FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

BEFORE THE FEDERAL ELECTION COMMISSION 

In the Matter of ) 

) 

New Models ) MUR 6872 

) 

STATEMENT OF REASONS OF 

VICE CHAIR CAROLINE C. HUNTER AND COMMISSIONER LEE E. GOODMAN 

In this matter the Commission was called upon to determine whether New Models, a 

social welfare organization incorporated under section 501(c)(4) of the Internal Revenue Code 

("IRC"), failed to register and report as a "political committee" under the Federal Election 

Campaign Act of 1971, as amended (the "Act"). 

This agency's controlling statute and court decisions stretching back over forty years 

properly tailor the applicability of campaign finance laws to protect non-profit issue advocacy 

groups from burdensome political committee registration and reporting requirements.' 

Organizations such as New Models do not become political committees under the Act merely as 

a result of making incidental or occasional campaign contributions. Rather, such organizations 

may be regulated as political committees only if their "major purpose" is the nomination or 

election of federal candidates.^ Determining an organization's major purpose requires a 

comprehensive, case-specific inquiry that focuses on the organization's public statements, 

organizational documents, and overall spending history.^ The Commission has settled on a 

"case-by-case analysis of an organization's conduct" in applying the major purpose doctrine." 

Publicly available tax returns indicate that for over 15 years, from 2000 to 2015, New 

Models engaged almost exclusively in policy research, polling and public policy discussion. 

That was consistent with New Models's social welfare mission and maintenance of its tax-

' Accord Statement of Reasons of Chairman Lee E. Goodman and Commissioners Caroline C. Hunter and 

Matthew S. Petersen at 1, MUR 6538 (Americans for Job Security, et a/.); Statement of Reasons of Chairman Lee E. 

Goodman and Commissioners Caroline C. Hunter and Matthew S. Petersen at 1, MUR 6396 (Crossroads GPS). 

2 Buckley v. Valeo, 424 U.S. 1, 79 (1976). 

' Statement of Reasons of Chairman Lee E. Goodman and Commissioners Caroline C. Hunter and Matthew 

S. Petersen at 1, MUR 6538 (Americans for Job Security, el al.). 

" Supplemental Explanation and Justification. Political Committee Status, 72 Fed. Reg. 5,596, 5,601 (Feb. 7, 

2007) ("2007 Supplemental E&J"). See also Real Truth About Abortion v. FEC, 681 F.3d 544, 556-57 (4th Cir. 

2012), cert, denied. 81 U.S.L.W. 3127 (U.S. Jan. 7,2013) (No. 12-311) ("RTAA"). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 2 of32 

exempt status. Over that time period, New Models received no contributions under the Act and 

made no disbursements to fund "expenditures" expressly advocating the election or defeat of 

federal candidates. The main allegation that New Models nonetheless was, or became, a political 

committee was based on the fact that it contributed $3 million—all publicly disclosed—to three 

political committees that made independent expenditures in 2012. Based on that financial 

activity in one year, the allegation was that New Models was a federal political committee 

required to register with the Commission, submit to extensive regulatory requirements, and file 

ongoing financial disclosure reports. 

Applying our case-by-case analysis and agency expertise to the facts in the record, and 

consistent with numerous court decisions applying the major purpose test, we concluded that 

New Models's major purpose was not the nomination or election of federal candidates over the 

course of its existence, that New Models's major purpose did not change to become the 

nomination or election of federal candidates based upon its contributions to political committees 

in one calendar year, and that New Models was not a political committee. Accordingly, we 

voted against finding reason to believe that New Models violated the Act. 

I. PROCEDURAL BACKGROUND 

A. THE COMPLAINT 

The Complaint in this matter was filed by Citizens for Responsibility and Ethics in 

Washington ("CREW") on September 18, 2014. The Complaint alleges New Models was a 

political committee in 2012 because it made $3,090,000 in contributions to three independent 

expenditure-only committees: Now or Never PAC, Government Integrity Fund Action Network 

("GIF AN"), and Citizens for a Working America PAC ("CWA PAC").^ In support of the 

allegation, CREW cites New Models's 2012 tax return in which New Models disclosed grants of 

$2,171,000 to Now or Never PAC and $627,000 to GIF AN, in addition to reports filed with the 

Commission by Now or Never PAC and GIFAN disclosing New Models as the source of the 

PACs' contributions received for those respective amounts.® CREW also includes an April 

Quarterly Report from CWA PAC disclosing New Models as the source of $292,000.' These 

amounts, when added together, constituted 68.5% of New Models's total disbursements for its 

2012 fiscal year and 51.6% for fiscal years 2011 and 2012 (the 2012 election cycle).® As a 

result, CREW argues that New Models was required to register and report as a "political 

committee" under the Act. 

' See Complaint at 5-7, MUR 6872 (New Models). 

® Id. at Exs. A, B & C; 

' Id at Ex. D. 

* See id. at Ex. E. (including the cover page of New Models's 2011 Form 990). 
4 

MUR 6872 (New Models) 

Statement of Reasons 

Page 3 of32 

B. THE RESPONSE 

New Models responded on November 17,2014, claiming it was a social welfare policyoriented organization established in 2000 and was never a political committee. New Models 

does not dispute that it contributed funds to Now or Never PAC, GIF AN, and CWA PAC. 

Rather, New Models denies it had the requisite major purpose, stating that it "did not [in 2012], 

and never has had, the major purpose of nominating or electing federal candidates" and that such 

a determination should not be based on its federal contributions in a single calendar year.^ 

The Response included an affidavit signed by New Models President and Chief 

Operating Officer Tim Crawford representing that New Models never advocated the election or 

defeat of a candidate for federal office through public statements, advertisements, or its website; 

New Models never made an independent expenditure or electioneering communication, never 

stated its purpose was the election or defeat of candidates, and that New Models's solicitation 

materials never expressed an intent to elect or defeat candidates. 

C. OFFICE OF GENERAL COUNSEL RECOMMENDAtiON 

The Commission's Office of General Counsel ("OGC") recommended the Commission 

find reason to believe New Models violated the Act by not registering as a political committee in 

2012, the year in which it contributed $3,090,000 to three separate independent expenditure-only 

committees, representing approximately 68.5% of its 2012 spending.'' OGC proposed an 

analysis of New Models's spending which focused principally on one calendar year, thereby 

concentrating on New Models's contributions to political committees in 2012 while ignoring 

New Models's extensive policy research and discussion activities over the course of its existence 

from 2000 to 2015.'^ 

D. COMMISSION ACTION 

On November 14,2017, the Commission considered and voted on this matter.'^ The 

available information failed to convince the required four Commissioners there was reason to 

* Response at 2. 

Resp., Affidavit of Tim Crawford 1114-10. 

II See First Gen. Counsel's Rpt. at 5-6, MUR 6872 (New Models). Independent expenditure-only committees 

are non-connected committees registered with the Commission which "may solicit and accept unlimited 

contributions from individuals, political committees, corporations, and labor organizations," for the purpose of 

making independent expenditures. See Advisory Opinion 2010-11 at 3 (Commonsense Ten). 

" See First Gen. Counsel's Rpt., MUR 6872 (New Models). 

MUR 6872 (New Models), Certification (Nov. 14,2017). 
MUR 6872 (New Models) 

Statement of Reasons. 

Page 4 of 32 

believe New Models violated the Act and the matter was dismissed.''* As the controlling group 

of Commissioners,'® we are issuing this Statement of Reasons to set forth the Commission's 

rationale for not finding reason to believe and dismissing the matter.'® 

II. FACTUAL BACKGROUND 

New Models appears to have incorporated in Washington, DC on August 17,2000, as a 

non-profit entity under section 501(c)'(4) of the IRC." Fpr more than a decade. New Models' 

primary purpose consisted of studying and advocating policy issues of national importance.'® Its 

mission in 2012, according to its annual return filed with the IRS, was to: 

"research[] national issues and support[] efforts to highlight or advocate for 

those issues. New Models polls to determine what issues the state, local 

and national public care about and what messages they may be hearing 

about those issues. New Models polls and focus groups to find out what 

philosophy can best handle the issues of the day. Ne [sic] models 

participates in issue advocacy when appropriate."" 

See 2 U.S.C. § 437g(a)(2) (four-vote requirement). 

. FEC V. Nal 7 Republican Senatorial Comm.. 966 F.2d 1471, 1476 (D.C. Cir. 1992) ("[W]hen the 

Commission deadlocks 3-3 and so dismisses a complaint, that dismissal, like any other, is judicially reviewable 

under [52 U.S.C. § 30109(a)(8)]... [T]o make judicial review a meaningful exercise, the three Commissioners who 

voted to dismiss must provide a statement of their reasons for so voting." (citing Democratic Cong. Campaign 

Comm. V. FEC, 931 F.2d 1131,1133 (D.C. Cir. 1987))). 

See id. ("Since those Commissioners constitute a controlling group for purposes of the decision, their 

rationale necessarily states the agency's reasons for acting as it did." (citing Democratic Cong. Campaign Comm., 

931 F.2d at 1134-35)). 

" See 26 U.S.C. § 501(c)(4)(A) (providing an exemption from taxation for "[cjivic leagues or organizations 

not organized for profit but operated exclusively for the promotion of social welfare"). The Response's 

identification of New Models as a Virginia Corporation appears to be mistaken. See Resp., Affidavit of Tim 

Crawford ^2. While New Models was licensed to do business in Virginia, the Virginia State Corporation 

Commission's online database identifies New Models as a foreign corporation {i.e., not a Virginia corporation) 

formed in DC. See Commonwealth of Virginia, State Corporation Commission Business Entity Search, 

https://sccefile.scc.virginia.gov/Find/Business (search in search bar for "New Models"); DC Department of 

Consumer and Regulatory Affairs, https://corponline.dcra.dc.gov/Home.aspx (search in search bar for "New 

Models"). 

" See New Models, 2004 Return of Organization Exempt from Income Tax ("Form 990"); New Models, 

2005 Form 990; New Models, 2006 Form 990; New Models, 2007 Form 990; New Models, 2008 Form 990; New 

Models, 2009 Form 990; New Models, 2010 Form 990; New Models, 2011 Form 990; New Models, 2012 Form 

990; New Models, 2013 Form 990; New Models, 2014 Form 990; and New Models, 2015 Form 990 (collectively 

"Form 990s"). 

" 2012 Form 990, Part 111 1. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 5 of 32 

The evidence indicates that New Models pursued this mission consistently throughout its 

lifetime, including before and after 2012.^° New Models conducted polls, maintained a website 

that published information about public policy, sponsored and made available polling results and 

research papers, and made grants to other organizations.^' From 20.02 through 2015, New 

Models spent approximately $17.2 million. A chart of New Models's revenue and expenses is 

below. 

FIGURE 1: IS ew Models's Revenue and Spending 2002-2015 

Year Total Revenue 

Total 

Expenses" 

Super PAC 

Contributions 

Super PAC 

Contributions 

As % of Total 

Expenses -

Calendar Year 

Super PAC 

Contributions 

As % of Total 

Expenses -

Lifetime 

2000 

2001 

2002 $89,700.00 $89,700.00 $0 0.0% 

2003 $332,500.00 $332,500.00 $0 0.0% 0.0% 

2004 $768,886.91 $754,805.21 $0 0.0% 0.0% 

2005 $581,136.39 $564,908.00 $0 0.0% 0.0% 

2006 $830,000.00 $702,025.00 $0 0.0% 0.0% 

2007 $656,516.54 $745,323.00 $ 0 0.0% 0.0% 

2008 $647,045.73 $599,638.68 $0 0.0% 0.0% 

2009 $2,049,110.10 $2,088,372.59 $0 0.0% 0.0% 

2010 $2,511,000.00 $2,326,991.10 $ 265,000" 11.4% 3.2 % 

20 

990s. 

21 

See 2004,2005,2006, & 2007 Form 990s $77; 2008,2009,2010,2011,2012,2013,2014 & 2015 Form 

See Form 990s, Fart III 4a-c (describing 501(c)(4) program services engaged in during the reporting year). 

See also Wayback Machine, internet Archive (search for "http://newmodelsusa.org) (revealing published research 

and polling reports from 2003 to early 2016 that was available on New Models's "http://newmodelsusa.org" 

website). 

22 This amount is derived from the New Models' reported "total expenses" on its annual retums, excluding 

2001,2002, and 2003 which do not appear to be available online. See Form 990s. Fundraising amounts for 2002 

and 2003 are listed in New Models's response and we use those figures as a proxy for expenses for those years. See 

Resp., Aff. of Tim Crawford Attachment I. 

OGC references, but does not include this $265,000 contribution in its analysis because it was not within 

the 2012 calendar year. See First Gen. Counsel's Rpt. at 4 n.8. We include it because the timeframe for our analysis 

is not and has never been limited to a single calendar year. New Models was CWA PAC's sole contributor in 2010. 

That same year CWA PAC reported making a $254,779 independent expenditure communication in opposition to 

South Carolina Congressman John Spratt. See October 2010 Quarterly Report of CWA PAC at 6-7; Post General 

2010 Report of CWA PAC at 6. New Models, however, reported to the IRS that it did not engage in direct or 

indirect political campaign activities during 2010. See 2010 Form 990 Part IV, Question 3. Furthermore, New 

Models disclosed a grant of $692,500 to Citizens for a Working America, a 501(c)(4) corporation, to fond a "legal 

battle in Ohio on the casino petition drive" and that the grantee "also did issue advocacy on the spending and 

taxation issue in South Carolina." See id. at Part III, 4c. The Complaint did not address the 2010 contribution and 
5 

MUR 6872 (New Models) 

Statement of Reasons 

Page 6 of 32 

2011 $1,388,291.50 $1,480,065.53 $0 0.0% 2.7% 

2012 $4,523,850.00 $4,506,176.20 $3,095,000^" 68.7%« 23.7% 

2013 $922,500.00 $1,025,833.22 $0 0.0% 22.1% 

2014 $885,000.00 $954,604.34 $0 0.0% 20.8% 

2015 $1,035,000.00 $ 1,057,073.40 $0 0.0% 19.5% 

Total S 17,220,537.17 $17,228,016.27 $3360,000 19.5% 

As shown in Figure 1, over 80% of New Models's lifetime spending was devoted to 

purposes other than the nomination or election of federal candidates. New Models never made 

(and legally could not make) contributions to independent expenditure-only committees until it 

contributed $265,000 to CWA PAC in 2010, the first year its First Amendment right to do so 

was recognized.^® This contribution was reported publicly by CWA PAC.^^ 

Contributions to Now or Never PAC, GIFAN, and CWA PAC in 2012 represent the only 

other contributions to independent expenditure-only committees made by New Models over its 

lifetime.^' These contributions also were disclosed publicly.^® Thus, contributions made by New 

Models to independent expenditure-only committees fi-om 2002 to 2015 total $3,360,000, or 

N?w Models has not been afforded the notice or opportunity to explain, nor have we had the opportunity to view the 

content of the communications. The inclusion of S26S,000 in our analysis of New Models' total campaign 

spending, however, does not change our determination that New Models is not a political committee under the Act. 

Therefore it is unnecessary to speculate whether the TV ad made by CWA PAC subsequent to New Models's 

contribution contained express advocacy, was misreported, or whether the discrepancy in filings was a result of an 

administrative or accounting error. 

" The Complaint did not address New Models's reported $5,000 contribution to OPSEC PAC. As we did for 

the 2010 CWA PAC contribution, we include it because it does not alter our conclusion as to New Models's status. 

15 

26 

27 

28 

The $3,095,000 constituted 51.7% of total expenses for 2011 and 2012. See discussion, infra at n.96. 

See Citizens United v. FEC, 558 U.S. 310 (2010); SpeechNOWv. FEC, 559 F.3d686 (D.C. Cir. 2010). 

See October 2010 Quarterly Report of CWA PAC at 6-7; Post Gen. 2010 Report of CWA PAC at 6. 

See Compl. at 3-5. We note that OGC appears willing to include an additional $37,500 based on a grant by 

New Models to an organization named Freedom PAC that was disclosed on the 2012 Form 990. See First Gen. 

Counsel's Rpt. at 2, 5, MUR 6872 (New Models); 2012 Form 990 Schedule C. We reject including this amount in 

an analysis of New Models' major purpose in this matter because the committee which received the $37,500 grant is 

not a political committee registered with the Commission. Instead, it is a committee registered with the Missouri 

Ethics Commission. Compare Missouri Ethics Commission: Electronic Reports, 8 Day Before General Election 

Report, available at http://www.mec.mo.gov/MEC/Campaign_Finance/CFl l_CommInfo.aspx (listing the same 

address and amount as information listed on 2012 Form 990), with First Gen. Counsel's Rpt. at 2 n.6 (citing 

Freedom PAC, Statement of Organization (Mar. 30,2012), 

http://docquery.fec.gOv/pdf/316/12030762316/12030762316.pdf (listing different information)). 

See 2012 30-Day Post-General Election Report of Now or Never PAC at 8-9; 2012 12-Day Pre-Election 

Report ofGIFAN at 6; April 2012 Quarterly Report of CWA PAC at 6. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 7 of32 

approximately 19.5% of the organization's spending during that period (and this figure 

overstates the statistic because New Models was established in 2000 and operated for a year and 

a half before our record of spending begins in 2002).^° Significantly, New Models has never 

made any independent expenditures nor has it ever funded any electioneering communications.^' 

In 2015 New Models ceased operations.^^ The graph at Figure 2 depicts New Models's 

contributions relative to its total expenses.^^ 

$5,000,000.00 

$4,000,000.00 

$3,000,000.00 

$2,000,000.00 

$1,000,000.00 

$0.00 

Figure 2: New Models' Spending 2002-2015 

B 

..-•J • 

i r 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

•Total Expenses • Contributions Reported to FEC 

111. LEGAL BACKGROUND 

The Supreme Court consistently has recognized that "PACs are burdensome alternatives" 

that are "expensive to administer and subject to extensive regulations": 

For example, every PAG must appoint a treasurer, forward donations to the 

treasurer promptly, keep detailed records of the identities of the persons making 

donations, preserve receipts for three years, and file an organization statement and 

report changes to this information within 10 days ... 

The 19.5% figure overstates New Model's lifetime political spending given the omission of2000 and 2001 

fiindraising and spending information in New Models' response and the absence of publicly available IRS Form 

990s for those years. 

See Resp., Affidavit of Tim Crawford flS-d. Commission records also reveal no independent expenditures 

or electioneering communications by New Models. 

" See New Models, 2015 Form 990 Part IV, Question 31 (representing that the organization liquidated, 

terminated, dissolved, or otherwise ceased operations). 

" The data used in Figure 2 comes directly from FEC reports filed by CWA PAC, GIFAN, and Now or Never 

PAC and New Models's Form 990s, except for 2002 and 2003 expenses, where fundraising amounts given in New 

Models' response are used as a proxy. See Resp., Affidavit of Tim Crawford Attachment 1 (listing fundraising 

amounts from 2002-2014). 
MUR6872 (New Models) 

Statement of Reasons 

Page 8 of32 

And that is just the beginning. PACs must file detailed monthly reports with the 

FEC, which are due at different times depending on the type of election that is 

about to occur: 

These reports must contain information regarding the amount of 

cash on hand; the total amount of receipts, detailed by 10 different 

categories; the identification of each political committee and 

candidate's authorized . or affiliated committee making 

contributions, and any persons making loans, providing rebates, 

refunds, dividends, or interest or any other offset to operating 

expenditures in an aggregate amount over $200; the total amount of 

all disbursements, detailed by 12 different categories; the names of 

all authorized or affiliated committees to whom expenditures 

aggregating over $200 have been made; persons to whom loan 

payments or refunds have been made; the total sum of all 

contributions, operating expenses, outstanding debts and 

obligations, and the settlement terms of the retirement of any debt 

or obligation.^^ 

Thus, characterizing the onerous requirements that attach to political-committee status as 

"Just disclosure" understates the significant burdens on First Amendment associational rights. 

Balancing those rights, the Act requires non-political committees that make independent 

expenditures that exceed certain amounts to report each of those expenditures on forms tailored 

to disclosing one-time events. Congress determined that such event-specific disclosures provide 

the public adequate disclosure of the financing of federal elections. 

By comparison, the Act imposes more comprehensive, perpetual organizational and 

disclosure obligations to report all financial activity on "political committees." The Act requires 

political committees that receive contributions to disclose each contributor over $200. The 

Supreme Court has limited the definition of "political committee" to include only those 

organizations that have the major purpose of nominating and electing federal candidates. 

It is a matter of First Amendment significance that the burdens attendant to. one-time, 

event-specific disclosure^® differ dramatically from the ongoing, all-encompassing reporting and 

regulatory burdens faced by political committees under the Act.®® Political committee status and 

its attendant disclosure requirements impose significant burdens on the exercise of 

constitutionally protected political activities. Hie Supreme Court has found that "compelled 

" Citizens United v. FEC, 558 U.S. at 338 (quoting McConneil v. FEC. 540 U.S. 93,331 -32 (2003)). 

« See, e.g., 52 U.S.C.§§ 30104(c), (f)& 30104(g). 

See Wisconsin Right to Life v. Borland, 751 F.3d 804, 811 (7th Cir. 2014) (noting that "[a] one-time, eventdriven disclosure rule is far less burdensome than the comprehensive registration and reporting system imposed on 

political committees"); cf. Citizens United, 558 U.S. at 366-71. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 9 of32 

disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the 

First Amendment"^' and "the invasion of privacy of belief may be as great when the information 

sought concerns the giving and spending of money as when it concerns the joining of 

organizations, for 'financial transactions can reveal much about a person's activities, 

associations, and beliefs.'"^® Mandatory ongoing disclosure of the names, addresses, 

occupations, and employers of all donors contributing over $200—^required of political 

committees but not of non-political committees filing independent expenditure reports^'—chills 

donors from using their contributions to associate with one another through the recipient 

organization. We are cautious to avoid compounding this chilling effect by imposing political 

committee status on issue groups that may occasionedly make contributions to independent 

expenditure-only committees, but which make no such communications themselves. 

In sum, regulatory obligations, prohibitions, and First Amendment impingements 

associated with political-committee status are weighty and extensive. As we have stated before, 

this is why courts have narrowed the reach of the Act's "political committee" definition to ensure 

that groups engaged in discussion of issues are not chilled from engaging in First Amendmentprotected speech and association. 

A. PRE-.gfyc/ff,£:K JUDICIAL TREATMENT OF THE ACT'S DEFINITION OF "POLITICAL 

COMMITTEE" 

The Act and Commission regulations define a "political committee" as "any committee, 

club, association, or other group of persons which receives contributions aggregating in excess of 

$1,000 during a calendar year or which makes expenditures aggregating in excess of $1,000 

during a calendar year.""" 

Soon after FECA's enactment, during the period between 1972 and 1976, several courts 

considered vagueness and overbreadth challenges to the Act's political committee definition. 

From the outset, the judiciary warned that absent imposition of a limiting construction on this 

definition, "[t]he dampening effect on first amendment rights ... would be intolerable.'"" 

" Davis V. FEC, 554 U.S. 724,744 (2008) (quoting Buckley. 424 U.S. at 64). 

" Buckley, 424 U.S. at 66 (quoting Cat. Bankers Ass'n v. Shulz, 416 U.S. 21, 78-94 (1974) (Powell, J.', 

concurring)). 

" However, an organization's independent expenditure reports requires the identification of every person who 

made a contribution in excess of S200 specifically for the purpose o/iiirthering the reported independent 

expenditure. See 11 C.F.R. § I09.10(e)(l)(vi); FEC Form 5 Instructions, available at 

http://www.fec.gov/pdf7forms/fecfrm5i.pdf. 

"o 52 U.S.C. § 30101(4): 11 C.F.R. § 100.5. 

"" United States v. Nat'l Comm. for Impeachment, 469 F.2d 1135, 1142 (2d Cir. 1972). This opinion was 

adopted by the D.C. Circuit in Buckley v. Valeo, 519 F.2d 821, 863 n.l 12 (D.C. Cir. 1975) (per curiam), affdin 

/jflrt, 424 U.S. 1 (1976), and cited by the Supreme Court in its opinion in £uci!:/eyv. I'ia/eo, 424 U.S. I,79n.l06 
MUR6872 (New Models) 

Statement of Reasons 

Page 10 of32 

Particularly troubling, courts admonished, was the prospect that "organizations which express . 

views on topical issues involving... positions adopted by office-seekers" would have "their 

associational rights ... encroached upon" by the disclosure burdens applicable to political 

committees.""^ It was "abhorrent" to think that "every position on any issue, major or minor, 

taken by anyone would be a campaign issue and any comment upon it in, say,... an 

advertisement would" subject an organization to political committee disclosure burdens."^ 

There was not a "shred of evidence in the legislative history of the Act that would tend to 

indicate that Congress meant to go so far" as to require issue groups to register as political 

committees."" A thorough review of the legislative history showed that, with respect to the 

political committee definition, "[cjongressional concern was with political campaign financing, 

not with the funding of movements dealing with national policy.""® In fact, Congress elected not 

to regulate directly as political committees many "liberal labor, environmental, business and 

conservative organizations,""® including those who "frequently and necessarily refer to, praise, 

criticize, set forth, describe or rate the conduct or actions of clearly identified public officials 

who may also happen to be candidates for federal office.""' Instead, Congress subjected these 

organizations to separate disclosure requirements under an independent provision of the Act, 2 

U.S.C. § 437a (1974)."® The D.C. Circuit, however, declared this statute unconstitutional in 

(1976). 

v.Ve«m«gj, 366 F. Supp. 1041,1055, 1057 (D.D.C. \913), vacated as moot sub nom., Staatx v. 

ACLU, 422 U.S. 1030 (1975); see also id. at 1056 (recognizing that "controversial organizations" like the ACLU 

must be excluded from coverage as a political comminee). 

Nal'l Comm. for Impeachment, 469 F.2d at 1142 (footnote omitted); see also id. at 1139, 1142 (applying 

"fundamental principles of fi-eedom of expression" in explaining that "every little Audubon Society chapter [should 

not] be a 'political corhmittee,' [simply because] 'environment* is an issue in one campaign after another"). 

Nat'l Comm. for impeachment, 469 F.2d at 1142. 

W. at 1441-42. 

120 CONG. REC. H10333 (daily ed., Oct. 10,1974). 

" Buckley, 519 F.2d at 871 (internal quotation marks omitted). 

Congress "made it abundantly clear that it intended section 437a to reach beyond the other disclosure 

provisions of the Act." id at 876. The statute provided that "[a]ny person (other than an individual) who expends any 

funds or commits any act directed to the public for the purpose of influencing the outcome of an election, or who 

publishes or broadcasts to the public any material referring to a candidate (by name, description, or other reference) 

advocating the election or defeat of such candidate, setting forth the candidate's position on any public issue, his 

voting record, or other official acts (in the case of a candidate who holds or has held Federal oftice), or otherwise 

designed to influence individuals to cast their votes for or against such candidate or to withhold their votes from 

such candidate shall file reports with the Commission as if such person were a political committee. The reports filed 

by such person shall set forth the source of the funds used in carrying out any activity described in the preceding 

sentence in the same detail as if the funds were contributions ... ."2 U.S.C. § 437a (1974). 
MUR 6872 (New Models) 

Statement of Reasons 

Page II of32 

Buckley v. Valeo, in a ruling that was not appealed to the Supreme Court'*' and "apparently 

accept[ed]" by lawmakers.^" Thus, Congress and the courts made clear that the political 

committee disclosure burdens did not apply to issue-advocacy organizations. 

As a result, even racially-tinged, character-assaulting advertisements like the followingpublished less than two weeks before the 1972 presidential election — did not and could not 

trigger political-committee status: 

AN OPEN LETTER TO PRESIDENT RICHARD M. NIXON IN 

OPPOSITION TO HIS STAND ON SCHOOL SEGREGATION 

Dear Mr. President: 

We write because we believethat you are taking steps to create an 

American apartheid. That, we know, is a nasty charge. Yet that is 

the direction the House of Representatives took us on August 17, 

1972. On that date, the House voted 282-102 to prohibit federal 

courts from taking effective action to end school segregation 

We believe instead that the ultimate source of pressure behind this 

shameful bill has been you, Mr. President. 

During the last six months, you have encouraged the resentment and 

fears of whites, and made open enemies of blacks. You have made 

scapegoats of the federal courts, and attacked the rule of law itself. 

You have cut the middle ground out from under the feet of 

reasonable men. We find it hard to imagine a more cynical use of 

presidential power. 

In the House of Representatives only 102 members stood fast 

against you** Now the issue is before the Senate. We urge you to 

back off from the path to apartheid, and withdraw your support for 

this bill. 

See Buckley, 424 U.S. at 10 & n.7. in so holding, the D.C. Circuit rejected congressional concerns that the 

law was necessary to demand disclosure from organizations that "use their resources for political purposes, [but 

which] conceal the interests they represent solely because [of] the technical definitions of political committee, 

contribution, and expenditure." H.R. REP. NO. 93-1438, 93d Cong., 2d Sess. 83 (1974); see also id. (explaining that 

the provision would "require any organization which expends any funds or comnriits any act directed to the public 

for the purpose of influencing the outcome of an election"). 

See Buckley, 519 F.2d at 863 n. 112 (observing that, while making other changes to the political committee 

definition. Congress did not materially alter the provision in response to the narrowing constructions imposed by 

Jennings and National Committee for Impeachment). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 12 of32 

**[To readers:] Let them hear from you. They deserve your support 

in their resistance to the Nixon administration's bill.^' 

Other, similar advertisements likewise did not count toward political-committee status, including 

one that was "derogatory to the President's stand on the Vietnam war," even though "the 

President is a candidate for re-election ... and the war is a campaign issue."^^ 

Thus, from the outset, courts recognized that although "[pjublic discussion of public 

issues which are also campaign issues readily and often unavoidably draws in candidates and 

their positions, their voting records and other official conduct,"^^ such discussions do not convert 

the organization into a political committee. To the contrary, courts have emphasized how "the 

interest of a group engaging in nonpartisan discussion e^cends to a high plane, while the 

governmental interest in disclosure correspondingly diminishes."^^ 

B. BUCKLEY'S "MAJOR PURPOSE" TEST 

In response to both vagueness and overbreadth concerns, the Supreme Court in Buckley v. 

Valeo limited the scope of the Act's definition of "political committee" in two important ways.^^ 

First, the Court circumscribed the Act's $1,000 statutory threshold by construing the defmition 

of expenditure to "reach only funds used for communications that expressly advocate the 

election or defeat of a clearly identified candidate."^® Second, to address concerns that the broad 

definition of "political committee" in the Act "could be interpreted to reach groups engaged 

purely in issue discussion," the Court held that the term political committee "need only 

encompass organizations that are under the control of a candidate or the major puipose of which 

is the nomination or election of a candidate."^' 

Buckley fashioned these limitations to prevent the Act from "encompassing both issue 

discussion and advocacy of a political result"; thus, the major purpose limitation protects 

important First Amendment rights, particularly the right of associational privacy, by ensuring 

Jennings, 366 F. Supp. at 1058 App'x; see also Buckley, 519 F.2d at 873-74 (referencing this discussion). 

Nat'l Comm. for Impeachment, 469 F.2d at 1138. 

" 5«c/l/^,519F.2dat875.. 

" W. at 873. 

" 424 U.S. at 79. 

" Id. at 80 (footnote omined). According to the Court, "[t]his reading is directed precisely to that spending 

that is unambiguously related to the campaign of a particular federal candidate." Id. Specifically, "communications 

containing express words of advocacy of election or defeat, such as 'vote for,' 'elect,' 'support,' 'cast your ballot 

for,' 'Smith for Congress,' 'vote against,' 'defeat,' 'reject.'" Id. at 44 n.52. 

" Id. at 79. 
1 

MUR 6872 (New Models) 

Statement of Reasons 

Pagel3of32 

issue-advocacy organizations are not swept into the Act's burdensome regulatory scheme.'® 

Regulation of electoral groups, the Court held, was constitutionally acceptable; regulation of 

issue groups was not. Therefore, the major purpose test serves to distinguish between the two 

and protect the latter. 

C. MASSACHUSETTS CITIZENS FOR LIFE AND "INDEPENDENT.SPENDING " 

A decade after Buckley, in FEC v. Massachusetts Citizens for Life ("MCFL"), the 

Supreme Court reaffirmed the distinction between electoral groups and issue groups while 

acknowledging that the extent of an organization's "independent spending" —^which the 

Supreme Court's logic in Buckley and MCFL strongly suggests is limited to spending on 

communications containing express advocacy—could cause an organization's major purpose to 

become the nomination or election of candidates and, thus, the organization would be classified 

as a political committee.'' Then, with respect to the nonprofit organization MCFL, the Court 

Id. at 66, 79. 

" 479U.S.238,248,262(1986)("MCFL"). In the Supreme Court upheld the disclosure 

^ requirements for organizations making independent expenditures by limiting the Act's definition of an 

"expenditure" to express advocacy. Id at 248; Buckley, 424 U.S. at 80. The Court reasoned this limitation is 

necessary to avoid unconstitutional overbreadth because "the distinction between discussion of issues and candidates 

and the advocacy of election or defeat of candidates may often dissolve in practical application." MCFL, at 249; 

Buckley at 42. The practical difficultly in distinguishing between "discussion of issues and candidates" and 

"advocacy of election or defeat of candidates" is not ameliorated by the purpose of the applicable regulation. 

Whether the regulation requires filing a one-time disclosure regarding a single communication, prohibits the 

communication, or requires registration and comprehensive ongoing financial reporting by the sponsor of the 

communication, fine distinctions between ambiguous texts are just as difficult. For this reason, in MCFL the 

Supreme Court again limited the prohibition against corporate independent expenditures to express advocacy. 

MCFL at 249. Accordingly, when the Court stated in MCFL that "should MCFL's independent spending become so 

extensive that the organization's major purpose may be regarded as campaign activity, the corporation would be 

classified as a political committee," id. at 262 (italics added), there is little doubt that the "independent spending" to 

which the Court referred was express advocacy. Any remaining doubt is resolved by the Court's numerous 

references in the decision to a group's independent expenditures (construed as express advocacy communications) 

as the group's "independent spending." See id. at 261-63. It is unlikely the Court used the term "independent 

spending" throughout the same decision to refer to two entirely different kinds of political speech without indicating 

it was doing so. Indeed, it would strain logic, if not qualify as absurd, for the Supreme Court to have limited 

disclosure requirements for independent expenditures to communications containing express advocacy while 

imposing political committee registration, organization, and reporting requirements on committees because they 

sponsored non-express advocacy communications. 

The enduring significance of the Supreme Court's jurisprudence arising from the practical difficulty 

identified in MCFL is confirmed by its holding in Citizens United. In that case, the Court rejected an argument that 

the FEC must further parse the content or meaning of electioneering communications (which lack express advocacy) 

to determine whether the Act's disclosure provisions applied. This understanding of MCFL is consistent with the 

holdings of the Seventh Circuit in Wisconsin Right to Life v. Borland, IS 1 F.3d 804 (7th Cir. 2014), the Tenth 

Circuit in New Mexico Youth Organized v. Herrera, 611 F.3d 669 (10th Cir. 2010) {"Herrera")., and the District of 

Columbia District Court panel in Independence Institute v. FEC, 216 F. Supp. 3d 176 (D.D.C. 2016). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 14 of32 

held that its "central organizational purpose is issue advocacy, although it occasionally engage[d] 

in activities on behalf of political candidates.""" 

D. LOWER COURT CLARIFICATIONS OF THE "MAJOR PURPOSE" TEST. 

Since Buckley sinA MCFL, various courts of appeals have further explored the major 

purpose limitation. In New Mexico Youth Organized v. Herrera, the Tenth Circuit stated: 

There are two methods to determine an organization's 'major purpose': (1) 

examination of the organization's central organizational purpose; or (2) 

comparison of the organization's electioneering spending with overall 

spending to determine whether the preponderance of expenditures is for 

express advocacy or contributions to candidates."' 

And the Fourth Circuit in North Carolina Right to Life, Inc. v. Leake explained: 

[T]he Court in Buckley must have been using "the major purpose" test to 

identify organizations that had the election or opposition of a candidate as 

their only or primary goal — this ensured that the burdens facing a political 

committee largely fell on election-related speech, rather than on protected 

political speech.... If organizations were regulable merely for having the 

support or opposition of a candidate as "a major purpose," political 

committee burdens could fall on organizations primarily engaged in speech 

on political issues unrelated to a particular candidate. This would not only 

contravene both the spirit and letter of Buckley's "unambiguously campaign 

MCFL, 479 U.S. at 252 n.6. The phrase "engage[d] in activities on behalf of political candidates" seems to 

have been used interchangeably with the term "independent expenditures." Compare id. at 252-53, with id. at 252 

n.6. Independent expenditures are reported to the Commission on Form 5 and are subject to three separate reporting 

requirements. First, a report is required when independent expenditures aggregate in excess of $250 in any quarterly 

reporting period. In addition to the quarterly report, a 48-hour report is required when independent expenditures 

aggregate $10,000 or more any time during the calendar year up to and including the twentieth day before an 

election. Each time subsequent independent expenditures relating to the same election aggregate $10,000 or more, a 

new 48-hour report is required to be filed. Each 48-hour report is due within forty-eight hours of when the 

communication is publicly distributed or otherwise publicly disseminated. Finally, a 24-hour report is required when 

independent expenditures aggregate $1,000 or more, less than twenty days but more than twenty-four hours before 

an election. Each time subsequent independent expenditures relating to the same election aggregate $1,000 or more, 

a new 24- hour report is required to be filed. Each 24-hour report is due within twenty-four hours of when the 

communication is publicly distributed or otherwise publicly disseminated. For purposes of determining whether 24-

and 48-hour reports are required to be filed, aggregation is based on all independent expenditures during a calendar 

year chat are made with respect to the same election for a Federal office. 11 C.F.R. § 109.10 (b), (c) & (d). 

611 F.3dat678. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 15 of32 

related" test, but it would also subject a large quantity of ordinary political 

speech to regulation.®^ 

The Fourth Circuit in Real Truth About Abortion v. FEC cited to a narrow understanding of the 

major purpose test, noting that "[t]he expenditure or contribution threshold means that some 

groups whose 'major purpose' was indisputably the nomination or election of federal candidates 

would not be designated PACs."®^ 

The nature and scope of the major purpose test as applied to the Act was further 

examined in FEC v. Malenick,^ and FEC v. GOP AC, /nc.®® In those cases, federal district courts 

examined the public and non-public statements, as well as the electoral spending, of particular 

groups to determine if the major purpose of each organization was the nomination or election of 

a federal candidate. 

E. COMMISSION RULEMAKING & APPLICATION OF THE "MAJOR PURPOSE" TEST 

Although Buckley established the major purpose test, it "did not mandate a particular 

methodology for determining an organization's major purpose," delegating such determinations 

and methodology to the Commission "either through categorical rules or through individualized 

adjudications."®® The Commission opted for the latter. Since Buckley, the Commission has 

determined the major purpose of an organization on a case-by-case basis, rejecting on multiple 

occasions the invitation to adopt a bright line rule governing the analysis. In 2004, the 

Commission published a Notice of Proposed Rulemaking to "explore[] whether and how [it] 

should amend its regulations defining whether an entity is a... political committee,"®^ and in 

particular, whether the regulatory definition of political committee "should be amended by 

incorporating the major purpose requirement."®® The Commission sought comment on.four tests 

for determining whether an entity had the requisite major purpose.®' These proposed tests would 

« 525 F.3d 274,287-88 (4th Cir. 2008) ("NCRTL") (emphasis in original). 

" 681 F.3d 544, 558 (4th Cir. 2012), cert, denied. 81 U.S.L.W. 3127 (U.S. Jan. 7,2013) (No. .12-311) 

("RF/l/t"). 

64 

6S 

310 F; Supp. 2d 230,234-36 (D.D.C. 2005). 

917 F. Supp. 851, 859 (D.D.C. 1996). 

*7V1/1,681 F.3dat556. 

" Notice of Proposed Rulemaking on Political Committee Status, 69 Fed. Reg. 11,736, 11,736 (Mar. 11, 

2004). 

;</. at 11,743. 

® /</. at 11,745. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 16 of32 

have examined — to varying degrees — an organization's avowed purpose, its spending, and its 

tax status.'" 

The Commission concluded that "incorporating a 'major purpose' test into the definition 

of 'political committee' [was] inadvisable" and declined to adopt any of the proposed 

standards." This decision was challenged in federal district court. The court found that the 

Commission's decision was not arbitrary and capricious but did order the Commission to provide 

a more detailed explanation of that decision.'^ In response, the Commission issued a 

Supplemental Explanatiori and Justification in 2007.'^ This Supplemental E&J did not issue or 

explain a new rule. Rather, it elaborated on the Commission's case-by-case approach, explaining 

that "[ajpplying the major purpose doctrine ... requires the flexibility of a case-by-case analysis 

of an organization's conduct that is incompatible with a one-size-fits-all rule," and that "any list 

of factors developed by the Commission would not likely be exhaustive in any event, as 

evidenced by the multitude of fact patterns at issue in the Commission's enforcement matters 

considering the political committee status of various entities."'^ 

The U.S. District Court for the District of Columbia upheld the Commission's case-bycase approach as further explained in the Supplemental E&J.'^ More recently, the Fourth and 

Tenth Circuits upheld the constitutionality of the Commission's case-by-case approach.'® The 

TM See id at 11745-49; see also Final Rules on Political Committee Status, Definition of Contribution, and 

Allocation for Separate Segregated Funds and Nonconnected Committees, 69 Fed. Reg. 68,056,68,064-65 (Nov. 

23,2004) ("2004 E&J") (explaining that the Commission considered — and rejected — two additional tests (for a 

total of six) prior to adopting the E&J). 

71 

72 

73 

2004 E&J, 69 Fed. Reg. at 68,065. 

424 F. Supp. 2d 100, 115-16 (D.D.C. 2006). 

2007 Supplemental E&J, 72 Fed. Reg. 5,596. 

Id. at 5,601-02. The Commission has periodically considered proposed rulemakings that would have 

determined major purpose by reference to a bright-line rule — such as proportional {i.e., 50%) or aggregate 

threshold amounts spent by an organization on federal campaign activity. But the Commission consistently has 

declined to adopt such bright-line rules. See Independent Expenditures; Corporate and Labor Organization 

Expenditures, 57 Fed. Reg. 33,548,33,558-59 (July 29, 1992) (Notice of Proposed Rulemaking); Definition of 

Political Committee, 66 Fed. Reg. 13,681, 13,685-86 (Mar. 7,2001) (Advance Notice of Proposed Rulemaking); 

also Summary of Comments and Possible Options on the Advance Notice of Proposed Rulemaking on the 

Definition of "Political Committee," Certification (Sept. 27,2001) (voting 6-0 to hold proposed rulemaking in 

abeyance). 

" Shays v. FEC, 511 F. Supp. 2d 19,29-31 (D.D.C. 2007) (holding that the Commission's choice to regulate 

"political organizations" as defined by 26 U.S.C. § 527 on a case-by-case basis was neither arbitrary nor capricious 

and was "exactly the type of question generally left to the expertise of [the] agency"). 

RTAA, 681 F.3d at 556. The court observed that the Commission's approach was "sensible ... [and] 

consistent with Supreme Court precedent". Id. at 558. See also Free Speech v. FEC, Case No. 12-CV-127-S, 2013 

WL 12142583, at *1 (D. Wyoming Mar. 19,2013) ("Free Speech") ("[A]gree[ing] with the assessment of the 
MUR 6872 (New Models) 

Statement of Reasons 

Page 17 of 32 

Fourth Circuit in Real Truth About Abortion v. FEC^'' ifor example, concluded that "[t]he 

determination of whether the election or defeat of federal candidates for office is the major 

purpose of an organization ... is inherently a comparative task, and in most instances it will 

require weighing the importance of some of a group's activities against others."'® 

While the fundamental approach to determining political-committee status set forth in the 

2007 Supplemental E&J — i.e., a flexible, fact-intensive analysis of relevant factors — remains 

sound," many of the enforcement matters contained therein have been undermined by 

subsequent judicial decisions. For example, the 2007 Supplemental E&J was issued prior to the 

Court's decision in EEC v. Wisconsin Right to Life, which clarified the distinction 

between issue and electoral advocacy." And recently, the Seventh Circuit in Wisconsin Right to 

Life V. Borland reinforced WRTL II's holding that genuine issue advertisements cannot be 

regulated - through disclosure rules - as electoral advocacy.®' The Commission has adapted to 

such developments in the law through its case-by-case approach. 

In sum: 

• Under the Act, an organization must (I) receive "contributions" or make 

"expenditures" expressly advocating the election or defeat of a federal candidate 

aggregating at least $1,000 in a calendar year and (2) have as its "major purpose" the 

nomination or election of federal candidates. 

• The major purpose of an organization must be nominating or electing federal 

candidates; a group that has as its major purpose the discussion of public policy, or 

political issues, may not be regulated as a political committee under the Act. 

Fourth Circuit in RTAA") (adopted in full as the opinion for the U.S. Court of Appeals for the Tenth Circuit in Free 

Speech v. FEC, 720 F.3d 788 (10th Cir. 2013). cert, denied 134 S. Ct. 2288, No. 13-772 (2014)). 

" m/1,681 F.3dat556. 

!d. (emphasis in original). The RTAA court also noted that the inquiry to assess an organization's major 

purpose "would not necessarily be an intrusive one" since "[mjuch of the information the Commission would 

consider would already be available in that organization's government filings or public statements." Id. 

79 2007 Supplemental E&J, 72 Fed. Reg. at 5,601. 

" The 2007 Supplemental E&J was issued on February 7,2007. See 72 Fed. Reg. 5595. JFRTZ, // was 

decided on June 25,2007. 511 U.S. 449 (2007) CWRTL IF'). 

*' See WRTL //, 551 U.S. at 478-79 ("Issue ads like WRTL's are by no means equivalent to contributions and 

the quid-pro-quo corruption interest cannot justify regulating them. To equate WRTL's ads with contributions is to 

ignore their value as political speech."). 

« Borland, 751 F.3d at 834-35. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 18 of32 

9 The Commission will apply the major purpose doctrine on a case-by-case basis, 

taking into consideration the unique facts and circumstances involved with a 

particular group." 

With these principles in mind, we turn to New Models. 

IV. ANALYSIS OF NEW MODELS' MAJOR PURPOSE 

As explained above, since its adoption, the Act's definition of "political committee" has 

been subject to judicial scrutiny. The Supreme Court held in Buckley that the definition as 

adopted by Congress impermissibly swept within its ambit groups engaged primarily in issue 

discussion. For this reason, the Court narrowly construed the definition of political committee to 

reach only groups that (1) meet the statutory definition and (2) have as their major purpose the 

nomination or election of a federal candidate. Congress also required a threshold predicate to 

distinguish between ordinary contributors and political committees - that as a threshold matter 

an organization receives contributions or makes expenditures. Upon thorough consideration of 

various facts indicative of political committee status; organizational documents, public 

statements of purpose, tax status, and independent spending, we do not have reason to believe 

that New Models met the threshold of receiving $1,000 in contributions or making $1,000 in 

expenditures under the first prong, or that New Models had the major purpose of nominating or 

electing federal candidates under the second prong. 

A. NEW MODELS HAS NOT MET THE STATUTORY THRESHOLD FOR POLITICAL 

COMMITTEE STATUS 

New Models made several contributions to political committees, but did not receive 

contributions as defined by the Act. There is also no evidence that New Models made 

expenditures as defined by the Act. Therefore, New Models did not meet the statutory threshold 

for becoming a political committee. 

The Act defines the term "contribution" to include "any gift, subscription, loan, advance, 

or deposit of money or anything of value made by any person for the purpose of influencing any 

While the Commission does look at the facts and circumstances to determine the organization's true 

purpose—such as its organizational documents, public statements of purpose, tax status, and the amount spent on 

express advocacy over the course of the organization's history—^the Commission cannot (and should not) consider 

the facts and circumstances of speech itself. See 2007 Supplemental E&J, 72 Fed. Reg. 5,595, 5,598 (Feb. 7,2007) 

(citing Rev. Rul. 2004-06,2004-1 C.B. and noting the IRS's facts and circumstances test, if applied to the Act, 

"clearly would violate the Supreme Court's Constitutional parameters established in Buckley, and reiterated in 

MCFL and McConnell, that campaign finance rules must avoid vagueness"); see also Citizens United, 558 U.S. at 

337; WRTL //, 551 U.S. at 473-74 (contextual factors of the sort invoked by [the Commission] should seldom play a 

signiflcant role the need to consider such background should not become an excuse for discovery or a broader 

inquiry"). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 19 of 32 

election for Federal office."®^ It defines "expenditure" to include "any purchase, payment, 

distribution, loan, advance, deposit, or gift of money or anything of value, made by any person 

for the purpose of influencing any election for Federal office."®^ With regard to both of these 

definitions, the Supreme Court clarified and, especially for non-candidates and non-political 

parties, limited the scope of what counts as "made ... for the purpose of influencing any election 

for Federal office."®® 

In Buckley, the Court upheld regulations on contributions, noting that "[a] contribution to 

[a Federal candidate] serves as a general expression of support for the candidate and his views, 

but does not communicate the underlying basis for the support."®' Even so, the Act limits 

contributions or requires their disclosure only when they are sufficiently "connected to a 

candidate or his campaign."®® Specifically, Buckley narrowed the definition.of contribution to 

encompass only (1) donations to candidates, political parties, or campaign committees; (2) 

expenditures made in coordination with a candidate or campaign committee; and (3) donations 

given to other persons or organizations but "earmarked for political purposes."®' New Models 

was not a candidate, party, or campaign committee and, as explained below, did not make any 

expenditures - coordinated or otherwise. Therefore, none of its fimding seems earmarked for a 

political purpose and would not be counted as a "Contribution" for purposes of the Act. 

The Court circumscribed the definition of "expenditure" even more than it did the term 

"contribution." The Court held that the term "expenditure" is construed "to reach only funds 

used for communications that expressly advocate the election or defeat of a clearly identified 

federal candidate."'® This is to limit regulation - including disclosure requirements - to 

"spending that is unambiguously related to the campaign of a particular federal candidate."" 

There is no claim that New Models made any independent expenditures of its own 

expressly advocating the election or defeat of a clearly identified candidate. New Models's 

spending on political activities consisted only of making contributions to several organizations. 

52U.S.C. §30101(8)(A)(i). 

« . 52 U.S.C. § 30101 (9)(A)(i). 

See, e.g., Buckley, 424 U.S. at 78-80. 

" W. at 424 U.S. at 21. 

" Id. at 78. 

86 

Id. at 23, n.24, 78. The United States Court of Appeals for the Second Circuit interpreted the phrase 

"earmarked for political purposes" to include only donations "that will be converted to expenditures subject to 

regulation under [the Act]." FECv. Survival Education Fund, Inc., 65 F.3d 285,295 (2d Cir. 1995). 

Id. at 79-80. 

" Id. at 80. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 20 of 32 

most of which were registered as political committees with the Commission. Those committees 

made expenditures independent of candidates and political parties.'^ The contributions to these 

political committees would be "generalized expressions of support" for those committees, but 

not necessarily any particular candidate. They would not be "expenditures made" under the Act. 

To find otherwise requires ignoring how the Act differentiates between "contributions" and 

"expenditures" throughout its provisions.'^ Moreover, the Act defines the term "contribution" 

and never includes that term in a definition or modification of the term "expenditure."'^ Thus, 

under the plain language of the Act, New Models did not receive contributions or make 

expenditures of more than $1,000. As a result, they were not required to register and report as a 

political committee with the Commission. 

7 The threshold inquiry is not a trivial technicality. It indicates a fundamental distinction 

D between a political committee, on the one hand, versus a contributor to political committees, on 

TM the other. New Models was a contributor, not a political committee. 

I B. THERE IS NO REASON TO BELIEVE NEW MODELS HAS THE MAJOR PURPOSE FOR 

f POLITICAL COMMITTEE STATUS 

I Whether or not New Models met the threshold inquiry, it nonetheless did not have the 

I requisite major purpose to be a political committee.'^ The Complaint bases its allegation upon a 

Indeed, New Model's contributions to these political committees are only permissible because, as the Court 

of Appeals for the District of Columbia held, "the government has no anti-corruption interest in limiting 

contributions to an independent expenditure group." SpeechNow.org v. FEC, 599 F.3d 686,695 (D.C. Cir. 2010). 

Thus, "limits on [such] contributions... cannot stand." Id. at 696. This follows from the Supreme Court's holding 

that spending for communications made independent of a candidate "do not give rise to corruption or appearance of 

corruption." Citizens United, 558 U.S. 310,357. As "general expressions[s] of support" for the independent 

expenditure committees. New Models' contributions here bear even less risk of corruption than the committees' 

expenditures do. [To paraphrase Buckley, these contributions "do not communicate the underlying basis for the 

support" of these independent groups, much less a clearly identified federal candidate.] This is another reason 

contributions to such groups should not count as "expenditures made" toward the statutory trigger of § 30101(4)(A). 

OGC argued that contributions to a politicai committee should qualify as expenditures for purposes of the 

statutory threshold. We think the better course is to maintain the distinction between contributions and expenditures 

that exists throughout the Act, Commission regulations, and case law. Seemingly contrary precedents can be 

distinguished by candidate invoivement. Political committees are the only organizations that can contribute to 

federal candidates. 52 U.S.C. §30ll6(a);c/ 11 C.F.R. §110.1(e) (permitting contributions by partnerships, provided 

they are attributed to individual partners). This lends weight to the argument that giving money to candidates may 

trigger political committee status. Whatever the merits of this argument when candidates are involved, however, 

they lose all force in context of contributions to independent expenditure groups, which have no potential for 

corruption or the appearance of corruption. 

^ See e.g; 52 U.S.C. § 30118. Contributions or expenditures by national banks, corporations, or labor 

organizations (modifying definitions of the terms "contribution" or "expenditure" for purposes of this subsection 

(emphasis added)). 

Our conclusion that the available evidence does not support finding reason to believe that New Models is 

not a political committee is based upon two independent grounds. First, New Models did not cross the statutory 
MUR 6872 (New Models) 

Statement of Reasons 

Page 21 of32 

comparison of New Models's 2012 campaign spending with its 2012 spending on activities 

unrelated to the election or defeat of federal candidates, a comparison showing 68.5% of New 

Models's total disbursements in 2012 went towards contributions to independent expenditureonly committees.''' We do not believe contributions in one year establish this organization's 

major purpose. Instead, we compare New Models's isolated contributions with other activities 

both in 2012 and during its lifetime. Our analysis also considers the First Amendment 

implications of overreaching to regulate a policy organization as a political committee—and 

subjecting it to the burdens attendant to such classification—based solely on a handful of 

contributions in a brief snapshot in time." 

1. New Models' Central Organizational Purpose Focused on Public Policy and 

Issues, not Federal Candidates 

A finding of reason to believe requires significant evidence a violation of the Act 

occurred. Here, the Complaint does not allege or provide evidence indicating New Models 

organized for purposes other than the promotion of social welfare consistent with 26 U.S.C. § 

501(c)(4) and Department of the Treasury regulations. Discussion of organizational purpose is 

likewise absent from OGC's analysis. 

Although an organization's tax status is not dispositive of the question, it is certainly a 

relevant consideration. As Senator McCain, a principal Senate sponsor of BCRA, has stated, 

"under existing tax laws, Section 501(c) groups ... cannot have a major purpose to influence 

federal elections, and therefore are not required to register as federal political committees, as 

threshold of SI,000 in contributions received or expenditures made. Second, New Models's major purpose is not 

nominating or electing federal candidates. Each ground is independently sufficient to substantiate our conclusion.. 

^ Compl. at 4-5,7. Similarly, OGC—while noting that the "Commission considers a group's overall 

conduct, including its disbursements, activities, and statements" when determining major purpose—devotes its 

analysis almost exclusively to New Models' spending in calendar year 2012, ignoring other conduct over 15 years. 

First Gen. Counsel's Rpt. at 5, MUR 6872. OGC also supports its recommendation by reference to New Models's 

2011-2012 election cycle spending. !d. at 6. That argument fails for the same reason as an analysis based solely on 

one calendar year. New Models made no contributions or expenditures in 2011, indicating it was not a political 

committee in 2011. Counting its 2012 contributions as a percentage of its 2011 and 2012 spending still uses a single 

year of activity to define the organization. Even counting the 2012 spending over that two-year period represents a 

departure, or temporary anomaly, from the organization's usual issue-related spending over the course of multiple 

years and election cycles and that snapshot does not, based upon our expertise in judging organizations, and 

considering all other facts and circumstances, represent the organization's major purpose. And arguing that New 

Models's major purpose "changed" in 2012 is a different rhetorical way to justify a focus on one year. We have 

consistently rejected OGC's myopic focus on one year of spending, no matter how OGC rhetorically describes one 

year of spending. The fundamental flaw in OGC's one-year approach - which is a recent creation by OGC - is that 

it ignores an organization's history and other activities. Here, New Models's history, before and after 2012, 

evidences a classic issue organization. 

" See Statement of Reasons of Chairman Lee E. Goodman and Commissioners Caroline C. Hunter and 

Matthew S. Petersen at 1, MUR 6538 (Americans for Job Security, et al.)\ Statement of Reasons of Chairman Lee E. 

Goodman and Commissioners Caroline C. Hunter and Matthew S. Petersen at 1, MUR 6396 (Crossroads GPS). 
MUR6872 (New Models) 

Statement of Reasons 

Page 22 of 32 

long as they comply with their tax law requirements."'® 501(c)(4) groups, specifically, are 

permitted to engage in a substantial amount of political campaign activity without losing their 

exempt status." 

The Complaint does not allege that New Models's organizational documents reveal its 

purpose to be the nomination or election of federal candidates.'" Without allegations or 

evidence to the contrary we may assume such documents were properly drafted in order to 

incorporate and operate as a non-profit organization and obtain and maintain 501(c)(4) status 

with the IRS.'°' Thus, we weigh this factor in favor of New Models absent evidence that its 

articles of incorporation or bylaws manifest an organizational purpose other than engaging in 

legitimate 501(c)(4) social welfare activities, or evidence that its 501(c)(4) status has been 

violated or revoked. Accordingly, we find that New Models's organizational documents weigh 

against finding reason to believe that its major purpose was the nomination or election of federal 

candidates. 

2. New Models' Public Statements Do Not Indicate That Its Major Purpose Was 

the Nomination or Election of Federal Candidates 

Some courts have asserted that an organization's major purpose may be established 

through "public statements of purpose."'" In Malenick, the court reviewed the organization's 

^ Comments of John McCain and Russell D. Feingold on Reg. 2003-07 (Political Committee Status) (Apr. 2, 

2004), attached statement of Senator John McCain, Senate Rules Committee, March 10,2004 at 2. See 26 U.S.C. § 

SO I (c)(4)(A) (providing an exemption from taxation for "[c]ivic leagues or organizations not organized for profit but 

operated exclusively for the promotion of social welfare"). See also Comment of Public Citizen on Reg. 2003-07 

(Political Committee Status) at 10 (Apr. 5,2004) ("[A] legitimate 501 (c) organization should not have to fear that it 

will become a political committee simply by engaging in political issue-related criticisms of public officials"). 

" See Rev. Rul. 81 -85, 1981 -1 C.B. 332 ("|T]he regulations do not impose a complete ban on [political 

campaign activities] for section 501(c)(4) organizations. Thus, an organization may carry on lawful political 

activities and remain exempt under section 501(c)(4) as long as it is primarily engaged in activities that promote 

social welfare."). Whether an organization is in fact "primarily" engaged in promoting social welfare under the IRC 

and Treasury Department regulations is a different (and broader) "facts and circumstances test," than the "major 

purpose" test articulated in Buckley. See 2007 Supplemental E&J at 5,598. 

See Statement of Reasons of Commissioners Darryl R. Wold, David M. Mason, and Scott E. Thomas at 2, 

MUR 4850 (Deloitte & Touche, LLP, el al.) ("The burden of proof does not shift to a respondent merely because a 

complaint is filed."). 

'®' SeeTreas. Reg. § 1.50l(c)(4)-l(a)(2)(ii) ("The promotion of social welfare does not include direct or 

indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public 

office."); Rev. Rul. 81-85, 1981-1 C.B. 332 ("In order to qualify for exemption under section 501(c)(4) of the 

[Internal Revenue] Code, an organization must be primarily engaged in activities that promote social welfare within 

the meaning of section 1.501 (c)(4)-1."). See also D.C. CODE § 29-402.02 (requiring articles of incorporation to set 

forth that the corporation is incorporated as a nonprofit.). 

"» FEC V. Malenick, 310 F. Supp. 2d 230,234-36 (D.D.C. 2004) (citing GOPAC, 917 F. Supp. at 859) 

(discussing FEC v. Machinists Non-Partisan League, 655 F.2d 380, 392 (D.C. Cir. 1981)). But see FEC v. 

Wisconsin Right to Life, 551 U.S. 449 (2007) CWRTL //"); North Carolina Right to Life v. Leake {"NCRTL //'), 525 
MUR 6872 (New Models) 

Statement of Reasons 

Page 23 of 32 

announced goals, brochures, fundraising letters, and express advocacy communications sent to 

its members, all of which indicated that the major purpose of the group in question was the 

election of federal candidates.'"^ In GOP AC, the court predominantly focused on letters GOPAC 

sent to citizens as well as discussions GOPAC had with one of its contributors, none of which 

indicated that the group's major purpose was the nomina:tion or election of federal candidates, 

but rather the election of state candida.tes.'"" 

Under GOPAC, official statements from a group, such as a group's organizing documents 

and official statement of purpose, or other materials issued under the group's name, including 

fundraising documents or press releases, are the primary public statements by which an entity's 

2 central organizational purpose is determined. According to the Supplemental E&J, "the 

7 Commission must evaluate the statements of the organization in a fact-intensive inquiry giving 

G due weight to the form and nature of the statements, as well as the speaker's position within the 

4 organization."'"^ Thus, under the Supplemental E&J and federal court decisions, these 

^ statements must be given significant weight and a stray quote or a paraphrase, in the face of all 

^ the other evidence, will not transform a group into a political committee. 

1 Here New Models denies that the organization has the requisite major purpose for 

g political committee status.'"® New Models claims it never made an independent expenditure,'"' 

2 nor publicly advocated the election or defeat of a federal candidate.'"" Its flmdraising materials 

do not state that the organization's goal is to elect federal candidates nor do they suggest to 

prospective donors that funds will be used to elect or defeat federal candidates; and New Models 

has never stated that its purpose was the election or defeat of a federal candidate.'"" 

The Complaint does not identify a single statement in over 15 years where a 

representative of New Models indicated the major purpose of the organization was to norninate 

F.3d 274 (cautioning against looking to subjective or contextual factors), which cast serious doubt on the validity of 

examining anything other than the amount of express advocacy in the major purpose test analysis. 

310F.Supp.2dat235. 

917 F.Supp. at 862-65. 

72 Fed. Reg. at 5,601. 

Resp. at 3-4; Resp., Aff. of Tim Crawford at H 3. 

"" Resp., Aff. of Tim Crawford at 1) 5. A review of Commission filings reveals no independent expenditure 

reports ever filed by New Models. Federal Election Commission, Independent Expenditures, 

https;//www.fec.gov/data/independentexpenditures/7data_type=processed&is_notice=false&max_date=08%2F29%2F2017 

/d. at4,7. 

/(/.at 9-10. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 24 of 32 

or elect federal candidates."" Public statements available in our record indicate that New 

Models's major purpose was to conduct and sponsor research on public policy. As set forth on 

its website, "New Models provides public opinion research on key issues facing the American 

people." The website even maintains an "[ajrchives" page allowing the public to view the 

research New Models engaged in or commissioned since 2003."' No online report that we 

reviewed contains language advocating the election or defeat of a candidate.' Therefore, New 

Models's public statements weigh against finding reason to believe New Models was a political 

committee and we place much weight on this factor in our analysis. 

3. 'New Models' Independent Spending Demonstrates Its Major Purpose Was 

Not the, Nomination or Election of a Federal Candidate 

In applying the Commission's case-by-case approach, we place significant weight upon 

an organization's history of activities and spending. This approach gives the most complete 

picture of an organization's major purpose."^ One federal court recently ruled that this approach 

'OGC's Report does not identify a single statement evincing a purpose to nominate or elect federal 

candidates. OGC's analysis states that "the available information does not include examples of New Model's public 

statements or non-contribution activities." First Gen. Counsel's Rpt., at 5, MUR 6872. This statement is inaccurate. 

New Models' 2012 Form 990 was attached to the Complaint and describes New Models' "program service 

accomplishments." See Compl. Ex. A, 2012 Form 990 Part III (listing program service activities including focus 

groups, national issues polling and branding). "A program service is an activity of an organization that 

accomplishes its exempt purpose." 2016 Instructions for Form 990 Return of Organization Exempt from Income 

Tax at 10, https.7/www.irs.gov/pub/irs-pdf/i990.pdf. Because "[t]he promotion of social welfare does not include 

direct or indirect participation or intervention in political campaigns ..." program service activities are by definition 

"non-contribution activities." 26 C.F.R. 1.501(c)(4)-l(a)(2)(ii). New Models' program service accomplishments 

are apparent throughout its lifetime. See Form 990s. Part III; NFW MOOELS, http;//newmodelsusa.org/. Because 

newmodelsusa.org website is no longer functioning we utilized an internet archive to review New Models's reports. 

See Wayback Machine, Internet Archive (search for "http://newmodelsusa.org") (revealing published monthly 

research results from 2003 to early 2016). Additionally, New Models' website is listed on the front page of the 2012 

Form 990 and 2011 Form 990, both of which were attached to the Complaint. See Compl. at Exs. A, E. A check of 

that website would easily have given OGC examples of New Models' public statements in addition to the polling 

research it funded for over a decade. 

Ml See Wayback Machine, Internet Archive (search for "http://nevmiodelsusa.org"). 

' See id; see e.g.. NEW MODELS, Messaging on Immigration Reform and the Fiscal Cliff (December 2012), 

https://web.archive.org/web/20160S0306283S/http://newmodelsusa.org/wpcontent/uploads/20l2/l2/NewModelsDecember2012Report.pdf. Even if New Models had engaged in express 

advocacy on its own website, such internet communications are not expenditures under the Act and have no 

relevance to an analysis of political committee status. See 11 C.F.R. § I00.IS3 (exempting uncompensated internet 

activity from the definition of "expenditure"). 

' See Statement of Reasons of Chairman Lee E. Goodman and Commissioners Caroline C. Hunter and 

Matthew S. Petersen, MUR 6S38 (Americans for Job Security, et at.) (looking at organization's spending over its 

lifetime); Statement of Reasons of Chairman Lee E. Goodman and Commissioners Caroline C. Hunter and Matthew 

S. Petersen at 24 n. 101, MUR 6396 ("Often one can assess an organization's true major purpose only by reference to 

its entire history."); see also Statement of Reasons of Vice Chairman Donald F. McGahn and Commissioners 
MUR 6872 (New Models) 

Statement of Reasons 

Page 25 of 32 

is reasonable."^ The Commission and courts have resolved major purpose analyses by 

examining each organization as a whole, considering varying years of activity ranging from two 

to ten years, and often the organization's entire history. 

For example, in MUR 5365 (Club for Growth, Inc.) the Commission cited "CFG's 

activities, including its candidate research and advertising campaigns discussed above [from 

2000 to 2004].""^ In MUR 5751 (The Leadership Forum), OGC cited IRS reports showing 

receipts and disbursements over a five-year period, from 2002 through 2006, before concluding 

that the Respondent had not crossed the statutory threshold for political committee status."^ 

In MUR 2804, the Commission considered whether the American Israel Public Affairs 

Committee ("AIPAC") was a political committee. The Commission based its conclusion that 

AlPAC was not a political committee upon the General Counsel's analysis of a full decade, from 

1983 to 1992, of varied political activities, which included some electoral expenditures."' After 

the Commission's conclusion was challenged in court and remanded, the Commission ratified 

that conclusion again in 2000."* The Commission's determination that AIPAC was not a 

Caroline C. Hunter and Matthew S. Petersen, MUR 6081 (American Issues Project, Inc.) (looking at four years of an 

organization's histoiy). 

' CREW V. FEC, 209 F. Supp. 3d. 77,94 (D.D.C. 2017) C'Given the EEC's embrace of a totality-of-thecircumstances approach to divining an organizations 'major purpose,' It is not per se unreasonable that the 

Commissioners would consider a particular organization's hill spending histoiy as relevant to its analysis."). The 

district court in CREW went on to rule that the Commission should consider whether an organization's major 

purpose fundamentally changed over time, and to consider whether a spike in electoral spending in one year 

indicates such a fundamental change in the organization. Id. at 94. Having considered New Models's history, and 

the contributions it made in 2012 in the context of that histoiy and the long-term mission, as well as its activities in 

the years immediately preceding and following 2012, the facts and circumstances do not provide reason to believe 

that New Models's major purpose changed from public policy discussion to nominating or electing federal 

candidates. This conclusion is depicted graphically in Figure 2 above. 

General Counsel's Brief at 24, MUR 5365 (Club For Growth, Inc.); see id. at 4 ("every CFG membership 

solicitation between 2000-2004 confirms [] the mission of the organization") & 12 ("charting CFG's "annual 

advertising disbursements compared to its total disbursements for each year since 2000."). See also Stipulation for 

Entry of Consent Judgment ^ 22, FEC v. Citizens Club for Growth, Inc., Civ. No. 1:05-01851 (Sept. 6,2007) 

("Defendant's disbursements also show that its major purpose is influencing federal elections. Between August 30, 

2000 and December 31,2004, Defendant made disbursements totaling approximately $15.1 million, the vast 

majority of which were made in connection with federal elections, including ... public communications referencing 

a clearly identified candidate.") (emphasis added). The legal underpinnings of this MUR, including its consideration 

of spending on activity merely "in connection with" federal elections have been undermined by FEC v. Wisconsin 

Right to Life, 55\\}.S. 449 {2007) and Emily's List v. FEC,5i\ F.3d I, I2-I4(D.C. Cir.2009). 

'General Counsel's Report #2 at 3, MUR 5751 (The Leadership Forum). 

See General Counsel's Brief (Jan. 30, 1992), MUR 2804 (American Israel Public Affairs Committee). 

' See Vote Certification (Mar. 22,2000), MUR 2804R, approving recommendations in General Counsel's 

Report (Mar. 8,2000) at 19-22, MUR 2804R ("This was the conclusion reached in MUR 2804 with regard to 

AIPAC, with the result that the Commission found no probable cause to believe that the organization had violated 2 
MUR6872 (New Models) 

Statement of Reasons 

Page 26 of 32 

political committee also was the basis for the Commission's conclusion, resolving a related 

allegation, that AIPAC was a bona fide membership organization.'" The Commission's two 

determinations - that AIPAC was not a political committee and was a membership organization 

- were conflated because classification M a membership organization turned on whether the 

organization was a political committee. When the issue was again reviewed by the U.S. District 

Court for the District of Columbia, the court affirmed the Commission's conclusion that AIPAC 

was not a political committee, even expanding the scope to AIPAC's "more than forty years" 

history: 

AIPAC was incorporated in 1963 as a non-profit organization with the "sole 

function," as a registered domestic lobby, to encourage close U.S.-Israel relations 

and to provide services to its own members. Based on a careful review of the 

administrative record and the parties' arguments, I find no evidence that AIPAC's 

focus on lobbying for more than forty years has been a sham perpetrated to 

circumvent the Act's contribution and expenditure limits.'^" 

The Commission has ianalyzed other matters according to several years of activity. In MUR 

3669, the Commission considered nearly the entire five-year lifetime of the Christian 

Coalition.'^' 

Here, the Complaint alleges New Models was a political committee in 2012 because it 

made contributions in excess of $1,000 to independent expenditure-only political committees. 

U.S.C. §§ 433 and 434.... Therefore, the Commission's determination that there was no probable cause to believe 

AIPAC had violated 2 U.S.C. §§ 433 and 434 by failing to register and report as a political committee should remain 

undisturbed."). 

General Counsel's Report at 19-20 (Mar. 8,2000), MUR 2804R. 

'2° Akim V. FEC, 736 F. Supp. 2d 9,20 (D.D.C. 2010). 

See. e.g.. Gen. Counsel's Brief at 13-169 (July 28,1995), MUR 3669 (Christian Coalition) (considering 

activities over five years, 1990, 1991, 1992, 1993 and 1994). The Christian Coalition was created in 1989. See FEC 

V. Christian Coalition, 52 P. Supp. 2d 45,49 (D.D.C. 1999). So the Commission's consideration of activities over 

five years, 1990, 1991, 1992,1993 and 1994, constituted practically the entire lifespan of the organization. See 

Statement of Reasons of Commissioner Scott E. Thomas, Vice Chairman John Warren McGarry, and Commissioner 

Danny Lee McDonald, MUR 3669 at 6-11 (Christian Coalition) (citing to OGC's 192-page brief and arguing the 

Christian Coalition's major purpose was "election-related activities" as shown by various activities and statements 

fi'om 1990 to 1994). See also General Counsel's Report (Mar. 18,1999) at 6, MUR 3669 (Christian Coalition) 

(expanding proposed investigation to "new areas of inquiry" including TV and newspaper ads from 1990, 1991, 

1992, and 1993); First Gen. Counsel's Rpt. at 12, 18-30, MUR 3669 (Christian Coalition) (analyzing activities from 

1990 through 1992 and determining that the organization's activities were "designed" to influence federal elections). 

The legal underpinnings of this MUR, including consideration of spending on "election-related" activities 

"designed" to influence federal elections have been undermined by FEC v. Wisconsin Right to Life, 551 U.S. 449 

(2007). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 27 of 32 

representing approximately 68.5% of its total spending during the 2012 calendar year.'^^ We 

disagree. Based upon our review of New Models's spending, nominating or defeating a federal 

candidate may have been a purpose of the organization in 2012, but was not the major purpose of 

the organization.?^^ New Models never received contributions or made independent 

expenditures. New Models's federal electoral activity was limited to making isolated 

contributions to three Super PACs. Over its lifetime, these contributions amounted to just 19.5% 

of the organization's total spending.'^'' Even in 2012, New Models spent $1.5 million on its 

traditional policy mission. Thus, the contributions it made to other organizations in 2012 does 

not support a finding that its the major purpose was nominating or electing candidates to federal 

office. 

Z Our conclusion is further supported by looking at New Models's activities in the wake of 

2 Citizens United and Speech Now. From 2010 through 2015, the amount allocated to independent 

expenditure-only committees totaled just 29.6% of New Models's overall spending. 

^ Furthermore, the three most recent calendar years show zero contributions to federal political 

3 committees.Accordingly, we do not have reason to believe that New Models's major purpose 

S is the nomination or election of federal candidates. Rather, we believe New Models is an issue 

5 discussion organization that made sporadic contributions to independent expenditure-only 

g committees. In other words. New Models is precisely the type of group the Buckley court sought 

to exclude from the definition of political committee through the major purpose limitation. 

Recently, in the last five years, OGC has conceived a new timeframe for determining an 

organization's major purpose by reference to a single calendar year. Although that argument has 

not persuaded the Commission, or any federal court, OGC nonetheless continues to advance it 

122 See Compl. at 6-7. 

Nor does New Models's spending after 2012 indicate a shift in the organization's spending pattern. To the 

contrary, the 2012 contributions deviate from New Models' usual spending practices both before and after 2012! 

Furthermore, New Models affirmed under penalty of perjury that no significant changes to its governing 

documents—and by extension the exempt purposes under IRC section 501(c)(4) required to be denoted in those 

documents—took place in 2012 or in the years following. See New Models' 2011,2012,2013,2014,2015 Form 

990s. 

OGC stated in its First General Counsel's Report that "the available information does not provide an 

adequate basis" to assess New Models's representation that its contributions amount to '"less than 20%' of its 

overall spending since the group's inception." First Gen. Counsel's Rpt. at 5. Again, OGC's Report was inaccurate. 

New Models' annual returns are publicly available. See Foundation Center 990 Finder, 

http://990fmder.foundationcenter.org/990results.aspx?990_type=A&fTi=New+Models&st=&zp=&ei=&fy=&action= 

Find; ProPublica Nonprofit Explorer, https://projects.propublica.org/nonprofits/organizations/522267268; 

OpenSecretis Nonprofit Data Search, https://www.opensecrets.org/outside-spending/politicalnonprofits/990_tax_forms?id=522267268 

123 209 F. Supp. 3d 77, 94 (D.D.C. 2017) (stating that the Commission should have given additional weight to 

an organization's most recent calendar year). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 28 of 32 

here.'^^ According to OGC's report, "whether the analytical time frathe for major purpose is a 

calendar year, the group's fiscal year, or the relevant election-cycle. New Models' spending on 

federal campaign activity'^' appears to constitute the majority of its overall spending."'^® 

Because the only year in which New Models made significant political contributions was 2012, 

OGC's analysis, whether phrased as calendar year, fiscal year, or election-cycle, turns on the 

contributions made in the single calendar year 2012. 

However, determining an organization's major purpose by reference to its activity in a 

narrow snapshot of time—one calendar year or two—overlooks the point of the major purpose 

test. The major purpose limitation is intended to act as a constraint, saving the Act's definition 

of "political committee" by restricting it to groups that exist to elect or defeat federalcandidates.'^' Other regulatory rules apply to groups that occasioh^ly, or incidentally, act to 

nominate or elect candidates. While OGC attempts to root the single calendar year approach in 

the statute,'^" the major purpose test is not expressed in the statute. The major purpose test was 

See First Gen. Counsel's Rpt. at 5, 6872 (New Models). 

While the Commission has erroneously strayed into the vague notion of generalized "campaign activity," 

rather than Buckley's strict concept of nomination or election of federal candidates, see, e.g., MUR S365 (Club for 

Growth), General Counsel's Report #2 at 3,5 ("[T]he vast majority of CFG's disbursements are for federal 

campaign activity" and concluding that CFG "has the major purpose of federal campaign activity."), the 

Commission more recently has abided by Buckley's mandate: that major purpose encompasses only activity 

expressly directed at the nomination or election of federal candidates. See. e.g.. Statement of Reasons of Chairman 

Lee E. Goodman and Commissioners Caroline C. Hunter and Matthew S. Petersen, MUR 6396 (Crossroads GPS); 

Statement of Reasons of Vice Chairman Donald F. McGahn and Commissioners Caroline C. Hunter and Matthew S. 

Petersen, MUR 6081 (American Issues Project); Statement of Reasons of Vice Chairman Matthew S. Petersen and 

Commissioners Caroline C. Hunter and Donald F. McGahn, MUR 5541 (The November Fund); Federal Election 

Commission's Brief for the Respondents in Opposition at 4, The Real Truth About Obama, Inc., v. FEC, 130 S. Ct. 

2371 (2010) (No. 09-724) ("RTAO") ("[A]n entity that is not controlled by a candidate need not register as a 

political committee unless its 'major purpose' is the nomination or election of federal candidates."); Brief of 

Appellees Federal Election Commission and United States Department of Justice at 5, RTAO, 575 F.3d 342 (4th Cir. 

2009) (No. 08-1977) ("[A] non-candidate-controlled entity must register as a political committee thereby 

becoming subject to limits on the sources and amounts of its contributions received — only if the entity crosses the 

$ 1,000 threshold of contributions or expenditures and its 'major purpose' is the nomination or election of federal 

candidates"). 

First Gen. Counsel's Rpt. at 6, 8, MUR 6872 (New Models). New Models's fiscal year is the calendar 

year. See Form 990s. 

See. e.g., 2007 Political Committee Status Supplemental E&J at 5,602 ("[EJven if the Commission were to 

adopt a regulation encapsulating the judicially created major purpose doctrine, that regulation could only serve to 

limit, rather than to define or expand, the number or type of organizations regarded as political committees."). 

OGC argues that "[a] calendar year provides the firmest statutory footing for the Commission's major 

purpose determination " First Gen. Counsel's Rpt.at 5 n.21, MUR 6872 (New Models). However, the fact that 

the statutory definition relies upon expenditures or contributions in a calendar year is not relevant to the major 

purpose for which a group was created and operates. The Act imposes a bright line that, according to Buckley, was 

unconstitutionally over-inclusive, and thus, the Court imposed the major purpose limitation as a further filter. It is 
I 

MUR 6872 (New Models) 

Statement of Reasons 

Page 29 of 32 

fashioned by the Supreme Court precisely to avoid a rigid, "one-size-fits-all rule" ruie.'^' The 

Commission has chosen a more comprehensive set of factors in a case-by-case approach. 

Moreover, a rigid calendar year approach or election cycle approach conflicts with multiple 

decisions by the U.S. District Court for the District of Columbia upholding Commission 

consideration of an organization's multi-year spending history.For these reasons, the 

Commission has never formally adopted such an approach'" and has eschewed limiting its 

analysis to a single calendar year in prior enforcement matters - matters OGC chose not to 

cite.'^^ 

Assessing the major purpose limitation through the myopic and artificial window of an 

organization's political contributions in a single calendar year would inevitably subject many 

issue-based organizations to the burdens of political committee status.As stated above, an 

examination of a group's major purpose is necessarily an after-the-fact exercise. In these cases, 

the Commission must determine whether a group properly refrained from registering and 

reporting as a political committee. Like any snapshot analysis, limiting ourselves to short time 

periods in the life of an organization provides an incomplete and distorted picture of a group's 

actual major purpose. 

unclear why that arbitrary statutory timefraine is appropriate when RTAA rejected the argument that "the major 

purpose test requires a bright-line, two factor test." 681 F.3d at SS7. 

According to RTAA, the Commission is not "foreclosefd]... from using a more comprehensive 

methodology." 681 F.3d at 557. But RTAA never approved of the Commission using a less comprehensive, 

selective methodology that would frustrate the reason for the major purpose test, which is precisely what would 

happen if the Commission limited the scope of the major purpose analysis to a single calendar year without 

consideration of any other spending outside that window. 

See CREW v. FEC, 209 F. Supp. 3d 77,94 (D.D.C. 2017) (reasonable for the Commission to consider 

organization's "full spending history"); Akins v. FEC, Tift F. Supp. 2d 9,20 (D.D.C. 2010) (considering 

organization's "focus on lobbying for more than forty years"). See also FEC v. Malenick, 310 F. Supp. 2d 230,233 

(D.D.C. 2004) (citing PL's Mem., Ex. I (Stipulation of Fact signed and submitted Malenick and Triad Inc., to the 

FEC on January 28, 2000, listing numerous 1995 and 1996 Triad materials) and Ex. 47 ("Letter from Malenick to 

Cone, dated Mar. 30, 1993" among others); id. at n.6 (citing to Triad Stip. 1(114.16, 5.1-5.4 for the value of checks 

forwarded to "intended federal candidate or campaign committees in 1995 and 1996.") (emphasis added); FEC v. 

GOPAC, 917 F. Supp. 851, 862-66 (D.D.C. 1996) (reviewing, among other things, GOPAC's 1989-1990 Political 

Strategy Campaign Plan and Budget). 

133 2007 Supplemental E&J, 72 Fed. Reg. 5,595 (Feb. 7,2007). 

See MUR 5751 (The Leadership Forum); MUR 5365 (Club for Growth); MUR 3669 (Christian Coalition); 

MURs 2804 & 2804R (AIPAC). 

A calendar-year approach also presents practical difficulties. If a group is a political committee, it must file 

a statement of organization within ten days of becoming a political committee. Since a group may not know its 

overall spending a priori, there is no way for a group to know when the ten-day period begins to run, or when the 

first filing is due. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 30 of 32 

For example, consider a group that exists for eight years, spending one million dollars per 

year. For four years, it spends 90% of its resources on issue advocacy and 10% on express 

advocacy. In year five, the organization's foremost issue becomes highly visible in a federal 

election. As a result, it devotes 90% of its resources that year to expressly advocate the election 

or defeat of clearly identified federal candidates and only 10% on issue advocacy. In years six, 

seven, and eight, it returns to spending 90% of its funds on issue advocacy and 10% on express 

advocacy. Under OGC's approach, this organization would be a federal political committee in 

its fifth year of operation, and would remain a federal political committee every year thereafter, 

despite the fact that over 78% of its total resources, and 90% of its resources in seven of its eight 

years of existence, were spent on issue advocacy. Deeming this organization's major purpose to 

be nominating and electing federal candidates would be an absurd finding. 

Another example would be a group created in the middle of an election year that intends 

to—and in fact does—remain operating after the election ends on a fiscal-year, rather than a 

calendar-year basis. Such an organization could devote 10% of its resources to express advocacy 

prior to the election, then spend the other 90% of its resources that fiscal year on post-election 

issue advocacy, and still be considered a political committee under OGC's proposed approach if 

its issue advocacy spending occurred in the calendar year following the election. The 

organization's major purpose determination would be based on a distinct minority of its spending 

within the first twelve months of its operation. Despite the group's best efforts to minimize its 

expenditures, the Commission would ignore the timeframe the group used to determine ex ante 

its major purpose. 

In both examples, a group concerned about federal policies and other legislative issues 

would focus some of its time and spending in the months preceding a federal election. As one 

reputable commentator has stated, "[ujnsurprisingly, most citizens begin to focus on and become 

engaged in political debate once election day approaches."'" Thus, linking issues to candidates 

and elections is quite common. But if a group resumes its issue advocacy after the election date, 

such spending is also evidence of its true purpose.'^' The Commission must take that reality into 

account. Anything less is contrived and does not yield a true or accurate understanding of the 

group's raison d'etre. 

Also problematic, if the groups in the examples above were regulated as political 

committees, they would be subjected to the Commission's regulatory and reporting burdens in 

perpetuity. Under Commission regulations, "only a committee which will no longer receive any 

Kirk L. Jowers, Issue Advocacy: if h Cannot Be Regulated When It is Least Valuable, It Cannot Be 

Regulated When It Is Most Valuable, 50 CATH. U. L. REV. 65, 76 (Fall 2000). 

Interestingly, in the past the Commission has relied, in part, on the fact that an organization ceased active 

operations after the end of the election cycle in question when determining that the major purpose teM had been met. 

See 2007 Political Committee Supplemental E&J, 72 Fed. Reg. at 5,605 (summarizing MUR 5511 (Swiftboat Vets) 

and MUR 5754 (MoveOn.org Voter Fund)). If the Commission may consider the lack of activity in the calendar 

year following an election as relevant for determining major purpose, then it certainly it can look at and evaluate 

actual activity undertaken in the next calendar year. 
MUR 6872 (New Models) 

Statement of Reasons 

Page 31 of32 

contributions or make any disbursements that would otherwise qualify it as a political committee 

may terminate, provided that such committee has no outstanding debts and obligations."'^® 

Thus, in order to stop filing burdensome and invasive financial reports, a committee would have 

to surrender its political rights and agree to not make any independent expenditures, regardless of 

the organization's major purpose. 

For all of these reasons, the Commission's analysis of an organization's major purpose 

has avoided setting a definitive time frame forjudging each organization's activities. Here, 

applying our expertise in the context of the Commission's well-established case-by-case 

framework, we considered New Models's contributions in 2012 in the context of the 

1 organization's history, before and after its contributions in 2012, to conclude that New Models's 

/ overall spending history did not support finding reason to believe that it had the major purpose of 

^ nominating or election federal candidates to office. Nor do we conclude that New Models's 

^ contributions in 2012, by themselves, support finding reason to believe that New Models 

fundamentally changed its organizational purpose. 

V. CONCLUSION 

Based on our review of the evidence in the record. New Models is an organization that 

made permissible contributions to independent expenditure-only political committees. These 

occasions were irregular, occurring iii 2010 and 2012 and totaled less than 20% of the 

organization's total lifetime expenses. As the 2007 Supplemental E&J made clear, however, to 

be considered a political committee under the Act, the nomination or election of a candidate must 

be the major purpose of the organization. Here, New Models's organizational purpose, tax 

exempt status, public statements, and overall spending evidence an issue discussion organization, 

not a political committee having the major purpose of nominating or electing candidates. As a 

result, it cannot (nor should it) be subject to the "pervasive" and "burdensome" requirements of 

registering and reporting as a political committee. For these reasons, and in exercise of our 

prosecutorial discretion,'" we voted against finding reason to believe that New Models violated 

the Act by failing to register and report as a political committee and to dismiss the matter. 

11 C.F.R. § 102.3(a). 

See Heckler v Chaney, 470 U.S. 821 (1985). Given the age of the activity and the fact that the organization 

appears no longer active, proceeding further would not be an appropriate use.of Commission resources. See 28 

U.S.C. § 2462. See also Nader v. FEC, 823 F. Supp. 2d 53,65:66 (D.D.C. 2011) (finding Commission decision to 

dismiss allegations that several groups were political committees was not contrary to law, and "represents a 

reasonable exercise of the agency's considerable prosecutorial discretion" given the "staleness of evidence and the 

defunctness of several of the groups"). 
MUR 6872 (New Models) 

Statement of Reasons 

Page 32 of 32 

Caroline C. Hunter 

Vice Chair 

Date 

De-c. lo, 1017 

Lee E>C}oodman 

Commissioner 

Date