, funds raised in
connection with an election for Federal office are
subject to the reporting requirements of the Act. See
2 U.S.C. 441i(e)(1)(A).
3 ‘‘Levin funds’’ are funds raised by State, district,
or local party committees pursuant to the
restrictions in 11 CFR 300.31 and disbursed subject
to the restrictions in 11 CFR 300.32. See 11 CFR
300.2(i).
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S2139 (daily ed. March 20, 2002)
(statement of Sen. McCain).
Notwithstanding these restrictions,
though, Section 323(e)(3) of BCRA states
explicitly that Federal candidates and
officeholders are permitted to ‘‘attend,
speak, or be a featured guest at a
fundraising event for a State, district, or
local committee of a political party.’’ See
2 U.S.C. 441i(e)(3).
B. 2002 Rulemaking
In 2002, the Commission commenced
a rulemaking to establish rules
governing Federal candidate and
officeholder participation in State,
district, and local party committee
fundraising events. The Commission
proposed alternative interpretations of 2
U.S.C. 441i(e)(3). One interpretation
would have allowed Federal candidates
and officeholders only to attend, speak,
or be a featured guest at State, district,
and local party committee fundraising
events, but, consistent with the Act’s
prohibition on the solicitation of funds
outside the amount limitations and
source prohibitions of the Act by
Federal candidates and officeholders,
would have prohibited those persons
from soliciting, receiving, directing,
transferring, or spending funds or
participating in any other fundraising
aspect of a State, district, or local party
committee fundraising event. See Notice
of Proposed Rulemaking on Prohibited
and Excessive Contributions; NonFederal Funds or Soft Money, 67 FR
35654, 35672, 35688 (May 20, 2002)
(‘‘2002 NPRM’’).
An alternative interpretation
proposed a ‘‘total exemption from the
general solicitation ban.’’ 2002 NPRM at
35672–73; see also 2 U.S.C.
441i(e)(1)(B); 11 CFR 300.62. Under this
interpretation, Federal candidates and
officeholders would be permitted to
‘‘speak freely at [party fundraising
events] without restriction or
regulation.’’ 2002 NPRM at 35672–73.
The Commission separately explored
how 2 U.S.C. 441i(e)(3)—specifically, its
reference to ‘‘featured guests’’—affected
the role that Federal candidates and
officeholders could play in publicizing
State, district, and local party committee
events. See 2002 NPRM at 35673. For
example, the Commission sought
comment on whether this provision of
BCRA allowed Federal candidates and
officeholders to be named in invitation
materials and to appear as members of
a host committee. Id.
The Commission concluded that
Section 441i(e)(3) was a total exemption
from the general solicitation ban. Under
the Commission’s regulation, Federal
candidates and officeholders were
permitted to attend, speak, and appear
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as featured guests at State, district, and
local party committee fundraising
events ‘‘without restriction or
regulation.’’ See Final Rules on
Prohibited and Excessive Contributions;
Non-Federal Funds or Soft Money, 67
FR 49064, 49108 (July 29, 2002) (‘‘2002
Final Rule’’); 11 CFR 300.64(b). The
Commission did not, however, interpret
2 U.S.C. 441i(e)(3) to allow unrestricted
participation in publicity by Federal
candidates and officeholders. Indeed,
the Commission concluded that Federal
candidates and officeholders were
‘‘prohibited from serving on ‘host
committees’ for a party fundraising
event or from personally signing a
solicitation in connection with a State,
local, or district party fundraising event
on the basis that these pre-event
activities are outside the permissible
activities* * * flowing from a Federal
candidate’s or officeholder’s appearance
or attendance at the event.’’ See 2002
Final Rule at 49108.
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C. Shays I
The Commission’s 2002 regulation
implementing 2 U.S.C. 441i(e)(3) was
challenged in Shays v. FEC, 337 F.
Supp. 2d 28 (D.D.C. 2004) (‘‘Shays I’’).
The district court held that the meaning
of 2 U.S.C. 441i(e)(3) was ambiguous,
and that the Commission’s regulation
was not necessarily contrary to
congressional intent. Shays I at 90
(applying Chevron U.S.A., Inc. v.
Natural Res. Def. Council, Inc., 467 U.S.
837 (1984)). And, while the court
acknowledged that the regulation
created ‘‘the potential for abuse,’’ it did
not find that the regulation unduly
compromised BCRA’s purpose such that
it was not entitled to deference from the
court. Id. at 91. The court did, however,
find that the Commission’s explanation
of the rule was inadequate and,
therefore, in violation of the
Administrative Procedure Act, 5 U.S.C.
553. Shays I at 92–93. The Commission
did not challenge this holding by the
district court.
D. 2005 Rulemaking
Upon remand, the Commission
commenced a rulemaking to implement
the Shays I district court’s opinion. See
Revised Explanation and Justification,
Candidate Solicitation at State, District
and Local Party Fundraising Events, 70
FR 37649 (June 30, 2005) (‘‘2005 Revised
E&J’’). This rulemaking provided
additional explanation and justification
of the 2002 Final Rule, but it did not
change the text of that rule. The
Commission, as it did in 2002,
concluded that 2 U.S.C. 441i(e)(3) was
a total exemption from the general
solicitation ban. Thus, Federal
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candidates and officeholders could still
attend, speak, and appear as featured
guests at State, district, and local party
committee fundraising events ‘‘without
restriction or regulation.’’ See 2005
Revised E&J at 37650–51.
E. Shays III
Against this backdrop, the
Commission’s rule implementing 2
U.S.C. 441i(e)(3) was again challenged
in court. The District Court for the
District of Columbia upheld the
Commission’s regulation. Shays v. FEC,
508 F. Supp. 2d. 10 (D.D.C. 2007).
On appeal, however, the United States
Court of Appeals for the District of
Columbia Circuit reversed the district
court, concluding that the total
exemption from the general solicitation
ban ‘‘allows what BCRA directly
prohibits.’’ Shays III at 933. In
addressing the Commission’s regulation,
the Court first concluded that 2 U.S.C.
441i(e)(3) did not create an ambiguity in
the law, but should be read as ‘‘merely
clarif[ying] that * * * federal
candidates may still ‘attend, speak, or be
a featured guest’ at State party events
where soft money is being raised, which
the statute might otherwise be read as
forbidding.’’ Id. The court then held that
the Commission had ‘‘no basis’’ to read
2 U.S.C. 441i(e)(3) as creating ‘‘an
implied fourth exception’’ to the
solicitation restrictions at Section
441i(e)(1), given that Congress had
explicitly enumerated the instances in
which Federal candidates and
officeholders could ‘‘solicit’’ funds
outside BCRA’s restrictions. Id. at 933–
34. The court found compelling the
specific language in the statute—noting
that ‘‘Congress repeatedly used the term
‘solicit’ and ‘solicitation’ in Section
441i—over a dozen times—yet chose not
to do so in Section 441i(e)(3).’’
F. Advisory Opinions
The Commission has also issued
several advisory opinions regarding
aspects of participation by Federal
candidates and officeholders in nonFederal fundraising events not
specifically addressed by the Act and
regulations. In particular, the
Commission has provided guidance on
the extent to which Federal candidates
and officeholders may participate in
non-Federal fundraising events for
entities other than State, district, and
local party committees and the degree to
which that participation can be
publicized before such an event.
In Advisory Opinions 2003–02
(Cantor) and 2003–36 (Republican
Governors Association), the
Commission stated that a Federal
candidate or officeholder may attend
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and speak at non-Federal fundraising
events for State and local candidates
and other non-Federal political
organizations, even if non-Federal funds
are being raised at the event. The
Commission concluded that this type of
participation would not violate BCRA’s
restrictions on soliciting funds outside
the limits and prohibitions of the Act
because attending such an event or
giving a speech at such an event is not
a solicitation under Commission
regulations.
In those same advisory opinions, the
Commission also determined that
Federal candidates and officeholders
may solicit funds at events at which
non-Federal funds are being raised if
their solicitations are limited to funds
that comply with the amount limitations
and source prohibitions of the Act. To
ensure that these solicitations are
properly limited, Federal candidates
and officeholders have had to either (1)
make a specific solicitation such as ‘‘I
am soliciting $500 from individuals
only,’’ or (2) condition a general
solicitation with a disclaimer indicating
that the solicitation is only for funds
within the limitations and prohibitions
of the Act. This disclaimer may be made
orally by the Federal candidate or
officeholder or, alternatively, in writing
by posting at the event a clear and
conspicuous notice limiting the
solicitation.
The Commission also issued several
advisory opinions addressing the role
that Federal candidates and
officeholders may play in publicizing
non-Federal fundraising events for
State, district, and local party
committees and other non-Federal
entities. See Advisory Opinions 2003–
03 (Cantor), 2003–36 (Republican
Governors Association), and 2007–11
(California State Party Committees). The
Commission reasoned that if publicity
does not contain a solicitation, then it
is not subject to BCRA’s solicitation
restrictions. Id. If the publicity does
contain a solicitation, and the Federal
candidate or officeholder consents to be
featured or appear in the publicity, then
the publicity must contain a clear and
conspicuous disclaimer limiting the
solicitation to funds compliant with the
amount limitations and source
prohibitions of the Act. See Advisory
Opinions 2003–03 (Cantor), and 2003–
36 (Republican Governors Association).
The Commission made clear, however,
that Federal candidates and
officeholders may not solicit funds in
excess of the limitations and
prohibitions of the Act and then qualify
that impermissible solicitation with a
limiting disclaimer. See Advisory
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Opinion 2003–36 (Republican
Governors Association).
The Commission was unable to
resolve whether a Federal candidate or
officeholder could be named as
honorary chairperson or featured
speaker in a solicitation for non-Federal
funds that is not otherwise signed by the
Federal candidate or officeholder. See
Advisory Opinions 2003–36
(Republican Governors Association) and
2007–11 (California State Party
Committees). In addition, the
Commission was unable to resolve
whether a Federal candidate or
officeholder may be named as a featured
speaker on publicity that is mailed with
(e.g., in the same envelope as) a
solicitation for non-Federal funds that
does not name a Federal candidate or
officeholder. See Advisory Opinion
2007–11 (California State Party
Committees).
G. Present Rulemaking
In response to the circuit court’s
decision in Shays III, the Commission
published a Notice of Proposed
Rulemaking on December 7, 2009. See
Notice of Proposed Rulemaking on
Participation by Federal Candidates and
Officeholders at Non-Federal
Fundraising Events, 74 FR 64016 (Dec.
7, 2009) (‘‘NPRM’’). The NPRM proposed
three alternative revisions to the
Commission’s rule at 11 CFR 300.64.
The first alternative proposed a surgical
revision to the rule, striking the
‘‘without restriction or regulation’’
language but leaving the other language
unchanged. The other two alternatives
effected the same change but also
proposed new rules governing Federal
candidate and officeholder participation
in all non-Federal fundraising events—
those for State, district, and local party
committees as well as other entities,
including State and local candidates
and State political committees and
organizations—and related publicity.
The initial public comment period for
the NPRM closed on February 8, 2010,
and a reply comment period concluded
on February 22, 2010. In total, the
Commission received seven comments
(six initial comments and one reply
comment) from seven commenters. The
Commission held a public hearing on
the proposed rules on March 16, 2010,
at which four witnesses testified. All
comments and a public transcript of the
hearing are available at https://
www.fec.gov/law/
law_rulemakings.shtml
#solicitationshays3. For purposes of this
document, the terms ‘‘comment’’ and
‘‘commenter’’ apply to both written
comments and oral testimony at the
public hearing.
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These final rules address participation
by Federal candidates and officeholders
at all fundraising events in connection
with an election for Federal office or
any non-Federal election—both those
for State, district, and local party
committees and those for other
entities—at which funds outside the
amount limitations and source
prohibitions of the Act, or Levin funds,
are solicited, even if funds that comply
with the amount limitations and source
prohibitions are also solicited at the
event. The final rules cover
participation by Federal candidates and
officeholders at the event as well as
participation by Federal candidates and
officeholders in publicizing the event.
Importantly, they set forth the manner
in which Federal candidates,
officeholders, and their agents can be
involved in such activities without
making a solicitation of funds outside
the amount limitations and source
prohibitions of the Act.
Under the APA, 5 U.S.C. 553(d), and
the Congressional Review of Agency
Rulemaking Act, 5 U.S.C. 801(a)(1),
agencies must submit final rules to the
Speaker of the House of Representatives
and the President of the Senate and
publish them in the Federal Register at
least 30 calendar days before they take
effect. The final rules that follow were
transmitted to Congress on April 30,
2010.
II. Explanation and Justification
The Commission is amending 11 CFR
300.64 in response to the circuit court’s
decision in Shays III. In the NPRM, the
Commission proposed three alternative
rules. Alternative 1 would have
removed the ‘‘without restriction or
regulation’’ language from 11 CFR
300.64 pursuant to the decision of the
Shays III court, and would have left the
rest of the rule largely intact. Under
Alternative 1, 11 CFR 300.64 would
have continued to address only
fundraising events for State, district,
and local party committees.
Alternatives 2 and 3 proposed more
extensive revisions of 11 CFR 300.64.
Like Alternative 1, and in response to
the court of appeals’ decision, both
Alternatives 2 and 3 would have
removed the ‘‘without restriction or
regulation’’ language from 11 CFR
300.64. Unlike Alternative 1,
Alternatives 2 and 3 also proposed
addressing more broadly participation
by Federal candidates and officeholders
at all fundraising events at which funds
outside the limits and prohibitions of
the Act are raised (‘‘non-Federal
fundraising events’’), and not just party
committee events. Alternatives 2 and 3
proposed detailed guidance on Federal
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candidate and officeholder participation
at non-Federal fundraising events. In
addition, the alternatives proposed
guidance on the manner in which
Federal candidates and officeholders
could participate in publicizing such
events. While Alternatives 2 and 3
addressed the same range of activities,
their treatment of those activities
differed. Alternative 2 proposed a single
set of rules for all non-Federal
fundraising events and related publicity;
it did not distinguish State, district, and
local party events from other nonFederal fundraising events. Alternative
3, though, proposed two different
standards: One for State, district, and
local party committee fundraising
events and another for non-party
fundraising events.
The contrasting approaches in
Alternatives 2 and 3 were rooted in
differing interpretations of 2 U.S.C.
441i(e)(3), particularly in the wake of
the Shays III decision. Alternative 2 was
predicated on the statement in the
Shays III decision that 2 U.S.C.
441i(e)(3) ‘‘merely clarifies’’ that Federal
candidates may attend, speak, and
appear as featured guests at State,
district, and local party committee
events without such activities
constituting an unlawful ‘‘solicitation.’’
Shays III at 933. As a ‘‘mere[ ]
clarif[ication],’’ 2 U.S.C. 441i(e)(3)
neither affords special permissions with
regard to Federal candidate and
officeholder participation in State,
district, and local party committee
fundraising events, nor does it imply
any restrictions with regard to other
non-Federal fundraising events.
Accordingly, Alternative 2 did not
distinguish between State, district, and
local party events and other non-Federal
fundraising events.
Alternative 3 was instead informed by
an interpretation of 2 U.S.C. 441i(e)(3)
as establishing a limited statutory
exception for Federal candidates to
attend, speak and be featured guests at
State, district, and local party committee
fundraisers—activities that the court in
Shays III acknowledged ‘‘might
otherwise be read as forbid[den]’’ by the
Act’s fundraising restrictions—which
did not extend to non-party fundraisers
because they were not addressed by the
statutory provision. Shays III at 933.
Accordingly, Alternative 3 proposed
one standard for Federal candidate and
officeholder participation at State,
district, and local party committee
events and another—more restrictive—
standard for Federal candidate and
officeholder participation at other nonFederal fundraising events.
The Commission sought comments on
the three alternatives, specifically
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asking whether each would faithfully
implement the statute, whether each
was responsive to the Shays III decision,
and whether each would provide
sufficient guidance to Federal
candidates and officeholders; State,
district, and local party committees; and
other affected entities.
Regarding Alternative 1, commenters
acknowledged that it was technically
responsive to the Shays III opinion, but
that it would leave unanswered many
important questions regarding Federal
candidate and officeholder participation
in non-Federal fundraising events. In
particular, the commenters pointed out
that Alternative 1 would not address the
Commission’s previous guidance
regarding Federal candidate and
officeholder participation in publicity
for non-Federal fundraising events and
whether—or how—a Federal candidate
or officeholder could solicit funds at a
State, district, or local party committee
non-Federal fundraising event.4 One
commenter suggested that failure to
address these related areas would create
‘‘uncertainty and trepidation for State
and local parties’’ that would chill
involvement between them and Federal
candidates and officeholders and
ultimately limit the parties’ ability ‘‘to
communicate their message and to fully
participate in the political process.’’ No
commenters objected to the
Commission’s proposal to establish
rules addressing more broadly Federal
candidate and officeholder participation
at all non-Federal fundraising events.
A number of commenters supported
the approach of Alternative 2, which
applied the same framework to nonFederal fundraising events for State,
district, and local party committees and
to other non-Federal fundraising events.
These commenters stated that
Alternative 2 properly balanced the
concerns of the Shays III court with the
congressional intent behind BCRA, and
that it better implemented the court’s
interpretation of 441i(e)(3). None of the
commenters objected to this alternative.
With regard to Alternative 3,
commenters generally did not favor its
distinction between party committee
events and other non-Federal
4 While the latter issue was addressed by the
Commission in advisory opinions with respect to
non-Federal fundraising events for State candidates
and 527 political organizations, see Advisory
Opinions 2003–03 (Cantor) and 2003–36
(Republican Governors Association), the advisory
opinions did not address Federal candidate and
officeholder solicitation at State, district, or local
party committee non-Federal fundraising events
because 11 CFR 300.64 permitted Federal
candidates and officeholders to solicit funds at such
events ‘‘without restriction or regulation.’’ The
invalidation of this aspect of 11 CFR 300.64 in
Shays III raised the question for the first time.
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fundraising events. Those commenters
suggested that Alternative 3’s approach
went further than is required by the
court’s holding in Shays III, and that it
would reverse previous Commission
guidance that had come to be relied on
by Federal candidates, officeholders,
and party committees alike. One
commenter predicted that Alternative 3
would effectively end participation by
Federal candidates and officeholders at
non-Federal fundraising events. The
commenters that did not object to
Alternative 3 nevertheless noted that the
Act did not require ‘‘a distinction
between different types of nonfederal
fundraising events,’’ as proposed in
Alternative 3.
The Commission agrees that
Alternative 1, while responsive to the
Shays III decision, would leave
unanswered many important questions
regarding Federal candidate and
officeholder participation in nonFederal fundraising events. Although
the Shays III decision does not mandate
the adoption of a single rule that
addresses participation by Federal
candidates and officeholders at all nonFederal fundraising events, Federal
candidates and officeholders, as well as
entities that solicit non-Federal funds in
connection with elections, would
benefit from the explicit guidance of a
more comprehensive rule.
Accordingly, the Commission is
revising 11 CFR 300.64 to provide
guidance on participation by Federal
candidates and officeholders in all nonFederal fundraising events in
connection with an election for Federal
office or any non-Federal election. As
set forth in more detail below, the
Commission’s final rule explicitly
addresses participation by Federal
candidates and officeholders at such
fundraising events, as well as
participation by Federal candidates,
officeholders, and their agents in
publicizing these events. In addition,
the rule covers participation by Federal
candidates and officeholders regardless
of whether the entity sponsoring the
event is a State or local candidate
committee, State political committee, or
any other organization that hosts a
fundraising event in connection with an
election for Federal office or any nonFederal election.
The Commission’s final rule is based
on Alternative 2 in the NPRM. The
Commission has determined that
Alternative 2 best accomplishes two
important goals: (1) Implementing 2
U.S.C. 441i(e) in accordance with the
Shays III decision, and (2) providing
clear, comprehensive guidance
regarding Federal candidate and
officeholder participation in non-
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Federal fundraising events and related
publicity.
A. 300.64(a)—Scope
The scope of new 11 CFR 300.64 is set
out in paragraph (a). The rule applies to
all fundraising events in connection
with an election for Federal office or
any non-Federal election at which funds
outside the limitations and source
prohibitions of the Act, or Levin funds,
are solicited. The rule applies even if
funds within the amount limitations
and source prohibitions of the Act are
also solicited at an event or in publicity.
The rule does not cover events at which
funds outside the amount limitations
and source prohibitions of the Act or
Levin funds are not solicited but are,
nevertheless, received. Nor does the rule
cover fundraising events at which only
Federal funds are solicited or
fundraising events in connection with
any non-Federal election at which only
funds subject to the limitations and
prohibitions of the Act are solicited,
such as an event soliciting small-dollar,
non-corporate, non-union funds for a
State candidate.
The rule covers only non-Federal
fundraising events that are ‘‘in
connection with an election for Federal
office or any non-Federal election.’’ It
does not apply to Federal candidate and
officeholder participation in fundraising
events that are not in connection with
an election, consistent with the Act’s
prohibition on Federal candidates and
officeholders from soliciting, receiving,
directing, transferring, spending, or
disbursing funds in connection with an
election for Federal office or any nonFederal elections. See 2 U.S.C.
441i(e)(1)(B).
The scope of the final rule is very
similar to the scope proposed in the
NPRM, except that the proposed rule
would have covered non-Federal
fundraising events at which funds
outside the limitations and prohibitions
of the Act are raised, and the final rule
covers non-Federal fundraising events at
which funds outside the limitations and
prohibitions of the Act are solicited. The
Commission made this change in
response to a comment that a
solicitation-based standard more
accurately captured the intent behind 2
U.S.C. 441i(e), which governs
solicitations by Federal candidates and
officeholders. The commenter expressed
concern that a standard based on
whether non-Federal funds are raised at
an event could be triggered when, for
example, a donor spontaneously
donates a large, corporate check at a
non-Federal fundraising event, even
though no one, including the
participating Federal candidate or
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officeholder, had solicited funds outside
the amount limitations or source
prohibitions of the Act. The
Commission agrees that a solicitationbased standard is more consistent with
the Act’s prohibition on solicitation
than a standard based on whether funds
are raised at an event. See 2 U.S.C.
441i(e)(1).
Commenters generally supported the
proposed scope of the Commission’s
rule in the NPRM. They differed,
however, on whether the rule’s
applicability should be limited to
fundraising events that are ‘‘in
connection with an election for Federal
office or any non-Federal election.’’ One
commenter supported the proposal to
limit the scope of the rule in this
manner, while noting the Commission’s
articulation of the standard in previous
advisory opinions, such as Advisory
Opinions 2003–12 (Flake) and 2005–10
(Berman/Doolittle). One commenter
urged the Commission to supersede
Advisory Opinion 2005–10 (Berman/
Doolittle), which, in the commenter’s
view, had incorrectly applied the ‘‘in
connection with an election for Federal
office or any non-Federal election’’
standard. Another commenter explicitly
urged the Commission not to supersede
the same.
The Commission declines to
supersede Advisory Opinion 2005–10
(Berman/Doolittle) in this rulemaking
and continues to be guided by its prior
advisory opinions on the ‘‘in connection
with an election for Federal office or
any non-Federal election’’ standard. See,
e.g., Advisory Opinions 2005–10
(Berman/Doolittle) (solicitation of
donations by Federal officeholders to a
State ballot measure committee was not
in connection with any election under
the circumstances described in the
request); 2004–14 (Davis) (solicitation of
donations by a Federal officeholder to a
charity was not in connection with any
election); 2003–20 (Hispanic College
Fund) (solicitation of donations by a
Federal officeholder to a scholarship
fund was not in connection with any
election); and 2003–12 (Flake)
(solicitation of donations by Federal
officeholders for a political organization
supporting a State referendum was in
connection with an election under the
circumstances described in the request).
Further guidance from the Commission
on which activities are in connection
with an election for Federal office or
any non-Federal election, and which are
not, is best offered through the advisory
opinion process.
The rule does not alter the fundraising
exception for Federal candidates and
officeholders who are also State
candidates, found at 11 CFR 300.63, or
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the fundraising exceptions for certain
tax-exempt organizations, found at 11
CFR 300.65. See also 2 U.S.C. 441i(e)(2)
and (e)(4). Thus, in the event of any
inconsistencies with new 11 CFR
300.64, the provisions of 11 CFR 300.63
and 300.65 govern.
B. 300.64(b)—Participation at NonFederal Fundraising Events
Paragraph (b) of new 11 CFR 300.64
addresses participation by Federal
candidates and officeholders at nonFederal fundraising events. Paragraph
(b)(1) addresses attendance, speeches,
and appearances as featured guests by
Federal candidates and officeholders at
non-Federal fundraising events.
Paragraph (b)(2) addresses solicitations
made by Federal candidates and
officeholders at non-Federal fundraising
events.
1. 300.64(b)(1)—Attending, Speaking or
Being a Featured Guest at Non-Federal
Fundraising Events
New 11 CFR 300.64(b)(1) provides
that Federal candidates and
officeholders may attend, speak at, and
be featured guests at non-Federal
fundraising events. This provision is
consistent with the Shays III decision,
which stated that 2 U.S.C. 441i(e)(3)
‘‘merely clarifies that despite the
statute’s ban on soliciting soft money,
federal candidates may still ‘attend,
speak or be a featured guest’ at state
party events where soft money is raised,
which the statute might otherwise be
read as forbidding.’’ Shays III at 933. If
2 U.S.C. 441i(e)(3) is a ‘‘mere[ ]
clarifi[cation],’’ it follows that the same
underlying framework applies to all
fundraising events. Thus, if the statutory
ban on soliciting soft money does not
prohibit a Federal candidate or
officeholder from attending, speaking at,
or being a featured guest at a State,
district, or local party committee’s nonFederal fundraising event, then the
statutory ban also does not prohibit the
same person from engaging in the same
activities at any other non-Federal
fundraising event.
This portion of the final rule is
identical to that proposed in Alternative
2 of the NPRM. No comments were
received on this provision, although the
commenters generally supported the
Commission’s broader proposal to treat
Federal candidates’ and officeholders’
participation in all non-Federal
fundraising events the same.
2. 300.64(b)(2)—Solicitations at NonFederal Fundraising Events
Under new 11 CFR 300.64(b)(2),
Federal candidates and officeholders
may solicit funds at non-Federal
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fundraising events, provided that the
solicitation is limited to funds that
comply with the limitations and
prohibitions of the Act and that are
consistent with State law. Federal
candidates and officeholders may no
longer speak ‘‘without restriction or
regulation’’ at any non-Federal
fundraising event, consistent with the
circuit court’s decision in Shays III.
New 11 CFR 300.64(b)(2) provides
that Federal candidates and
officeholders may limit solicitations
made at non-Federal fundraising events
by displaying at the event a clear and
conspicuous written notice or by
making a clear and conspicuous oral
statement that the solicitation is not for
Levin funds (if the beneficiary of the
fundraiser has a Levin fund account and
is raising funds for that account), does
not seek funds in excess of Federally
permissible amounts, and does not seek
funds from sources prohibited under the
Act, including corporations, labor
organizations, national banks, Federal
contractors, or foreign nationals. A
notice or statement limiting a
solicitation will not be considered ‘‘clear
and conspicuous’’ for purposes of the
final rule if it is difficult to read or hear
or if its placement is easily overlooked
by any significant number of those in
attendance. The Commission’s
regulation at 11 CFR 100.11(c) further
informs the ‘‘clear and conspicuous’’
standard.
One example of a limited solicitation
under new 11 CFR 300.64(b)(2) is for the
Federal candidate or officeholder to say
at a non-Federal fundraising event for a
State or local candidate: ‘‘I am only
asking for donations of up to
$[applicable Federally permissible
amount, currently $2,400 per election]
from individuals and for donations of
up to $[applicable Federally permissible
amount, currently $5,000 per year] from
multi-candidate political committees. I
am not asking for donations in excess of
these amounts or for donations from
corporations, labor organizations,
foreign nationals, Federal contractors, or
national banks.’’ When delivered to the
general audience, this type of statement
need be made only once; Federal
candidates and officeholders are not
obligated to repeat it during one-on-one
discussions with individuals at the
fundraising event. Federal candidates
and officeholders may not, however,
recite a limitation publicly, and then
encourage event attendees to disregard
the limitation during one-on-one
discussions.
If a Federal candidate or officeholder
wishes to make a general solicitation
that does not expressly refer to the
amount limitations and source
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prohibitions of the Act at a non-Federal
fundraising event, then the candidate or
officeholder may limit the solicitation
by displaying a clear and conspicuous
written notice or by making a clear and
conspicuous oral statement at the event
that the solicitation is limited to funds
that comply with the limitations and
prohibitions of the Act. An example of
an adequate written notice is a placard
prominently displayed so that it cannot
be overlooked at the entrance to a
fundraising event for a State or local
candidate at which the Federal
candidate or officeholder is appearing,
or a card placed on every table at the
event, stating:
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Solicitations made by Federal candidates
and officeholders at this event are limited by
Federal law. The Federal candidates and
officeholders speaking tonight are soliciting
only donations of up to $[applicable
Federally permissible amount, currently
$2,400 per election] from individuals and up
to $[applicable Federally permissible
amount, currently $5,000 per year] from
multi-candidate political committees. They
are not soliciting donations in any amount
from corporations, labor organizations,
national banks, Federal contractors, or
foreign nationals.
Alternatively, an event official or the
Federal candidate or officeholder could
make the same or a similar statement
orally before any general solicitations
are made by the Federal candidate or
officeholder, such as in welcoming
remarks to persons attending the
fundraising event. These types of
public, limiting statements need not be
repeated in one-on-one discussions
between the Federal candidate or
officeholder and event attendees, so
long as the Federal candidate or
officeholder does not encourage event
attendees to disregard the limitation
during one-on-one discussions.
The provisions of new 11 CFR
300.64(b) are substantially the same as
those proposed in paragraph (b) of
Alternative 2 of the NPRM. Most of the
comments on the proposal focused on
the requirement that Federal candidates
and officeholders limit their
solicitations at non-Federal fundraising
events. Two commenters asked the
Commission to provide in its final rule
more explicit guidance on how to limit
such solicitations. In particular, the
commenters requested additional
examples of acceptable oral and written
limitations and a clearer articulation of
the ‘‘clear and conspicuous’’ standard. In
response to these commenters, and to
facilitate compliance with the
regulations, the Commission has
provided examples of acceptable
statements.
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Two other commenters suggested that
it would be unnecessary and ‘‘awkward
and confusing’’ to require Federal
candidates and officeholders to limit
their solicitations at non-Federal
fundraising events with clear and
conspicuous oral or written statements.
The Commission concludes that any
solicitation that is not limited either by
its express terms or otherwise (such as
through a clear and conspicuous oral
statement or written notice) risks being
understood as soliciting donations in
amounts and from sources prohibited
under the Act, especially if other
individuals at the fundraising event
explicitly solicit funds that are not
consistent with the limitations and
prohibitions of the Act. See 11 CFR
300.2(m) (defining ‘‘to solicit’’ to include
‘‘an oral or written communication that,
construed as reasonably understood in
the context in which it is made,
contains a clear message, asking,
requesting, or recommending that
another person make a contribution,
donation, transfer of funds, or otherwise
provide anything of value’’).
C. 300.64(c)—Publicity for Non-Federal
Fundraising Events
Paragraph (c) of new 11 CFR 300.64
addresses participation by Federal
candidates and officeholders in
publicity for non-Federal fundraising
events. The final rule applies to Federal
candidate and officeholder participation
in all types of publicity for non-Federal
fundraising events, including publicity
soliciting funds. The term ‘‘publicity’’ as
used in new 11 CFR 300.64 includes all
methods used to publicize a nonFederal fundraising event, including
advertisements, announcements, and
pre-event invitations, regardless of form
or medium (and includes phone calls,
mail, e-mail, facsimile, and text
messages), as well as follow-up contacts.
New paragraph (c) is intended to ensure
that Federal candidates and
officeholders do not, in the course of
publicizing a non-Federal fundraising
event, solicit funds outside the amount
limitations and source prohibitions of
the Act.
Paragraph (c) of the final rules is
substantially similar to paragraph (c) of
Alternative 2 in the NPRM, except as
described below. All commenters
supported the Commission’s proposal to
address publicity for non-Federal
fundraising events in the rule and to
clarify guidance provided by the
Commission in previous advisory
opinions and Matters Under Review. As
one commenter noted, ‘‘these rules
regarding pre-event publicity in practice
are what * * * really matter.’’ Another
commenter expressed a similar
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sentiment: ‘‘Frankly, once you’re at the
event, it’s very rare that solicitations are
ever made regardless. So it is
appropriate that you’ve opened the door
to revisiting the guidance and the rules
regarding pre-event publicity. And
clarity really is an important thing in
these rules[.]’’
1. 300.64(c)(1)—Publicity Not
Containing a Solicitation
Paragraph (c)(1) of new 11 CFR 300.64
provides that if publicity for, or
information about, a non-Federal
fundraising event does not solicit funds,
then Federal candidates, officeholders,
or their agents may approve, authorize,
agree to, or consent to the use of the
Federal candidates’ or officeholders’
name and likenesses in it. Such
publicity may, for example, use the
name or likeness of a Federal candidate
or officeholder to indicate that such
person will attend, speak, or be a
featured guest at the event. The
publicity may also indicate the Federal
candidate’s or officeholder’s
involvement or role in the event. See
discussion of paragraph (c)(3), below.
No Federal disclaimer or attribution
statement is required on such publicity.
Paragraph (c)(1) is nearly identical to
proposed paragraph (c)(1) in Alternative
2 of the NPRM, except that it now
explicitly applies to agents of Federal
candidates and officeholders.
The Commission did not receive any
comments specifically addressing this
provision, although the commenters
generally supported the Commission’s
proposed treatment of publicity for nonFederal fundraising events. One
commenter, for example, indicated that
the mere listing of a Federal candidate
or officeholder on an invitation for a
non-Federal fundraising event does not
constitute a solicitation.
The Commission agrees that, in the
context of publicity that does not
otherwise contain a solicitation, merely
approving, authorizing, agreeing to, or
consenting to the use of the Federal
candidate’s or officeholder’s name or
likeness does not, in and of itself,
constitute a solicitation by that Federal
candidate or officeholder.
The Commission also concludes that
paragraph (c)(1) gives full effect to 2
U.S.C. 441i(e)(3), as interpreted by the
court in Shays III, which states that
Federal candidates and officeholders
may be featured guests at State, district,
and local party committee fundraising
events. One aspect of being a featured
guest is being identified as such in
publicity. Thus, paragraph (c)(1) is
consistent with the Act and the Shays
III court decision.
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2. 300.64(c)(2)—Publicity Containing a
Solicitation Limited to Funds That
Comply With the Amount Limitations
and Source Prohibitions of the Act
Paragraph (c)(2) of new 11 CFR 300.64
provides that Federal candidates,
officeholders, or their agents may
approve, authorize, agree to, or consent
to the use of the Federal candidates’ or
officeholders’ names and likenesses in
publicity for a non-Federal fundraising
event if the publicity solicits only funds
that comply with the amount limitations
and source prohibitions of the Act.
Federal candidates and officeholders
may be identified on the publicity in a
manner specifically related to
fundraising, such as honorary
chairperson of the fundraising event,
and may also sign the solicitation letters
themselves, if the solicitation is limited
to funds that comply with the amount
limitations and source prohibitions of
the Act.
This provision merely makes explicit
what was implicit in the proposed rule,
and reiterates what is expressly
provided for in 2 U.S.C. 441i(e)(1): That
Federal candidates and officeholders
may solicit funds that comply with the
amount limitations and source
prohibitions of the Act.
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3. 300.64(c)(3)—Publicity Containing a
Solicitation Outside the Amount
Limitations and Source Prohibitions of
the Act
Paragraph (c)(3) of new 11 CFR 300.64
addresses publicity that solicits funds
outside the amount limitations and
source prohibitions of the Act or Levin
funds. This provision is based on the
Commission’s determination that a
Federal candidate, officeholder, or an
agent of either may approve, authorize,
agree to, or consent to the use of the
Federal candidate’s or officeholder’s
name or likeness on publicity for a nonFederal fundraising event in a manner
that does not result in the solicitation
being attributed to the Federal candidate
or officeholder.
Under paragraph (c)(3)(i), a Federal
candidate, officeholder, or an agent of
either may approve, authorize, agree to,
or consent to the use of the Federal
candidate’s or officeholder’s name or
likeness in publicity for a non-Federal
fundraising event that contains a
solicitation of funds outside the amount
limitations and source prohibitions of
the Act or Levin funds, but only if: (1)
The Federal candidate or officeholder is
identified in the publicity in a manner
not specifically related to fundraising,
and (2) the publicity includes a clear
and conspicuous disclaimer that the
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solicitation is not being made by the
Federal candidate or officeholder.
New 11 CFR 300.64(c)(3)(i)(A)
provides nonexhaustive examples of the
positions that a Federal candidate or
officeholder may be identified as
holding that are not specifically related
to fundraising. They include featured
guest, honored guest, special guest,
featured speaker, or honored speaker.
Thus, merely identifying a Federal
candidate or officeholder as holding a
position not specifically related to
fundraising on publicity does not
constitute a solicitation of funds outside
the amount limitations and source
prohibitions of the Act or Levin funds
by the Federal candidate or officeholder.
The Commission is not requiring that all
Federal candidates or officeholders be
identified by one of the listed titles.
Rather, the Federal candidate or
officeholder may be identified in any
manner not specifically related to
fundraising. For example, the Federal
candidate or officeholder may be
identified simply by name, as in ‘‘Please
join the State Party at a reception with
Senator Jones and Governor Smith.’’
To avoid any confusion in this regard,
paragraph (c)(3)(i)(B) requires the
publicity to include a clear and
conspicuous disclaimer stating that the
solicitation is not being made by the
Federal candidate or officeholder. New
11 CFR 300.64(c)(3)(ii) provides that
disclaimers on written publicity must
meet the requirements in 11 CFR
110.11(c)(2). For publicity disseminated
via non-written means, such as by
telephone calls, a disclaimer is required
if the publicity is recorded, follows any
form of a written script, or is conducted
according to a structured or organized
program. A script for these purposes
means any written text that callers use
to guide their conversations with
potential attendees, regardless of
whether it takes the form of complete
paragraphs, bullet points, notes, or other
written prompts. As long as the text
includes appropriate disclaimers, the
Commission will presume (absent
evidence to the contrary) that the
requirements of the rule were met.
When non-written solicitations are
conducted according to a structured or
organized program, the Commission
will similarly presume that the
requirements of the rule were met where
a sworn statement that appropriate
disclaimers were made is submitted by
the person making the solicitation or by
the Federal candidate or officeholder
who authorized the use of his or her
name. A structured or organized
program includes the making, at a
designated time, of telephone calls that
invite people to and solicit funds for a
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non-Federal fundraising event, and
which is authorized, requested, or
agreed to by the Federal candidate or
officeholder.
New paragraph (c)(3)(iv) provides two
examples of disclaimers that would
satisfy the requirement. Both examples
state that the Federal candidate or
officeholder is not soliciting funds in
connection with the fundraising event.
These examples are intended to serve as
guidance for Federal candidates,
officeholders, and sponsors of nonFederal fundraising events. Importantly,
written disclaimers, including those that
conform to the examples provided in
the rule, are not sufficient unless they
are ‘‘clear and conspicuous’’ under 11
CFR 110.11(c)(2). To the extent the
publicity already has a disclaimer
required by 11 CFR 100.11 (Federal
disclaimer), the disclaimer required by
this paragraph may be included in the
same box as the Federal ‘‘Paid for by’’
disclaimer. Some additional limitations
on the use of disclaimers are addressed
in new paragraph (c)(3)(v) of 11 CFR
300.64, as discussed below.
Paragraph (c)(3)(v) of new 11 CFR
300.64 states that a Federal candidate,
officeholder, or an agent of either may
not approve, authorize, agree to, or
consent to the use of the Federal
candidate’s or officeholder’s name or
likeness in publicity that contains a
solicitation of non-Federal or Levin
funds if the Federal candidate or
officeholder is identified in the
publicity as serving in a position
specifically related to fundraising.
Positions specifically related to
fundraising include, for example,
honorary chair of the fundraising event
or member of the host committee. Nor
may a Federal candidate, officeholder,
or an agent of either approve, authorize,
agree to, or consent to the use of the
Federal candidate’s or officeholder’s
name or likeness if the Federal
candidate or officeholder is identified
on publicity containing a solicitation of
non-Federal or Levin funds as extending
an invitation to the event. For example,
an invitation stating ‘‘Featured guest
Congressman X invites you to join him
at next week’s reception’’ would fall into
this category, as would an invitation
signed by the Federal candidate or
officeholder.
The Commission has concluded that
participation by the Federal candidate
or officeholder in this manner would be
an impermissible solicitation of funds
outside the amount limitations and
source prohibitions of the Act or Levin
funds. As such, no disclaimer, even one
that complies with paragraph (c)(3)(i)(B)
of new 11 CFR 300.64, would be capable
of curing the violation of 2 U.S.C.
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441i(e), no matter how clear or
conspicuous the disclaimer may be.
Finally, paragraph (c)(3)(vi) prohibits
Federal candidates, officeholders, and
their agents from disseminating
publicity for a non-Federal fundraising
event if the publicity solicits funds
outside the amount limitations and
source prohibitions of the Act or Levin
funds. This paragraph is a logical
outgrowth of the proposal in the NPRM;
the Commission has decided to
implement this provision to prohibit
conduct that could result in an
impermissible solicitation by Federal
candidates and officeholders.
The final rule covers much of the
same activity as the rule proposed in
Alternative 2 of the NPRM, but is
organized differently. The proposed rule
did not, for example, explicitly address
publicity that solicits only funds within
the limitations and prohibitions of the
Act, whereas the final rule does. More
significantly, the structure of the
proposed rule depended on whether the
solicitation in the publicity was made
by the Federal candidate or officeholder.
By contrast, the structure of the final
rule depends on whether the publicity
solicits funds within the amount
limitations and source prohibitions of
the Act. The final rule also applies to
the agents of Federal candidates and
officeholders.
The comments received on this aspect
of the proposed rule focused for the
most part on the disclaimer requirement
for publicity naming a Federal
candidate or officeholder and including
a solicitation by a person other than the
Federal candidate or officeholder. Four
commenters disagreed with the
disclaimer requirement, arguing that the
disclaimers would confuse the average
person. These commenters observed
that the average recipient of publicity
could easily conclude that the mere
listing of a Federal candidate or
officeholder—as a featured guest, for
example—on publicity was not a
solicitation by that Federal candidate or
officeholder, even if the publicity
included a solicitation of funds outside
the amount limitations and source
prohibitions of the Act. Moreover, one
commenter opined that fundraising
hosts would bear a substantial burden if
employees and volunteers were required
to issue such disclaimers during the
telephone calls and conversations that
frequently follow the distribution of
written publicity for a non-Federal
fundraising event. Instead, two
commenters suggested that the
Commission require such disclaimers
only when a Federal candidate or
officeholder signs a solicitation or
explicitly solicits funds.
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Other commenters supported the
Commission’s proposed disclaimer
requirement, stating that it would make
‘‘infinitely clear to the recipient of the
solicitation’’ that the Federal candidate
or officeholder was not asking for funds
outside the limitations or prohibitions
of the Act. Another commenter asked
the Commission to provide specific
examples of statements that would
satisfy the disclaimer requirement.
The Commission has considered the
comments and has concluded that
identifying a Federal candidate or
officeholder as serving in a role not
specifically related to fundraising does
not, by itself, result in a solicitation by
the Federal candidate or officeholder.
However, just as the circuit court
concluded in Shays III that 2 U.S.C.
441i(e)(3) ‘‘merely clarifies’’ the reach of
‘‘the statute’s ban on soliciting soft
money,’’ the Commission also seeks to
make it unmistakably clear that Federal
candidates and officeholders who
participate at non-Federal fundraising
events and in publicity are not making
a solicitation that would be prohibited
under the law. Shays III at 933. The
disclaimer requirement helps to ensure
that persons receiving publicity for nonFederal fundraising events understand
that any solicitation of funds outside the
amount limitations and source
prohibitions of the Act is made by a
person other than the Federal candidate
or officeholder identified in the
publicity. The disclaimer requirement
may also help to protect Federal
candidates and officeholders against
complaints filed with the Commission
that result from a misunderstanding as
to who is soliciting funds in connection
with the fundraising event.
D. Effect of This Rulemaking on Prior
Commission Advisory Opinions
The Commission has addressed the
issue of participation by Federal
candidates and officeholders in nonFederal fundraising events in Advisory
Opinions 2007–11 (California State
Party Committees), 2005–02 (Corzine II),
2004–12 (Democrats for the West),
2003–36 (Republican Governors
Association), and 2003–03 (Cantor). As
explained below, the Commission is
superseding the aspects of these
advisory opinions that address this
issue.
In Advisory Opinions 2005–02
(Corzine II) and 2004–12 (Democrats for
the West), the Commission concluded,
in part, that Federal candidates and
officeholders could appear, speak, and
be featured guests at non-Federal
fundraising events ‘‘without restriction
or regulation’’ under former 11 CFR
300.64(b). Given that this provision of
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the rule was explicitly struck down by
the Shays III court and has been
removed by the Commission, the
Commission is superseding the parts of
Advisory Opinions 2004–12 (Democrats
for the West) and 2005–02 (Corzine II)
that apply the ‘‘without restriction or
regulation’’ standard. Specifically, the
Commission is superseding the answer
to Question 7 in Advisory Opinion
2004–12 (Democrats for the West), as to
whether Democrats for the West may
invite Federal candidates, officeholders,
or their agents to appear as guests or
featured speakers at fundraising events,
and the second paragraph in the answer
to Question 2 in Advisory Opinion
2005–02 (Corzine II), regarding Federal
candidate and officeholder participation
in raising funds for the non-Federal
accounts of State and local party
committees.
Advisory Opinions 2007–11
(California State Party Committees),
2003–36 (Republican Governors
Association), and 2003–03 (Cantor) also
addressed participation by Federal
candidates and officeholders at nonFederal fundraising events in
connection with elections, and related
publicity. Some of the conclusions are
consistent with new 11 CFR 300.64,
such as the conclusion in Advisory
Opinions 2003–36 (Republican
Governors Association) and 2003–03
(Cantor) that the mere attendance of a
Federal candidate or officeholder at a
non-Federal fundraiser does not, in and
of itself, give rise to a violation of the
Act or Commission regulations. On the
other hand, some of the conclusions in
these prior advisory opinions may not
be consistent with new 11 CFR 300.64.
To help avoid potential confusion as
to which parts of the prior advisory
opinions are consistent with the new
rule and which parts are inconsistent,
the Commission is superseding
Advisory Opinion 2003–03 (Cantor),
except for the answer to Question 6
regarding agency, and Advisory Opinion
2003–36 (Republican Governors
Association), except for the answer to
Question 3 regarding corporate
donations to the Republican Governors
Association’s conference account and
the last paragraph of the answer to
Question 2 regarding whether the
conference account’s activities are in
connection with an election. The
Commission is also superseding in its
entirety Advisory Opinion 2007–11
(California State Party Committees),
which addressed three types of
proposed communications related to
State party fundraising events that
identified Federal candidates or
officeholders as featured speakers or
honored guests.
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These actions are consistent with a
comment received in response to the
NPRM. The comment noted the
potential tension and confusion that
could result from having to reconcile
past advisory opinions with the
Commission’s new rule. The comment
suggested that the Commission indicate
explicitly that the series of advisory
opinions on this issue no longer
articulate the correct standard of law
and are thus superseded.
The Commission agrees that where
the new rule addresses the same issue
as a prior advisory opinion, the new
rule provides the applicable standard of
law, and the advisory opinion is
superseded. However, the Commission
declines to supersede the entire series of
advisory opinions that reference this
issue. As discussed above, sections of
certain advisory opinions are not
affected by the new rule and hence
remain in force. Accordingly, the
Commission has explicitly indicated
which advisory opinions are now
superseded, in whole or in part.
Although new 11 CFR 300.64 is in part
informed by, and adopts, some of the
Commission’s conclusions in prior
advisory opinions, the new rule is based
entirely on the reasoning set forth in
this explanation and justification and
does not rely on any prior Commission
advisory opinions.
Certification of No Effect Pursuant to 5
U.S.C. 605(b) [Regulatory Flexibility
Act]
The Commission certifies that the
attached final rule will not have a
significant economic impact on a
substantial number of small entities.
The basis for this certification is that the
entities affected by this rule do not meet
the definition of ‘‘small entity’’ under 5
U.S.C. 601. That definition requires that
the enterprise be independently owned
and operated and not dominate in its
field. 5 U.S.C. 601(4).
This final rule affects State, district,
and local party committees, as well as
Federal candidates and their campaign
committees. Federal candidates, as
individuals, do not fall within the
definition at 5 U.S.C. 601, and campaign
committees are not independently
owned and operated because they are
not financed and controlled by a small
identifiable group of individuals.
State, district, and local party
committees also fall outside the
definition of ‘‘small entity.’’ These
committees are not independently
owned and operated because they are
not financed and controlled by a small
identifiable group of individuals, and
they are affiliated with the larger
national political party organizations. In
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14:33 May 04, 2010
Jkt 220001
addition, the State political party
committees representing the Democratic
and Republican parties have a major
controlling influence within the
political arenas of their States and are
thus dominant in their fields. District
and local party committees are generally
considered affiliated with the State
committees and need not be considered
separately. To the extent that any State
party committees representing minor
political parties might be considered
‘‘small organizations,’’ the number
affected by this final rule is not
substantial.
List of Subjects in 11 CFR Part 300
Campaign funds, nonprofit
organizations, political committees and
parties, political candidates, reporting
and recordkeeping requirements.
For the reasons set out in the
preamble, Subchapter C of Chapter 1 of
title 11 of the Code of Federal
Regulations is amended to read as
follows:
■
PART 300—NON-FEDERAL FUNDS
1. The authority citation for part 300
continues to read as follows:
■
Authority: 2 U.S.C. 434(e), 438(a)(8),
441a(a), 441i, 453.
2. Section 300.64 is revised to read as
follows:
■
§ 300.64 Participation by Federal
candidates and officeholders at non-Federal
fundraising events (2 U.S.C. 441i(e)(1) and
(3)).
(a) Scope. This section covers
participation by Federal candidates and
officeholders at fundraising events in
connection with an election for Federal
office or any non-Federal election at
which funds outside the amount
limitations and source prohibitions of
the Act or Levin funds are solicited.
This section also covers participation by
Federal candidates and officeholders in
publicity related to such non-Federal
fundraising events. This section applies
even if funds that comply with the
amount limitations and source
prohibitions of the Act are also solicited
at the event. Nothing in this section
shall be construed to alter the
fundraising exception for State
candidates at 11 CFR 300.63 or the
fundraising exceptions for certain taxexempt organizations at 11 CFR 300.65.
(b) Participation at non-Federal
fundraising events. A Federal candidate
or officeholder may:
(1) Attend, speak at, or be a featured
guest at a non-Federal fundraising
event.
(2) Solicit funds at a non-Federal
fundraising event, provided that the
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24383
solicitation is limited to funds that
comply with the amount limitations and
source prohibitions of the Act and that
are consistent with State law.
(i) A Federal candidate or officeholder
may limit such a solicitation by
displaying at the fundraising event a
clear and conspicuous written notice, or
making a clear and conspicuous oral
statement, that the solicitation is not for
Levin funds (when applicable), does not
seek funds in excess of $[Federally
permissible amount], and does not seek
funds from corporations, labor
organizations, national banks, federal
government contractors, or foreign
nationals.
(ii) A written notice or oral statement
is not clear and conspicuous if it is
difficult to read or hear or if its
placement is easily overlooked by any
significant number of those in
attendance.
(c) Publicity for non-Federal
fundraising events. For the purposes of
this paragraph, publicity for a nonFederal fundraising event includes, but
is not limited to, advertisements,
announcements, or pre-event invitation
materials, regardless of format or
medium of communication.
(1) Publicity not containing a
solicitation. A Federal candidate,
officeholder, or an agent of either may
approve, authorize, agree to, or consent
to the use of the Federal candidate’s or
officeholder’s name or likeness in
publicity for a non-Federal fundraising
event that does not contain a
solicitation.
(2) Publicity containing a solicitation
limited to funds that comply with the
amount limitations and source
prohibitions of the Act. A Federal
candidate, officeholder, or an agent of
either may approve, authorize, agree to,
or consent to the use of the Federal
candidate’s or officeholder’s name or
likeness in publicity for a non-Federal
fundraising event that solicits only
funds that comply with the amount
limitations and source prohibitions of
the Act.
(3) Publicity containing a solicitation
of funds outside the amount limitations
and source prohibitions of the Act.
(i) A Federal candidate, officeholder,
or an agent of either may approve,
authorize, agree to, or consent to the use
of the Federal candidate’s or
officeholder’s name or likeness in
publicity for a non-Federal fundraising
event that contains a solicitation of
funds outside the amount limitations
and source prohibitions of the Act or
Levin funds only if:
(A) The Federal candidate or
officeholder is identified as a featured
guest, honored guest, special guest,
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featured speaker, or honored speaker, or
in any other manner not specifically
related to fundraising; and
(B) The publicity includes a clear and
conspicuous disclaimer that the
solicitation is not being made by the
Federal candidate or officeholder.
(ii) The disclaimer required in
paragraph (c)(3)(i)(B) of this section
must meet the requirements in 11 CFR
110.11(c)(2) if the publicity is written.
(iii) Where publicity is disseminated
by non-written means, the disclaimer
described in paragraph (c)(3)(i)(B) of
this section is required only if the
publicity is recorded or follows any
form of written script or is conducted
according to a structured or organized
program.
(iv) Examples of disclaimers that
satisfy paragraph (c)(3)(i)(B) of this
section include, but are not limited to:
(A) ‘‘[Name of Federal candidate/
officeholder] is appearing at this event
only as a featured speaker. [Federal
candidate/officeholder] is not asking for
funds or donations’’; or
(B) ‘‘All funds solicited in connection
with this event are by [name of nonFederal candidate or entity], and not by
[Federal candidate/officeholder].’’
(v) A Federal candidate, officeholder,
or an agent of either may not approve,
authorize, agree to, or consent to the use
of the Federal candidate’s or
officeholder’s name or likeness in
publicity for a non-Federal fundraising
event that contains a solicitation of
funds outside the amount limitations
and source prohibitions of the Act or
Levin funds if:
(A) The Federal candidate or
officeholder is identified as serving in a
position specifically related to
fundraising, such as honorary
chairperson or member of a host
committee, or is identified in the
publicity as extending an invitation to
the event, even if the communication
contains a written disclaimer as
described in paragraph (c)(3)(i)(B) of
this section; or
(B) The Federal candidate or
officeholder signs the communication,
even if the communication contains a
written disclaimer as described in
paragraph (c)(3)(i)(B) of this section.
(vi) A Federal candidate, officeholder,
or an agent of either, may not
disseminate publicity for a non-Federal
fundraising event that contains a
solicitation of funds outside the amount
limitations and source prohibitions of
the Act or Levin funds by someone
other than the Federal candidate or
officeholder.
Dated: April 30, 2010.
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14:33 May 04, 2010
Jkt 220001
On behalf of the Commission.
Matthew S. Petersen,
Chairman, Federal Election Commission.
SUPPLEMENTARY INFORMATION:
[FR Doc. 2010–10571 Filed 5–4–10; 8:45 am]
In order to help the Federal Reserve
implement monetary policy, on
December 31, 2009, the Board requested
public comment on a proposal to amend
Regulation D to authorize Reserve Banks
to offer term deposits to eligible
institutions.1 ‘‘Eligible institution’’ is
defined in Regulation D and includes
the depository institutions defined in
section 19(b)(1)(A) of the Act, including
banks, savings associations, savings
banks and credit unions that are
federally insured or eligible to apply for
federal insurance. ‘‘Eligible institution’’
also includes trust companies, Edge and
agreement corporations, and U.S.
agencies and branches of foreign banks.2
Under the proposal, the Reserve Banks
would accept term deposits subject to
such terms and conditions as the Board
may establish from time to time,
including but not limited to conditions
regarding the maturity of the term
deposits being offered, maximum and
minimum amounts that may be
maintained by an eligible institution in
a term deposit, the interest rate or rates
offered and, if term deposits are offered
through an auction mechanism, the size
of the offering, and maximum and
minimum bid amounts. Term deposits
would not satisfy required reserve
balances or contractual clearing
balances and would not be available for
general payments or other activities.
The Board also proposed to amend
section 204.10(b)(3) of Regulation D to
reflect the fact that term deposits would
earn interest, and that like other
balances maintained at Reserve Banks
by or on behalf of eligible institutions,
the interest rate on term deposits could
not exceed the general level of shortterm interest rates, consistent with the
limitation in the Federal Reserve Act.3
For purposes of that statutory
requirement, the Board proposed to
amend section 204.10(b)(3) to define the
term ‘‘short-term interest rates’’ as
including ‘‘the primary credit rate and
rates on obligations with maturities of
up to one year in which eligible
institutions may invest, such as rates on
term federal funds, term repurchase
agreements, commercial paper, term
Eurodollar deposits, and other similar
rates.’’
BILLING CODE 6715–01–P
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Regulation D; Docket No. R–1381]
Reserve Requirements of Depository
Institutions Policy on Payment System
Risk
AGENCY: Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
SUMMARY: The Board is amending
Regulation D, Reserve Requirements of
Depository Institutions, to authorize
Reserve Banks to offer term deposits.
Term deposits are intended to facilitate
the conduct of monetary policy by
providing a tool for managing the
aggregate quantity of reserve balances.
Institutions eligible to receive earnings
on their balances in accounts at Federal
Reserve Banks (‘‘eligible institutions’’)
may hold term deposits and receive
earnings at a rate that does not exceed
the general level of short-term interest
rates. Term deposits are separate and
distinct from balances maintained in an
institution’s master account at a Reserve
Bank (‘‘master account’’) as well as from
those maintained in an excess balance
account. Term deposits do not satisfy an
institution’s required reserve balance or
contractual clearing balance and do not
constitute excess balances. Term
deposits are not available to clear
payments and may not be used to
reduce an institution’s daylight or
overnight overdrafts. The Board is also
making minor amendments to the
posting rules for intraday debits and
credits to master accounts as set forth in
the Board’s Policy on Payment System
Risk to address transactions associated
with term deposits.
DATES: The amendments are effective on
June 4, 2010.
FOR FURTHER INFORMATION CONTACT:
Sophia H. Allison, Senior Counsel (202)
452–3565, or Dena L. Milligan, Staff
Attorney (202) 452–3900), Legal
Division, or Seth Carpenter, Associate
Director (202) 452–2385, or Margaret
Gillis DeBoer, Assistant Director (202)
452–3139, Division of Monetary Affairs;
for users of Telecommunications Device
for the Deaf (TDD) only, contact (202)
263–4869); Board of Governors of the
Federal Reserve System, 20th and C
Streets, NW., Washington, DC 20551.
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I. Summary of Proposal
1 74
FR 69301 (Dec. 31, 2009).
institution’’ does not include all
entities for which the Reserve Banks hold accounts.
For example, the term does not include entities for
which the Reserve Banks act as fiscal agents, such
as Federal Home Loan Banks, Fannie Mae, and
Freddie Mac. 12 CFR 204.2(y).
3 See 12 U.S.C. 461(b)(12).
2 ‘‘Eligible
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Agencies
[Federal Register Volume 75, Number 86 (Wednesday, May 5, 2010)]
[Rules and Regulations]
[Pages 24375-24384]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10571]
[[Page 24375]]
=======================================================================
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FEDERAL ELECTION COMMISSION
11 CFR Part 300
[Notice 2010-11]
Participation by Federal Candidates and Officeholders at Non-
Federal Fundraising Events
AGENCY: Federal Election Commission.
ACTION: Final rules.
-----------------------------------------------------------------------
SUMMARY: The Federal Election Commission (``Commission'') is revising
its rules regarding appearances by Federal officeholders and candidates
at State, district, and local party fundraising events under the
Federal Election Campaign Act of 1971, as amended. Consistent with the
decision of the U.S. Court of Appeals for the District of Columbia
Circuit in Shays v. FEC, Federal candidates and officeholders may no
longer speak at State, district, and local party fundraising events
``without restriction or regulation.'' The revised rules address
participation by Federal candidates and officeholders at all non-
Federal fundraising events that are in connection with an election for
Federal office or any non-Federal election and in related publicity.
DATES: Effective Date: These rules are effective on June 4, 2010.
FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant
General Counsel, or Attorneys, Mr. David C. Adkins or Mr. Neven F.
Stipanovic, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or
(800) 424-9530.
SUPPLEMENTARY INFORMATION: The Bipartisan Campaign Reform Act of 2002
\1\ (``BCRA'') contained extensive and detailed amendments to the
Federal Election Campaign Act of 1971, as amended, 2 U.S.C. 431 et seq.
(``the Act''). The Commission promulgated a number of rules to
implement BCRA, including rules at 11 CFR 300.64 regarding Federal
candidate and officeholder solicitations at State, district, and local
party committee fundraising events. The Court of Appeals for the
District of Columbia Circuit found aspects of these rules invalid in
Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008) (``Shays III''). The
Commission is revising its rules at 11 CFR 300.64 to implement the
Shays III decision.
---------------------------------------------------------------------------
\1\ Public Law 107-155, 116 Stat. 81 (2002).
---------------------------------------------------------------------------
I. Background Information
A. BCRA
In 2002, Congress amended the Act by restricting the fundraising
activity of Federal candidates and officeholders, their agents, and
entities directly or indirectly established, financed, maintained,
controlled by, or acting on behalf of, Federal candidates or
officeholders. See BCRA at Section 323(e) (codified at 2 U.S.C.
441i(e)). These persons may not ``solicit, receive, direct, transfer or
spend'' funds in connection with an election for Federal office or any
non-Federal election unless the funds comply with the amount
limitations and source prohibitions of the Act.\2\ See 2 U.S.C.
441i(e)(1)(A) and (e)(1)(B); 11 CFR 300.61 and 300.62. Furthermore,
Congress prohibited State, district and local party committees from
accepting or using as Levin funds \3\ any funds that have been
solicited, received, directed, transferred, or spent by or in the name
of Federal candidates and officeholders. Thus, Federal candidates and
officeholders were effectively prohibited from raising Levin funds. See
2 U.S.C. 441i(b)(2)(C)(i); 11 CFR 300.31(e).
---------------------------------------------------------------------------
\2\ The amount limitations on contributions depend on the type
of contributor and the recipient. See 2 U.S.C. 441a(a)(1), (2), and
(3). For example, an individual and a non-multicandidate PAC may
each contribute up to $2,400 per election to a candidate, up to
$5,000 per calendar year to a PAC, and up to $10,000 per year to a
State party committee (or to a State party's respective district and
local party committees, which share the State party committee's
combined limit). A multicandidate PAC, by contrast, may contribute
up to $5,000 per election to a candidate, up to $5,000 per calendar
year to a PAC, and up to $5,000 per calendar year to a State party
committee (or to a State party's respective district and local party
committees, which share the State party committee's combined limit).
Sources prohibited from making contributions under the Act include
national banks, corporations, labor organizations, and foreign
nationals. See 2 U.S.C. 441a, 441b, and 441e; see also 2 U.S.C. 441c
(government contractors) and 441f (contributions made in the name of
another). Furthermore, funds raised in connection with an election
for Federal office are subject to the reporting requirements of the
Act. See 2 U.S.C. 441i(e)(1)(A).
\3\ ``Levin funds'' are funds raised by State, district, or
local party committees pursuant to the restrictions in 11 CFR 300.31
and disbursed subject to the restrictions in 11 CFR 300.32. See 11
CFR 300.2(i).
---------------------------------------------------------------------------
As one principal BCRA sponsor noted, ``The basic rule in the bill
is that federal candidates and officials cannot raise non-federal (or
soft) money donations--that is, funds that do not comply with federal
contribution limits and source prohibitions.'' 148 Cong. Rec. H407
(daily ed. Feb. 13, 2002) (statement of Rep. Shays). As that ban
related to party committees, another of BCRA's main sponsors noted:
``The rule here is simple: Federal candidates and officeholders cannot
solicit soft money funds, funds that do not comply with Federal
contribution limits and source prohibitions, for any party committee--
national, State, or local.'' 148 Cong. Rec. S2139 (daily ed. March 20,
2002) (statement of Sen. McCain).
Notwithstanding these restrictions, though, Section 323(e)(3) of
BCRA states explicitly that Federal candidates and officeholders are
permitted to ``attend, speak, or be a featured guest at a fundraising
event for a State, district, or local committee of a political party.''
See 2 U.S.C. 441i(e)(3).
B. 2002 Rulemaking
In 2002, the Commission commenced a rulemaking to establish rules
governing Federal candidate and officeholder participation in State,
district, and local party committee fundraising events. The Commission
proposed alternative interpretations of 2 U.S.C. 441i(e)(3). One
interpretation would have allowed Federal candidates and officeholders
only to attend, speak, or be a featured guest at State, district, and
local party committee fundraising events, but, consistent with the
Act's prohibition on the solicitation of funds outside the amount
limitations and source prohibitions of the Act by Federal candidates
and officeholders, would have prohibited those persons from soliciting,
receiving, directing, transferring, or spending funds or participating
in any other fundraising aspect of a State, district, or local party
committee fundraising event. See Notice of Proposed Rulemaking on
Prohibited and Excessive Contributions; Non-Federal Funds or Soft
Money, 67 FR 35654, 35672, 35688 (May 20, 2002) (``2002 NPRM'').
An alternative interpretation proposed a ``total exemption from the
general solicitation ban.'' 2002 NPRM at 35672-73; see also 2 U.S.C.
441i(e)(1)(B); 11 CFR 300.62. Under this interpretation, Federal
candidates and officeholders would be permitted to ``speak freely at
[party fundraising events] without restriction or regulation.'' 2002
NPRM at 35672-73. The Commission separately explored how 2 U.S.C.
441i(e)(3)--specifically, its reference to ``featured guests''--
affected the role that Federal candidates and officeholders could play
in publicizing State, district, and local party committee events. See
2002 NPRM at 35673. For example, the Commission sought comment on
whether this provision of BCRA allowed Federal candidates and
officeholders to be named in invitation materials and to appear as
members of a host committee. Id.
The Commission concluded that Section 441i(e)(3) was a total
exemption from the general solicitation ban. Under the Commission's
regulation, Federal candidates and officeholders were permitted to
attend, speak, and appear
[[Page 24376]]
as featured guests at State, district, and local party committee
fundraising events ``without restriction or regulation.'' See Final
Rules on Prohibited and Excessive Contributions; Non-Federal Funds or
Soft Money, 67 FR 49064, 49108 (July 29, 2002) (``2002 Final Rule'');
11 CFR 300.64(b). The Commission did not, however, interpret 2 U.S.C.
441i(e)(3) to allow unrestricted participation in publicity by Federal
candidates and officeholders. Indeed, the Commission concluded that
Federal candidates and officeholders were ``prohibited from serving on
`host committees' for a party fundraising event or from personally
signing a solicitation in connection with a State, local, or district
party fundraising event on the basis that these pre-event activities
are outside the permissible activities* * * flowing from a Federal
candidate's or officeholder's appearance or attendance at the event.''
See 2002 Final Rule at 49108.
C. Shays I
The Commission's 2002 regulation implementing 2 U.S.C. 441i(e)(3)
was challenged in Shays v. FEC, 337 F. Supp. 2d 28 (D.D.C. 2004)
(``Shays I''). The district court held that the meaning of 2 U.S.C.
441i(e)(3) was ambiguous, and that the Commission's regulation was not
necessarily contrary to congressional intent. Shays I at 90 (applying
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837
(1984)). And, while the court acknowledged that the regulation created
``the potential for abuse,'' it did not find that the regulation unduly
compromised BCRA's purpose such that it was not entitled to deference
from the court. Id. at 91. The court did, however, find that the
Commission's explanation of the rule was inadequate and, therefore, in
violation of the Administrative Procedure Act, 5 U.S.C. 553. Shays I at
92-93. The Commission did not challenge this holding by the district
court.
D. 2005 Rulemaking
Upon remand, the Commission commenced a rulemaking to implement the
Shays I district court's opinion. See Revised Explanation and
Justification, Candidate Solicitation at State, District and Local
Party Fundraising Events, 70 FR 37649 (June 30, 2005) (``2005 Revised
E&J''). This rulemaking provided additional explanation and
justification of the 2002 Final Rule, but it did not change the text of
that rule. The Commission, as it did in 2002, concluded that 2 U.S.C.
441i(e)(3) was a total exemption from the general solicitation ban.
Thus, Federal candidates and officeholders could still attend, speak,
and appear as featured guests at State, district, and local party
committee fundraising events ``without restriction or regulation.'' See
2005 Revised E&J at 37650-51.
E. Shays III
Against this backdrop, the Commission's rule implementing 2 U.S.C.
441i(e)(3) was again challenged in court. The District Court for the
District of Columbia upheld the Commission's regulation. Shays v. FEC,
508 F. Supp. 2d. 10 (D.D.C. 2007).
On appeal, however, the United States Court of Appeals for the
District of Columbia Circuit reversed the district court, concluding
that the total exemption from the general solicitation ban ``allows
what BCRA directly prohibits.'' Shays III at 933. In addressing the
Commission's regulation, the Court first concluded that 2 U.S.C.
441i(e)(3) did not create an ambiguity in the law, but should be read
as ``merely clarif[ying] that * * * federal candidates may still
`attend, speak, or be a featured guest' at State party events where
soft money is being raised, which the statute might otherwise be read
as forbidding.'' Id. The court then held that the Commission had ``no
basis'' to read 2 U.S.C. 441i(e)(3) as creating ``an implied fourth
exception'' to the solicitation restrictions at Section 441i(e)(1),
given that Congress had explicitly enumerated the instances in which
Federal candidates and officeholders could ``solicit'' funds outside
BCRA's restrictions. Id. at 933-34. The court found compelling the
specific language in the statute--noting that ``Congress repeatedly
used the term `solicit' and `solicitation' in Section 441i--over a
dozen times--yet chose not to do so in Section 441i(e)(3).''
F. Advisory Opinions
The Commission has also issued several advisory opinions regarding
aspects of participation by Federal candidates and officeholders in
non-Federal fundraising events not specifically addressed by the Act
and regulations. In particular, the Commission has provided guidance on
the extent to which Federal candidates and officeholders may
participate in non-Federal fundraising events for entities other than
State, district, and local party committees and the degree to which
that participation can be publicized before such an event.
In Advisory Opinions 2003-02 (Cantor) and 2003-36 (Republican
Governors Association), the Commission stated that a Federal candidate
or officeholder may attend and speak at non-Federal fundraising events
for State and local candidates and other non-Federal political
organizations, even if non-Federal funds are being raised at the event.
The Commission concluded that this type of participation would not
violate BCRA's restrictions on soliciting funds outside the limits and
prohibitions of the Act because attending such an event or giving a
speech at such an event is not a solicitation under Commission
regulations.
In those same advisory opinions, the Commission also determined
that Federal candidates and officeholders may solicit funds at events
at which non-Federal funds are being raised if their solicitations are
limited to funds that comply with the amount limitations and source
prohibitions of the Act. To ensure that these solicitations are
properly limited, Federal candidates and officeholders have had to
either (1) make a specific solicitation such as ``I am soliciting $500
from individuals only,'' or (2) condition a general solicitation with a
disclaimer indicating that the solicitation is only for funds within
the limitations and prohibitions of the Act. This disclaimer may be
made orally by the Federal candidate or officeholder or, alternatively,
in writing by posting at the event a clear and conspicuous notice
limiting the solicitation.
The Commission also issued several advisory opinions addressing the
role that Federal candidates and officeholders may play in publicizing
non-Federal fundraising events for State, district, and local party
committees and other non-Federal entities. See Advisory Opinions 2003-
03 (Cantor), 2003-36 (Republican Governors Association), and 2007-11
(California State Party Committees). The Commission reasoned that if
publicity does not contain a solicitation, then it is not subject to
BCRA's solicitation restrictions. Id. If the publicity does contain a
solicitation, and the Federal candidate or officeholder consents to be
featured or appear in the publicity, then the publicity must contain a
clear and conspicuous disclaimer limiting the solicitation to funds
compliant with the amount limitations and source prohibitions of the
Act. See Advisory Opinions 2003-03 (Cantor), and 2003-36 (Republican
Governors Association). The Commission made clear, however, that
Federal candidates and officeholders may not solicit funds in excess of
the limitations and prohibitions of the Act and then qualify that
impermissible solicitation with a limiting disclaimer. See Advisory
[[Page 24377]]
Opinion 2003-36 (Republican Governors Association).
The Commission was unable to resolve whether a Federal candidate or
officeholder could be named as honorary chairperson or featured speaker
in a solicitation for non-Federal funds that is not otherwise signed by
the Federal candidate or officeholder. See Advisory Opinions 2003-36
(Republican Governors Association) and 2007-11 (California State Party
Committees). In addition, the Commission was unable to resolve whether
a Federal candidate or officeholder may be named as a featured speaker
on publicity that is mailed with (e.g., in the same envelope as) a
solicitation for non-Federal funds that does not name a Federal
candidate or officeholder. See Advisory Opinion 2007-11 (California
State Party Committees).
G. Present Rulemaking
In response to the circuit court's decision in Shays III, the
Commission published a Notice of Proposed Rulemaking on December 7,
2009. See Notice of Proposed Rulemaking on Participation by Federal
Candidates and Officeholders at Non-Federal Fundraising Events, 74 FR
64016 (Dec. 7, 2009) (``NPRM''). The NPRM proposed three alternative
revisions to the Commission's rule at 11 CFR 300.64. The first
alternative proposed a surgical revision to the rule, striking the
``without restriction or regulation'' language but leaving the other
language unchanged. The other two alternatives effected the same change
but also proposed new rules governing Federal candidate and
officeholder participation in all non-Federal fundraising events--those
for State, district, and local party committees as well as other
entities, including State and local candidates and State political
committees and organizations--and related publicity.
The initial public comment period for the NPRM closed on February
8, 2010, and a reply comment period concluded on February 22, 2010. In
total, the Commission received seven comments (six initial comments and
one reply comment) from seven commenters. The Commission held a public
hearing on the proposed rules on March 16, 2010, at which four
witnesses testified. All comments and a public transcript of the
hearing are available at https://www.fec.gov/law/law_rulemakings.shtml#solicitationshays3. For purposes of this document,
the terms ``comment'' and ``commenter'' apply to both written comments
and oral testimony at the public hearing.
These final rules address participation by Federal candidates and
officeholders at all fundraising events in connection with an election
for Federal office or any non-Federal election--both those for State,
district, and local party committees and those for other entities--at
which funds outside the amount limitations and source prohibitions of
the Act, or Levin funds, are solicited, even if funds that comply with
the amount limitations and source prohibitions are also solicited at
the event. The final rules cover participation by Federal candidates
and officeholders at the event as well as participation by Federal
candidates and officeholders in publicizing the event. Importantly,
they set forth the manner in which Federal candidates, officeholders,
and their agents can be involved in such activities without making a
solicitation of funds outside the amount limitations and source
prohibitions of the Act.
Under the APA, 5 U.S.C. 553(d), and the Congressional Review of
Agency Rulemaking Act, 5 U.S.C. 801(a)(1), agencies must submit final
rules to the Speaker of the House of Representatives and the President
of the Senate and publish them in the Federal Register at least 30
calendar days before they take effect. The final rules that follow were
transmitted to Congress on April 30, 2010.
II. Explanation and Justification
The Commission is amending 11 CFR 300.64 in response to the circuit
court's decision in Shays III. In the NPRM, the Commission proposed
three alternative rules. Alternative 1 would have removed the ``without
restriction or regulation'' language from 11 CFR 300.64 pursuant to the
decision of the Shays III court, and would have left the rest of the
rule largely intact. Under Alternative 1, 11 CFR 300.64 would have
continued to address only fundraising events for State, district, and
local party committees.
Alternatives 2 and 3 proposed more extensive revisions of 11 CFR
300.64. Like Alternative 1, and in response to the court of appeals'
decision, both Alternatives 2 and 3 would have removed the ``without
restriction or regulation'' language from 11 CFR 300.64. Unlike
Alternative 1, Alternatives 2 and 3 also proposed addressing more
broadly participation by Federal candidates and officeholders at all
fundraising events at which funds outside the limits and prohibitions
of the Act are raised (``non-Federal fundraising events''), and not
just party committee events. Alternatives 2 and 3 proposed detailed
guidance on Federal candidate and officeholder participation at non-
Federal fundraising events. In addition, the alternatives proposed
guidance on the manner in which Federal candidates and officeholders
could participate in publicizing such events. While Alternatives 2 and
3 addressed the same range of activities, their treatment of those
activities differed. Alternative 2 proposed a single set of rules for
all non-Federal fundraising events and related publicity; it did not
distinguish State, district, and local party events from other non-
Federal fundraising events. Alternative 3, though, proposed two
different standards: One for State, district, and local party committee
fundraising events and another for non-party fundraising events.
The contrasting approaches in Alternatives 2 and 3 were rooted in
differing interpretations of 2 U.S.C. 441i(e)(3), particularly in the
wake of the Shays III decision. Alternative 2 was predicated on the
statement in the Shays III decision that 2 U.S.C. 441i(e)(3) ``merely
clarifies'' that Federal candidates may attend, speak, and appear as
featured guests at State, district, and local party committee events
without such activities constituting an unlawful ``solicitation.''
Shays III at 933. As a ``mere[ ] clarif[ication],'' 2 U.S.C. 441i(e)(3)
neither affords special permissions with regard to Federal candidate
and officeholder participation in State, district, and local party
committee fundraising events, nor does it imply any restrictions with
regard to other non-Federal fundraising events. Accordingly,
Alternative 2 did not distinguish between State, district, and local
party events and other non-Federal fundraising events.
Alternative 3 was instead informed by an interpretation of 2 U.S.C.
441i(e)(3) as establishing a limited statutory exception for Federal
candidates to attend, speak and be featured guests at State, district,
and local party committee fundraisers--activities that the court in
Shays III acknowledged ``might otherwise be read as forbid[den]'' by
the Act's fundraising restrictions--which did not extend to non-party
fundraisers because they were not addressed by the statutory provision.
Shays III at 933. Accordingly, Alternative 3 proposed one standard for
Federal candidate and officeholder participation at State, district,
and local party committee events and another--more restrictive--
standard for Federal candidate and officeholder participation at other
non-Federal fundraising events.
The Commission sought comments on the three alternatives,
specifically
[[Page 24378]]
asking whether each would faithfully implement the statute, whether
each was responsive to the Shays III decision, and whether each would
provide sufficient guidance to Federal candidates and officeholders;
State, district, and local party committees; and other affected
entities.
Regarding Alternative 1, commenters acknowledged that it was
technically responsive to the Shays III opinion, but that it would
leave unanswered many important questions regarding Federal candidate
and officeholder participation in non-Federal fundraising events. In
particular, the commenters pointed out that Alternative 1 would not
address the Commission's previous guidance regarding Federal candidate
and officeholder participation in publicity for non-Federal fundraising
events and whether--or how--a Federal candidate or officeholder could
solicit funds at a State, district, or local party committee non-
Federal fundraising event.\4\ One commenter suggested that failure to
address these related areas would create ``uncertainty and trepidation
for State and local parties'' that would chill involvement between them
and Federal candidates and officeholders and ultimately limit the
parties' ability ``to communicate their message and to fully
participate in the political process.'' No commenters objected to the
Commission's proposal to establish rules addressing more broadly
Federal candidate and officeholder participation at all non-Federal
fundraising events.
---------------------------------------------------------------------------
\4\ While the latter issue was addressed by the Commission in
advisory opinions with respect to non-Federal fundraising events for
State candidates and 527 political organizations, see Advisory
Opinions 2003-03 (Cantor) and 2003-36 (Republican Governors
Association), the advisory opinions did not address Federal
candidate and officeholder solicitation at State, district, or local
party committee non-Federal fundraising events because 11 CFR 300.64
permitted Federal candidates and officeholders to solicit funds at
such events ``without restriction or regulation.'' The invalidation
of this aspect of 11 CFR 300.64 in Shays III raised the question for
the first time.
---------------------------------------------------------------------------
A number of commenters supported the approach of Alternative 2,
which applied the same framework to non-Federal fundraising events for
State, district, and local party committees and to other non-Federal
fundraising events. These commenters stated that Alternative 2 properly
balanced the concerns of the Shays III court with the congressional
intent behind BCRA, and that it better implemented the court's
interpretation of 441i(e)(3). None of the commenters objected to this
alternative.
With regard to Alternative 3, commenters generally did not favor
its distinction between party committee events and other non-Federal
fundraising events. Those commenters suggested that Alternative 3's
approach went further than is required by the court's holding in Shays
III, and that it would reverse previous Commission guidance that had
come to be relied on by Federal candidates, officeholders, and party
committees alike. One commenter predicted that Alternative 3 would
effectively end participation by Federal candidates and officeholders
at non-Federal fundraising events. The commenters that did not object
to Alternative 3 nevertheless noted that the Act did not require ``a
distinction between different types of nonfederal fundraising events,''
as proposed in Alternative 3.
The Commission agrees that Alternative 1, while responsive to the
Shays III decision, would leave unanswered many important questions
regarding Federal candidate and officeholder participation in non-
Federal fundraising events. Although the Shays III decision does not
mandate the adoption of a single rule that addresses participation by
Federal candidates and officeholders at all non-Federal fundraising
events, Federal candidates and officeholders, as well as entities that
solicit non-Federal funds in connection with elections, would benefit
from the explicit guidance of a more comprehensive rule.
Accordingly, the Commission is revising 11 CFR 300.64 to provide
guidance on participation by Federal candidates and officeholders in
all non-Federal fundraising events in connection with an election for
Federal office or any non-Federal election. As set forth in more detail
below, the Commission's final rule explicitly addresses participation
by Federal candidates and officeholders at such fundraising events, as
well as participation by Federal candidates, officeholders, and their
agents in publicizing these events. In addition, the rule covers
participation by Federal candidates and officeholders regardless of
whether the entity sponsoring the event is a State or local candidate
committee, State political committee, or any other organization that
hosts a fundraising event in connection with an election for Federal
office or any non-Federal election.
The Commission's final rule is based on Alternative 2 in the NPRM.
The Commission has determined that Alternative 2 best accomplishes two
important goals: (1) Implementing 2 U.S.C. 441i(e) in accordance with
the Shays III decision, and (2) providing clear, comprehensive guidance
regarding Federal candidate and officeholder participation in non-
Federal fundraising events and related publicity.
A. 300.64(a)--Scope
The scope of new 11 CFR 300.64 is set out in paragraph (a). The
rule applies to all fundraising events in connection with an election
for Federal office or any non-Federal election at which funds outside
the limitations and source prohibitions of the Act, or Levin funds, are
solicited. The rule applies even if funds within the amount limitations
and source prohibitions of the Act are also solicited at an event or in
publicity. The rule does not cover events at which funds outside the
amount limitations and source prohibitions of the Act or Levin funds
are not solicited but are, nevertheless, received. Nor does the rule
cover fundraising events at which only Federal funds are solicited or
fundraising events in connection with any non-Federal election at which
only funds subject to the limitations and prohibitions of the Act are
solicited, such as an event soliciting small-dollar, non-corporate,
non-union funds for a State candidate.
The rule covers only non-Federal fundraising events that are ``in
connection with an election for Federal office or any non-Federal
election.'' It does not apply to Federal candidate and officeholder
participation in fundraising events that are not in connection with an
election, consistent with the Act's prohibition on Federal candidates
and officeholders from soliciting, receiving, directing, transferring,
spending, or disbursing funds in connection with an election for
Federal office or any non-Federal elections. See 2 U.S.C.
441i(e)(1)(B).
The scope of the final rule is very similar to the scope proposed
in the NPRM, except that the proposed rule would have covered non-
Federal fundraising events at which funds outside the limitations and
prohibitions of the Act are raised, and the final rule covers non-
Federal fundraising events at which funds outside the limitations and
prohibitions of the Act are solicited. The Commission made this change
in response to a comment that a solicitation-based standard more
accurately captured the intent behind 2 U.S.C. 441i(e), which governs
solicitations by Federal candidates and officeholders. The commenter
expressed concern that a standard based on whether non-Federal funds
are raised at an event could be triggered when, for example, a donor
spontaneously donates a large, corporate check at a non-Federal
fundraising event, even though no one, including the participating
Federal candidate or
[[Page 24379]]
officeholder, had solicited funds outside the amount limitations or
source prohibitions of the Act. The Commission agrees that a
solicitation-based standard is more consistent with the Act's
prohibition on solicitation than a standard based on whether funds are
raised at an event. See 2 U.S.C. 441i(e)(1).
Commenters generally supported the proposed scope of the
Commission's rule in the NPRM. They differed, however, on whether the
rule's applicability should be limited to fundraising events that are
``in connection with an election for Federal office or any non-Federal
election.'' One commenter supported the proposal to limit the scope of
the rule in this manner, while noting the Commission's articulation of
the standard in previous advisory opinions, such as Advisory Opinions
2003-12 (Flake) and 2005-10 (Berman/Doolittle). One commenter urged the
Commission to supersede Advisory Opinion 2005-10 (Berman/Doolittle),
which, in the commenter's view, had incorrectly applied the ``in
connection with an election for Federal office or any non-Federal
election'' standard. Another commenter explicitly urged the Commission
not to supersede the same.
The Commission declines to supersede Advisory Opinion 2005-10
(Berman/Doolittle) in this rulemaking and continues to be guided by its
prior advisory opinions on the ``in connection with an election for
Federal office or any non-Federal election'' standard. See, e.g.,
Advisory Opinions 2005-10 (Berman/Doolittle) (solicitation of donations
by Federal officeholders to a State ballot measure committee was not in
connection with any election under the circumstances described in the
request); 2004-14 (Davis) (solicitation of donations by a Federal
officeholder to a charity was not in connection with any election);
2003-20 (Hispanic College Fund) (solicitation of donations by a Federal
officeholder to a scholarship fund was not in connection with any
election); and 2003-12 (Flake) (solicitation of donations by Federal
officeholders for a political organization supporting a State
referendum was in connection with an election under the circumstances
described in the request). Further guidance from the Commission on
which activities are in connection with an election for Federal office
or any non-Federal election, and which are not, is best offered through
the advisory opinion process.
The rule does not alter the fundraising exception for Federal
candidates and officeholders who are also State candidates, found at 11
CFR 300.63, or the fundraising exceptions for certain tax-exempt
organizations, found at 11 CFR 300.65. See also 2 U.S.C. 441i(e)(2) and
(e)(4). Thus, in the event of any inconsistencies with new 11 CFR
300.64, the provisions of 11 CFR 300.63 and 300.65 govern.
B. 300.64(b)--Participation at Non-Federal Fundraising Events
Paragraph (b) of new 11 CFR 300.64 addresses participation by
Federal candidates and officeholders at non-Federal fundraising events.
Paragraph (b)(1) addresses attendance, speeches, and appearances as
featured guests by Federal candidates and officeholders at non-Federal
fundraising events. Paragraph (b)(2) addresses solicitations made by
Federal candidates and officeholders at non-Federal fundraising events.
1. 300.64(b)(1)--Attending, Speaking or Being a Featured Guest at Non-
Federal Fundraising Events
New 11 CFR 300.64(b)(1) provides that Federal candidates and
officeholders may attend, speak at, and be featured guests at non-
Federal fundraising events. This provision is consistent with the Shays
III decision, which stated that 2 U.S.C. 441i(e)(3) ``merely clarifies
that despite the statute's ban on soliciting soft money, federal
candidates may still `attend, speak or be a featured guest' at state
party events where soft money is raised, which the statute might
otherwise be read as forbidding.'' Shays III at 933. If 2 U.S.C.
441i(e)(3) is a ``mere[ ] clarifi[cation],'' it follows that the same
underlying framework applies to all fundraising events. Thus, if the
statutory ban on soliciting soft money does not prohibit a Federal
candidate or officeholder from attending, speaking at, or being a
featured guest at a State, district, or local party committee's non-
Federal fundraising event, then the statutory ban also does not
prohibit the same person from engaging in the same activities at any
other non-Federal fundraising event.
This portion of the final rule is identical to that proposed in
Alternative 2 of the NPRM. No comments were received on this provision,
although the commenters generally supported the Commission's broader
proposal to treat Federal candidates' and officeholders' participation
in all non-Federal fundraising events the same.
2. 300.64(b)(2)--Solicitations at Non-Federal Fundraising Events
Under new 11 CFR 300.64(b)(2), Federal candidates and officeholders
may solicit funds at non-Federal fundraising events, provided that the
solicitation is limited to funds that comply with the limitations and
prohibitions of the Act and that are consistent with State law. Federal
candidates and officeholders may no longer speak ``without restriction
or regulation'' at any non-Federal fundraising event, consistent with
the circuit court's decision in Shays III.
New 11 CFR 300.64(b)(2) provides that Federal candidates and
officeholders may limit solicitations made at non-Federal fundraising
events by displaying at the event a clear and conspicuous written
notice or by making a clear and conspicuous oral statement that the
solicitation is not for Levin funds (if the beneficiary of the
fundraiser has a Levin fund account and is raising funds for that
account), does not seek funds in excess of Federally permissible
amounts, and does not seek funds from sources prohibited under the Act,
including corporations, labor organizations, national banks, Federal
contractors, or foreign nationals. A notice or statement limiting a
solicitation will not be considered ``clear and conspicuous'' for
purposes of the final rule if it is difficult to read or hear or if its
placement is easily overlooked by any significant number of those in
attendance. The Commission's regulation at 11 CFR 100.11(c) further
informs the ``clear and conspicuous'' standard.
One example of a limited solicitation under new 11 CFR 300.64(b)(2)
is for the Federal candidate or officeholder to say at a non-Federal
fundraising event for a State or local candidate: ``I am only asking
for donations of up to $[applicable Federally permissible amount,
currently $2,400 per election] from individuals and for donations of up
to $[applicable Federally permissible amount, currently $5,000 per
year] from multi-candidate political committees. I am not asking for
donations in excess of these amounts or for donations from
corporations, labor organizations, foreign nationals, Federal
contractors, or national banks.'' When delivered to the general
audience, this type of statement need be made only once; Federal
candidates and officeholders are not obligated to repeat it during one-
on-one discussions with individuals at the fundraising event. Federal
candidates and officeholders may not, however, recite a limitation
publicly, and then encourage event attendees to disregard the
limitation during one-on-one discussions.
If a Federal candidate or officeholder wishes to make a general
solicitation that does not expressly refer to the amount limitations
and source
[[Page 24380]]
prohibitions of the Act at a non-Federal fundraising event, then the
candidate or officeholder may limit the solicitation by displaying a
clear and conspicuous written notice or by making a clear and
conspicuous oral statement at the event that the solicitation is
limited to funds that comply with the limitations and prohibitions of
the Act. An example of an adequate written notice is a placard
prominently displayed so that it cannot be overlooked at the entrance
to a fundraising event for a State or local candidate at which the
Federal candidate or officeholder is appearing, or a card placed on
every table at the event, stating:
Solicitations made by Federal candidates and officeholders at
this event are limited by Federal law. The Federal candidates and
officeholders speaking tonight are soliciting only donations of up
to $[applicable Federally permissible amount, currently $2,400 per
election] from individuals and up to $[applicable Federally
permissible amount, currently $5,000 per year] from multi-candidate
political committees. They are not soliciting donations in any
amount from corporations, labor organizations, national banks,
Federal contractors, or foreign nationals.
Alternatively, an event official or the Federal candidate or
officeholder could make the same or a similar statement orally before
any general solicitations are made by the Federal candidate or
officeholder, such as in welcoming remarks to persons attending the
fundraising event. These types of public, limiting statements need not
be repeated in one-on-one discussions between the Federal candidate or
officeholder and event attendees, so long as the Federal candidate or
officeholder does not encourage event attendees to disregard the
limitation during one-on-one discussions.
The provisions of new 11 CFR 300.64(b) are substantially the same
as those proposed in paragraph (b) of Alternative 2 of the NPRM. Most
of the comments on the proposal focused on the requirement that Federal
candidates and officeholders limit their solicitations at non-Federal
fundraising events. Two commenters asked the Commission to provide in
its final rule more explicit guidance on how to limit such
solicitations. In particular, the commenters requested additional
examples of acceptable oral and written limitations and a clearer
articulation of the ``clear and conspicuous'' standard. In response to
these commenters, and to facilitate compliance with the regulations,
the Commission has provided examples of acceptable statements.
Two other commenters suggested that it would be unnecessary and
``awkward and confusing'' to require Federal candidates and
officeholders to limit their solicitations at non-Federal fundraising
events with clear and conspicuous oral or written statements. The
Commission concludes that any solicitation that is not limited either
by its express terms or otherwise (such as through a clear and
conspicuous oral statement or written notice) risks being understood as
soliciting donations in amounts and from sources prohibited under the
Act, especially if other individuals at the fundraising event
explicitly solicit funds that are not consistent with the limitations
and prohibitions of the Act. See 11 CFR 300.2(m) (defining ``to
solicit'' to include ``an oral or written communication that, construed
as reasonably understood in the context in which it is made, contains a
clear message, asking, requesting, or recommending that another person
make a contribution, donation, transfer of funds, or otherwise provide
anything of value'').
C. 300.64(c)--Publicity for Non-Federal Fundraising Events
Paragraph (c) of new 11 CFR 300.64 addresses participation by
Federal candidates and officeholders in publicity for non-Federal
fundraising events. The final rule applies to Federal candidate and
officeholder participation in all types of publicity for non-Federal
fundraising events, including publicity soliciting funds. The term
``publicity'' as used in new 11 CFR 300.64 includes all methods used to
publicize a non-Federal fundraising event, including advertisements,
announcements, and pre-event invitations, regardless of form or medium
(and includes phone calls, mail, e-mail, facsimile, and text messages),
as well as follow-up contacts. New paragraph (c) is intended to ensure
that Federal candidates and officeholders do not, in the course of
publicizing a non-Federal fundraising event, solicit funds outside the
amount limitations and source prohibitions of the Act.
Paragraph (c) of the final rules is substantially similar to
paragraph (c) of Alternative 2 in the NPRM, except as described below.
All commenters supported the Commission's proposal to address publicity
for non-Federal fundraising events in the rule and to clarify guidance
provided by the Commission in previous advisory opinions and Matters
Under Review. As one commenter noted, ``these rules regarding pre-event
publicity in practice are what * * * really matter.'' Another commenter
expressed a similar sentiment: ``Frankly, once you're at the event,
it's very rare that solicitations are ever made regardless. So it is
appropriate that you've opened the door to revisiting the guidance and
the rules regarding pre-event publicity. And clarity really is an
important thing in these rules[.]''
1. 300.64(c)(1)--Publicity Not Containing a Solicitation
Paragraph (c)(1) of new 11 CFR 300.64 provides that if publicity
for, or information about, a non-Federal fundraising event does not
solicit funds, then Federal candidates, officeholders, or their agents
may approve, authorize, agree to, or consent to the use of the Federal
candidates' or officeholders' name and likenesses in it. Such publicity
may, for example, use the name or likeness of a Federal candidate or
officeholder to indicate that such person will attend, speak, or be a
featured guest at the event. The publicity may also indicate the
Federal candidate's or officeholder's involvement or role in the event.
See discussion of paragraph (c)(3), below. No Federal disclaimer or
attribution statement is required on such publicity.
Paragraph (c)(1) is nearly identical to proposed paragraph (c)(1)
in Alternative 2 of the NPRM, except that it now explicitly applies to
agents of Federal candidates and officeholders.
The Commission did not receive any comments specifically addressing
this provision, although the commenters generally supported the
Commission's proposed treatment of publicity for non-Federal
fundraising events. One commenter, for example, indicated that the mere
listing of a Federal candidate or officeholder on an invitation for a
non-Federal fundraising event does not constitute a solicitation.
The Commission agrees that, in the context of publicity that does
not otherwise contain a solicitation, merely approving, authorizing,
agreeing to, or consenting to the use of the Federal candidate's or
officeholder's name or likeness does not, in and of itself, constitute
a solicitation by that Federal candidate or officeholder.
The Commission also concludes that paragraph (c)(1) gives full
effect to 2 U.S.C. 441i(e)(3), as interpreted by the court in Shays
III, which states that Federal candidates and officeholders may be
featured guests at State, district, and local party committee
fundraising events. One aspect of being a featured guest is being
identified as such in publicity. Thus, paragraph (c)(1) is consistent
with the Act and the Shays III court decision.
[[Page 24381]]
2. 300.64(c)(2)--Publicity Containing a Solicitation Limited to Funds
That Comply With the Amount Limitations and Source Prohibitions of the
Act
Paragraph (c)(2) of new 11 CFR 300.64 provides that Federal
candidates, officeholders, or their agents may approve, authorize,
agree to, or consent to the use of the Federal candidates' or
officeholders' names and likenesses in publicity for a non-Federal
fundraising event if the publicity solicits only funds that comply with
the amount limitations and source prohibitions of the Act. Federal
candidates and officeholders may be identified on the publicity in a
manner specifically related to fundraising, such as honorary
chairperson of the fundraising event, and may also sign the
solicitation letters themselves, if the solicitation is limited to
funds that comply with the amount limitations and source prohibitions
of the Act.
This provision merely makes explicit what was implicit in the
proposed rule, and reiterates what is expressly provided for in 2
U.S.C. 441i(e)(1): That Federal candidates and officeholders may
solicit funds that comply with the amount limitations and source
prohibitions of the Act.
3. 300.64(c)(3)--Publicity Containing a Solicitation Outside the Amount
Limitations and Source Prohibitions of the Act
Paragraph (c)(3) of new 11 CFR 300.64 addresses publicity that
solicits funds outside the amount limitations and source prohibitions
of the Act or Levin funds. This provision is based on the Commission's
determination that a Federal candidate, officeholder, or an agent of
either may approve, authorize, agree to, or consent to the use of the
Federal candidate's or officeholder's name or likeness on publicity for
a non-Federal fundraising event in a manner that does not result in the
solicitation being attributed to the Federal candidate or officeholder.
Under paragraph (c)(3)(i), a Federal candidate, officeholder, or an
agent of either may approve, authorize, agree to, or consent to the use
of the Federal candidate's or officeholder's name or likeness in
publicity for a non-Federal fundraising event that contains a
solicitation of funds outside the amount limitations and source
prohibitions of the Act or Levin funds, but only if: (1) The Federal
candidate or officeholder is identified in the publicity in a manner
not specifically related to fundraising, and (2) the publicity includes
a clear and conspicuous disclaimer that the solicitation is not being
made by the Federal candidate or officeholder.
New 11 CFR 300.64(c)(3)(i)(A) provides nonexhaustive examples of
the positions that a Federal candidate or officeholder may be
identified as holding that are not specifically related to fundraising.
They include featured guest, honored guest, special guest, featured
speaker, or honored speaker. Thus, merely identifying a Federal
candidate or officeholder as holding a position not specifically
related to fundraising on publicity does not constitute a solicitation
of funds outside the amount limitations and source prohibitions of the
Act or Levin funds by the Federal candidate or officeholder. The
Commission is not requiring that all Federal candidates or
officeholders be identified by one of the listed titles. Rather, the
Federal candidate or officeholder may be identified in any manner not
specifically related to fundraising. For example, the Federal candidate
or officeholder may be identified simply by name, as in ``Please join
the State Party at a reception with Senator Jones and Governor Smith.''
To avoid any confusion in this regard, paragraph (c)(3)(i)(B)
requires the publicity to include a clear and conspicuous disclaimer
stating that the solicitation is not being made by the Federal
candidate or officeholder. New 11 CFR 300.64(c)(3)(ii) provides that
disclaimers on written publicity must meet the requirements in 11 CFR
110.11(c)(2). For publicity disseminated via non-written means, such as
by telephone calls, a disclaimer is required if the publicity is
recorded, follows any form of a written script, or is conducted
according to a structured or organized program. A script for these
purposes means any written text that callers use to guide their
conversations with potential attendees, regardless of whether it takes
the form of complete paragraphs, bullet points, notes, or other written
prompts. As long as the text includes appropriate disclaimers, the
Commission will presume (absent evidence to the contrary) that the
requirements of the rule were met. When non-written solicitations are
conducted according to a structured or organized program, the
Commission will similarly presume that the requirements of the rule
were met where a sworn statement that appropriate disclaimers were made
is submitted by the person making the solicitation or by the Federal
candidate or officeholder who authorized the use of his or her name. A
structured or organized program includes the making, at a designated
time, of telephone calls that invite people to and solicit funds for a
non-Federal fundraising event, and which is authorized, requested, or
agreed to by the Federal candidate or officeholder.
New paragraph (c)(3)(iv) provides two examples of disclaimers that
would satisfy the requirement. Both examples state that the Federal
candidate or officeholder is not soliciting funds in connection with
the fundraising event. These examples are intended to serve as guidance
for Federal candidates, officeholders, and sponsors of non-Federal
fundraising events. Importantly, written disclaimers, including those
that conform to the examples provided in the rule, are not sufficient
unless they are ``clear and conspicuous'' under 11 CFR 110.11(c)(2). To
the extent the publicity already has a disclaimer required by 11 CFR
100.11 (Federal disclaimer), the disclaimer required by this paragraph
may be included in the same box as the Federal ``Paid for by''
disclaimer. Some additional limitations on the use of disclaimers are
addressed in new paragraph (c)(3)(v) of 11 CFR 300.64, as discussed
below.
Paragraph (c)(3)(v) of new 11 CFR 300.64 states that a Federal
candidate, officeholder, or an agent of either may not approve,
authorize, agree to, or consent to the use of the Federal candidate's
or officeholder's name or likeness in publicity that contains a
solicitation of non-Federal or Levin funds if the Federal candidate or
officeholder is identified in the publicity as serving in a position
specifically related to fundraising. Positions specifically related to
fundraising include, for example, honorary chair of the fundraising
event or member of the host committee. Nor may a Federal candidate,
officeholder, or an agent of either approve, authorize, agree to, or
consent to the use of the Federal candidate's or officeholder's name or
likeness if the Federal candidate or officeholder is identified on
publicity containing a solicitation of non-Federal or Levin funds as
extending an invitation to the event. For example, an invitation
stating ``Featured guest Congressman X invites you to join him at next
week's reception'' would fall into this category, as would an
invitation signed by the Federal candidate or officeholder.
The Commission has concluded that participation by the Federal
candidate or officeholder in this manner would be an impermissible
solicitation of funds outside the amount limitations and source
prohibitions of the Act or Levin funds. As such, no disclaimer, even
one that complies with paragraph (c)(3)(i)(B) of new 11 CFR 300.64,
would be capable of curing the violation of 2 U.S.C.
[[Page 24382]]
441i(e), no matter how clear or conspicuous the disclaimer may be.
Finally, paragraph (c)(3)(vi) prohibits Federal candidates,
officeholders, and their agents from disseminating publicity for a non-
Federal fundraising event if the publicity solicits funds outside the
amount limitations and source prohibitions of the Act or Levin funds.
This paragraph is a logical outgrowth of the proposal in the NPRM; the
Commission has decided to implement this provision to prohibit conduct
that could result in an impermissible solicitation by Federal
candidates and officeholders.
The final rule covers much of the same activity as the rule
proposed in Alternative 2 of the NPRM, but is organized differently.
The proposed rule did not, for example, explicitly address publicity
that solicits only funds within the limitations and prohibitions of the
Act, whereas the final rule does. More significantly, the structure of
the proposed rule depended on whether the solicitation in the publicity
was made by the Federal candidate or officeholder. By contrast, the
structure of the final rule depends on whether the publicity solicits
funds within the amount limitations and source prohibitions of the Act.
The final rule also applies to the agents of Federal candidates and
officeholders.
The comments received on this aspect of the proposed rule focused
for the most part on the disclaimer requirement for publicity naming a
Federal candidate or officeholder and including a solicitation by a
person other than the Federal candidate or officeholder. Four
commenters disagreed with the disclaimer requirement, arguing that the
disclaimers would confuse the average person. These commenters observed
that the average recipient of publicity could easily conclude that the
mere listing of a Federal candidate or officeholder--as a featured
guest, for example--on publicity was not a solicitation by that Federal
candidate or officeholder, even if the publicity included a
solicitation of funds outside the amount limitations and source
prohibitions of the Act. Moreover, one commenter opined that
fundraising hosts would bear a substantial burden if employees and
volunteers were required to issue such disclaimers during the telephone
calls and conversations that frequently follow the distribution of
written publicity for a non-Federal fundraising event. Instead, two
commenters suggested that the Commission require such disclaimers only
when a Federal candidate or officeholder signs a solicitation or
explicitly solicits funds.
Other commenters supported the Commission's proposed disclaimer
requirement, stating that it would make ``infinitely clear to the
recipient of the solicitation'' that the Federal candidate or
officeholder was not asking for funds outside the limitations or
prohibitions of the Act. Another commenter asked the Commission to
provide specific examples of statements that would satisfy the
disclaimer requirement.
The Commission has considered the comments and has concluded that
identifying a Federal candidate or officeholder as serving in a role
not specifically related to fundraising does not, by itself, result in
a solicitation by the Federal candidate or officeholder. However, just
as the circuit court concluded in Shays III that 2 U.S.C. 441i(e)(3)
``merely clarifies'' the reach of ``the statute's ban on soliciting
soft money,'' the Commission also seeks to make it unmistakably clear
that Federal candidates and officeholders who participate at non-
Federal fundraising events and in publicity are not making a
solicitation that would be prohibited under the law. Shays III at 933.
The disclaimer requirement helps to ensure that persons receiving
publicity for non-Federal fundraising events understand that any
solicitation of funds outside the amount limitations and source
prohibitions of the Act is made by a person other than the Federal
candidate or officeholder identified in the publicity. The disclaimer
requirement may also help to protect Federal candidates and
officeholders against complaints filed with the Commission that result
from a misunderstanding as to who is soliciting funds in connection
with the fundraising event.
D. Effect of This Rulemaking on Prior Commission Advisory Opinions
The Commission has addressed the issue of participation by Federal
candidates and officeholders in non-Federal fundraising events in
Advisory Opinions 2007-11 (California State Party Committees), 2005-02
(Corzine II), 2004-12 (Democrats for the West), 2003-36 (Republican
Governors Association), and 2003-03 (Cantor). As explained below, the
Commission is superseding the aspects of these advisory opinions that
address this issue.
In Advisory Opinions 2005-02 (Corzine II) and 2004-12 (Democrats
for the West), the Commission concluded, in part, that Federal
candidates and officeholders could appear, speak, and be featured
guests at non-Federal fundraising events ``without restriction or
regulation'' under former 11 CFR 300.64(b). Given that this provision
of the rule was explicitly struck down by the Shays III court and has
been removed by the Commission, the Commission is superseding the parts
of Advisory Opinions 2004-12 (Democrats for the West) and 2005-02
(Corzine II) that apply the ``without restriction or regulation''
standard. Specifically, the Commission is superseding the answer to
Question 7 in Advisory Opinion 2004-12 (Democrats for the West), as to
whether Democrats for the West may invite Federal candidates,
officeholders, or their agents to appear as guests or featured speakers
at fundraising events, and the second paragraph in the answer to
Question 2 in Advisory Opinion 2005-02 (Corzine II), regarding Federal
candidate and officeholder participation in raising funds for the non-
Federal accounts of State and local party committees.
Advisory Opinions 2007-11 (California State Party Committees),
2003-36 (Republican Governors Association), and 2003-03 (Cantor) also
addressed participation by Federal candidates and officeholders at non-
Federal fundraising events in connection with elections, and related
publicity. Some of the conclusions are consistent with new 11 CFR
300.64, such as the conclusion in Advisory Opinions 2003-36 (Republican
Governors Association) and 2003-03 (Cantor) that the mere attendance of
a Federal candidate or officeholder at a non-Federal fundraiser does
not, in and of itself, give rise to a violation of the Act or
Commission regulations. On the other hand, some of the conclusions in
these prior advisory opinions may not be consistent with new 11 CFR
300.64.
To help avoid potential confusion as to which parts of the prior
advisory opinions are consistent with the new rule and which parts are
inconsistent, the Commission is superseding Advisory Opinion 2003-03
(Cantor), except for the answer to Question 6 regarding agency, and
Advisory Opinion 2003-36 (Republican Governors Association), except for
the answer to Question 3 regarding corporate donations to the
Republican Governors Association's conference account and the last
paragraph of the answer to Question 2 regarding whether the conference
account's activities are in connection with an election. The Commission
is also superseding in its entirety Advisory Opinion 2007-11
(California State Party Committees), which addressed three types of
proposed communications related to State party fundraising events that
identified Federal candidates or officeholders as featured speakers or
honored guests.
[[Page 24383]]
These actions are consistent with a comment received in response to
the NPRM. The comment noted the potential tension and confusion that
could result from having to reconcile past advisory opinions with the
Commission's new rule. The comment suggested that the Commission
indicate explicitly that the series of advisory opinions on this issue
no longer articulate the correct standard of law and are thus
superseded.
The Commission agrees that where the new rule addresses the same
issue as a prior advisory opinion, the new rule provides the applicable
standard of law, and the advisory opinion is superseded. However, the
Commission declines to supersede the entire series of advisory opinions
that reference this issue. As discussed above, sections of certain
advisory opinions are not affected by the new rule and hence remain in
force. Accordingly, the Commission has explicitly indicated which
advisory opinions are now superseded, in whole or in part. Although new
11 CFR 300.64 is in part informed by, and adopts, some of the
Commission's conclusions in prior advisory opinions, the new rule is
based entirely on the reasoning set forth in this explanation and
justification and does not rely on any prior Commission advisory
opinions.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) [Regulatory
Flexibility Act]
The Commission certifies that the attached final rule will not have
a significant economic impact on a substantial number of small
entities. The basis for this certification is that the entities
affected by this rule do not meet the definition of ``small entity''
under 5 U.S.C. 601. That definition requires that the enterprise be
independently owned and operated and not dominate in its field. 5
U.S.C. 601(4).
This final rule affects State, district, and local party
committees, as well as Federal candidates and their campaign
committees. Federal candidates, as individuals, do not fall within the
definition at 5 U.S.C. 601, and campaign committees are not
independently owned and operated because they are not financed and
controlled by a small identifiable group of individuals.
State, district, and local party committees also fall outside the
definition of ``small entity.'' These committees are not independently
owned and operated because they are not financed and controlled by a
small identifiable group of individuals, and they are affiliated with
the larger national political party organizations. In addition, the
State political party committees representing the Democratic and
Republican parties have a major controlling influence within the
political arenas of their States and are thus dominant in their fields.
District and local party committees are generally considered affiliated
with the State committees and need not be considered separately. To the
extent that any State party committees representing minor political
parties might be considered ``small organizations,'' the number
affected by this final rule is not substantial.
List of Subjects in 11 CFR Part 300
Campaign funds, nonprofit organizations, political committees and
parties, political candidates, reporting and recordkeepi