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18 February 2009 Includes notice on "Price Index Increases for Contribution and Expenditure Limitations and Lobbyist Bundling Disclosure Threshold:"
[Federal Register: February 17, 2009 (Volume 74, Number 30)]
|
Accordingly, new 11 CFR 104.22(a)(6)(ii) follows HLOGA, as
explained in the Section-by-Section Analysis, in requiring that a
contribution be both received by the reporting committee and credited
to a lobbyist/registrant or lobbyist/registrant PAC to satisfy the
definition of ``bundled contribution.'' See 2 U.S.C. 434(i)(8)(A)(ii).
Thus, for example, if a lobbyist merely tells a candidate that the
lobbyist has raised $20,000 for the candidate's campaign, those
contributions are not considered ``bundled contributions'' under 11 CFR
104.22(a)(6)(ii) unless they have been both received and credited by
the candidate or the reporting committee.
The Commission emphasizes that any intentional misrepresentation or
misreporting of the reporting committee's actual crediting of bundled
contributions is a violation of this rule.
ii. 11 CFR 104.22(a)(6)(ii)(A)--Records, Designations, or Other Means
of Recognizing
HLOGA Section 204 requires the disclosure of information about
lobbyists/registrants and lobbyist/registrant PACs that are credited by
a reporting committee, ``through records, designations or other means
of recognizing,'' with having raised contributions in excess of the
threshold amount for the reporting committee. 2 U.S.C.
434(i)(8)(A)(ii).
A. Records
HLOGA states that reporting committees may credit lobbyists/
registrants or lobbyist/registrant PACs ``through records,
designations, or other means of recognizing.'' 2 U.S.C.
434(i)(8)(A)(ii). The NPRM requested commenters to submit examples of
``records, designations or other means of recognizing'' that a
lobbyist/registrant or lobbyist/registrant PAC had raised contributions
for a reporting committee. NPRM, 72 FR at 62603.
The Commission received one comment addressing the ``records''
aspect of crediting. The comment observed that the proposed rule did
not define the type of ``record'' that would trigger the reporting
requirement and asked that the final rule indicate the level of
specificity or certainty required for a ``record'' to constitute
credit.
The Commission has decided to draw from the Federal Rules of Civil
Procedure to define ``records'' in new 11 CFR 104.22(a)(6)(ii)(A).
``Records'' means written evidence, which includes writings, charts,
computer files, tables, spreadsheets, databases, or other data or data
compilations stored in any medium from which information can be
obtained. 11 CFR 104.22(a)(6)(ii)(A); see also Fed. R. Civ. P. 34. In
sum, a ``record'' is any method that the reporting committee uses to
retain information pertaining to the committee's crediting, and
includes not just paper, but electronic, digital, audio, video, or any
other format. The Commission notes that records include informal items
such as hand-written notations on a business card.
B. Designations or Other Means of Recognizing
The proposed rules in the NPRM would have defined ``designations or
other means of recognizing'' to include ``titles [bestowed upon
lobbyists/registrants or lobbyist/registrant PACs] based on levels of
fundraising, access to events reserved exclusively for those who
generate a certain level of contributions, or similar benefits provided
as a reward for successful fundraising.'' NPRM, 72 FR at 62603. The
NPRM asked whether ``designations or other means of recognizing'' must
be written and sought other examples of crediting through
``designations or other means of recognizing.''
Several comments addressed this issue. All of them asserted that
the ``designation or other means of recognizing'' bundled contributions
need not be written. Some comments argued that the standard should be
one of knowledge by the candidate involved or by the reporting
committee that the committee has received a certain amount of bundled
contributions raised by a lobbyist/registrant or lobbyist/registrant
PAC, but others disagreed.
One comment indicated that additional examples of ``designations
and other means of recognizing'' bundled contributions could include
(1) being the host or co-host of a
[[Page 7294]]
fundraising event; (2) using a lobbyist/registrant's or lobbyist/
registrant PAC's office or residence for a fundraising event; or (3)
being on a steering committee in exchange for raising a certain amount
of money. With respect to the first two suggested examples, the
Commission notes that the Section-by-Section Analysis specifically
states, ``[t]he disclosure requirement is not triggered * * * where * *
* an event is held on the premises of a registrant. An event hosted by
a registered lobbyist may trigger the disclosure requirement if the
reporting committee credits the lobbyist with the proceeds of the
fundraiser through record, designation, or other form of recognition. *
* *'' 153 Cong. Rec. S10709 (daily ed. August 2, 2007) (emphasis
added). Thus, the Section-by-Section Analysis indicated that the simple
fact that a lobbyist/registrant or lobbyist/registrant PAC hosts a
fundraiser or holds a fundraiser on its premises would not, by itself,
trigger the reporting requirement.
Two comments cited the Bush ``Pioneer/Ranger model,'' in which
bundlers were given titles corresponding with the amounts of money
raised, as an example of crediting. One comment also referred to the
earmarking standard of ``implied or expressed, oral or written''
designation as analogous to the standard that the Commission should set
for what type of designation would constitute crediting. See 11 CFR
110.6(b)(1). One comment noted that crediting is not necessarily the
same thing as keeping records.
Consistent with the statutory imperative to provide for the
broadest possible disclosure consistent with the law (2 U.S.C.
434(i)(5)(D)), the Commission has determined that the phrase
``designations, or other means of recognizing that a certain amount of
money has been raised'' is to be construed broadly as encompassing
benefits given by the reporting committee to a lobbyist/registrant or
lobbyist/registrant PAC for raising a certain amount of contributions.
The Section-by-Section Analysis provides ``honorary titles within
the committee'' as an example of ``designations.'' 153 Cong. Rec. at
S10709 (daily ed. August 2, 2007). The Commission has incorporated this
concept in its regulations. Thus, designations include titles that the
reporting committee gives to persons who have raised a certain amount
of contributions. 11 CFR 104.22(a)(6)(ii)(A)(1). The titles that
various presidential campaigns have given to their fundraisers are
examples of such designations. Titles, however, are only one example of
a ``designation.''
Similarly, the Commission interprets ``other means of recognizing
that a certain amount of money has been raised'' as benefits that
reporting committees use to credit lobbyist/registrants or lobbyist/
registrant PACs for having raised a certain amount of contributions,
and not to include benefits given to such individuals or entities
solely for any other reason. The example in the Section-by-Section
Analysis is instructive: ``examples of such recognition include access
to certain events reserved exclusively for those who generate a certain
level of contributions or similar benefits provided by the committee as
a reward for successful fundraising.'' 153 Cong. Rec. at S10709 (daily
ed. August 2, 2007). Thus, if a reporting committee holds an event in
recognition of its fundraisers, to which it invites only persons who
raised at least $20,000, invitations to the event would be a means of
recognizing that a ``certain amount of money has been raised'' (i.e.,
at least $20,000). 11 CFR 104.22(a)(6)(ii).
Additionally, a candidate may credit a lobbyist by inviting the
lobbyist to an event that is not exclusive to those who generate a
certain level of contributions, so long as that particular invitation
was extended in recognition of the lobbyist having raised a certain
amount of contributions. In contrast, if, for example, an individual
who happens to be a lobbyist, but who has not actually raised any money
for the reporting committee, is invited to the event, then the
invitation to that individual would not constitute crediting with
respect to that individual (i.e., a means of recognizing that a certain
amount of money has been raised by that individual). On the other hand,
if a lobbyist who has raised contributions in excess of the reporting
threshold is invited to an event in recognition of the reporting
committee's fundraisers, the committee cannot avoid disclosing that
lobbyist by claiming that the lobbyist was invited for some other
reason.
The Commission agrees with those comments that urged that neither
designations nor ``other means of recognizing'' need be in writing. 2
U.S.C. 434(i)(8)(A)(ii). While the inherent nature of ``records'' is
that they be in writing, or ``recorded'' in some form, ``designations
or other means of recognizing'' need not be. The example in the
Section-by-Section Analysis of ``access to certain events reserved
exclusively for those who generate a certain level of contributions or
similar benefits provided by the committee as a reward for successful
fundraising,'' is again instructive. 153 Cong. Rec. at S10709 (daily
ed. August 2, 2007). Access to events may be memorialized in records
(such as guest lists) but they will not necessarily be so.
New 11 CFR 104.22(a)(6)(ii)(A) expands on the examples suggested in
the Section-by-Section Analysis. Thus, ``other means of recognizing''
include tracking identifiers that the reporting committee assigns and
that are included on contributions or contribution-related materials
(for example, contributor response devices, cover letters, or Internet
website solicitation pages) that may be used to maintain information
about the amounts of contributions that a person raises. 11 CFR
104.22(a)(6)(ii)(A)(2). Other ``means of recognizing'' also include
access, including offers of attendance (invitations) and/or actual
attendance, at events given to a lobbyist/registrant or lobbyist/
registrant PAC by the reporting committee as a result of the lobbyist/
registrant or lobbyist/registrant PAC having raised a certain amount of
contributions. 11 CFR 104.22(a)(6)(ii)(A)(3). Another common means of
recognizing those who bundle contributions are mementos, such as
photographs with the candidate or autographed copies of books authored
by the candidate, given by the reporting committee to persons who have
raised a certain amount of contributions. 11 CFR
104.22(a)(6)(ii)(A)(4).
The fact that a reporting committee knows that a contribution was
raised by a lobbyist/registrant or lobbyist/registrant PAC and credits
the lobbyist/registrant or lobbyist/registrant PAC through some means
of recognition is sufficient to satisfy this final type of credit. The
examples listed in the new rule are illustrative, and are designed to
give guidance, but do not constitute an exhaustive list. Committees may
be creative in how they recognize their fundraisers, and the Commission
has no interest in limiting or discouraging creative incentives that
are consistent with the law.
The Commission notes that some comments suggested that mere
knowledge by a reporting committee that a lobbyist/registrant or
lobbyist/registrant PAC has raised funds of a certain amount is enough
to constitute credit. Although Congress could have enacted a provision
in HLOGA to require reporting if a reporting committee simply ``knows
or has reason to know'' that a contribution was raised by a lobbyist/
registrant or lobbyist/registrant PAC, without requiring that the
reporting committee credit a lobbyist/registrant or lobbyist/registrant
PAC for the contribution, neither
[[Page 7295]]
HLOGA as enacted, nor the Section-by-Section Analysis, suggested any
intent to require reporting in that situation. In several instances
similar to this, Congress has used a ``knows or has reason to know''
standard in sections of FECA, but did not do so here. See, e.g., 2
U.S.C. 434(f)(2)(D) (requiring the reporting of names of candidates to
be identified in an electioneering communication ``if known''); 2
U.S.C. 434(i)(1) (requiring the reporting of information on each person
``reasonably known'' to be a lobbyist/registrant or lobbyist/registrant
PAC); 2 U.S.C. 441a(f) (prohibiting candidates or political committees
from ``knowingly'' accepting contributions in violation of FECA); and 2
U.S.C. 441b(a) (prohibiting candidates or political committees from
``knowingly'' accepting or receiving contributions from national banks,
corporations, or labor organizations).
Instead, HLOGA as enacted, and as confirmed by the Section-by-
Section Analysis, requires credit to be given by the reporting
committee to a lobbyist/registrant or lobbyist/registrant PAC before a
contribution received from a contributor is considered a ``bundled
contribution.'' 2 U.S.C. 434(i)(8)(A)(ii); see also 153 Cong. Rec.
S10709 (daily ed. August 2, 2007). Therefore, mere knowledge, in and of
itself, is not enough. Rather, it is necessary for a reporting
committee to credit through ``records, designations, or other means of
recognizing that a certain amount of money has been raised'' before
reporting is required.
iii. 11 CFR 104.22(a)(6)(ii)(B)--The Candidate Involved
HLOGA requires the disclosure of information about lobbyists/
registrants or lobbyist/registrant PACs that are credited by a
reporting committee or the ``candidate involved'' with the reporting
committee as having raised a ``certain amount'' of contributions for
the reporting committee. 2 U.S.C. 434(i)(8)(A)(ii). HLOGA does not
define ``candidate involved.''
The Section-by-Section Analysis defines the ``candidate involved''
for each of the three types of reporting committee (i.e., authorized
committees of Federal candidates, leadership PACs and political party
committees). First, the Section-by-Section Analysis defines the
``candidate involved'' in an authorized committee as ``the candidate
for whom the committee is the principal campaign committee.'' 153 Cong.
Rec. S10709 (daily ed. August 2, 2007). This definition follows the
definition of ``authorized committee'' in FECA, which states that an
authorized committee is a political committee authorized by a candidate
to receive contributions or make expenditures on behalf of the
candidate. 2 U.S.C. 431(6); see also 11 CFR 100.5(f)(1). Second, the
Section-by-Section Analysis indicates that the ``candidate involved''
in a leadership PAC is ``the candidate who directly or indirectly
establishes, finances, maintains or controls the Leadership PAC,''
which tracks the definition of leadership PAC in HLOGA. See 2 U.S.C.
434(i)(8)(B); 153 Cong. Rec. S10709 (daily ed. August 2, 2007). Last,
the Section-by-Section Analysis also indicates that the ``candidate
involved'' in a party committee is the chairman of the party committee.
See 153 Cong. Rec. S10709 (daily ed. August 2, 2007).
The proposed rules followed the definitions in the Section-by-
Section Analysis for authorized committees and leadership PACs, but did
not include a definition of ``candidate involved'' in the context of a
political party committee.
The only comment that addressed this topic referred to the Section-
by-Section Analysis and suggested that the final rules include a
definition of ``candidate involved'' with party committees, in addition
to those proposed for authorized committees of Federal candidates and
for leadership PACs.
The Commission agrees with the comment that a definition of
``candidate involved'' for all three types of reporting committees
would provide useful additional guidance to the regulated community.
Accordingly, new 11 CFR 104.22(a)(6)(ii)(B) defines ``candidate
involved'' in accordance with the Section-by-Section Analysis.
iv. Co-Hosting Fundraisers
Another issue in the NPRM that several comments addressed was how a
reporting committee should give credit to multiple lobbyists/
registrants or lobbyist/registrant PACs that co-host fundraisers or
raise funds for a candidate as a result of any coordinated effort.
Although HLOGA Section 204 did not explicitly address co-hosted
fundraisers, in a colloquy on the Senate floor, two Senators stated
that there was concern that reporting committees would attempt to avoid
the reporting requirements by dividing the total receipts of a
fundraising event among many co-hosts on a prorated basis or another
allocation method potentially designed to avoid disclosure. 153 Cong.
Rec. S10699 (daily ed. August 2, 2007). To prevent this, one Senator
stated that where two or more lobbyists/registrants or lobbyist/
registrant PACs are co-hosts of a fundraiser, then each lobbyist/
registrant or lobbyist/registrant PAC ``should be treated as providing
the total amount raised at the event'' for the purposes of reaching the
reporting threshold, and for the purposes of reporting ``bundled
contributions'' under HLOGA Section 204. Id.
The Commission has considered this colloquy in light of the text of
HLOGA and the Section-by-Section Analysis, which describes bundled
contributions as those where a ``committee or candidate credits a
registered lobbyist for generating the contributions and where such
credit is reflected in some form of record, designation or
recognition.'' 153 Cong. Rec. S10709 (daily ed. August 2, 2007)
(emphasis added). The Section-by-Section Analysis states that ``[a]n
event hosted by a registered lobbyist may trigger the disclosure
requirement if the committee credits the lobbyist with the proceeds of
the fundraiser. * * *'' Id. (emphasis added).
Three comments urged the Commission to promulgate regulations
requiring the reporting committee in all instances to credit each of
the hosts for the entire amount raised for purposes of bundling
disclosure.
By contrast, a fourth comment argued that crediting each host with
the total amount raised would result in inaccurate and misleading
reporting of the actual amount raised. This comment indicated a
preference for an approach under which credit for the amount raised
should be prorated among the fundraiser's co-hosting lobbyists/
registrants and lobbyist/registrant PACs. Other comments, however,
disagreed, arguing that proration among a fundraiser's co-hosts would
enable reporting committees to avoid reporting bundled contributions by
increasing the number of co-hosts, such that when the total amount of
contributions raised is divided among them, none of the co-hosts would
be credited with raising more than the reporting threshold.
Other comments supported the Section-by-Section Analysis. They
asserted that the amount of funds a reporting committee actually
credits of the funds raised at a fundraiser hosted by multiple
lobbyists/registrants and/or lobbyist/registrant PACs is the amount
that should be disclosed. One comment noted that the reporting
committees know best who they credited for raising bundled
contributions at a co-hosted fundraiser, and how much, and that there
should not be a regulatory mandate requiring committees to give and
report credit in a contrary manner. Moreover, the comment pointed out
that an individual may be listed as a ``co-host'' of a fundraiser for
many different
[[Page 7296]]
reasons unrelated to actual amounts raised from a particular event.
Another comment noted that in many cases, to be on a hosting committee,
a lobbyist/registrant or lobbyist/registrant PAC is required to raise a
certain amount of contributions. The comment stated that if a co-host
fails to raise the requisite amount, the reporting committee would not
credit that co-host with having raised more than the co-host actually
raised. The comment also pointed out that in other situations, where,
for example, 25 members of a host committee each raise $3,000, the
reporting committee would not credit each co-host with having raised
the full $75,000.
After considering the colloquy on the Senate floor, the Section-by-
Section Analysis, and the comments received, the Commission concludes
that any determination of whether the reporting threshold is met, and
how much must be reported, is controlled by (a) whether a reporting
committee credits a lobbyist/registrant or lobbyist/registrant PAC for
having raised contributions, and (b) how much the reporting committee
credits the lobbyist/registrant or lobbyist/registrant PAC with having
raised. Both the reporting committee and the fundraiser have
independent incentives to ensure that credit for funds raised is
properly attributed--on the one hand, the reporting committee is
motivated to provide appropriate credit in an effort to encourage the
fundraiser to continue raising funds and, on the other hand, the
fundraiser is motivated to ensure that the fundraiser is receiving the
proper credit for any funds raised. As noted above, the Commission
received testimony that committees, in order to have effective
fundraising programs, need to know and do know who is raising funds for
them and how much those persons are raising. The Commission believes
that this dual motivation will result in the accurate reporting of
actual credit given.
Requiring a reporting committee to credit the entire amount raised
at a fundraiser to each lobbyist/registrant and lobbyist/registrant PAC
co-host could be confusing and could lead to the compelled disclosure
of potentially misleading information. The requirement could be
confusing, because it would involve the creation of two separate and
potentially inconsistent definitions of crediting: One to apply in
every situation other than co-hosted fundraising events, and the other
to apply only in situations involving co-hosted fundraising events.
Under the non-co-host definition, a reporting committee would disclose
information about a lobbyist/registrant only if the reporting committee
actually credits the lobbyist/registrant with having raised
contributions exceeding the threshold amount during the covered period.
Under the co-host definition, by contrast, a reporting committee would
disclose information about a lobbyist/registrant or lobbyist/registrant
PAC co-host regardless of whether or how much the reporting committee
actually credits the co-host for having raised. Such a result could
lead to further confusion as to who is raising contributions, and how
much, for reporting committees.
As noted above, the Section-by-Section Analysis provides that
``[a]n event hosted by a registered lobbyist may trigger the disclosure
requirement if the [reporting] committee credits the lobbyist with the
proceeds of the fundraiser * * * '' 153 Cong. Rec. S10709 (daily ed.
August 2, 2007) (emphasis added). The Commission reads this statement
as an expression of legislative intent to apply not only to lobbyists
hosting fundraising events or functions, but also to lobbyists that co-
hosts the events or functions, regardless of whether such events or
functions are formal or informal.
Finally, as discussed below, requiring a reporting committee to
credit the entire amount raised at a fundraiser to each lobbyist/
registrant and lobbyist/registrant PAC co-host could be potentially
misleading. It would require reporting committees to report not only
that they credited lobbyist/registrant and lobbyist/registrant PAC co-
hosts for raising more money than the co-hosts might actually have
raised, but also that they gave the co-hosts credit when, in fact,
credit was not given. For example, if a group of individuals consisting
of lobbyists and non-lobbyists co-host a fundraiser for a candidate,
the candidate's committee would have to report that each of the
lobbyists raised the entire amount, without regard to how much the
reporting committee credited them for having raised, without regard to
how much they might actually have raised, and without regard to the
non-lobbyist co-hosts. This could result in committees reporting
information that they know to be untrue. One comment stated that
treasurers would be reluctant to sign such reports.
The Commission similarly rejected the suggestion that it require
credit for the entire amount of contributions raised at a co-hosted
fundraising event to be pro-rated among all of the co-hosting
lobbyists/registrants and lobbyist/registrant PACs. Not only would such
a requirement enable reporting committees to avoid the reporting
threshold by increasing the number of co-hosts, as noted by several
comments, but it would also raise the same potential for confusion and
inaccuracy as would requiring the full amount raised to be credited to
each co-host.
Thus, the Commission has decided not to adopt either the suggestion
that the total proceeds of a fundraising event be required to be
prorated among all the co-hosts, or the suggestion that the total
proceeds of any event be required to be credited to each of the co-
hosts. Instead, co-hosted events will be treated like any other
fundraising activity: Committees must report the actual amounts raised
by and credited to lobbyist/registrants and lobbyist/registrant PACs.
Accordingly, the Commission concludes that reporting committees are
in the best position to determine the amount of contributions raised by
lobbyists/registrants and their PACs from co-hosted fundraisers, based
on the reporting committees' recognition of the amount each person
actually raised. This conclusion is consistent with both the language
of the statute and the Section-by-Section Analysis.
Contributions raised as the result of a fundraising event hosted by
one or more lobbyist/registrants or lobbyist/registrant PACs will
follow the general rule in new 11 CFR 104.22(a)(6)(ii), which requires
that a contribution be both received by the reporting committee and
credited to a lobbyist/registrant or lobbyist/registrant PAC to satisfy
the definition of ``bundled contribution.'' The reporting committee
must disclose any and all bundled contributions received as the result
of a fundraiser that are credited to a lobbyist/registrant or lobbyist/
registrant PAC so long as the reporting threshold has been exceeded for
that lobbyist/registrant or lobbyist/registrant PAC during the relevant
covered period. The following are examples that assume a $16,000
reporting threshold: \13\
|
---------------------------------------------------------------------------
\13\ For 2009, the applicable reporting threshold is $16,000.
Although HLOGA Section 204 set the initial reporting threshold at
$15,000, 2 U.S.C. 434(i)(3)(A), this number will be indexed for
inflation annually. 2 U.S.C. 434(i)(3)(B); 11 CFR 104.22(g).
Example 1. A fundraising event is co-hosted by Lobbyists A, B
and C. The event generates $20,000 in contributions. The reporting
committee believes that Lobbyist A raised the entire $20,000 and
thus credits Lobbyist A with the entire $20,000 raised at the event,
and does not credit Lobbyists B or C. The reporting committee must
disclose the $20,000 that has been credited to Lobbyist A. The
reporting committee need not disclose any information regarding
Lobbyists B and C, because neither Lobbyist B nor C has been
credited with any bundled contributions.
[[Page 7297]]
Example 2. A fundraising event is co-hosted by Lobbyist A and
Lobbyist B, as well as three non-lobbyist hosts. The event generates
$20,000 in contributions. The reporting committee gives each host
credit for raising $20,000. The reporting committee must disclose
the $20,000 of bundled contributions that has been credited to
Lobbyist A and also report the $20,000 of bundled contributions that
has been credited to Lobbyist B because the reporting committee has
credited the full amount to each lobbyist.\14\ The reporting
committee may, if it chooses, include a memo entry in the space
provided on FEC Form 3L to indicate that, although only a total of
$20,000 was raised at the event, that full $20,000 was credited to
each of the co-hosts, or any other information that the reporting
committee wishes to include.
---------------------------------------------------------------------------
\14\ The reporting committee would report having received only
$20,000 on FEC Form 3 and would provide itemized information on
Schedule A related to the $20,000 of received contributions. It is
only the credit that is reported twice on FEC Form 3L (see section
III-B below) and this would be a direct result of the reporting
committee having given the full $20,000 credit to two different
lobbyists. A reporting committee may give credit to all co-hosts for
the full amount raised, but is not required to do so.
---------------------------------------------------------------------------
Example 3. A fundraising dinner is co-hosted by Lobbyist A and
Lobbyist B, as well as three non-lobbyist hosts. Each host takes
responsibility for filling eight seats at $500 a seat. The
fundraiser generates $20,000 in contributions from non-hosts, and
the reporting committee credits each host with generating $4,000 in
contributions. The reporting committee must disclose the $4,000 of
bundled contributions that has been credited to Lobbyist A, if the
reporting committee also has credited Lobbyist A with more than
$12,000 of other bundled contributions during the relevant covered
period, thereby causing Lobbyist A to surpass the $16,000 reporting
threshold. This same analysis would apply for Lobbyist B.
Example 4. A fundraising event is co-hosted by Lobbyist A and
Lobbyist B, as well as three non-lobbyist hosts. The fundraiser
generates $21,000 in contributions and the reporting committee knows
that Lobbyist A raised $17,000 of the total. The committee credits
Lobbyist A with generating $17,000 of the contributions and credits
Lobbyist B, as well as the three non-lobbyist hosts as having
generated $1,000 each. The reporting committee must disclose the
$17,000 of bundled contributions that has been credited to Lobbyist
A because this amount is in excess of the $16,000 reporting
threshold. The reporting committee must also disclose the $1,000 in
bundled contributions that has been credited to Lobbyist B if the
reporting committee also has credited Lobbyist B with more than
$15,000 of other bundled contributions during the relevant covered
period, thereby causing Lobbyist B to surpass the $16,000 reporting
threshold.
Example 5. A fundraising event is co-hosted by Lobbyist A and
Lobbyist B, as well as three non-lobbyist hosts. The fundraiser
generates $20,000 in contributions and the reporting committee knows
that Lobbyist A raised $17,000 of the total and that one of the non-
lobbyist hosts raised the remaining $3,000. The Committee credits
Lobbyist A with generating $17,000 of the contributions. The
reporting committee must disclose the $17,000 of bundled
contributions that has been credited to Lobbyist A because $17,000
is in excess of the $16,000 reporting threshold. The reporting
committee need not disclose any information regarding Lobbyist B
because Lobbyist B is not responsible for raising any of the $20,000
raised at the fundraiser and Lobbyist B has not been credited with
any bundled contributions.
The Commission notes that the examples and above discussion do not
apply to bundled contributions that are forwarded by lobbyists/
registrants or lobbyist/registrant PACs at co-hosted fundraisers.
Credit is not a consideration in the case of forwarded contributions.
Accordingly, contributions forwarded by a lobbyist/registrant or
lobbyist/registrant PAC at a co-hosted fundraiser count as
contributions bundled by the lobbyist/registrant or lobbyist/registrant
PAC that forwarded the contributions, regardless of whether the
lobbyist/registrant or lobbyist/registrant PAC is a co-host of the
fundraiser or an attendee.
For example, at a fundraiser co-hosted by Lobbyist A and several
non-lobbyist hosts, Lobbyist B (who is not a co-host of the fundraiser)
approaches the candidate for whom funds are being raised and hands the
candidate $20,000 in contributions from other individuals. Because
these are contributions that have been ``forwarded'' by Lobbyist B, the
reporting committee must disclose the $20,000 of bundled contributions
that were forwarded by Lobbyist B irrespective of any amount of credit
given to Lobbyist B.
If the reporting committee also credits Lobbyist A, a co-host of
the fundraiser, $20,000 for having raised the contributions forwarded
by Lobbyist B (because the contributions were received during the
fundraising event), the reporting committee must then also disclose
that $20,000 of bundled contributions has been credited to Lobbyist A.
Similar to ``Example 2'' above, even though the reporting committee
must disclose the entire $20,000 as having been forwarded by Lobbyist
B, the reporting committee must also report that same $20,000 of
bundled contributions has been credited to Lobbyist A (again, assuming
it has credited Lobbyist A for that amount).
v. Crediting a Prohibited Source
Finally, the NPRM requested comments on whether a lobbyist/
registrant that is otherwise prohibited from making or facilitating
contributions can be credited by a reporting committee with having
raised contributions. Such prohibitions apply to national banks,
corporations, labor organizations, foreign nationals, and Federal
government contractors. See 2 U.S.C. 441b, 441(c), 441(e); 11 CFR
110.6(b)(2)(ii), 110.20, 114.2, 115.2.
Three comments argued that registrants that are prohibited sources
of contributions should not be allowed to be credited with having
raised contributions. In contrast to these three comments, other
comments stated that, while certain entities are prohibited from making
contributions, these entities must be reported if, through their
agents, they forward contributions to a reporting committee or are
credited with raising contributions for a reporting committee above the
reporting threshold. This comment further stated that Congress was well
aware that many entities that register under the LDA are, in fact,
prohibited sources of contributions under FECA, and that these entities
may nonetheless be credited with having raised contributions.
The Commission recognizes that under the LDA, registrants include
lobbying organizations that would be prohibited sources of
contributions under FECA. Congress is presumed to be aware of existing
law when it passes legislation. See Miles v. Apex Marine Corp., 498
U.S. 19, 32 (1990). Thus, Congress's failure to exempt disclosure about
registrants who would be prohibited sources under FECA if they are
credited with raising contributions suggests that Congress intended
information about them to be reported.
Accordingly, these final rules operate independently of the
prohibitions in FECA and Commission regulations on certain entities
making and facilitating contributions and acting as conduits or
intermediaries. See, e.g., 2 U.S.C. 441b(a); 11 CFR 114.2(f); 11 CFR
110.6(b)(2)(ii). The concept of ``credit'' is distinct from making,
facilitating, or serving as a conduit or intermediary for,
contributions. A registrant that is a corporation, for example, would
be prohibited from facilitating the making of contributions by persons
outside of the corporation's restricted class. But if a reporting
committee nonetheless credits the corporation for having raised
contributions received by that reporting committee, and the amount of
contributions exceeds the reporting threshold in a covered period,
information about the corporate registrant must be reported.
The Commission emphasizes that the prohibitions in FECA and
Commission regulations are not affected by this
[[Page 7298]]
rulemaking and continue to apply. The Commission cautions reporting
committees against confusing the giving of credit to a registrant that
is a prohibited source, which is permissible and may be reportable,
with actually accepting contributions from, or that have been forwarded
by, a prohibited source, which is not permissible.
c. 11 CFR 104.22(a)(6)(iii)--Bundled Contributions Do Not Include
Contributions From Personal Funds of Lobbyists/Registrants or Their
Spouses
New 11 CFR 104.22(a)(6)(iii) provides that bundled contributions do
not include contributions made by a lobbyist/registrant or lobbyist/
registrant PAC from three sources: (1) The personal funds of the
lobbyist/registrant who forwards or is credited with raising
contributions; (2) the personal funds of that person's spouse; and (3)
contributions made by lobbyist/registrant PACs. This provision is
consistent with HLOGA, which excludes contributions made to the
reporting committee by the lobbyist/registrant or lobbyist/registrant's
spouse from counting towards the reporting threshold. See 2 U.S.C.
434(i)(3)(A).
The final rule at new 11 CFR 104.22(a)(6)(iii) is nearly identical
to the proposed rule, on which the Commission received no comments. The
only change from the proposed rule is the application of the rule to
contributions made by lobbyist/registrant PACs. New 11 CFR
104.22(a)(6)(iii) extends this exclusion to contributions made by
lobbyist/registrant PACs to reflect the fact that lobbyist/registrant
PACs, like individuals, may make contributions under FECA in their own
right, and the contributions count against the lobbyist/registrant
PACs' contribution limits. Contributions made by lobbyist/registrant
PACs from committee funds are not bundled contributions, just as
contributions made by individual lobbyists from their personal funds
are not bundled contributions. Therefore, including contributions by
lobbyist/registrant PACs in the exception in new 11 CFR
104.22(a)(6)(iii) is consistent with HLOGA Section 204.
Unlike contributions made by a lobbyist/registrant PAC, or from the
personal funds of a lobbyist/registrant or spouse, bundled
contributions forwarded by a lobbyist/registrant or lobbyist/registrant
PAC will not affect the lobbyist/registrant's or lobbyist/registrant
PAC's contribution limits, so long as the lobbyist/registrant or
lobbyist/registrant PAC does not exercise any direction or control over
the bundled contributions. This result is consistent with the
Commission's rule governing earmarked contributions to candidate
committees through conduits and intermediaries. See 11 CFR 110.6(d).
B. 11 CFR 104.22(b)--Reporting Requirement for Reporting Committees
New 11 CFR 104.22(b) implements HLOGA's reporting provisions by
requiring reporting committees to disclose certain information on a new
form, FEC Form 3L.
1. 11 CFR 104.22(b)(1)--FEC Form 3L
HLOGA Section 204 requires reporting committees to disclose certain
information about each person reasonably known by the reporting
committee to be a lobbyist/registrant or lobbyist/registrant PAC that
``provided 2 or more bundled contributions'' aggregating in excess of
the reporting threshold to the reporting committee during the covered
period. See 2 U.S.C. 434(i)(1). New 11 CFR 104.22(b)(1) implements this
requirement by requiring reporting committees to file FEC Form 3L, on
which reporting committees must disclose the name and address of the
lobbyist/registrant or lobbyist/registrant PAC, the employer of the
lobbyist/registrant (for individual lobbyists/registrants), and the
aggregate amount of bundled contributions provided by the lobbyist/
registrant or lobbyist/registrant PAC during the covered period. Cf. 2
U.S.C. 434(i)(1).
Accordingly, for each covered period, a reporting committee must
disclose information about each lobbyist/registrant or lobbyist/
registrant PAC that provided the committee with ``[two] or more bundled
contributions'' aggregating in excess of the reporting threshold during
the covered period, regardless of whether those contributions consist
of (1) only ``forwarded'' contributions, (2) only ``received and
credited'' contributions, or (3) some combination of the two types of
bundled contributions, and regardless of whether those contributions
were forwarded or received either (1) one-by-one during the covered
period or (2) all at once.
The final rule requires the reporting committee to disclose the
aggregate amount of bundled contributions ``forwarded by or received
and credited to,'' rather than the amount ``provided by,'' each
lobbyist/registrant or lobbyist/registrant PAC as was proposed in the
NPRM. This change was made to enhance precision and clarity and is not
a substantive change. Otherwise, the provisions are the same as those
in the proposed rule. The Commission received no comments on the
proposed provision.
2. Bundled Contributions That are Returned or Refunded
i. Returned Contributions
If a bundled contribution is not deposited and is, instead,
returned pursuant to 11 CFR 103.3(a) and (b), 110.1(b)(3)(i),
110.2(b)(3)(i), or 110.4(c)(2), then it does not aggregate toward the
reporting threshold for disclosure of bundled contributions and it does
not have to be reported on the reporting committee's Form 3L.
ii. Refunded Contributions
If a bundled contribution is received, deposited, and later
refunded pursuant to 11 CFR 102.9(e), 103.3(b)(3), 110.1(b)(3)(i) or
110.2(b)(3)(i), or for any other reason, then the bundled contribution
does aggregate toward the reporting threshold for the covered period in
which it was received. Accordingly, it must be reported on the
reporting committee's Form 3L if the reporting threshold is exceeded
for that covered period. See 2 U.S.C. 434(i)(1); 11 CFR 104.22(b)(1).
If the receipt of the bundled contribution is reported on Form 3L, then
the refund of the bundled contribution should also be reported on Form
3L for the covered period in which the refund occurred.
3. 11 CFR104.22(b)(2)--Determining Whether a Person is Reasonably Known
to be a Lobbyist/Registrant or Lobbyist/Registrant PAC
HLOGA Section 204 requires the disclosure of information about a
person who forwards, or who is credited with having raised, two or more
bundled contributions aggregating in excess of the reporting threshold
during the covered period if the person is ``reasonably known by the
[reporting] committee to be'' a lobbyist/registrant or a lobbyist/
registrant PAC. 2 U.S.C. 434(i)(1). HLOGA also requires the Commission
to ``provide guidance to [reporting] committees with respect to whether
a person is reasonably known by a committee to be'' a lobbyist/
registrant or lobbyist/registrant PAC. 2 U.S.C. 434(i)(5)(B). In so
doing, the Commission is to include a ``requirement that [reporting]
committees consult the websites maintained by the Secretary of the
Senate and the Clerk of the House of Representatives containing
information filed pursuant to the Lobbying Disclosure Act of 1995.'' 2
U.S.C. 434(i)(5)(B).
The Commission proposed 11 CFR 104.22(b)(2) to provide guidance
with respect to how reporting committees
[[Page 7299]]
would comply with these requirements. Specifically, under the proposed
rule, reporting committees would have had to consult the websites
maintained by the Clerk of the House of Representatives, the Secretary
of the Senate, and the Federal Election Commission in order to
determine whether a person is identified on a filing under the LDA or
FECA as a registrant, a lobbyist, or a political committee established
or controlled by a registrant or lobbyist. The NPRM requested
suggestions as to other sources that reporting committees might be
required to check to determine whether a contributor is a lobbyist/
registrant or a lobbyist/registrant PAC.
The Commission received two comments in response, both supporting
the proposed rule. One comment also recommended amending the proposed
rule to provide a safe harbor, such that a reporting committee will be
deemed to have complied with the regulation if it relies on the
websites for purposes of determining whether a person is a lobbyist/
registrant or lobbyist/registrant PAC. See discussion below of section
104.22(b)(2)(ii).
Consistent with the proposed rule, the final rule at 11 CFR
104.22(b)(2)(i) requires reporting committees to consult the House,
Senate and Commission websites to determine if a person is a lobbyist/
registrant or lobbyist/registrant PAC. If a person is listed on any of
these websites as a lobbyist/registrant or lobbyist/registrant PAC,
then the person is ``reasonably known to be'' a lobbyist/registrant or
lobbyist/registrant PAC, and information about the person is subject to
the reporting requirement of 11 CFR 104.22(b).
The House and Senate Web sites identify registered lobbyists and
registrants. The websites also list political committees disclosed as
being established or controlled by lobbyists/registrants on their semi-
annual reports of contributions to candidates and Federal officeholders
and donations to related entities. These political committees are
``lobbyist/registrant PACs'' under new 11 CFR 104.22(a)(4)(i). To
ensure that reporting committees have the most up-to-date information
available about lobbyist/registrant PACs, and to provide information
about lobbyist/registrant PACs that are unable to ascertain from the
Secretary of the Senate or Clerk of the House of Representatives
whether they are established or controlled by a lobbyist/registrant,
but which meet the Commission's additional ``established or
controlled'' criteria under 11 CFR 104.22(a)(4)(ii), these final rules
require reporting committees to check the Commission's Web site as
well. Any political committee that is ``established or controlled'' by
a lobbyist/registrant must identify itself as such on its Statement of
Organization (FEC Form 1), which will be posted on the Commission's
website. See 11 CFR 104.22(c), discussed below.
Each reporting committee must consult the House, Senate, and
Commission websites ``in a manner reasonably calculated to find the
name of each person who is a lobbyist/registrant or lobbyist/registrant
PAC.'' 11 CFR 104.22(b)(2)(i). The Commission recognizes that reporting
committees that have exercised due diligence in searching House,
Senate, and Commission Web sites must be able to rely on the results of
their searches. Under new 11 CFR 104.22(b)(2)(i), a reporting committee
will not be deemed to have ``reasonably known'' about the status of a
lobbyist/registrant or lobbyist/registrant PAC whose name the committee
did not find in searching the House, Senate, and Commission Web sites,
so long as the reporting committee performs its searches in a manner
reasonably calculated to find the name of each lobbyist/registrant or
lobbyist/registrant PAC listed on the Web sites.
New 11 CFR 104.22(b)(2)(ii) provides that a computer printout or
screen capture showing the absence of the person's name on the House,
Senate, or Commission Web sites on the date in question, may be used to
demonstrate that the reporting committee consulted the required Web
sites in a manner reasonably calculated to find the name of each person
who is a lobbyist/registrant or lobbyist/registrant PAC, and did not
find the name of the person in question. This provision allows
reporting committees to rely on the results of website searches,
provided that the printout shows that the search history utilized by
the reporting committee to verify that the search was performed in a
manner reasonably calculated to find the name of the person in
question, as discussed above. Such a computer printout or screen
capture constitutes conclusive evidence that the reporting committee
has consulted the websites and not found the name of the person sought.
Accordingly, except as described below, such evidence demonstrates that
a person was not reasonably known by the reporting committee to be a
lobbyist/registrant or lobbyist/registrant PAC for the purposes of 11
CFR 104.22(b)(1). A reporting committee also may provide other credible
evidence to show that it has consulted the websites in compliance with
11 CFR 104.22(b)(2)(i).
Notwithstanding new 11 CFR 104.22(b)(2)(ii), a reporting committee
is not entitled to rely on the results of a website search if the
reporting committee knows that the person who forwarded or is credited
with raising contributions is a lobbyist/registrant or lobbyist/
registrant PAC. New 11 CFR 104.22(b)(iii) provides that a reporting
committee is required to report bundled contributions forwarded by or
received and credited to a person that the reporting committee actually
knows is a lobbyist/registrant or lobbyist/registrant PAC as defined in
11 CFR 104.22(a)(2) or (a)(3), even if the reporting committee
consulted the Web sites in accordance with 11 CFR 104.22(b)(2)(i) and
(2)(ii), and did not find the person's name on any of the Web sites. A
reporting committee is deemed to have actual knowledge if the candidate
involved, the treasurer of the reporting committee, or any members of
the reporting committee's staff who are responsible for verifying the
accuracy of Form 3L have actual knowledge that the person who forwarded
or is credited with raising contributions is required to be listed as a
lobbyist/registrant or lobbyist/registrant PAC.
C. 11 CFR 104.22(c)--Lobbyist/Registrant PAC Reporting Requirements
Prior to HLOGA, the Commission required political committees to
identify themselves as only one type of political committee on their
Statements of Organization. See FEC Form 1 Statement of Organization,
Question 5 (``Type of Committee'').
The NPRM sought comments on how, going forward, an organization
that is both an SSF and a ``lobbyist/registrant PAC'' should identify
itself on its Statement of Organization, and whether one type of
registration should control or whether political committees should
identify themselves as both types. The Commission received no comments
on this issue.
To promote the greatest disclosure and to accommodate entities that
qualify as more than one type of political committee, the Commission is
revising FEC Form 1 to make it possible for committees to identify
themselves as more than one type of political committee. Under new 11
CFR 104.22(c), all new leadership PACs and lobbyist/registrant PACs
that register with the Commission after the effective date of this rule
(30 days after publication in the Federal Register) must check all
appropriate boxes on FEC Form 1, in accordance with 11 CFR 102.2(a)(1).
See 11 CFR 100.5(e)(6) (definition of leadership PAC) and 11 CFR
104.22(a)(3) (definition of lobbyist/registrant PAC). Leadership PACs
and lobbyist/registrant PACs already
[[Page 7300]]
registered with the Commission must amend their FEC Form 1 in
accordance with 11 CFR 102.2(a)(2) no later than ten days after the
effective date of this rule (ten days after the thirty-day period from
the date of publication of these rules in the Federal Register).
D. 11 CFR 104.22(d)--Where to File
New section 104.22(d) requires reporting committees to file FEC
Form 3L in accordance with 11 CFR Part 105. Under 11 CFR Part 105,
authorized committees of candidates for the House of Representatives,
the principal campaign committees of presidential candidates, and any
other political committees that support such candidates must file
reports with the Commission. See 11 CFR 105.1, 105.3 and 105.4.
Authorized committees of candidates for the Senate and any other
political committees that support only Senate candidates must file
their reports with the Secretary of the Senate. See 11 CFR 105.2. The
Commission requested but received no comments on this provision in the
NPRM.
E. 11 CFR 104.22(e)--When to File
Under HLOGA Section 204, the first report required to be filed by a
reporting committee under 2 U.S.C. 434 and 11 CFR Part 104.5 after each
covered period must set forth the name, address, and employer of each
person reasonably known by the committee to be a lobbyist/registrant or
lobbyist/registrant PAC who provided two or more bundled contributions
to the reporting committee in an aggregate amount greater than the
threshold amount during the reporting period. See 2 U.S.C. 434(i)(1).
New 11 CFR 104.22(e) implements this provision of HLOGA. It
provides that reporting committees must file Form 3L with the first
campaign finance report that they file under 11 CFR 104.5 following the
end of each covered period.
New 11 CFR 104.22(e) mirrors the proposed rule, on which the
Commission requested comments in the NPRM. No comments addressed this
section of the proposed rule specifically, although many did comment on
the related ``covered period'' definition.
As discussed above, new 11 CFR 104.22(a)(5) defines the term
``covered period'' as the semi-annual periods of January 1 through June
30 and July 1 through December 31, and as the periods that coincide
with a reporting committee's monthly or quarterly campaign finance
reporting periods under 11 CFR 104.5. Accordingly, reporting committees
must file Form 3L to disclose information about any lobbyist/registrant
or lobbyist/registrant PAC that forwards, or is credited by the
reporting committee for having raised, bundled contributions that
aggregate in excess of the reporting threshold semi-annually and at the
end of each reporting period under 2 U.S.C. 434 and 11 CFR 104.5.
When a reporting committee is required to file pre- and post-
election reports under 2 U.S.C. 434 and 11 CFR 104.5, each of those
reporting periods constitutes a new covered period. Accordingly, the
reporting committee must also file FEC Form 3L for those periods if it
receives bundled contributions in excess of the reporting threshold
during those periods. Similarly, when a reporting committee is required
to file reports in connection with special elections, under 11 CFR
104.5(h), or runoff elections, each of those reporting periods
constitutes a new covered period, and the reporting committee must file
FEC Form 3L if it receives bundled contributions in excess of the
reporting threshold during those periods.
F. 11 CFR 104.22(f)--Recordkeeping
Commission regulations implement certain statutory recordkeeping
requirements that also apply to certain bundled contributions. For
example, political committees must keep a record and account of each
contribution exceeding $50 for three years after filing the report to
which the record or account relates. See 2 U.S.C. 432(c)(2) and (d); 11
CFR 102.9(a) and (c). In addition, any person who receives and forwards
contributions to any political committee must also forward certain
information about the original contributor. See 2 U.S.C. 432(c) and
441a(a)(8); 11 CFR 102.8(c). Any authorized committee that receives
contributions forwarded by a ``conduit'' or ``intermediary'' must also
maintain records regarding the information forwarded with the
contributions by the conduit or intermediary. See 11 CFR 110.6(c) and
102.9(c).
New 11 CFR 104.22(f) refers to the existing recordkeeping
requirements in Commission regulations at 11 CFR 102.8, 102.9 and
110.6. The new provisions also require reporting committees to maintain
for three years after filing a report, records of any bundled
contributions forwarded by or received and credited to a lobbyist/
registrant or lobbyist/registrant PAC that aggregate in excess of the
reporting threshold for any covered period. The rule requires reporting
committees to maintain records that document the name and address of
the lobbyist/registrant or lobbyist/registrant PAC, the employer of the
lobbyist/registrant (if an individual), and the aggregate amount of
bundled contributions forwarded by or received and credited to each
lobbyist/registrant or lobbyist/registrant PAC by the reporting
committee during the covered period.
The rule requires only the maintenance of documentation with
respect to the matters required to be reported, which shall provide in
sufficient detail the necessary information and data from which the
filed reports may be verified, explained, clarified, and checked for
accuracy and completeness. If a committee is not required to file such
a report because it has not received any contributions meeting the
definition of ``bundled contributions'' under this section, then the
new recordkeeping provision does not apply. Additionally, the new
recordkeeping provision does not require reporting committees to create
records the committee would not otherwise have created under its usual
fundraising and accounting practices. These provisions are similar to
the provisions in proposed 11 CFR 104.22(e), on which the Commission
received no comments.
G. 11 CFR 104.22(g) and 110.17(e)(2) and (f)--Price Index Increase
New 11 CFR 104.22(g) requires that the disclosure threshold for
reporting bundled contributions be indexed by applying a price index
increase similar to the price index increase applied to contribution
limitations in FECA and Commission regulations. These final rules also
add a cross-reference to 11 CFR 104.22(g) in 11 CFR 110.17(e)(2) and
(f), which governs the price index increases for certain contribution
and expenditure limitations under FECA.
1. 11 CFR 104.22(g)--Price Index Increase
HLOGA Section 204 requires that the reporting threshold be indexed
for inflation annually, using the Consumer Price Index as verified by
the Secretary of Labor, with 2006 as the ``base period.'' See 2 U.S.C.
434(i)(3)(B). New 11 CFR 104.22(g) implements this provision by
requiring that the initial $15,000 disclosure threshold be indexed in
the same manner as certain contribution limits under FECA and
Commission regulations. See 2 U.S.C. 441a(c) and 11 CFR 110.17. The
Commission has placed this provision in new 11 CFR 104.22 rather than
in 11 CFR 110.17, which contains similar indexing provisions, because
the dollar amount here is a threshold for disclosure, rather than the
contribution
[[Page 7301]]
and expenditure limits covered under 11 CFR Part 110.
New 11 CFR 104.22(g) is the same as the one proposed by the
Commission in the NPRM. The Commission requested but received no
comments on it.
The NPRM also requested but received no comments on the timing of
the application of the indexing for inflation requirement. HLOGA
Section 204 provides that the indexing requirement ``shall apply'' to
the reporting threshold ``[i]n any calendar year after 2007.'' 2 U.S.C.
434(i)(3)(B). HLOGA also provides, however, that 2 U.S.C. 434(i) will
go into effect ``with respect to reports filed * * * after the
expiration of the 3-month period which begins on the date that the
regulations required to be promulgated by the Commission [under new 2
U.S.C. 434(i)] become final.'' Pub. L. No. 110-81, sec. 204(b), 121
Stat. 735 at 746 (2007). Given that these rules are expected to go into
effect in March 2009, the initial $15,000 reporting threshold provided
for in HLOGA Section 204 will be indexed for 2009. The Commission will
publish a notice of the 2009 reporting threshold in the Federal
Register and on the Commission's Web site in accordance with new 11 CFR
110.17(e)(2), discussed below.
2. 11 CFR 110.17(e)(2) and 110.17(f)--Price Index Increase
Current 11 CFR 110.17 governs the price index increases for certain
contribution and expenditure limitations, as well as the publication of
those limitations on a biennial basis. While the bundling disclosure
dollar threshold is not a contribution or expenditure limit, it is
indexed for inflation on an annual basis, in the same manner as the
limitations in 11 CFR 110.17 are indexed biennially. The Commission
concluded that it would be helpful to the regulated community to place
a cross-reference in 11 CFR 110.17 to the indexing provision in new 11
CFR 104.22(f). Accordingly, the Commission is adding a cross-reference
in new 11 CFR 110.17(f) to new 11 CFR 104.22(g). Additionally, as an
aid to providing the new annual threshold to the regulated community,
the Commission has added new 110.17(e)(2), requiring the lobbyist/
registrant bundling threshold to be published in the Federal Register
annually and posted on the Commission's Web site.
H. Application of Rule to In-Kind Contributions
The NPRM requested comments on whether the new rules should apply
to in-kind contributions as well as monetary contributions. No comments
addressed this issue.
HLOGA uses the term ``contributions.'' See 2 U.S.C. 434(i)(1). FECA
and Commission regulations define ``contributions'' as including in-
kind contributions. See 2 U.S.C. 431(8)(A)(i) and 11 CFR 100.51(a),
100.52, 100.54, 100.56, 109.21. Nothing in HLOGA or its legislative
history suggests that ``contributions'' is intended to have a different
meaning from that already established in FECA and Commission
regulations. Thus, the Commission determined that these rules apply to
both in-kind and monetary contributions. For example, if a lobbyist/
registrant asked several contributors to send monetary contributions to
a reporting committee and asked others to send computers, furniture,
and office supplies to the reporting committee, with a total aggregate
value of monetary and in-kind contributions exceeding the reporting
threshold during the covered period, and the reporting committee
credited the lobbyist/registrant with having raised the contributions,
then the reporting committee would have to file Form 3L disclosing
information about the lobbyist/registrant for the covered period.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the attached final rules do not have
a significant economic impact on a substantial number of small
entities. The basis for this certification is that few, if any, small
entities will be affected by these rules, which apply only to Federal
candidates and their campaign committees, political committees
established, financed, maintained or controlled by Federal candidates
or individuals holding Federal office, political committees of
political parties, and political committees established or controlled
by lobbyist/registrants. Authorized committees of Federal candidates
are not considered small entities under the definition at 5 U.S.C.
601(6). Leadership PACs established, financed, maintained or controlled
by Federal candidates or individuals holding Federal office also do not
qualify as small entities. Such committees, while established by an
individual, are not independently owned and operated because they are
not financed and controlled by a small identifiable group of
individuals; rather, they rely on contributions from a variety of
persons to fund the committees' activities. Political committees
representing the Democratic and Republican parties have a major
controlling influence within the political arena and are thus dominant
in their field. However, to the extent that any party committees
representing major or minor political parties or any other political
committees might be considered ``small organizations,'' the number that
would be affected by this rule is not substantial.
Additionally, any separate segregated funds that are affected by
these rules are not-for-profit political committees that do not meet
the definition of ``small organization'' because they are financed by a
combination of individual contributions and financial support for
certain expenses from corporations, labor organizations, membership
organizations, or trade associations, and therefore are not
independently owned and operation. Most of the other political
committees that are affected by these rules are not-for-profit
committees that do not meet the definition of ``small organization.''
Most political committees are not independently owned and operated
because they are not financed by a small identifiable group of
individuals. In addition, most political committees rely on
contributions from a large number of individuals to fund the
committees' operations and activities.
Furthermore, any small entities affected should not feel a
significant economic impact from the final rule. The activity being
regulated (receiving bundled contributions that have been forwarded by,
or that have been raised by and credited to, lobbyists/registrants or
lobbyist/registrant PACs) is entirely voluntary. Any reporting
obligations for reporting committees are triggered only if entities
choose to engage in this activity above the reporting threshold for any
given covered period. The reporting obligations for reporting
committees are also limited to contributions either forwarded by or
raised by and credited to lobbyists/registrants or lobbyist/registrant
PACs. The reporting requirement for lobbyist/registrant PACs is limited
to the political committee disclosing itself as a lobbyist/registrant
PAC on the political committee's initial Form 1 (Statement of
Organization) filed with the Commission, or to filing a single
amendment to the political committee's Form 1. Therefore, the final
rules do not have a significant economic impact on a substantial number
of small entities.
List of Subjects
11 CFR Part 100
Elections.
[[Page 7302]]
11 CFR Part 104
Campaign funds, political committees and parties, reporting and
recordkeeping requirements.
11 CFR Part 110
Campaign funds, political committees and parties.
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For the reasons set out in the preamble, the Federal Election
Commission is amending Subchapter A of Chapter 1 of Title 11 of the
Code of Federal Regulations as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
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1. The authority citation for part 100 continues to read as follows:
Authority: 2 U.S.C. 431, 434, and 438(a)(8).
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2. Section 100.5 is amended by adding new paragraphs (e)(6) and (7) to
read as follows:
Sec. 100.5 Political committee (2 U.S.C. 431(4), (5), (6)).
* * * * *
(e) * * *
(6) Leadership PAC. Leadership PAC means a political committee that
is directly or indirectly established, financed, maintained or
controlled by a candidate for Federal office or an individual holding
Federal office but which is not an authorized committee of the
candidate or individual and which is not affiliated with an authorized
committee of the candidate or individual, except that leadership PAC
does not include a political committee of a political party.
(7) Lobbyist/Registrant PAC. See 11 CFR 104.22(a)(3).
* * * * *
PART 104--REPORTS BY POLITICAL COMMITEES AND OTHER PERSONS (2
U.S.C. 434)
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3. The authority citation for part 104 continues to read as follows:
Authority: 2 U.S.C. 431(1), 431(8), 431(9), 432(i), 434,
438(a)(8) and (b), 439a, 441a, and 36 U.S.C. 510.
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4. Section 104.22 is added to read as follows:
Sec. 104.22 Disclosure of bundling by Lobbyists/Registrants and
Lobbyist/Registrant PACs (2 U.S.C. 434(i)).
(a) Definitions.
(1) Reporting Committee. Reporting committee means:
(i) An authorized committee of a Federal candidate as defined at 11
CFR 100.5(f)(1);
(ii) A leadership PAC as defined at 11 CFR 100.5(e)(6); or
(iii) A party committee as defined at 11 CFR 100.5(e)(4).
(2) Lobbyist/Registrant. Lobbyist/registrant means a person who, at
the time a contribution is forwarded to, or is received by, a reporting
committee, is:
(i) A current registrant under Section 4(a) of the Lobbying
Disclosure Act of 1995 (2 U.S.C. 1603(a)); or
(ii) An individual who is named on a current registration or
current report filed under Section 4(b)(6) or 5(b)(2)(C) of the
Lobbying Disclosure Act of 1995 (2 U.S.C. 1603(b)(6) or 1604(b)(2)(C)).
(3) Lobbyist/Registrant PAC. Lobbyist/registrant PAC means any
political committee that a lobbyist/registrant ``established or
controls,'' as defined in paragraph (a)(4) of this section.
(4) Established or Controls.
(i) For purposes of this section only, a lobbyist/registrant
established or controls any political committee that the lobbyist/
registrant is required to disclose to the Secretary of the U. S. Senate
or Clerk of the U.S. House of Representatives as being established or
controlled by that lobbyist/registrant under Section 203 of the Honest
Leadership and Open Government Act of 2007, amending the Lobbying
Disclosure Act of 1995 (2 U.S.C. 1604(d)(1)(C)).
(ii) If, after consulting guidance from the offices of the
Secretary of the Senate or Clerk of the U.S House of Representatives,
or communicating with such offices, a political committee is unable to
ascertain whether it is established or controlled by a lobbyist/
registrant, a lobbyist/registrant will be deemed to have established or
to control a political committee if:
(A) The political committee is a separate segregated fund with a
current registrant under Section 4(a) of the Lobbying Disclosure Act (2
U.S.C. 1603(a)) as its connected organization; or
(B) The political committee meets either of the following criteria:
(1) A lobbyist/registrant had a primary role in the establishment
of the political committee, excluding the provision of legal or
compliance services or advice; or
(2) A lobbyist/registrant directs the governance or operations of
the political committee, excluding the provision of legal or compliance
services or advice.
(5) Covered Period. Covered period means:
(i) Semi-annually. The semi-annual periods of January 1 through
June 30, and July 1 through December 31; and the period described in
paragraph (a)(5)(ii), (iii) or (iv), below, that applies to the
reporting committee.
(ii) Quarterly. For reporting committees that file campaign finance
reports under 11 CFR 104.5 on a quarterly basis, the covered period
also includes the quarters beginning on January 1, April 1, July 1, and
October 1 of each calendar year and the applicable pre- and post-
election reporting periods in election years; in a nonelection year,
reporting committees not authorized by a candidate need only observe
the semi-annual period described in paragraph (a)(5)(i) above; or
(iii) Monthly. For reporting committees that file monthly campaign
finance reports under 11 CFR 104.5, the covered period also includes
each month in the calendar year, except that in election years the pre-
and post-general election reporting periods shall constitute the
covered period in lieu of the monthly November and December reporting
periods.
(iv) Alternative for monthly filers. Any reporting committee that
files monthly campaign finance reports under 11 CFR 104.5 may choose to
file reports pursuant to the quarterly covered period in paragraph
(a)(5)(ii) of this section instead of the monthly covered period in
paragraph (a)(5)(iii) of this section. It shall do so by notifying the
Commission in writing of its intention to do so at the time the
reporting committee files a monthly report under paragraph (a)(5)(iii)
of this section. The reporting committee will be required to file its
next report under the new filing frequency. The reporting committee may
change its filing frequency no more than once per calendar year.
(v) Runoffs and Special Elections. For special elections and runoff
elections set by State law, the covered period shall be the same as the
reporting periods set under 11 CFR 104.5(h).
(6) Bundled Contribution. Bundled contribution means any
contribution that meets the definition set forth in either paragraph
(i) or (ii) below:
(i) Forwarded contribution means a contribution delivered or
transmitted, by physical or electronic means, to the reporting
committee by a lobbyist/registrant or lobbyist/registrant PAC, or by
any person that the reporting committee knows to be forwarding such
contribution on behalf of a lobbyist/registrant or lobbyist/registrant
PAC.
(ii) Received and credited contribution means a contribution
received by the reporting committee from the contributor or
contributors, and credited by the reporting committee or candidate
involved to a lobbyist/registrant or lobbyist/registrant PAC through
records, designations, or other means of recognizing that a certain
[[Page 7303]]
amount of money has been raised by the lobbyist/registrant or lobbyist/
registrant PAC.
(A) Records, designations, or other means of recognizing. Records
means written evidence (including writings, charts, computer files,
tables, spreadsheets, databases, or other data or data compilations
stored in any medium from which information can be obtained) that the
reporting committee or candidate involved attributes to a lobbyist/
registrant or lobbyist/registrant PAC contributions raised by that
person or entity and received by the reporting committee.
Designations or other means of recognizing bundled contributions
means benefits given by the reporting committee to persons for raising
a certain amount of contributions, including but not limited to:
(1) Titles that the reporting committee assigns to persons who have
raised a certain amount of contributions;
(2) Tracking identifiers that the reporting committee assigns and
that are included on contributions or contributions-related materials
(for example, contributor response devices, cover letters, or Internet
Web site solicitation pages) for the purpose of maintaining information
about the amounts of contributions that a person raises;
(3) Access (including offers or attendance) to events or activities
given to the lobbyist/registrant or lobbyist/registrant PAC by the
reporting committee as a result of raising a certain amount of
contributions; and
(4) Mementos, such as photographs with the candidate or autographed
copies of books authored by the candidate, given by the reporting
committee to persons who have raised a certain amount of contributions.
(B) The candidate involved. The candidate involved means the
candidate by whom the authorized committee is authorized; the candidate
or individual holding Federal office who directly or indirectly
established, finances, maintains or controls the leadership PAC; or the
chairman of the committee in the case of a political party committee.
(iii) Bundled contributions do not include contributions made by
the lobbyist/registrant PAC or from the personal funds of the lobbyist/
registrant that forwards or is credited with raising the contributions
or the personal funds of that person's spouse.
(b) Reporting requirement for reporting committees.
(1) FEC Form 3L. Each reporting committee must file FEC Form 3L
(Report of Contributions Bundled by Lobbyist/Registrants and Lobbyist/
Registrant PACs) if it has received two or more bundled contributions
(see paragraph (a)(6)) forwarded by or received and credited to a
person reasonably known by the reporting committee to be a lobbyist/
registrant or lobbyist/registrant PAC aggregating in excess of $15,000
during the covered period. The form shall set forth:
(i) The name of each lobbyist/registrant or lobbyist/registrant
PAC;
(ii) The address of each lobbyist/registrant or lobbyist/registrant
PAC;
(iii) The employer of each lobbyist/registrant; and
(iv) The aggregate amount of bundled contributions forwarded by or
received and credited to each lobbyist/registrant or lobbyist/
registrant PAC by the reporting committee during the covered period.
(2) Determining whether a person is reasonably known to be a
lobbyist/registrant or lobbyist/registrant PAC.
(i) In order to comply with paragraph (b)(1) of this section, a
reporting committee must consult, in a manner reasonably calculated to
find the name of each person who is a lobbyist/registrant or lobbyist/
registrant PAC, the Web sites maintained by the Clerk of the House of
Representatives, the Secretary of the Senate, and the Federal Election
Commission to determine whether, at the time a contribution was
forwarded to, or received by, the reporting committee:
(A) The person was listed as a current registrant under Section
4(a) of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1603(a));
(B) The person was an individual listed on a current registration
filed under Section 4(b)(6) or a current report filed under Section
5(b)(2)(C) of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1603 or
1604);
(C) The person identified itself as a lobbyist/registrant PAC on
its Statement of Organization, FEC Form 1, filed with the Commission;
or
(D) The person was listed as a political committee established or
controlled by a lobbyist or registrant on a report filed under Sec.
203(a) of the Honest Leadership and Open Government Act of 2007,
amending the Lobbying Disclosure Act of 1995 (2 U.S.C. 1604).
(ii) A manner reasonably calculated to find the name of each person
who is a lobbyist/registrant or lobbyist/registrant PAC may be
demonstrated by the reporting committee producing a computer printout
or screen capture from a Web browser indicating that the name of the
person sought was not listed in the results of the Web site
consultations performed in accordance with paragraph (b)(2)(i) of this
section. Such a computer printout or screen capture shall constitute
conclusive evidence that the reporting committee has consulted such Web
sites and not found the name of the person sought, but shall not be the
exclusive means by which the reporting committee may provide evidence
that it has consulted such Web sites and not found the name of the
person sought.
(iii) A reporting committee shall be subject to the reporting
requirement under paragraph (b)(1) of this section if it had actual
knowledge that, at the time a contribution was forwarded or received,
the person whose name is sought was required to be listed on any
registration or report described in paragraph (b)(2)(i) of this
section.
(c) Lobbyist/Registrant PAC reporting requirements. Any political
committee that is a lobbyist/registrant PAC as defined in paragraph
(a)(3) of this section must identify itself as such on FEC Form 1
either upon registration with the Commission if it is a new political
committee, or by amendment in accordance with 11 CFR 102.2(a)(2) if it
is a political committee registered with the Commission.
(d) Where to file. Reporting committees shall file either with the
Secretary of the Senate or with the Federal Election Commission in
accordance with 11 CFR Part 105.
(e) When to file. Reporting committees must file the forms required
under this section with the first report that they file under 11 CFR
104.5 following the end of each covered period.
(f) Recordkeeping. In addition to any requirements to maintain
records and accounts under 11 CFR 102.8, 102.9 and 110.6, each
reporting committee must maintain for three years after the filing of
the report to which the information relates a record of any bundled
contributions (see 11 CFR 104.22(a)(6)) provided by a lobbyist/
registrant or lobbyist/registrant PAC that aggregate in excess of
$15,000 for any covered period. The information required to be
maintained is:
(1) The name and address of the lobbyist/registrant or lobbyist/
registrant PAC;
(2) The employer of the lobbyist/registrant; and
(3) The aggregate amount of bundled contributions forwarded by or
received and credited to each lobbyist/registrant or lobbyist/
registrant PAC by the reporting committee during the covered period.
(g) Price index increase.
(1) The threshold for reporting bundled contributions established
in
[[Page 7304]]
paragraph (b)(1) of this section shall be increased by the percent
difference between the price index as defined at 11 CFR 110.17(d), as
certified to the Commission by the Secretary of Labor, for the 12
months preceding the beginning of the calendar year and the price index
for the base period.
(2) Each contribution bundling threshold so increased shall be the
threshold in effect for that calendar year.
(3) For purposes of this paragraph (g), the term base period means
calendar year 2006.
(4) If any amount after the increases under this paragraph (g) is
not a multiple of $100, such amount shall be rounded to the nearest
multiple of $100.
PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS
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3. The authority citation for part 110 is revised to read as follows:
Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 434(i)(3),
438(a)(8), 441a, 441b, 441d, 441e, 441f, 441g, 441h and 36 U.S.C.
510.
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4. In section 110.17, paragraph (e) is revised and paragraph (f) is
added to read as follows:
Sec. 110.17 Price index increase.
* * * * *
(e) Publication of price index increases.
(1) Expenditure and Contribution Limitations. In every odd-numbered
year, the Commission will publish in the Federal Register the amount of
the expenditure and contribution limitations in effect and place such
information on the Commission's Web site.
(2) Lobbyist/registrant and lobbyist/registrant PAC contribution
bundling disclosure threshold. In every calendar year, the Commission
will publish in the Federal Register the amount of the lobbyist/
registrant and lobbyist/registrant PAC contribution bundling disclosure
threshold in effect and place such information on the Commission's Web
site.
(f) Price index increases for lobbyist/registrant and lobbyist/
registrant PAC contribution bundling threshold. The threshold for
disclosure of lobbyists/registrants and lobbyist/registrant PACs that
bundle contributions shall be indexed for each calendar year in
accordance with 11 CFR 104.22(g).
Dated: February 5, 2009.
On behalf of the Commission,
Steven T. Walther,
Chairman, Federal Election Commission.
[FR Doc. E9-2838 Filed 2-13-09; 8:45 am]
BILLING CODE 6715-01-P
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