64260 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

FEDERAL ELECTION COMMISSION

11 CFR Parts 100, 102, 109, 110, and

114

[Notice 1995–23]

Corporate and Labor Organization

Activity; Express Advocacy and

Coordination With Candidates

AGENCY: Federal Election Commission.

ACTION: Final rule and transmittal of

regulations to Congress.

SUMMARY: The Commission is issuing

revised regulations regarding

expenditures by corporations and labor

organizations. The new rules implement

the Supreme Court’s opinion in Federal

Election Commission v. Massachusetts

Citizens for Life, Inc., 479 U.S. 238

(1986) (MCFL), by substituting an

express advocacy standard for the

previous partisan/nonpartisan standard

with respect to corporate and labor

organization expenditures.

Consequently, in many respects, the

revised rules permit corporations and

labor organizations to engage in a

broader range of activities than was

permitted under the previous rules.

New provisions are also being added to

provide corporations and labor

organizations with guidance regarding

endorsements of candidates, activities

which facilitate the making of

contributions, and candidate

appearances at colleges and universities.

DATES: Further action, including the

publication of a document in the

Federal Register announcing an

effective date, will be taken after these

regulations have been before Congress

for 30 legislative days pursuant to 2

U.S.C. 438(d).

FOR FURTHER INFORMATION CONTACT:

Ms. Susan E. Propper, Assistant General

Counsel, or Ms. Rosemary C. Smith,

Senior Attorney, 999 E Street NW.,

Washington, D.C. 20463, (202) 219–3690

or (800) 424–9530.

SUPPLEMENTARY INFORMATION: The

Commission is publishing today the

final text of revisions to its regulations

at 11 CFR 109.1(b)(4), 110.12, 110.13,

114.1 (a) and (j), 114.2, 114.3, 114.4,

114.12(b) and 114.13. These provisions

implement 2 U.S.C. 431(17) and 441b,

provisions of the Federal Election

Campaign Act of 1971, as amended (the

Act or FECA), 2 U.S.C. 431 et seq. Also

included are conforming amendments to

11 CFR 100.7(b)(21), 100.8 (b)(3) and

(b)(23) and 102.4(c)(1). Section 438(d) of

Title 2, United States Code, requires that

any rule or regulations prescribed by the

Commission to carry out the provisions

of Title 2 of the United States Code be

transmitted to the Speaker of the House

of Representatives and the President of

the Senate 30 legislative days before

they are finally promulgated. These

regulations were transmitted to

Congress on December 8, 1995.

Explanation and Justification

The new and revised rules reflect

recent judicial and Commission

interpretations of 2 U.S.C. 441b. This

section of the FECA prohibits

corporations and labor organizations

from using general treasury monies to

make contributions or expenditures in

connection with federal elections. The

new and amended rules contain the

following changes:

1. The partisan/nopartisan standards

in previous 11 CFR part 114 have been

replaced by new language at section

114.2, 114.3, and 114.4, prohibiting

corporations and labor organizations

from making expenditures for

communications to the general public

expressly advocating the election or

defeat of federal candidates. This new

language applies only to expenditures.

2. The provisions regarding candidate

debates, candidate appearances,

distributing registration and voting

information, voter guides, voting

records, and conducting voter

registration and get-out-vote drives in

sections 110.13, 114.3, 114.4 and 114.13

have been revised and updated.

3. New provisions have been added to

sections 110.12, 114.1., 114.2, and 114.4

to define ‘‘restricted class,’’ and to

address candidate appearances at

colleges and universities, endorsements

of candidates, and activities which

facilitate the making of contributions.

4. New language has been added to 11

CFR 114.2, 114.3 and 114.4 to address

the question of when coordination

between a candidate and a corporation

or labor organization will cause an

activity to become a prohibited

contribution.

Please note that at an earlier stage of

this rulemaking, the Commission

revised the definition of express

advocacy in accordance with the

judicial interpretations found in

Buckley v. Valeo, 424 U.S. 1, 44 n. 52

(1976) (Buckley, MCFL and Federal

Election Commission v. Furgatch, 807 F

2d 857 (9th Cir.), cert. denied, 484 U.S.

850 (1987) (Furgatch) and moved it to

11 CFR 100.22. See Explanation and

Justification for 11 CFR 100.17, 100.22,

106.1, 109.1 and 114.10, 60 FR 35292

(July 6, 1995). At that time, the

definition of ‘‘clearly identified,’’ in 11

CFR 100.17, was also updated. In

addition, new section 114.10 was added

to allow qualified nonprofit

corporations possessing certain essential

features to use general treasury funds for

independent expenditures, and to set

out reporting obligations for qualified

nonprofit corporations making

independent expenditures. Section

114.10 implements the Supreme Court’s

decisions in MCFL and Austin v.

Michigan Chamber of Commerce, 494

U.S.C. 652 (1990) (Austin).

The history of this rulemaking,

including the Petition for Rulemaking

and the comments and public

testimony, are discussed in more detail

in the previously published Explanation

and Justification at 60 FR 35292 (July 6,

1995), and in the Notice of Proposed

Rulemaking at 57 FR 33548 (July 29,

1992) (Notice or NPRM). The

promulgation of these regulations, after

the close of the thirty legislative day

period, will complete the Commission’s

consideration of the National Right to

Work Committee’s Petition for

Rulemaking.

Section 100.7(b)(21) Contribution

Paragraph (b)(21) of this section is

being amended by removing the term

‘‘nonpartisan’’ in describing candidate

debates because that term is no longer

used in the debate rules at 11 CFR

110.13. In addition, the cite to section

114.4(e) is being changed to 111.4(f) to

correspond to the renumbering of that

section.

Section 100.8 (b)(3) and (b)(23)

Expenditure

Paragraph (b)(3) of section 100.8 is

being amended to delete the term

‘‘nonpartisan’’ in describing the type of

voter drive activity which fall outside

the definition of ‘‘expenditure.’’ In order

for this exception to apply, such activity

must still be conducted without any

effort to determine party or candidate

preference. A reference to section

114.3(c)(4) has also been added for the

convenience of readers concerned with

corporate or labor organization voter

drives aimed at the restricted class.

Paragraph (b)(23) of this section is

being amended by removing the term

‘‘nonpartisan’’in describing candidate

debates because that term is no longer

used in the debate rules at 11 CFR

110.13. In addition, the cite to section

114.4(e) is being changed to 114.4(f) to

correspond to the renumbering of that

section.

Section 102.4(c)(1) Administrative

Termination

The citation to the rules governing

debt settlement procedures is being

changed from 11 CFR 114.10 to 11 CFR

part 116. Section 114.10 now covers

qualified nonprofit corporations, not

debt settlement.
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64261

Section 109.1(b)(4) Coordination with

Candidates

The Notice suggested revising 11 CFR

109.1(b)(4) to indicate that the limited

types of communication with

candidates and their campaign staff

which are described in 11 CFR 114.2(c),

114.3 and 114.4 do not constitute

coordination if they comply with the

requirements of those sections. Upon

further reflection, this proposal has been

dropped because 11 CFR part 109 covers

all persons, and the Commission’s

concerns regarding the coordination of

corporate or labor organization activity

is more appropriately addressed in 11

CFR 114.2 through 114.4, which are

discussed below.

Section 110.12 Candidate Appearance

on Public Educational Institution

Premises

New section 110.12 of the regulations

addresses candidate appearances on the

premises of public educational

institutions. This section generally

follows new paragraph (c)(7) of section

114.4, which is discussed more fully

below. It has been included in the

regulations so that public colleges and

universities may continue to invite

candidates to appear and address either

the academic community or the general

public in the same manner as

incorporated private colleges and

universities. A number of commenters

pointed out that private schools should

be treated the same as public

educational institutions. Please note,

however, that these institutions are also

governed by state law which may

impose additional requirements in this

area.

Section 110.13 Candidate Debates

The Commission has revised its

regulations at 11 CFR 110.13 governing

the staging of candidate debates in

several respects. First, the previous

requirement that debates be

‘‘nonpartisan’’ has been removed.

However, the rules continue to specify

that candidate debates may not be

structured to promote or advance a

particular candidate. Also, debates may

not be coordinated with a candidate in

a manner that would result in the

making of an in-kind contribution.

In the NPRM, the Commission has

proposed several additional

requirements, such as a restriction on

discussing campaign strategy and tactics

with the candidate or agents of the

candidate. The NPRM also included

restrictions on giving one candidate

more time during the debate or more

advance information as to the questions

to be asked. Several commenters were

critical of these proposals. While this

language has been deleted from the final

rules, these restrictions are subsumed

within the requirement that the debate

not be structured to promote or advance

a particular candidate over the others.

The Commission also considered

including language stating that staging

organizations may not expressly

advocate the election or defeat of any

clearly identified candidate during the

debates. That language does not need to

be included in the final rule because the

rules already state that the debates may

not be structured to promote or advance

one candidate over another. Please note

that no portion of the entire event,

including any pre-debate or post-debate

commentary and analysis, may be

structured to promote or advance a

particular candidate. Nevertheless, a

news organization that stages a

candidate debate may produce a

separate editorial containing express

advocacy under the news story

exception to the definitions of

contribution and expenditure in 11 CFR

100.7(b)(2) and 100.8(b)(2).

1. Definition of Staging Organization

Section 110.13(a) addresses several

issues that have been raised regarding

nonprofit groups and media

organizations that wish to be staging

organizations for candidate debates.

First, this provision was rewritten to

clarify that nonprofit organizations

described in 26 U.S.C. 501 (c)(3) and

(c)(4) may stage debates even if they

have not received official confirmation

from the Internal Revenue Service of

their status as nonprofit organizations.

In addition, the previous language may

have been confusing because it

described these entities as ‘‘exempt from

Federal taxation’’, when they may be

required to pay taxes on their

nonexempt function income. Please

note that under section 110.13, it is

possible for a candidate debate to be

sponsored by multiple staging

organizations. The Internal Revenue

Service commented that while the

requirements in the FEC’s rules are not

identical to the factors the IRS

considers, they do not conflict with the

IRS’s rules regarding political activity

carried out by 501(c) organizations.

Another commenter questioned the

reason for disqualifying nonprofit

organizations from staging debates if

they endorsed candidates, as long as the

debate is fair. The Commission is

retaining this requirement because it is

needed to ensure the integrity of

candidate debates.

Section 110.13(a)(2) follows the

previous provision by indicating that

broadcasters and the print media may

stage candidate debates, but it does not

indicate whether local cable stations or

cable networks may stage debates.

However, questions involving cable

debates will be addressed in a separate

NPRM. This area is currently subject to

many changes, and the Commission

intends to consult further with the

Federal Communications Commission

before addressing it.

Two comments questioned the use of

the term ‘‘bona fide’’ to describe

newspapers who may qualify as debate

staging organizations, and the

Commission’s authority to determine

what is a bona fide newspaper or

magazine under the First Amendment

guarantee of freedom of the press. Bona

fide newspapers and magazines include

publications of general circulation

containing news, information, opinion,

and entertainment, which appear at

regular intervals and derive their

revenues from subscriptions and

advertising. This term is explained in

more detail in the Explanation and

Justification for the 1979 rules on

funding and sponsorship of federal

candidate debates. See 44 FR 76734

(December 27, 1979). These rules were

transmitted to Congress on December

20, 1979, together with the Explanation

and Justification. They became effective

on April 1, 1980, after neither house of

Congress disapproved them under 2

U.S.C. 438(d)(2). (An earlier version of

the candidate debate rules was

disapproved by Congress on September

18, 1979. See 44 FR 39348 (July 5,

1979).) This is, as the Supreme Court

has noted, an ‘‘indication that Congress

does not look favorably’’ upon the

Commission’s construction of the Act.

FEC v. Democratic Senatorial Campaign

Committee, 454 U.S. 27, 34 (1981). See

also, e.g., Sibbach v. Wilson, 312 U.S. 1,

16 (1941) (‘‘That no adverse action was

taken by Congress indicates, at least,

that no transgression of legislative

policy was found’’). Accordingly, the

revised rules follow the previous

provisions by retaining the term ‘‘bona

fide’’ to describe newspapers and

magazines that may stage candidate

debates.

Finally, please note that the purpose

of section 110.13 and 114.4(f) is to

provide a specific exception so that

certain nonprofit organizations and the

news media may stage debates, without

being deemed to have made prohibited

corporate contributions to the

candidates taking part in debates. This

exception is consistent with the

traditional role these organizations have

played in the political process.

Individuals and unincorporated entities

wishing to stage debates are not covered

by the exception.
64262 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

2. Debate Structure and Selection of

Candidates

The rules in section 110.13(b)(1)

continue the previous policy of

permitting staging organizations to

decide which candidates to include in

a debate, so long as the debate includes

at least two candidates. Please note that

a face-to-face appearance or

confrontation by the candidates is an

inherent element of a debate. Hence, a

debate does not consist of a series of

candidates appearances at separate

times over the course of a longer event.

See AO 1986–37. Nevertheless, the

requirement of including two

candidates would be satisfied, for

example, if two candidates were invited

and accepted, but one was unable to

reach the debate site due to bad weather

conditions, and the staging organization

held the debate with only the other

candidate present. Other situations will

be addressed on a case-by-case basis.

The Commission does not intend to

penalize staging organizations for going

forward with debates when

circumstances beyond their control

result in only one candidate being

present and it is not feasible to

reschedule. Please note that in some

situations, the rules in 11 CFR 114.4

regarding candidate appearance may

also be applicable.

Many comments, and much public

testimony, was received on whether the

Commission should establish

reasonable, objective, nondiscriminatory

criteria to be used by staging

organizations in determining who must

be invited to participate in candidate

debates. In the alternative, it was

suggested that the Commission could

allow staging organizations to use their

own pre-established sets of reasonable,

objective, nondiscriminatory criteria,

provided the criteria are subject to

Commission review and are announced

to the candidates in advance.

In response to the comments and

testimony, new paragraph (c) has been

added to section 110.13 to require all

staging organizations to use preestablished objective criteria to

determine which candidates are allowed

to participate in debates. Given that the

rules permit corporate funding of

candidate debates, it is appropriate that

staging organizations use preestablished objective criteria to avoid

the real or apparent potential for a quid

pro quo, and to ensure the integrity and

fairness of the process. The choice of

which objective criteria to use is largely

left to the discretion of the staging

organization. The suggestion that the

criteria be ‘‘reasonable’’ is not needed

because reasonableness is implied.

Similarly, the revised rules are not

intended to permit the use of

discriminatory criteria such as race,

creed, color, religion, sex or national

origin.

Although the new rules do not require

staging organizations to do so, those

staging debates would be well advised

to reduce their objective criteria to

writing and to make the criteria

available to all candidates before the

debate. This will enable staging

organizations to show how they decided

which candidates to invite to the debate.

Staging organizations must be able to

show that their objective criteria were

used to pick the participants, and that

the criteria were not designed to result

in the selection of certain pre-chosen

participants. The objective criteria may

be set to control the number of

candidates participating in a debate if

the staging organization believes there

are too many candidates to conduct a

meaningful debate.

Under the new rules, nomination by

a particular political party, such as a

major party, may not be the sole

criterion used to bar a candidate from

participating in a general election

debate. But, in situations where, for

example, candidates must satisfy three

of five objective criteria, nomination by

a major party may be one of the criteria.

This is a change from the Explanation

and Justification for the previous rules,

which had expressly allowed staging

organizations to restrict general election

debates to major party candidates. See

Explanation and Justification, 44 FR

76735 (December 27, 1979). In contrast,

the new rules do not allow a staging

organization to bar minor party

candidates or independent candidates

from participating simply because they

have not been nominated by a major

party.

The final rules which follow also

continue the previous policy that

sponsoring a primary debate for

candidates of one political party does

not require the staging organization to

hold a debate for the candidates of any

other party. See Explanation and

Justification, 44 FR 76735 (December 27,

1979).

Section 114.1 Definitions

1. Contribution and Expenditure

The revised regulations in 11 CFR

114.1 (a)(1) and (a)(2) recognize that the

MCFL decision necessitates certain

distinctions between the terms

‘‘contribution’’ and ‘‘expenditure.’’ The

previous rules had treated these terms

as coextensive. The distinction arises

because the Court read an express

advocacy standard into the 2 U.S.C.

441b definition of expenditure.

However, payments which are

coordinated with candidates constitute

expenditures and in-kind contributions

to those candidates even if the

communications do not contain express

advocacy. See AO 1988–22.

One commenter urged the

Commission to continue to interpret the

term ‘‘contribution or expenditure’’ to

cover the same disbursements. The

comment argued that the MCFL decision

applies equally to contributions and

expenditures. The Commission

disagrees with this interpretation of

MCFL, given that the case only involved

the issue of whether corporate

expenditures were made. In MCFL, the

parties did not raise, and the Supreme

Court did not resolve, the factual

question of whether corporate

contributions had been made by MCFL,

Inc. However, the MCFL Court

reaffirmed the First Amendment

distinction between independent

expenditures and contributions, which

was recognized in the Buckley opinion.

In Buckley, the Supreme Court generally

struck down the Act’s limitations on

independent campaign expenditures by

individuals and organizations (Buckley,

424 U.S. at 39–51), but upheld the

constitutionality of the Act’s restrictions

on contributions to candidates. Id. at

23–38. Subsequently, the Court stated in

NCPAC that ‘‘there was a fundamental

constitutional difference between

money spent to advertise one’s views

independently of the candidate’s

campaign and money contributed to the

candidate to be spent on his campaign.’’

Federal Election Comission v. National

Conservation PAC, 470 U.S. 480, 497

(1985). Similarly, the Court indicated

that ‘‘a corporation’s expenditures to

propagate its views on issues of general

public interest are of a different

constitutional stature than corporate

contributions to candidates.’’ Id., at

495–96. In light of this judiciallyrecognized distinction, the final version

of section 114.1(a)(1) and (a)(2) is being

modified to recognize that the terms

‘‘contribution’’ and ‘‘expenditure’’ are

not coextensive.

The attached rules also include two

technical amendments to section

114.1(a)(1). First, the reference to the

National (sic) Savings and Loan

Insurance Corporation has been deleted,

because that entity no longer exists.

Paragraph (a)(2)(ii) of section 114.1 is

also being amended to remove the

reference to ‘‘nonpartisan’’ voter drives.

2. Restricted Class

New paragraph (j) of section 114.1

contains a definition of ‘‘restricted

class’’ for purposes of receiving
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64263

corporate or labor organization

communications containing express

advocacy. It has been included to avoid

describing everyone in the restricted

class in numerous places throughout the

regulations where it would be more

convenient to simply use the term

‘‘restricted class.’’ The definition does

not change who is considered to be

within the restricted class. It also does

not change who is an executive or

administrative employee under section

114.1(c) or who is a member of a

membership association under section

114.1(e).

For most corporations and labor

organizations, the restricted class is the

same as the solicitable class. However,

for incorporated trade associations and

certain cooperatives, there are

differences in who can receive

solicitations and who can receive

express advocacy communications. For

example, a trade association’s restricted

class includes member corporations

who are not in its solicitable class, since

corporations may not make

contributions under section 441b of the

FECA. Conversely, however, a trade

association may solicit its member

corporations’ stockholders and

executive and administrative personnel,

even though these individuals are not in

its restricted class, if the member

corporations have approved the

solicitations. See, e.g., AO 1991–24 and

11 CFR 114.8.

Section 114.2 Prohibitions on

Contributions and Expenditures

1. Express Advocacy

The final rules incorporate an express

advocacy standard in several sections of

11 CFR part 114. First, new language in

paragraphs (a) and (b) of section 114.2

prohibits corporations and labor

organizations from making expenditures

for communications to the general

public that expressly advocate the

election or defeat of one or more clearly

identified candidates. Please note that

some portions of the regulations refer to

‘‘communications containing express

advocacy.’’ This term has the same

meaning as the references elsewhere to

‘‘communications expressly advocating

the election or defeat of one or more

clearly identified candidates.’’

For the reasons explained above, the

express advocacy standard in the

revised rules applies to independent

expenditures, but not contributions. The

prohibition against contributions made

by corporations and labor organizations

in connection with federal elections

remains unaffected by MCFL. Most, but

not all, commenters supported the

adoption of an express advocacy

standard for evaluating independent

expenditures under section 441b of the

FECA.

The provision prohibiting

expenditures for communications

containing express advocacy applies to

all corporations and labor organizations

except for qualified nonprofit

corporations meeting the criteria set out

in new section 114.10. Thus, these

qualified nonprofit corporations may

use general treasury funds to make

independent expenditure

communications to the general public

which contain express advocacy. These

could include registration and voting

communications, official registration

and voting information, voting records

and voter guides. See also 11 CFR

114.4(c)(1)(i) and (ii).

2. Coordination With Candidates

A new paragraph (c) has been added

to 11 CFR 114.2 to address the topic of

coordination of corporate or labor

organization activity with candidates or

their authorized committees or agents,

which results in the making of an inkind contribution. Previous paragraphs

(c) and (d) have been redesignated as

paragraphs (d) and (e), respectively.

a. Initial Proposals. In Buckley v.

Valeo, the Supreme Court made a

distinction between independent

expenditures and contributions. The

Court observed, ‘‘[u]nlike contributions,

such independent expenditures may

well provide little assistance to the

candidate’s campaign and indeed may

prove counterproductive. The absence

of prearrangement and coordination of

an expenditure with the candidate or

his agent not only undermines the value

of the expenditure to the candidate, but

also alleviates the danger that

expenditures will be given as a quid pro

quo for improper commitments from the

candidate.’’ Buckley, 424 U.S. at 47.

Thus, Buckley could be interpreted to

prohibit all contacts with candidates.

However, the NPRM recognized that it

is justifiable to allow some forms of

contact to preserve the previous range of

permissible activity, such as sponsoring

candidate appearances. The prohibition

against corporate contributions was

expressly reaffirmed in MCFL. 479 U.S.

at 260. Therefore, the NPRM sought to

draw a distinction between permissible

contacts with candidates which are

necessary to conduct these activities,

and more extensive coordination that

will result in in-kind contributions in

some circumstances. The proposals in

the NPRM would have defined

coordination to include discussions of

specific campaign strategy or tactics.

The proposed rules include new

language in section 114.2(c) indicating

when corporate and labor organization

disbursements will be treated as

impermissible in-kind contributions to

particular candidates. Prior to the MCFL

decision, the Commission had not

needed to examine the extent to which

such payments by corporations and

labor organizations could be treated as

in-kind contributions, because they

were simply treated as prohibited

corporate or labor organization

expenditures in connection with federal

elections, unless permitted by a specific

exemption.

b. Comments and Testimony.

Numerous commenters expressed a

wide variety of views on this topic.

Many were confused as to how such a

standard would work in practice. Some

pointed out that this was an area not

addressed by the MCFL decision, and

that it appeared as though the

Commission was trying to find a way to

impose new requirements that would be

at least as restrictive as the former

partisan/nonpartisan standard. They

argued that section 441b(b)(2)(A) of the

FECA excludes communications with

the restricted class on any subject from

the definition of contribution or

expenditures. Others favored a more

restrictive rule allowing no contacts

except for arranging the logistics of

candidate debates and appearances, or

obtaining responses for voter guides.

c. Revised Rules. In response to these

concerns, new section 114.2(c) has been

rewritten to clarify what types of

contacts with candidates are considered

impermissible coordination, and what

types are permissible. The comments

received in response to these proposals

illustrated the need to clarify and

simplify the operation of these

provisions. Under revised section 114.2,

a corporation or labor organization that

only makes communications to its

restricted class does not run the risk of

having its expenditures treated as inkind contributions. On the other hand,

a corporation or labor organization that

engages in election-related activities

directed at the general public must

avoid most forms of coordination with

candidates, as this will generally result

in prohibited in-kind contributions, and

will compromise the independence of

future communications to the general

public. For example, a prohibited inkind contribution would result if a voter

guide is prepared and distributed after

consulting with the candidate regarding

his or her plans, projects or needs

regarding the campaign. Please note

that, in the case of a communication just

to the restricted class, coordination will

not cause that activity or future

communications to the restricted class

to be considered in-kind contributions.
64264 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

However, such coordination may

compromise the ability of a

corporation’s or labor organization’s

separate segregated fund to make

independent expenditures to those

outside the restricted class in the future.

Additional changes to the rules

covering candidate debates, candidate

appearances, colleges and universities,

voting records, voting guides, voter

registration and get-out-the-vote drives,

endorsements, trademarks and

letterhead, and facilitation are described

below.

3. Facilitating the Making of

Contributions

As part of the revisions to 11 CFR Part

114, the Commission has reassessed the

prohibition against corporations and

labor organizations facilitating the

making of contributions, and is adding

a new provision which modifies its

prior interpretation. Previously, in AOs

1987–29, 1986–4 and 1982–2, MUR

3540 and in the 1989 and 1977

Explanation and Justifications of

sections 110.6 and 114.3, the

Commission has stated that corporations

and labor organizations may not

facilitate the making of contributions to

particular candidates or political

committees other than their own

separate segregated funds. Explanation

and Justification of Regulations, H. Doc.

No. 95–44, 95th Cong., 1st Sess. at 104–

105 (1977); 54 F.R. 34106 (Aug. 17,

1989).

The NPRM contemplated adding new

language to 11 CFR 114.3(d) to set forth

the current policies regarding

facilitating the making of contributions.

Please note that the new facilitation

rules have been relocated to 11 CFR

114.2(f), since section 114.3 covers

activities involving only the restricted

class, and facilitation can involve

activities that are directed to the

restricted class or that go beyond the

restricted class.

The comments addressing this topic

reflected a diversity of opinion. Some

felt it was helpful to include the

Commission’s policies on facilitation in

the regulations. Others felt the proposals

would restrict the ability of corporations

to engage in activities that were

permissible, and would drive political

fundraising underground, and thwart

public disclosure. Another concern was

that the rules would discourage

corporations and labor organization

from supporting the political activities

of their employees in situations where

the corporation or labor organizations

does not take a position on the election.

The Internal Revenue Service found no

conflict with its requirements covering

nonprofit corporations.

The revised facilitation provisions

attempt to address a variety of concerns.

First, section 114.2(f)(1) sets out the

general prohibition, and explains that

facilitation means using corporate

resources or facilities to engage in

fundraising for candidates. However,

this is not intended to negate the range

of permissible activities found in other

portions of the rules. For example,

individual volunteer activity using

corporate or labor organization facilities

is still permissible under 11 CFR 100.7,

1008, and 114.9 (a), (b), and (c),

provided it meets the conditions set

forth in those rules. Similarly, there are

no changes to the regulations governing

the rental or use of corporate or labor

organization facilities or aircraft by

other persons. 11 CFR 114.9 (d) and (e).

The new rules at 11 CFR 114.2(f)(1)

also explain that commercial vendors,

such as hotels or caterers, would not

facilitate the making of corporate

contributions if in the ordinary course

of their business they provide meeting

rooms or food for a candidate’s

fundraiser and receive the usual and

normal charge. The term ‘‘commercial

vendor’’ is defined in 11 CFR 116.1(c).

In the past, the Commission has also

addressed situations where a candidate

owns or operates a corporation. E.g. AOs

1995–8, 1994–8 and 1992–24. Nothing

in the new facilitation rules would

modify the conclusions of these

opinions that these corporations may

serve as a commercial vendor or lessor

to the candidate’s committee as long as

the transactions are consistent with the

corporation’s ordinary course of

business.

New paragraph (f)(2) of section 114.2

gives several examples of facilitation.

Some of these include activities that do

not fall within the ‘‘safe harbors’’

provided by other regulations. For

example, facilitation would occur if a

corporation or labor organization makes

its meeting room available for a

candidate’s fundraiser, but has not made

the room available for community or

civic groups. Compare 11 CFR

114.2(f)(2)(i)(D) with 11 CFR 114.13. The

permissibility of using such room when

the corporation or labor organization

receives payment would be governed by

11 CFR 114.9(a), (b) or (d). Similarly,

facilitation would result if other

facilities, such as telephones and

copiers, are used by campaign

committee staff for a fundraiser, and the

corporation is not reimbursed within a

commercially reasonable time for the

normal and usual rental charge.

Compare 11 CFR 114.2(f)(2)(i)(B) with

11 CFR 114.9(d).

Other examples of facilitation include

directing corporate or union employees

to work on a fundraiser for a candidate;

using a mailing, telephone or computer

list of customers, vendors, or others

outside the restricted class to distribute

invitations and solicit contributions;

and providing in-house or external

catering and food services for the

fundraiser. 11 CFR 114.2(f)(2)(i) (A), (C),

and (E). However, in these three

situations, the new rules allow either

the candidate, or the organization’s

separate segregated fund, or the official

directing the activity to pay the

corporation or labor organization in

advance for the fair market value of the

services or the list. Such payment by a

separate segregated fund or official

would constitute an in-kind

contribution subject to the individual’s

or the separate segregated fund’s

contribution limits, and is not treated as

facilitation. The candidate’s authorized

committee must report receiving these

in-kind contributions.

A more limited advance payment

method was approved by the

Commission with regard to employee

services in AO 1984–37. The new rules

go beyond this advisory opinion with

regard to the source of the advance

payment and the types of services for

which advance payment may be made.

‘‘In advance’’ means prior to when the

list is provided, or the catering or food

services are obtained, or the employees

perform the work. Fair market value

consists of the price that would

normally be paid in the marketplace

where the corporation or labor

organization would normally obtain

these goods or services, if reasonably

ascertainable. However, in no case is the

fair market value less than the

corporation’s or labor organization’s

actual cost, which includes total

compensation earned by all employees

directed or ordered to engage in

fundraising, plus benefits and overhead.

These new rules modify, to some

extent, the interpretation applied in

prior enforcement matters, including

MUR 3540. The conciliation agreement

for MUR 3540 stated that, ‘‘[t]he

‘individual volunteer activity’

exemption does not, however, extend to

collective enterprises where the top

executives of a corporation direct their

subordinates in fundraising projects, use

the resources of the corporation, such as

lists of vendors and customers, or solicit

whole classes of corporate executives

and employees. See MURs 1690 and

2668. The individual volunteer activity

exemption also does not apply when an

employee uses the facilities of a

corporation in connection with a

Federal election and the corporation is

reimbursed by a political committee or
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64265

a candidate’s committee [emphasis

added]. See MUR 2185.’’

However, the new facilitation

regulations now provide another

exemption where an individual or a

candidate’s committee or other political

committee pays in advance for the use

of corporate personnel who are directed

to organize or conduct a fundraiser for

the candidate as part of their job, and

hence are not volunteers. Although

employees may be asked to undertake

such activity, under new language in

paragraph (f)(2)(iv) of this section, it is

not permissible to use coercion, threats,

force or reprisal to urge any individual

to contribute to a candidate or engage in

fundraising activities. Thus, employees

who are unwilling to perform these

services as part of their job have a right

to refuse to do so.

Under new paragraphs (f)(2)(iii) and

(f)(4)(iii), facilitation includes corporate

or labor organization solicitation of

earmarked contributions that will be

collected and forwarded by the

organization’s separate segregated fund

(whether or not deposited in the

separate segregated fund’s account),

unless the earmarked contributions are

treated as contributions both by and to

that separate segregated fund. The

corporation or labor organization may

name in the solicitation the candidate(s)

for whom an earmarked contribution is

sought. Space may be left on the

contribution response card for

contributors to designate candidates of

their choice, but no candidates are

suggested in the accompanying

solicitation materials. The latter

situation was presented in AO 1995–15.

In both cases, under new paragraphs

(f)(2)(iii) and (f)(4)(iii), the contributions

must be counted against the separate

segregated fund’s limits to avoid

facilitation, which is impermissible.

Hence these new provisions supersede

those portions of AOs 1991–29, 1981–57

and 1981–21 which indicate that a

conduit separate segregated fund’s

contribution limits under 2 U.S.C. 441a

are only affected if it exercises direction

or control over the choice of the

recipient candidate. Please note that 11

CFR 110.6(b)(2)(ii) has not been

changed, and therefore continues to

prohibit corporations or labor

organizations, themselves, from acting

as conduits for contributions earmarked

to candidates. See AO 1986–4. However,

in AO 1983–18, the Commission

recognized that a trade association

political action committee may collect

and forward contributions to other trade

association political action committees

where directed by member corporation

executives. A corporation or union

employee may still utilize the volunteer

exemption found at 11 CFR 100.7(b)(3)

to collect earmarked contributions on

their own time and forward such

contributions to a specific candidate or

committee. Such earmarked

contributions would not be considered

as contributions by the separate

segregated fund.

Paragraph (f)(3) lists two examples of

separate segregated fund activity that do

not constitute corporate or labor

organization facilitation. First, separate

segregated funds may continue to solicit

or make contributions in accordance

with the requirements of 11 CFR 110.1,

110.2, and 114.5 through 114.8.

Secondly, separate segregated funds

may continue to solicit, collect and

forward earmarked contributions to

candidates under 11 CFR 110.6. The

money expended by the separate

segregated fund to solicit earmarked

contributions must come from

permissible funds received under the

FECA, and will count against the

separate segregated fund’s contribution

limit for the candidate(s) involved.

These examples contrast with new

paragraphs (f)(2)(iii) and (f)(4)(iii), under

which a solicitation by the corporation

or labor organization would either

constitute facilitation or result in the

contribution being counted against the

separate segregated fund’s contribution

limits.

In addition to the latter example

discussed above, paragraph (f)(4) lists

two other examples of corporate or labor

organization activity which do not

result in facilitation. The first preserves

the practice of enrolling the restricted

class in a payroll deduction plan or

check-off system, or an employee

participation plan. No changes are being

made in the operation of employee

participation plans under 11 CFR 114.11

or payroll deduction plans. The second

example permits solicitations of the

restricted class for contributions that

contributors will send directly to

candidates, without being bundled or

forwarded through the separate

segregated fund. This situation was

presented in AO 1989–29, and falls

within the corporation’s or labor

organization’s right to communicate

with its restricted class on any subject

under 2 U.S.C. 441b(b)(2)(A).

Section 114.3 Disbursements for

Communications to the Restricted Class

in Connection With a Federal Election

1. Express Advocacy, Coordination, and

Reporting Internal Communications

The revised rules preserve several

distinctions between communications

and other activities directed solely to

the restricted class (set forth at 11 CFR

114.3) and those directed to the general

public or other individuals outside the

restricted class (set forth at 11 CFR

114.4). Section 114.3 continues to

recognize that the FECA permits

corporations and labor organizations to

communicate with their restricted

classes on any subject. 2 U.S.C.

441b(b)(2)(A). However, in light of the

MCFL decision, the references to

‘‘partisan’’ activities have been replaced

with narrower provisions that only

apply to communications containing

express advocacy. For example, in

paragraph (c) of section 114.3, revised

language makes clear that

communications directed solely to the

restricted class may contain express

advocacy. In addition, amended section

114.3(b) now states more explicitly that

only communications expressly

advocating the election or defeat of a

clearly identified candidate are subject

to the reporting requirements of 11 CFR

100.8(b)(4) and 104.6. Similarly, the

revisions delete the more restrictive

language in previous section 114.3(a)(1)

that had prohibited corporate and labor

organization expenditures for ‘‘partisan’’

communications to the general public

because revised section 114.4

establishes that such communications

are only prohibited if they contain

express advocacy or are impermissibly

coordinated with candidates or political

committees.

In contrast, under revised section

114.3(a)(1), communications directed

solely to the restricted class may be

coordinated with candidates and

political committees. For example, they

may involve discussions with campaign

staff regarding a candidate’s plans,

projects, or needs. Such coordination

will not transform that restricted class

communication into an in-kind

contribution. Nor will it affect

subsequent activities directed only to

the restricted class. However,

communications to the restricted class

that are based on a candidate’s plans,

projects and needs may jeopardize the

independence of subsequent

communications or activities, including

those financed from the separate

segregated fund, which extend to

anyone outside the restricted class.

One witness at the hearing objected to

labor organizations’ use of general

treasury funds which could come from

compulsory union dues to subsidize

new forms of election-related activity, or

even the activities set out in sections

114.3 and 114.4. This is an area over

which the Department of Labor has

jurisdiction, and recently it issued final

rules removing 29 CFR part 470, in

response to Executive Order 12836

revoking Executive Order 12800. 58 FR
64266 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

15402 (March 22, 1993). The

Commission does not have jurisdiction

over whether dues and assessments are

paid as a condition of employment or

whether they are voluntary.

2. Candidate Appearances

Paragraph (c)(2) of 11 CFR 114.3

governs corporate and labor

organization funding of candidate

appearances before the restricted class.

The NPRM sought to resolve several

issues not addressed in the previous

rules and to clarify language on which

the Commission has received a number

of questions. For example, the Notice

proposed that instead of allowing

‘‘limited invited guests and observers’’

to attend candidate appearances, the

rule should refer to guests who are being

honored or speaking or participating in

the event. This is intended to cover

individuals who are part of the program.

One commenter was concerned that

this language would interfere with its

ability to allow its members to attend a

candidate appearance. Under these

provisions, which have been retained in

the final rules, all those who qualify as

members, and are therefore in an

organization’s restricted class, may

attend. As noted above, nothing in the

attached revisions to the rules affects

the definition of who is a member.

In addition, these amendments do not

adversely affect the ability of

corporations or labor organizations to

invite their restricted class, other

employees or the general public to

attend a speech given by an officeholder

or other prominent individual who is

also a federal candidate, if the speech is

not campaign-related and the individual

is not appearing in his or her capacity

as a candidate for Federal office. See,

e.g., AOs 1980–22 and 1992–6.

Two issues which generated

considerable debate in this area were

the solicitation and collection of

contributions, and the presence of the

news media, during restricted class

candidate appearances.

a. Collection of Contributions by

Candidates and Party Representatives

During the Appearance

The NPRM sought comment on

whether candidates and party

representatives should continue to be

able to solicit contributions during an

appearance before the restricted class.

This had been specifically allowed

under previous section 114.3(c)(2) for

appearances before the restricted class.

The NPRM sought comments on

whether the candidate should be able to

collect contributions at appearances,

such as by ‘‘passing the hat’’ or placing

donation boxes in the meeting room.

Given that the proposed rules sought to

incorporate the Commission’s

established policy that corporations and

labor organizations are not permitted to

facilitate the making of contributions to

candidates or political committees other

than their separate segregated funds, the

NPRM questioned whether allowing

candidates to accept contributions

during their appearances should be

viewed as impermissible facilitation.

Some comments supported allowing

candidates to request contributions. The

Internal Revenue Service found no

conflict between the provisions

regarding candidate appearances and its

rules.

Section 114.3(c)(2) of the final rules

provides that a candidate or party

representative may ask for and collect

contributions before, during or after the

appearance while on corporate or union

premises. Candidates and party

representatives may also provide

information on how to make

contributions, such as by giving out a

phone number or mailing address or by

leaving envelopes or other campaign

materials. However, this provision also

specifies that corporate or labor

organization officials may not collect

contributions during the event. The

collection of contributions by such

officials would go beyond the right to

communicate with the restricted class

on any subject, and in essence, turn the

candidate appearance into a fundraising

event sponsored by the corporation or

labor organization. As explained above,

under new section 114.2(f), corporations

and labor organizations may not

facilitate the making of contributions to

candidates.

b. Presence of the News Media

Several issues have arisen regarding

section 114.3(c)(2), which governs the

presence of news media representatives

at candidate appearances before only

the restricted class. For example, a news

organization may wish to reprint or

broadcast the candidate’s appearance in

its entirety. Concerns have been raised

that a candidate appearance before a

corporation’s or labor organization’s

restricted class would be transformed by

this type of gavel-to-gavel coverage into

a general public appearance.

Accordingly, the Commission sought

comments on two alternative proposals.

Under Alternative C–1, such coverage

was contemplated for appearances

before the restricted class, provided that

two conditions were met. First, if the

corporation or labor organization

permits one media representative to

cover the appearance, all bona fide

media organizations who request to

cover the appearance must be given the

opportunity to do so. This could be

accomplished through pooling

arrangements, if necessary. Secondly, if

the corporation or labor organization

permits the news media to cover an

appearance by one candidate, the news

media must be given the opportunity to

cover all other candidates who appear

on the same or different occasions.

Alternative C–2 indicated that the

corporation or labor organization may

not permit the media to cover such

candidate appearances before just the

restricted class. Instead, under

Alternative C–2, in addition to the two

requirements on media access, media

coverage of candidate appearances

would be permissible only if all rank

and file employees may also attend, all

candidates for the same seat who

request to appear are given a similar

opportunity, and the corporation or

labor organization does not expressly

advocate, or encourage the audience to

expressly advocate, the election or

defeat of any candidate.

One commenter felt that gavel-togavel coverage indicated that the

candidate’s speech is newsworthy, and

that there is no evidence of a problem

involving the exclusion of the news

media. Others objected that the

proposed rule would interfere with their

ability to have officeholders address

employees on topics of interest to the

employees when the officeholders are

candidates for office.

The Commission has concluded that a

modified version of Alternative C–1 is

preferable and has been included in

section 114.3(c)(2)(iv). The proposed

language of Alternative C–2 which

would have required the organization

open the event to all rank and file

employees, not just the restricted class,

has been dropped because this would be

administratively difficult to accomplish.

However, the requirements in

Alternative C–1 that candidates for the

same office be treated similarly, and that

different news organizations also be

treated fairly, have been retained. These

new provisions are intended to ensure

that the corporation or labor

organization does not manipulate the

news media coverage of newsworthy

events that are subsequently broadcast

to the general public in a way that

ensures favorable coverage for certain

candidates, and no coverage or

unfavorable coverage for others. Please

note, however, that nothing in the

amended rules will force corporations

or labor organizations to invite the

media to events that they would

otherwise prefer to limit to the restricted

class.
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64267

3. Registration and Get-Out-the-Vote

Drives

Section 114.3(c)(4) sets forth

provisions governing voter registration

and get-out-the-vote drives aimed at a

corporation’s or labor organization’s

restricted class. The NPRM included

one revision to this provision. The

proposed languaged stated explicitly

that express advocacy is permissible in

voter drive communications aimed

solely at a corporation’s or labor

organization’s restricted class.

Consequently, the proposed revisions to

section 114.3(c)(4) also retained the

former language specifically permitting

voter drive communications to urge the

restricted class to vote for particular

candidates and to register with a

particular party. The proposed rules

also contemplated continuing the longstanding policy that information and

assistance in registering and voting shall

not be withheld on the basis of support

for or opposition to particular

candidates or political parties.

The Internal Revenue Service

indicated that while the FEC’s proposed

rules regarding candidate appearances

are more specific than theirs, they do

not impinge upon the Internal Revenue

Service’s ‘‘facts and circumstances’’ test.

Some commenters opposed removing

the ‘‘nonpartisan’’ requirement from

section 114.3(c)(4) because section

441b(b)(2)(B) of the Act requires that

drives aimed at a corporation’s or labor

organization’s restricted class be

nonpartisan. The Commission believes

the basic purpose of this statutory

provision will be maintained by

continuing to require corporations and

labor organizations to make the same

voter registration and voter drive

services available to those who do not

support the organization’s preferred

candidates or political party.

Consequently, the final voter driver

rules in this section follow the previous

proposals, with one change. The revised

rules specify that voter registration

efforts may include transportation to the

place of registration in addition to

transportation to the polls.

Section 114.4 Disbursement for

Communications Beyond the Restricted

Class in Connection With a Federal

Election

1. Express Advocacy and Coordination

The provisions of section 114.4

regarding communications by

corporations and labor organizations to

persons outside the restricted class have

also been substantially revised and

reorganized. First, the nonpartisan

standards found in the previous

regulations have been replaced by

language prohibiting corporations and

labor organizations from including

express advocacy in communications

directed outside the restricted class

when: (1) holding candidate

appearances; (2) issuing registration and

get-out-the-vote communications; (3)

distributing registration and voting

information, forms, or absentee ballots;

(4) producing voter guides or voting

records; or (5) conducting voter

registration and get-out-the-vote drives.

Second, in response to the concerns

expressed by several commenters which

are discussed above, the Commission

has substantially revised the concept of

coordination in section 114.4. The

MCFL decision addressed the scope of

the FECA’s prohibition against

corporate expenditures. However, the

prohibition against corporate

contributions was expressly reaffirmed

in MCFL. 479 U.S. at 260. Accordingly,

the final rules which follow preserve the

statutory ban on contributions made by

corporations and labor organizations in

connection with federal elections.

Prohibited contributions include inkind contributions resulting from the

coordination of election-related

corporate or union communications

with candidates, except for certain

activities described in this section and

11 CFR 114.3, which may involve

limited types of coordination with

candidates.

Under revised section 114.4(a),

communications to the general public or

to employees outside the restricted class

that are based on information about a

candidate’s plans, projects and needs

provided by the candidate or the

candidate’s agent are considered

coordinated, and hence, in-kind

contributions. Such coordination may

also jeopardize the independence of

subsequent communications to the

general public, but will not affect future

communications to the restricted class.

Qualified nonprofit corporations

under 11 CFR 114.10 are subject to the

same restriction on coordinating their

communications directed to the general

public. Consequently, they may not

include express advocacy in

coordinated communications directed

beyond the restricted class. Conversely,

if they do include express advocacy in

communications to the general public,

these communications may not be

coordinated with any candidate or

political party. The purpose of the

limited exception the Supreme Court

recognized in MCFL was to avoid

impermissibly infringing on these

organizations’ First Amendment rights

when making independent

expenditures.

2. Candidate and Party Appearances

The NPRM sought comments on

several questions and possible

amendments regarding corporate and

labor organization funding of candidate

appearances before employees who are

not in the restricted class. Section

114.4(b), as set out in the Notice,

followed the previous rules at 11 CFR

114.4(a)(2) by allowing rank and file

employees who are not in the restricted

class to attend candidate appearances

organized by corporations or labor

organizations. Please note that corporate

appearances are covered in paragraph

(b)(1), and parallel provisions for labor

organizations are found in paragraph

(b)(2).

As explained above, certain contacts

with the candidate’s campaign may be

necessary to arrange the appearance.

However, because these

communications are being made beyond

the restricted class, discussions of the

candidate’s plans, projects or needs

relating to the campaign go beyond the

permissible level of coordination, and

hence would transform the appearance

into an in-kind contribution. Likewise,

corporations and labor organizations are

also not permitted to expressly advocate

the election or defeat of any clearly

identified candidates in conjunction

with the appearance. Nor should they

promote or encourage express advocacy

by the audience, thereby transforming

the appearance into little more than a

campaign rally.

a. Notifying and Inviting Other

Candidates; Audience

In situations where one candidate

appears at a corporate or labor

organization event, the proposed rules

in section 114.4(b) would have followed

the previous provisions by requiring

corporations and labor organizations to

let the other candidates for that office

come and speak if they so request.

However, comments were sought on

possibly requiring a corporation to

notify the other candidates in advance

whenever they invite a candidate to

appear. The commenters expressed

concern that such a requirement would

be unworkable. Accordingly, the final

rules do not contain a prior notice

provision.

Instead, the final rules on candidate

appearances generally follow the

candidate debate rules in the case of

Presidential candidates by requiring

corporations and labor organizations to

establish, in advance, objective criteria

for deciding which Presidential and

Vice Presidential candidates may

appear, upon request. Under section

114.4(b)(1)(i), appearances by House
64268 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

and Senate candidates remain subject to

the requirement that all candidates for

the seat must be given a similar

opportunity to appear, upon request.

Similarly, the provisions governing

appearances by political party

representatives in paragraph (b)(1)(iii)

generally follow the previous

regulations.

Comments were also requested on

new language in section 114.4(b)(1)(vi)

that would not allow the corporation or

labor organization to favor one

candidate through the structure or

format of the candidate appearance. One

example cited was giving rank and file

employees time off to listen to one

candidate but not to listen to others.

Another example arises where

candidates receive unequal time or

facilities, unless it is clearly impractical

to provide all candidates with similar

opportunities, such as where a

candidate requests to appear after a

labor organization’s convention is over.

In response to another comment which

objected to consideration of the format

and timing of a candidate appearance,

the Commission is revising the language

in section 114.4(b)(1)(vi) to clarify that

candidates cannot be given unequal

amounts of time or substantially

different locations for their appearances,

unless the corporation can show it is

impractical to give each candidate a

similar time and location.

In addition, paragraph (b)(1) of

section 114.4 allows guests who are

being honored or speaking or

participating in the event (i.e. those who

are part of the program), to be present

during the candidate appearance. This

provision follows similar language in 11

CFR 114.3(c)(2)(i).

b. Collection of Contributions by

Candidates and Party Representatives

During the Appearance

A question presented in the NPRM

was whether the candidate or party

representative may solicit and collect

contributions during an appearance

before employees who are not in the

restricted class. Although this has been

specifically allowed under section

114.3(c)(2) for appearances before the

restricted class, there was no provision

in former section 114.4 either allowing

or disallowing this practice when the

audience extends to all employees. The

NPRM sought comments on whether the

candidate should be able to pass the hat

or place donation boxes in the room.

Some comments supported allowing

candidates to request contributions, but

indicated that the rules needed to clarify

that this would not constitute

facilitation by the corporation or labor

organization. The Internal Revenue

Service found no conflict between the

provisions regarding candidate

appearances and its rules.

Section 114.4(b)(1)(iv) of the final

rules provides that a candidate or party

representative may ask for

contributions, may provide information

on how to make contributions, and may

leave campaign materials and envelopes

for making contributions. See, e.g., AO

1987–29, n. 2. However, this provision

also specifies that candidates and party

representatives may not collect

contributions during the event.

Moreover, the corporation or labor

organization, and its officers and

employees, may not solicit or collect

these contributions. This restriction

includes corporate and union officials

who may also serve on a fundraising

committee for the candidate or

otherwise be active in the campaign.

The collection of contributions by

corporate or union officials would, in

essence, turn the candidate appearance

into a general fundraising even

sponsored by the corporation or labor

organization, in violation of the new

facilitation regulations of section

114.2(f).

c. Presence of the News Media

The Notice presented several issues

regarding the presence of news media at

candidate appearances before

employees outside the restricted class.

For the reasons stated above, the final

rules regarding these appearances

follow the new regulations applicable to

appearances before the restricted class.

See discussion of 11 CFR 114.3(c)(2)(iv),

including NPRM and comments, supra.

3. Use of Logos, Trademarks and

Letterhead

Another topic addressed in this

rulemaking concerns the use of

corporate or labor organization logos,

trademarks and letterhead. The

Commission has encountered situations

in which executives of corporations or

labor organizations use official

corporate or labor organization

stationery, whether or not reproduced at

the executive’s personal expense, to

solicit funds or support for a candidate.

E.g., MURs 3066, 1690 and 1261. The

question presented in the NPRM was

whether such a logo, trademark or

letterhead may be used if the

corporation or labor organization is

reimbursed for the intangible value of

the item(s), or whether their use (except

through ordinary commercial

transactions in the usual course of

business) should be prohibited.

Comments were sought on two

alternative approaches. The first option,

Alternative B–1, was to amend the

definition in section 114.1(a)(1) to treat

logos, trademarks and letterhead as

something of value and a contribution

or expenditure if provided without

charge or at less than the fair market

value. That approach would have

allowed individuals and candidates to

reimburse corporations and labor

organizations for the cost of the

stationery plus the value of using the

corporate or union symbol, name, etc.

One difficulty, however, would have

been ascertaining the fair market value,

given subjective consideration such as

goodwill. Thus, the second option,

which was set forth as Alternative B–2

in section 114.4(c)(1), was to prohibit

such uses, whether or not the

corporation or labor organization is

reimbursed, with four exceptions for:

corporations qualifying for the MCFL

exception; communications to the

restricted class, as described under 11

CFR 114.3; communications beyond the

restricted class, as permitted under 11

CFR 114.4; and solicitations made in

accordance with 11 CFR 114.5 through

114.8.

The Commission received comments

supporting and opposing both options.

The Internal Revenue Service stated that

alternative B–1 may conflict with the

Internal Revenue Code requirements

applicable to section 501(c)(3)

corporations. Other commenters

claimed that logos and letterhead were

not corporate resources, or were of no

value or of de minimis value, or that it

is too difficult to assign a monetary

value.

The Commission considered the

alternatives regarding the use of logos,

letterhead and trademarks when it

prepared the final rules, but could not

reach a majority decision by the

required four affirmative votes. See 2

U.S.C. 437c(c). Consequently, neither

alternative has been included in the

final rules.

Both alternatives in the NPRM also

indicated that when individuals make

communications either by using

personal stationery or by appearing in a

campaign ad, the letter or advertisement

cannot indicate that the individual is

acting on behalf of the corporation or

labor organization, and cannot include

references to the individual’s official

title at that organization. Thus, these

proposals were intended to preclude an

individual from including an

identification such as ‘‘Vice President of

XYZ Automobile Corporation.’’

However, a general identification such

as ‘‘auto maker’’ would be acceptable.

Several commenters opposed this

restriction on various grounds,

including that the corporate title is part

of the individual’s identity, the use of
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64269

the title enhances disclosure of those

who are making the communication and

it would encourage fraud if

identifications were not allowed, and

because the speech of people associated

with nonprofit groups would be

inhibited.

The Commission considered the use

of corporate or labor organization titles

in individual communications and

advertisements on behalf of a candidate

when it prepared the final rules, but

could not reach a majority decision by

the required four affirmative votes. See

2 U.S.C. 437c(c). Consequently, the

proposed language has not been

included in the final rules.

4. Registration and Voting

Communications; Official Registration

and Voting Information

The provisions of previous paragraphs

(b)(2) and (b)(3) of section 114.4

regarding the distribution of registration

and voting communications and

information to the general public have

been moved to new paragraphs (c)(2)

and (c)(3), respectively. In addition to

the changes regarding express advocacy

and coordination with candidates,

which are discussed above, revised

paragraph (c)(3)(ii) no longer contains a

reference to ‘‘applicable state law’’

permitting voter registration by mail.

That language was made obsolete by the

National Voter Registration Act of 1993,

42 U.S.C. 1973gg–1 et seq.

Please also note that section

114.4(c)(2), regarding voting

communications, does not change the

Commission’s decision in AO 1980–20

that corporations may place newspaper

or magazine advertisements simply

urging the general public to register to

vote.

5. Voting Records

Provisions regarding the

dissemination of voting records of

Members of Congress are being moved

from previous section 114.4(b)(4) to new

section 114.4(c)(4). In response to the

MCFL decision, the NPRM proposed

modifying these rules in two respects.

First, new language was put forth

prohibiting voting records, and all

accompanying communications to the

general public, from expressly

advocating the election or defeat of one

or more clearly identified candidates or

the candidates of a clearly identified

political party. The proposed

amendments also sought to disallow

coordination with candidates in

distributing voting records. The Internal

Revenue Service commented that

although their standards were different

than the FEC’s, the FEC’s proposed rules

do not impinge on the test used by the

Internal Revenue Service to determine

whether voting records or voter guides

constitute political activity. Another

commenter believed there was no need

to discuss these matters with

candidates.

The revised version of section

114.4(c)(4) is substantially similar to the

proposed rules. However, new language

has been included to indicate that the

decision as to the content of a voting

record also may not be coordinated with

a candidate or political party. The

NPRM raised the question of whether to

include language preventing

corporations and labor organizations

from obtaining voting record

information directly from Members of

Congress or political parties. The

Commission has decided not to include

such a restriction in the revised

regulations.

6. Voter Guides

In Faucher v. Federal Election

Commission, 928 F.2d 468 (1st Cir.

1991), cert. denied sub nom. Federal

Election Commission v. Keefer et al.,

502 U.S. 820 (1991), the Court of

Appeals for the First Circuit invalidated

the Commission’s previous voter guide

regulations at 11 CFR 114.4(b)(5)(i). The

Court concluded that the previous

provisions of section 114.4(b)(5)(i)

exceed the regulatory boundaries

imposed by the FECA as interpreted by

the Supreme Court. 928 F.2d at 472.

Consequently, the NPRM proposed

revisions, located in section 114.4(c)(5),

to allow corporations and labor

organizations to prepare and distribute

to the general public their own voter

guides or to obtain voter guides

prepared by nonprofit organizations that

are tax-exempt under 26 U.S.C. 501

(c)(3) or (c)(4). The proposed rules

would have required that the same

amount of space be provided for each

candidate’s response, that the voter

guide not contain express advocacy, and

that contact with candidates be limited

to the preparations reasonably necessary

to produce the guide, such as written

communications regarding the

candidate’s positions on issues. The

proposed revisions also sought to

eliminate the previous restrictions on

the geographic area in which voter

guides could be distributed, and to

prohibit coordination of the distribution

of voter guides with candidates.

Several commenters and witnesses

challenged these proposals as contrary

to the intent of the court in Faucher. In

particular, they questioned the need to

reprint the candidates’ responses

verbatim, the restriction that contacts

with campaigns be in writing, the

prohibition on coordinating the

distribution of the guides, and the

prohibition on distributing voter guides

prepared by 501(c) organizations that

endorse candidates, when the

corporation or labor organization can

make its own endorsements.

In view of these comments, the

Commission has substantially revised

the final rules to provide a choice of two

different ways of issuing and

distributing voter guides, which are

intended to comport with Faucher.

Revised section 114.4(c)(5) begins by

explaining that voter guides consist of

candidates’ positions on campaign

issues, and may include biographical

information on the candidates. Voter

guides are similar to candidate debates

in that they must include at least two

candidates in the same election.

However, no particular format is

required for either type of voter guide.

Under the new rules, both types of

voter guides may be obtained from

nonprofit organizations described in 26

U.S.C. 501 (c)(3) or (c)(4), regardless of

whether the nonprofit group endorses

candidates. Please note however, that a

comment from the Internal Revenue

Service indicates that nonprofit

corporations organized under 26 U.S.C.

501(c)(3) cannot endorse candidates.

The previous rules referred to these

groups as ‘‘tax exempt,’’ which may be

confusing given that they may pay tax

on certain categories of income.

The first type of permissible voter

guide, which is described in paragraph

(c)(5)(i), is one that is prepared and

distributed without any contact,

cooperation, coordination or

consultation with the candidate. the

candidate’s campaign or the candidate’s

agent. Hence, the information regarding

the candidate’s position on issues must

be obtained from news articles, voting

records, or other non-campaign sources.

The voter guide also must not expressly

advocate the election or defeat of any

clearly identified candidate.

The second type of permissible voter

guide, which is described in paragraph

(c)(5)(ii), is subject to further restrictions

because it contemplates limited written

contact with the candidate’s campaign

committee to obtain the candidate’s

responses to issues included in the voter

guide. For example, further

coordination with a candidate or his or

her agents, such as a discussion of the

candidate’s plans, projects, or needs

relating to the campaign, does not fall

within this limited exception, and

would thus result in an in-kind

contribution. The Faucher decision does

not mandate eliminating all restrictions

on voter guides save for the prohibition

on express advocacy. Accordingly,

organizations preparing the second type
64270 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

of voter guide must give all candidates

in the election (except for Presidential

candidates) an equal opportunity to

respond to the questions posed.

Moreover, no candidate may receive

greater prominence or substantially

more space than other candidates

participating in the voter guide. This

requirement is similar to the candidate

debate situation in which the forum

may not be structured to promote one

candidate over others.

The second type of voter guide must

not contain an electioneering message.

See, Federal Election Commission v.

Colorado Republican Federal Campaign

Committee, 59 F. 3d 1015 (1th Cir.

1995), petition for cert. filed, No. 95–489

(Sept. 21, 1995) (statement that an office

holder has a right to run for the Senate,

but doesn’t have the right to change the

facts constituted an electioneering

message); and AOs 1985–14 and 1984–

15. Similarly, the voter guide must not

score or rate the candidates’ responses

in a way that conveys an electioneering

message, such as by indicating that

certain responses are ‘‘right’’ or ‘‘wrong’’

or receive a higher or lower grade than

others.

7. Endorsements

The NPRM proposed adding new

paragraph (c)(6) to section 114.4 to

reflect the Commission’s policy

regarding public endorsements of

candidates by corporations and labor

organizations. In AO 1984–23, the

Commission permitted a corporation to

include an endorsement in a publication

directed to its restricted class. In

addition, the NPRM indicated that the

endorsement could be made during the

candidate’s appearance before the

restricted class. One comment objected

to enhancing the publicity corporate

endorsements will receive. Another

comment opposed these restrictions on

corporate endorsements because labor

organization endorsements receive

wider media coverage. The Commission

believes these concerns are misplaced.

Media coverage of endorsements by

corporations or labor organizations is

similar to media coverage of candidate

appearances in that both are governed

by the news media’s determination as to

the newsworthiness of the event.

The NPRM also sought comment on

two alternative approaches regarding

further corporate or labor efforts to

publicize the endorsement through

press releases and press conferences.

Alternative D–1 sought to follow AO

1984–23 by allowing the corporation or

labor organization to spend a de

minimis amount to issue a press release

regarding the endorsement to its usual

media contacts. This language also

explicitly recognized that the press

release may be accompanied by a

routine press conference. In contrast,

Alternative D–2 would have permitted

the corporation or labor organization to

publicize the endorsement only by

responding to quesitons posed during a

routine press conference.

Several comments preferred

Alternative D–1, believing that

Alternative D–2 could be easily

manipulated, and is an artificial

distinction. The Commission agrees,

and has therefore decided to adopt

Alternative D–1.

The proposed rules would also have

permitted corporations and labor

organizations to have contact with

candidates to the limited extent

necessary to make the endorsement,

without treating these communications

as impermissible in-kind contributions.

The Commission sought comment,

however, on whether this limitation on

candidate contact would inhibit the

corporation’s or labor organization’s

ability to obtain the information needed

to make an endorsement decision.

While one commenter expressed

concern that these discussions with

candidates and their campaign staff

were unnecessary and provided an

opportunity to coordinate endorsements

with candidates, another commenter

believed that organizations need to

know the nature and viability and

organization of the campaign, and thus

the candidate’s likelihood of success.

The Commission agrees that

organizations need to discuss various

issues with candidates and their staff

when deciding who to endorse. Hence,

the language in section 114.4(c)(6)(ii)

has been revised to allow a greater range

of discussion with the candidate or

campaign staff prior to the endorsement.

However, the public announcement of

the endorsement may not be

coordinated with the candidate or the

candidate’s agents or authorized

committee.

Finally, the new rules advise

consulting the Internal Revenue Code

and IRS regulations regarding

restrictions and prohibitions on

endorsements by nonprofit

corporations. The Internal Revenue

Service indicated in its comment that

nonprofit corporations organized under

26 U.S.C. 501(c)(3) cannot endorse

candidates.

8. Candidate Appearances on

Educational Institution Premises

The FECA prohibits corporations from

making contributions to or giving

anything of value to a federal candidate,

including free use of facilities, such as

halls and auditoriums. Since most

private colleges and universities are

incorporated, this prohibition applies to

them. The NPRM included draft

provisions to clarify the Commission’s

interpretation of this statutory

prohibition as it applies to incorporated

educational institutions. In the

proposed rules, section 114.4(c)(7)

included an exception to permit

colleges, universities, and other

incorporated nonprofit educational

institutions which are exempt from

federal taxation under 26 U.S.C.

501(c)(3) to make their premises

available to groups that are associated

with the school and wish to invite

candidates to address students, faculty

and the general public, under certain

conditions.

Several comments and witnesses

expressed an overall concern that the

Commission was attempting to overregulate political speech on campuses.

They pointed out that historically,

universities have sought to promote the

free exchange and debate of ideas in an

intellectual environment, and have tried

to stimulate student interest in

democratic processes and institutions.

They were also concerned that the new

rules could affect classroom

discussions. The Internal Revenue

Service indicated that the proposed FEC

rules were more specific than the ‘‘facts

and circumstances’’ test used by the

IRS, but did not conflict with that test.

The Commission has now revised

new paragraph (c)(7) of section 114.4 in

a number of respects to clarify the intent

of the new rules. First, language has

been added at paragraph (c)(7)(i) to

clarify that educational institutions may

continue to charge candidates the usual

and normal charge for the use of their

facilities. Secondly, private colleges,

universities, and other incorporated

nonprofit educational institutions may

make their premises available to

candidates who wish to address

students, faculty, the academic

community, or the general public

(whomever is invited) at no cost or for

less than the usual and normal charge.

See 11 CFR 114.4(c)(7)(ii). However, the

school must make reasonable efforts to

ensure that the appearances are

conducted as speeches, question and

answer sessions, or other academic

events, and do not constitute campaign

rallies. Incorporated educational

institutions may also continue to allow

individuals who are candidates to

appear in another capacity, such as

officeholders or prominent speakers on

particular issues, if they do not refer to

the campaign or their status as

candidates. See, e.g., AO 1992–6. The

new rules also do not prevent

candidates from participating in campus
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64271

events in other capacities, such as when

the candidate is also a faculty member.

Although the proposed rules in the

Notice covered candidate appearances

on college campuses, they did not

specifically address candidate debates.

As noted by the commenters, there is a

long tradition of holding candidate

debates in college auditoriums. The

Commission did not intend to curtail

this practice, and the final rules do not

prevent such debates from being held.

Colleges and universities that qualify for

tax-exempt status under 26 U.S.C.

501(c)(3) may stage candidate debates in

accordance with the requirements set

out in 11 CFR 110.13 and 114.4(f).

The proposed rules in section

114.4(c)(7)(i) would have required

educational institutions to have an

established policy allowing associated

organizations, such as student groups, to

sponsor candidate appearances so long

as the policy does not favor one

candidate or party over any other.

Several commenters questioned the

need for such a policy, and expressed

concern that colleges and universities

would be forced to grant access to their

facilities to groups not connected with

the educational institution.

Consequently, the language in new

section 114.4(c)(7) is being amended to

include a more general requirement that

the educational institution does not

favor any one candidate or political

party in allowing the appearances.

The proposed rules also sought to

ensure that admission to a candidate’s

appearance would not be based on party

affiliation, or any other indications of

support for or opposition to the

candidate by requiring either the

educational institution or the

sponsoring group to control access to

the facility, rather than the candidate’s

campaign committee. This proposal has

been dropped as impracticable.

The NPRM indicated that one

objective was to ensure that these

candidate appearances will not become

campaign rallies, fundraising events, or

opportunities for the school or group

issuing the invitation to expressly

advocate, or encourage the audience to

expressly advocate, the election or

defeat of the candidate who is

appearing. Accordingly, the proposals

sought to restrict the presence of

campaign banners, posters, balloons and

other similar items which would be

viewed as indicative of a campaign

rally. Several commenters and witnesses

recognized the necessity for educational

institutions to refrain from express

advocacy, so as to avoid jeopardizing

their nonprofit status. However, the

comments also emphasized the practical

difficulties in trying to control

expressions of support or opposition by

the audience, and trying to ensure that

a campaign rally atmosphere does not

ensue. They also questioned

distinctions between posters and hats or

buttons. Finally, they argued that

colleges are public fora, and the

government’s ability to restrict speech

in public fora is limited.

The revised rules in paragraph

(c)(7)(ii)(B) retain the prohibition

against the educational institution

engaging in express advocacy. However,

the language regarding a campaign rally

atmosphere has been modified to

require the educational institution to

make reasonable efforts to ensure that

the appearance does not turn into a

campaign rally. This does not require

the college or university to monitor

buttons or campaign materials brought

in or worn by members of the audience.

These provisions are consistent with the

requirement that exempt organizations

under 26 U.S.C. 501(c)(3) refrain from

participating in or intervening in

political campaigns.

The NPRM also proposed a

prohibition against candidates

collecting contributions during the

appearance, coupled with language

allowing candidates to ask for

contributions to be sent to their

campaign committees. The Notice also

suggested a provision barring

educational institutions from soliciting

contributions. The comments generally

supported these proposals as consistent

with the nonprofit status of these

educational institutions under the

Internal Revenue Code. They also

suggested that candidates be informed

in advance that they may not collect

contributions.

It is not necessary to include in the

final rules these restrictions on

soliciting and collecting contributions.

They are already subsumed within the

requirement that the educational

institution make a reasonable effort to

ensure the candidate appearance does

not become a campaign rally. In

addition, candidate appearances at

incorporated private colleges and

universities are already subject to

additional requirements under the

Internal Revenue Code and regulations

issued thereunder.

The NPRM also included provisions

allowing educational institutions to

invite the media to cover these

candidate appearances and to broadcast

them to the general public, provided the

schools follow the same guidelines that

would apply to other corporations, as

set forth in section 114.3(c)(2)(iii) and

section 114.4(b)(1)(viii). The

Commission has decided not to include

this provision in the final rules and to

allow educational institutions and the

news media to work out their own

arrangements.

9. Candidate Appearances in Churches

The NPRM presented the possibility

of issuing rules regarding candidate

appearances in churches and religious

facilities. However, this topic received

little attention from the commenters.

The large number of other more

immediate issues in this rulemaking

may have overshadowed considerations

of candidate appearances in religious

settings. At this point, the Commission

has decided to defer this matter for

further consideration.

10. Registration and Get-Out-The-Vote

Drives

Voter registration and get-out-the-vote

drives aimed at the general public or at

employees outside the restricted class

have been moved from previous

paragraph (c) to renumbered paragraph

(d) of section 114.4. The NPRM

included several revisions to this

provision, most of which are included

in the attached final rules. First, the

regulations distinguish between the

speech and nonspeech components of

voter drives. Thus, the rules conform to

the MCFL decision by applying an

express advocacy standard to the speech

components of voter drives. Hence, new

language in paragraph (d)(1) indicates

that communications containing express

advocacy may not be made during voter

drives aimed at employees outside the

restricted class, or during voter drives

aimed more broadly at the general

public.

The revised voter drive rules also

include changes regarding the

nonspeech components of voter drives.

Under section 114.4(d), corporations

and labor organizations may conduct

voter registration and get-out-the-vote

drives without the involvement of a

nonprofit organization which is

described in 26 U.S.C. 501 (c)(3) or

(c)(4). To the extent that AO 1978–102

indicates that such drives must be

jointly sponsored with a civic or

nonprofit organization, that opinion is

superseded by the regulatory changes to

this section. However, the validity of

AO 1980–45, which affirmed the ability

of a 501(c)(3) nonprofit corporation to

conduct a voter registration drive, is not

affected by the revised rules. Paragraph

(d)(2) specifies that these drives cannot

be coordinated with any candidate or

political party. Moreover, under

paragraph (d)(5), workers cannot be paid

only to register voters supporting a

particular candidate or political party.

Both the proposed and the final rules

in section 114.4(d)(4) contemplate
64272 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

continuing the long-standing policy that

information and assistance in registering

and voting shall not be withheld on the

basis of support for or opposition to

particular candidates or political

parties. New language in paragraph

(d)(6) indicates that those receiving

information or assistance must be

notified in writing that their party or

candidate preferences may not be a

basis for refusing them assistance. This

requirement can be easily satisfied

simply by posting a sign at a voter

registration table or in a vehicle used to

take voters to the polls.

The comments and testimony

revealed little, if any, consensus

regarding these proposals. There was

opposition to section 114.4(d) on the

grounds that voter drives are something

of value to candidates, and are therefore

contributions or expenditures. There

was also concern that the proposals did

not contain sufficient safeguards against

electioneering and coordination with

candidates. On the other hand, others

believed that the Commission has no

authority to prohibit coordinating voter

registration and get-out-the-vote drive

communications with candidates, and

that the only restriction on this activity

should be that the organization must

refrain from express advocacy. The

provisions requiring certain

notifications to the targets of the drive

were thought to be unnecessary and

expensive. The Internal Revenue

Service indicated that while the FEC’s

rules are more specific than theirs, they

do not impinge upon the Internal

Revenue Service’s ‘‘facts and

circumstances’’ test.

After carefully considering the

comments, the Commission has decided

that the proposals in the NPRM are in

keeping with the FECA and the MCFL

decision. Thus, the final rules follow the

proposed rules, with two minor

changes. First, paragraph (d)(3) has been

modified to clarify that voter

registration and get-out-the-vote drives

cannot be targeted primarily at

individuals who will register with, or

vote for, the party preferred by the drive

sponsor. Second, the rules specify that

voter registration efforts may include

transportation to the place of

registration in addition to transportation

to the polls.

11. Membership Organizations, Trade

Associations, Cooperatives and

Corporations Without Capital Stock

Paragraph (e) of section 114.4

generally follows previous paragraph (d)

by specifying that these organizations

may hold candidate appearances under

the same conditions as other

corporations.

12. Candidate Debates

Provisions governing the funding of

candidate debates, which were

previously located in section 114.4(e),

are now located in section 114.4(f).

These rules have been revised in two

respects. First, these debates are no

longer referred to as ‘‘nonpartisan.’’

Second, the term ‘‘bona fide’’ has been

moved so that it modifies ‘‘newspaper,

magazine and other periodical

publication,’’ instead of modifying

‘‘broadcaster.’’ This change conforms to

the wording of the candidate debate

rules in 11 CFR 110.13.

Section 114.12 Incorporation of

Political Committees; Payment of Fringe

Benefits

This section has been renamed to

make it easier for the reader to locate the

topics covered. In addition, paragraph

(b) of section 114.12, which pertains to

candidates using corporate and labor

organization meeting rooms, has been

moved to new section 114.13.

Section 114.13 Use of Meeting Rooms

This new section replaces previous 11

CFR 114.12(b). It permits corporations

and labor organizations to make meeting

rooms available to a candidate or

political committee if the room is

customarily made available to clubs,

civic or community groups, and if the

rooms are made available to any other

candidate or committee upon request. It

differs from the previous rule, however,

in that it does not not refer to making

rooms available on a ‘‘nonpartisan

basis.’’ One commenter objected to this

provision arguing that it sanctions the

political use of labor organization

facilities paid for, in part, with the

forced dues of employees. Issues

involving compulsory union dues are

more properly within the jurisdiction of

the Department of Labor.

Certification of no Effect Pursuant to 5

U.S.C. 605(b) [Regulatory Flexibility

Act]

The attached final rules will not, if

promulgated, have a significant

economic impact on a substantial

number of small entities. The basis for

this certification is that, few, if any,

small entities will be affected by these

final rules. In addition, any small

entities affected are already required to

comply with the requirements of the

Federal Election Campaign Act.

List of Subjects

11 CFR Part 100

Elections.

11 CFR Part 102

Political committees and parties,

Reporting and recordkeeping

requirements.

11 CFR Part 109

Elections, Reporting and

recordkeeping requirements.

11 CFR Part 110

Campaign funds, Political committees

and parties.

11 CFR Part 114

Business and industry, Elections,

Labor.

For the reasons set out in the

preamble, Subchapter A, Chapter I of

Title 11 of the Code of Federal

Regulations is amended as follows:

PART 100—SCOPE AND DEFINITIONS

(2 U.S.C. 431)

1. The authority citation for Part 100

continues to read as follows:

Authority: 2 U.S.C. 431, 438(a)(8).

2. 11 CFR part 100 is amended by

revising paragraph (b)(21) of section

100.7 to read as follows:

§ 100.7 Contribution (2 U.S.C. 431(8)).

* * * * *

(b) * * *

(21) Funds provided to defray costs

incurred in staging candidate debates in

accordance with the provisions of 11

CFR 110.13 and 114.4(f).

* * * * *

3. 11 CFR Part 100 is amended by

revising paragraphs (b)(3) and (b)(23) of

section 100.8 to read as follows:

§ 100.8 Expenditure (2 U.S.C. 431(9)).

* * * * *

(b) * * *

(3) Any cost incurred for activity

designed to encourage individuals to

register to vote or to vote is not an

expenditure if no effort is or has been

made to determine the party or

candidate preference of individuals

before encouraging them to register to

vote or to vote, except that corporations

and labor organizations shall engage in

such activity in accordance with 11 CFR

114.4 (c) and (d). See also 11 CFR

114.3(c)(4).

* * * * *

(23) Funds used to defray costs

incurred in staging candidate debates in

accordance with the provisions of 11

CFR 110.13 and 114.4(f).

* * * * *
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64273

PART 102—REGISTRATION,

ORGANIZATION, AND

RECORDKEEPING BY POLITICAL

COMMITTEES (2 U.S.C. 433)

4. The authority citation for Part 102

continues to read as follows:

Authority: 2 U.S.C. 432, 433, 438(a)(8),

441d.

5. 11 CFR part 102 is amended by

revising paragraph (c)(1) of section

102.4 to read as follows:

§ 102.4 Administrative termination (2

U.S.C. 433(d)(2)).

* * * * *

(c) * * *

(1) The committee has complied with

the debt settlement procedures set forth

at 11 CFR part 116.

* * * * *

PART 109—INDEPENDENT

EXPENDITURES (2 U.S.C. 431(17),

434(c))

6. The authority citation for part 109

continues to read as follows:

Authority: 2 U.S.C. 431(17), 434(c),

438(a)(8), 441d.

7. 11 CFR part 109 is amended by

revising paragraph (b)(4) of section

109.1 to read as follows:

§ 109.1 Definitions (2 U.S.C. 431(17)).

* * * * *

(b) * * *

(4) Made with the cooperation or with

the prior consent of, or in consultation

with, or at the request or suggestion of,

a candidate or any agent or authorized

committee of the candidate—

(i) Means any arrangement,

coordination, or direction by the

candidate or his or her agent prior to the

publication, distribution, display, or

broadcast of the communication. An

expenditure will be presumed to be so

made when it is—

(A) Based on information about the

candidate’s plans, projects, or needs

provided to the expending person by the

candidate, or by the candidate’s agents,

with a view toward having an

expenditure made; or

(B) Made by or through any person

who is, or has been, authorized to raise

or expend funds, who is, or has been,

an officer of an authorized committee,

or who is, or has been, receiving any

form of compensation or reimbursement

from the candidate, the candidate’s

committee or agent;

(ii) But does not include providing to

the expending person upon request

Commission guidelines on independent

expenditures.

* * * * *

PART 110—CONTRIBUTION AND

EXPENDITURE LIMITATIONS AND

PROHIBITIONS

8. The authority citation for part 110

continues to read as follows:

Authority: 2 U.S.C. 431(8), 431(9),

432(c)(2), 437d(a)(8), 438(a)(98), 441a, 441b,

441d, 441e, 441f, 441g and 441h.

9. 11 CFR part 110 is amended by

adding new section 110.12 to read as

follows:

§ 110.12 Candidate appearances on public

educational institution premises.

(a) Rental of facilities at usual and

normal charge. Any unincorporated

public educational institution exempt

from federal taxation under 26 U.S.C.

115, such as a school, college or

university, may make its facilities

available to any candidate or political

committee in the ordinary course of

business and at the usual and normal

charge. In this event, the requirements

of paragraph (b) of this section are not

applicable.

(b) Use of facilities at no charge or at

less than the usual and normal charge.

An unincorporated public educational

institution exempt from federal taxation

under 26 U.S.C. 115, such as a school,

college or university, may sponsor

appearances by candidates, candidates’

representatives or representatives of

political parties at which such

individuals address or meet the

institution’s academic community or the

general public (whichever is invited) on

the educational institution’s premises at

no charge or at less than the usual and

normal charge, if:

(1) The educational institution makes

reasonable efforts to ensure that the

appearances constitute speeches,

question and answer sessions, or similar

communications in an academic setting,

and makes reasonable efforts to ensure

that the appearances are not conducted

as campaign rallies or events; and

(2) The educational institution does

not, in conjunction with the appearance,

expressly advocate the election or defeat

of any clearly identified candidate(s) or

candidates of a clearly identified

political party, and does not favor any

one candidate or political party over any

other in allowing such appearances.

10. 11 CFR part 110 is amended by

revising section 110.13 to read as

follows:

§ 110.13 Candidate debates.

(a) Staging organizations. (1)

Nonprofit organizations described in 26

U.S.C. 501 (c)(3) or (c)(4) and which do

not endorse, support, or oppose political

candidates or political parties may stage

candidate debates in accordance with

this section and 11 CFR 114.4(f).

(2) Broadcasters, bona fide

newspapers, magazines and other

periodical publications may stage

candidate debates in accordance with

this section and 11 CFR 114.4(f).

(b) Debate structure. The structure of

debates staged in accordance with this

section and 11 CFR 114.4(f) is left to the

discretion of the staging organization(s),

provided that:

(1) Such debates include at least two

candidates; and

(2) The staging organization(s) does

not structure the debates to promote or

advance one candidate over another.

(c) Criteria for candidate selection.

For all debates, staging organization(s)

must use pre-established objective

criteria to determine which candidates

may participate in a debate. For general

election debates, staging organization(s)

shall not use nomination by a particular

political party as the sole objective

criterion to determine whether to

include a candidate in a debate. For

debates held prior to a primary election,

caucus or convention, staging

organizations may restrict candidate

participation to candidates seeking the

nomination of one party, and need not

stage a debate for candidates seeking the

nomination of any other political party

or independent candidates.

PART 114—CORPORATE AND LABOR

ORGANIZATION ACTIVITY

11. The authority citation for part 114

continues to read as follows:

Authority: 2 U.S.C. 431(8)(B), 431(9)(B),

432, 437d(a)(8), 438(a)(8), and 441b.

12. 11 CFR part 114 is amended by

revising paragraphs (a)(1), (a)(2)

introductory text and (a)(2)(ii), and by

adding paragraph (j) to section 114.1 as

follows.

§ 114.1 Definitions.

(a) For purposes of part 114 and

section 12(h) of the Public Utility

Holding Company Act (15 U.S.C.

791(h))—

(1) The terms contribution and

expenditure shall include any direct or

indirect payment, distribution, loan,

advance, deposit, or gift of money, or

any services, or anything of value

(except a loan of money by a State bank,

a federally chartered depository

institution (including a national bank)

or a depository institution whose

deposits and accounts are insured by

the Federal Deposit Insurance

Corporation or the National Credit

Union Administration, if such loan is

made in accordance with 11 CFR

100.7(b)(11)) to any candidate, political
64274 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

party or committee, organization, or any

other person in connection with any

election to any of the offices referred to

in 11 CFR 114.2 (a) or (b) as applicable.

(2) The terms contribution and

expenditure shall not include—

(i) * * *

(ii) Registration and get-out-the-vote

campaigns by a corporation aimed at its

stockholders and executive or

administrative personnel, and their

families, or by a labor organization

aimed at its members and executive or

administrative personnel, and their

families, as described in 11 CFR 114.3;

* * * * *

(j) Restricted class. A corporation’s

restricted class is its stockholders and

executive or administrative personnel,

and their families, and the executive

and administrative personnel of its

subsidiaries, branches, divisions, and

departments and their families. A labor

organization’s restricted class is its

members and executive or

administrative personnel, and their

families. For communications under 11

CFR 114.3, the restricted class of an

incorporated membership organization,

incorporated trade association,

incorporated cooperative or corporation

without capital stock is its members and

executive or administrative personnel,

and their families. (The solicitable class

of a membership organization,

cooperative, corporation without capital

stock or trade association, as described

in 11 CFR 114.7 and 114.8, may include

some persons who are not considered

part of the organization’s restricted

class, and may exclude some persons

who are in the restricted class.)

13. 11 CFR part 114 is amended by

revising section 114.2 to read as follows:

§ 114.2 Prohibitions on contributions and

expenditures.

(a) National banks and corporations

organized by authority of any law of

Congress are prohibited from making a

contribution, as defined in 11 CFR

114.1(a), in connection with any

election to any political office,

including local, State and Federal

offices, or in connection with any

primary election or political convention

or caucus held to select candidates for

any political office, including any local,

State or Federal office. National banks

and corporations organized by authority

of any law of Congress are prohibited

form making expenditures as defined in

11 FR 114.1(a) for communications to

those outside the restricted class

expressly advocating the election or

defeat of one or more clearly identified

candidate(s) or the candidates of a

clearly identified political party, with

respect to an election to any political

office, including any local, State or

Federal office.

(1) Such national banks and

corporations may engage in the

activities permitted by 11 CFR part 114,

except to the extent that such activity is

foreclosed by provisions of law other

than the Act.

(2) The provisions of 11 CFR part 114

apply to the activities of a national

bank, or a corporation organized by any

law of Congress, in connection with

local, State and Federal elections.

(b) Any corporation whatever or any

labor organization is prohibited from

making a contribution as defined in 11

CFR 114.1(a) in connection with any

Federal election. Except as provided at

11 CFR 114.10, corporations and labor

organizations are prohibited from

making expenditures with respect to a

Federal election (as defined in 11 CFR

114.1(a)) for communications to those

outside the restricted class expressly

advocating the election or defeat of one

or more clearly identified candidate(s)

or the candidates of a clearly identified

political party.

(c) Disbursements by corporations and

labor organizations for the electionrelated activities described in 11 CFR

114.3 and 114.4 will not cause those

activities to be contributions or

expenditures, even when coordinated

with any candidate, candidate’s agent,

candidate’s authorized committee(s) or

any party committee to the extent

permitted in those sections.

Coordination beyond that described in

11 CFR 114.3 and 114.4 shall not cause

subsequent activities directed at the

restricted class to be considered

contributions or expenditures. However,

such coordination may be considered

evidence that could negate the

independence of subsequent

communications to those outside the

restricted class by the corporation, labor

organization or its separate segregated

fund, and could result in an in-kind

contribution. See 11 CFR 109.1

regarding independent expenditures

and coordination with candidates.

(d) A candidate, political committee,

or other person is prohibited from

knowingly accepting or receiving any

contribution prohibited by this section.

(e) No officer or director of any

corporation or any national bank, and

no officer of any labor organization shall

consent to any contribution or

expenditure by the corporation, national

bank, or labor organization prohibited

by this section.

(f) Facilitating the making of

contributions. (1) Corporations and

labor organizations (including officers,

directors or other representatives acting

as agents of corporations and labor

organizations) are prohibited from

facilitating the making of contributions

to candidates or political committees,

other than to the separate segregated

funds of the corporations and labor

organizations. Facilitation means using

corporate or labor organization

resources or facilities to engage in

fundraising activities in connection

with any federal election, such as

activities which go beyond the limited

exemptions set forth in 11 CFR 100.7,

100.8, 114.9(a) through (c) and 114.13.

A corporation does not facilitate the

making of a contribution to a candidate

or political committee if it provides

goods or services in the ordinary course

of its business as a commercial vendor

in accordance with 11 CFR part 116 at

the usual and normal charge.

(2) Examples of facilitating the

making of contributions include but are

not limited to—

(i) Fundraising activities by

corporations (except commercial

vendors) or labor organizations that

involve—

(A) Officials or employees of the

corporation or labor organization

ordering or directing subordinates or

support staff (who therefore are not

acting as volunteers) to plan, organize or

carry out the fundraising project as a

part of their work responsibilities using

corporate or labor organization

resources, unless the corporation or

labor organization receives advance

payment for the fair market value of

such services;

(B) Failure to reimburse a corporation

or labor organization within a

commercially reasonable time for the

use of corporate facilities described in

11 CFR 114.9(d) in connection with

such fundraising activities;

(C) Using a corporate or labor

organization list of customers, clients,

vendors or others who are not in the

restricted class to solicit contributions

or distribute invitations to the

fundraiser, unless the corporation or

labor organization receives advance

payment for the fair market value of the

list;

(D) Using meeting rooms that are not

customarily made available to clubs,

civic or community organizations or

other groups; or

(E) Providing catering or other food

services operated or obtained by the

corporation or labor organization, unless

the corporation or labor organization

receives advance payment for the fair

market value of the services;

(ii) Providing materials for the

purpose of transmitting or delivering

contributions, such as stamps,

envelopes addressed to a candidate or

political committee other than the
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64275

corporation’s or labor organization’s

separate segregated fund, or other

similar items which would assist in

transmitting or delivering contributions,

but not including providing the address

of the candidate or political committee;

(iii) Soliciting contributions

earmarked for a candidate that are to be

collected and forwarded by the

corporation’s or labor organizations’s

separate segregated fund, except to the

extent such contributions also are

treated as contributions to and by the

separate segregated fund; or

(iv) Using coercion, such as the threat

of a detrimental job action, the threat of

any other financial reprisal, or the threat

of force, to urge any individual to make

a contribution or engage in fundraising

activities on behalf of a candidate or

political committee.

(3) Facilitating the making of

contributions does not include the

following activities if conducted by a

separate segregated fund—

(i) Any activity specifically permitted

under 11 CFR 110.1, 110.2, or 114.5

through 114.8, including soliciting

contributions to a candidate or political

committee, and making in kind

contributions to a candidate or political

committee; and

(ii) Collecting and forwarding

contributions earmarked to a candidate

in accordance with 11 CFR 110.6.

(4) Facilitating the making of

contributions also does not include the

following activities if conducted by a

corporation or labor organization—

(i) Enrolling members of a

corporation’s or labor organization’s

restricted class in a payroll deduction

plan or check-off system which deducts

contributions from dividend or payroll

checks to make contributions to the

corporation’s or labor organization’s

separate segregated fund or an employee

participation plan pursuant to 11 CFR

114.11;

(ii) Soliciting contributions to be sent

directly to candidates if the solicitation

is directed to the restricted class, see 11

CFR 114.1(a)(2)(i); and

(iii) Soliciting contributions

earmarked for a candidate that are to be

collected and forwarded by the

corporation’s or labor organization’s

separate segregated fund, to the extent

such contributions also are treated as

contributions to and by the separate

segregated fund.

14. 11 CFR part 114 is amended by

revising section 114.3 to read as follows:

§ 114.3 Disbursements for

communications to the restricted class in

connection with a Federal election.

(a) General. (1) Corporations and labor

organizations may make

communications on any subject,

including communications containing

express advocacy, to their restricted

class or any part of that class.

Corporations and labor organizations

may also make the communications

permitted under 11 CFR 114.4 to their

restricted class or any part of that class.

The activities permitted under this

section may involve election-related

coordination with candidates and

political committees. See 11 CFR 109.1

and 114.2(c) regarding independent

expenditures and coordination with

candidates.

(2) Incorporated membership

organizations, incorporated trade

associations, incorporated cooperatives

and corporations without capital stock

may make communications to their

restricted class, or any part of that class

as permitted in paragraphs (a)(1) and (c)

of this section.

(b) Reporting communications

containing express advocacy.

Disbursements for communications

expressly advocating the election or

defeat of one or more clearly identified

candidate(s) made by a corporation,

including a corporation described in

paragraph (a)(2) of this section, or labor

organization to its restricted class shall

be reported in accordance with 11 CFR

100.8(b)(4) and 104.6.

(c) Communications containing

express advocacy. Communications

containing express advocacy which may

be made to the restricted class include,

but are not limited to, the examples set

forth in paragraphs (c)(1) through (c)(4)

of this section.

(1) Publications. Printed material

expressly advocating the election or

defeat of one or more clearly identified

candidate(s) or candidates of a clearly

identified political party may be

distributed by a corporation or by a

labor organization to its restricted class,

provided that:

(i) The material is produced at the

expense of the corporation or labor

organization; and

(ii) The material constitutes a

communications of the views of the

corporation or the labor organization,

and is not the republication or

reproduction, in whole or in part, of any

broadcast, transcript or tape or any

written, graphic, or other form of

campaign materials prepared by the

candidate, his or her campaign

committees, or their authorized agents.

A corporation or labor organization

may, under this section, use brief

quotations from speeches or other

materials of a candidate that

demonstrate the candidate’s position as

part of the corporation’s or labor

organization’s expression of its own

views.

(2) Candidate and party appearances.

(i) A corporation may allow a candidate,

candidate’s representative or party

representative to address its restricted

class at a meeting, convention or other

function of the corporation, but is not

required to do so. A labor organization

may allow a candidate or party

representative to address its restricted

class at a meeting, convention, or other

function of the labor organization, but is

not required to do so. A corporation or

labor organization may bar other

candidates for the same office or a

different office and their

representatives, and representatives of

other parties addressing the restricted

class. A corporation or labor

organization may allow the presence of

employees outside the restricted class of

the corporation or labor organization

who are necessary to administer the

meeting, other guests of the corporation

or labor organization who are being

honored or speaking or participating in

the event, and representatives of the

news media.

(ii) The candidate, candidate’s

representative or party representative

may ask for contributions to his or her

campaign or party, or ask that

contributions to the separate segregated

fund of the corporation or labor

organization be designated for his or her

campaign or party. The incidental

solicitation of persons outside the

corporation’s or labor organization’s

restricted class who may be present at

the meeting as permitted by this section

will not be a violation of 11 CFR part

114. The candidate’s representative or

party representative (other than an

officer, director or other representative

of a corporation or official, member or

employee of a labor organization) or the

candidate, may accept contributions

before, during or after the appearance at

the meeting, convention or other

function of the corporation or labor

organization.

(iii) The corporation or labor

organization may suggest that members

of its restricted class contribute to the

candidate or party committee, but the

collection of contributions by any

officer, director or other representative

of the corporation or labor organization

before, during, or after the appearance

while at the meeting, is an example of

a prohibited facilitation of contributions

under 11 CFR 114.2(f).

(iv) If the corporation or labor

organization permits more than one

candidate for the same office, or more

than one candidate’s representative or

party representative, to address its

restricted class, and permits the news
64276 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

media to cover or carry an appearance

by one candidate or candidate’s

representative or party representative,

the corporation or labor organization

shall also permit the news media to

cover or carry the appearances by the

other candidate(s) for that office, or the

other candidates’ representatives or

party representatives. If the corporation

or labor organization permits a

representative of the news media to

cover or carry a candidate or candidate’s

representative or party representative

appearance, the corporation or labor

organization shall provide all other

representatives of the news media with

equal access for covering or carrying

that appearance. Equal access is

provided by—

(A) Providing advance information

regarding the appearance to the

representatives of the news media

whom the corporation or labor

organization customarily contacts and

other representatives of the news media

upon request; and

(B) Allowing all representatives of the

news media to cover or carry the

appearance, through the use of pooling

arrangements if necessary.

(3) Phone banks. A corporation or a

labor organization may establish and

operate phone banks to communicate

with its restricted class, urging them to

register and/or vote for a particular

candidate or candidates, or to register

with a particular political party.

(4) Registration and get-out-the-vote

drives. A corporation or a labor

organization may conduct registration

and get-out-the-vote drives aimed at its

restricted class. Registration and get-outthe-vote drives include providing

transportation to the place of

registration and to the polls. Such drives

may include communications

containing express advocacy, such as

urging individuals to register with a

particular party or to vote for a

particular candidate or candidates.

Information and other assistance

regarding registering or voting,

including transportation and other

services offered, shall not be withheld

or refused on the basis of support for or

opposition to particular candidates, or a

particular political party.

15. 11 CFR part 114 is amended by

revising section 114.4 to read as follows:

§ 114.4 Disbursements for

communications beyond the restricted

class in connection with a Federal election.

(a) General. A corporation or labor

organization may communicate beyond

the restricted class in accordance with

this section. Any communications

which a corporation or labor

organization may make to the general

public under paragraph (c) of this

section may also be made to the

corporation’s or labor organization’s

restricted class and to other employees

and their families. Communications

which a corporation or labor

organization may make only to its

employees (including its restricted

class) and their families, but not to the

general public, are found in paragraph

(b) of this section. Communications

which a corporation or labor

organization may make only to its

restricted class are found at 11 CFR

114.3. The activities permitted under

paragraphs (b) and (c) of this section

may involve election-related

coordination with candidates and

political committees only to the extent

permitted by this section. See 11 CFR

109.1 and 114.2(c) regarding

independent expenditures and

coordination with candidates.

Incorporated membership organizations,

incorporated trade associations,

incorporated cooperatives and

corporations without capital stock will

be treated as corporations for the

purpose of making communications

beyond the restricted class under this

section.

(b) Communications by a corporation

or labor organization to employees

beyond its restricted class— (1)

Candidate and party appearances on

corporate premises or at a meeting,

convention or other function.

Corporations may permit candidates,

candidates’ representatives or

representatives of political parties on

corporate premises or at a meeting,

convention, or other function of the

corporation to address or meet its

restricted class and other employees of

the corporation and their families, in

accordance with the conditions set forth

in paragraphs (b)(1)(i) through

(b)(1)(viii) of this section. Other guests

of the corporation who are being

honored or speaking or participating in

the event and representatives of the

news media may be present. A

corporation may bar all candidates,

candidates’ representatives and

representatives of political parties from

addressing or meeting its restricted class

and other employees of the corporation

and their families on corporate premises

or at any meeting, convention or other

function of the corporation.

(i) If a candidate for the House or

Senate or a candidate’s representative is

permitted to address or meet employees,

all candidates for that seat who request

to appear must be given a similar

opportunity to appear;

(ii) If a Presidential or Vice

Presidential candidate or candidate’s

representative is permitted to address or

meet employees, all candidates for that

office who are seeking the nomination

or election, and who meet preestablished objective criteria under 11

CFR 110.13(c), and who request to

appear must be given a similar

opportunity to appear;

(iii) If representatives of a political

party are permitted to address or meet

employees, representatives of all

political parties which had a candidate

or candidates on the ballot in the last

general election or which are actively

engaged in placing or will have a

candidate or candidates on the ballot in

the next general election and who

request to appear must be given a

similar opportunity to appear;

(iv) The candidate’s representative or

party representative (other than an

officer, director or other representative

of a corporation) or the candidate, may

ask for contributions to his or her

campaign or party, or ask that

contributions to the separate segregated

fund of the corporation be designated

for his or her campaign or party. The

candidate, candidate’s representative or

party representative shall not accept

contributions before, during or after the

appearance while at the meeting,

convention or other function of the

corporation, but may leave campaign

materials or envelopes for members of

the audience. A corporation, its

restricted class, or other employees of

the corporation or its separate

segregated fund shall not, either orally

or in writing, solicit or direct or control

contributions by members of the

audience to any candidate or party in

conjunction with any appearance by any

candidate or party representative under

this section, and shall not facilitate the

making of contributions to any such

candidate or party (see 11 CFR 114.2(f));

(v) A corporation or its separate

segregated fund shall not, in

conjunction with any candidate,

candidate representative or party

representative appearance under this

section, expressly advocate the election

or defeat of any clearly identified

candidate(s) or candidates of a clearly

identified political party and shall not

promote or encourage express advocacy

by employees;

(vi) No candidate, candidate’s

representative or party representative

shall be provided with more time or a

substantially better location than other

candidates, candidates’ representatives

or party representatives who appear,

unless the corporation is able to

demonstrate that it is clearly impractical

to provide all candidates, candidates’

representatives and party

representatives with similar times or

locations;
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64277

(vii) Coordination with each

candidate, candidate’s agent, and

candidate’s authorized committee(s)

may include discussions of the

structure, format and timing of the

candidate appearance and the

candidate’s positions on issues, but

shall not include discussions of the

candidate’s plans, projects, or needs

relating to the campaign; and

(viii) Representatives of the news

media may be allowed to be present

during a candidate, candidate

representative or party representative

appearance under this section, in

accordance with the procedures set

forth at 11 CFR 114.3(c)(2)(iv).

(2) Candidate and party appearances

on labor organization premises or at a

meeting, convention or other function. A

labor organization may permit

candidates, candidates’ representatives

or representatives of political parties on

the labor organization’s premises or at a

meeting, convention, or other function

of the labor organization to address or

meet its restricted class and other

employees of the labor organization, and

their families, in accordance with the

conditions set forth in paragraphs (b)(1)

(i) through (iii), (vi) through (viii), and

paragraphs (b)(2) (i) and (ii) of this

section. Other guests of the labor

organization who are being honored or

speaking or participating in the event

and representatives of the news media

may be present. A labor organization

may bar all candidates, candidates’

representatives and representatives of

political parties from addressing or

meeting its restricted class and other

employees of the labor organization and

their families on the labor organization’s

premises or at any meeting, convention

or other function of the labor

organization.

(i) The candidate’s representative or

party representative (other than an

official, member or employee of a labor

organization) or the candidate, may ask

for contributions to his or her campaign

or party, or ask that contributions to the

separate segregated fund of the labor

organization be designated for his or her

campaign or party. The candidate,

candidate’s representative or party

representative shall not accept

contributions before, during or after the

appearance while at the meeting,

convention or other function of the

labor organization, but may leave

campaign materials or envelopes for

members of the audience. No official,

member, or employee of a labor

organization or its separate segregated

fund shall, either orally or in writing,

solicit or direct or control contributions

by members of the audience to any

candidate or party representative under

this section, and shall not facilitate the

making of contributions to any such

candidate or party. See 11 CFR 114.2(f).

(ii) A labor organization or its separate

segregated fund shall not, in

conjunction with any candidate or party

representative appearance under this

section, expressly advocate the election

or defeat of any clearly identified

candidate(s), and shall not promote or

encourage express advocacy by its

members or employees.

(c) Communications by a corporation

or labor organization to the general

public.

(1) General. A corporation or labor

organization may make the

communications described in

paragraphs (c)(2) through (c)(5) of this

section to the general public. The

general public includes anyone who is

not in the corporation’s or labor

organization’s restricted class. The

provisions of paragraph (c) of this

section shall not prevent a qualified

nonprofit corporation under 11 CFR

114.10(c) from including express

advocacy in any communication made

to the general public under paragraphs

(c)(2) through (c)(5)(i) of this section.

(2) Registration and voting

communications. A corporation or labor

organization may make registration and

get-out-the vote communications to the

general public, provided that the

communications do not expressly

advocate the election or defeat of any

clearly identified candidate(s) or

candidates of a clearly identified

political party. The preparation and

distribution or registration and get-outthe-vote communications shall not be

coordinated with any candidate(s) or

political party. A corporation or labor

organization may make communications

permitted under this section through

posters, billboards, broadcasting media,

newspapers, newsletter, brochures, or

similar means of communication with

the general public.

(3) Official registration and voting

information.

(i) A corporation or labor organization

may distribute to the general public, or

reprint in whole and distribute to the

general public, any registration or voting

information, such as instructional

materials, which has been produced by

the official election administrators.

(ii) A corporation or labor

organization may distribute official

registration-by-mail forms to the general

public. A corporation or labor

organization may distribute absentee

ballots to the general public if permitted

by the applicable State law.

(iii) A corporation or labor

organization may donate funds to State

or local government agencies

responsible for the administration of

elections to help defray the costs of

printing or distributing registration or

voting information and forms.

(iv) The corporation or labor

organization shall not, in connection

with any such distribution, expressly

advocate the election or defeat of any

clearly identified candidate(s) or

candidates of a clearly identified

political party and shall not encourage

registration with any particular political

party.

(v) The reproduction and distribution

of registration or voting information and

forms shall not be coordinated with any

candidate(s) or political party.

(4) Voting records. A corporation or

labor organization may prepare and

distribute to the general public the

voting records of Members of Congress,

provided that the voting record and all

communications distributed with it do

not expressly advocate the election or

defeat of any clearly identified

candidate, clearly identified group of

candidates or candidates of a clearly

identified political party. The decision

on content and the distribution of voting

records shall not be coordinated with

any candidate, group of candidates or

political party.

(5) Voter guides. A corporation or

labor organization may prepare and

distribute to the general public voter

guides consisting of two or more

candidates’ positions on campaign

issues, including voter guides obtained

from a nonprofit organization which is

described in 26 U.S.C. 501 (c)(3) or

(c)(4), provided that the voter guides

comply with either paragraph (c)(5)(i) or

(c)(5)(ii) (A) through (E) of this section.

The sponsor may include in the voter

guide biographical information on each

candidate, such as education,

employment positions, offices held, and

community involvement.

(i) The corporation or labor

organization shall not contact or in any

other way act in cooperation,

coordination, or consultation with or at

the request or suggestion of the

candidates, the candidates’ committees

or agents regarding the preparation,

contents and distribution of the voter

guide, and no portion of the voter guide

may expressly advocate the election or

defeat of one or more clearly identified

candidate(s) or candidates of any clearly

identified political party.

(ii) (A) The corporation or labor

organization shall not contact or in any

other way act in cooperation,

coordination, or consultation with or at

the request or suggestion of the

candidates, the candidates’ committees

or agents regarding the preparation,

contents and distribution of the voter
64278 Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations

guide, except that questions may be

directed in writing to the candidates

included in the voter guide and the

candidates may respond in writing;

(B) All of the candidates for a

particular seat or office shall be

provided an equal opportunity to

respond, except that in the case of

Presidential and Vice Presidential

candidates the corporation or labor

organization may choose to direct the

questions only to those candidates

who—

(1) Are seeking the nomination of a

particular political party in a contested

primary election; or

(2) Appear on the general election

ballot in the state(s) where the voter

guide is distributed or appear on the

general election ballot in enough states

to win a majority of the electoral votes;

(C) No candidate may receive greater

prominence in the voter guide than

other participating candidates, or

substantially more space for responses;

(D) The voter guide and its

accompanying materials shall not

contain an electioneering message; and

(E) The voter guide and its

accompanying materials shall not score

or rate the candidates’ responses in such

a way as to convey an electioneering

message.

(6) Endorsements. A corporation or

labor organization may endorse a

candidate and may communicate the

endorsement to its restricted class

through the publications described in 11

CFR 114.3(c)(1) or during a candidate

appearance under 11 CFR 114.3(c)(2),

provided that no more than a de

minimis number of copies of the

publication which includes the

endorsement are circulated beyond the

restricted class. The corporation or labor

organization may publicly announce the

endorsement and state the reasons

therefor, in accordance with the

conditions set forth in paragraphs (c)(6)

(i) and (ii) of this section. The Internal

Revenue Code and regulations

promulgated thereunder should be

consulted regarding restrictions or

prohibitions on endorsements by

nonprofit corporations described in 26

U.S.C. 501(c)(3).

(i) The public announcement of the

endorsement may be made through a

press release and press conference.

Disbursements for the press release and

press conference shall be de minimis.

The disbursements shall be considered

de minimis if the press release and

notice of the press conference is

distributed only to the representatives of

the news media that the corporation or

labor organization customarily contacts

when issuing non-political press

releases or holding press conferences for

other purposes.

(ii) The public announcement of the

endorsement may not be coordinated

with the candidate, the candidate’s

agents or the candidate’s authorized

committee(s).

(7) Candidate appearances on

educational institution premises—(i)

Rental of facilities at usual and normal

charge. Any incorporated nonprofit

educational institution exempt from

federal taxation under 26 U.S.C.

501(c)(3), such as a school, college or

university, may make its facilities

available to any candidate or political

committee in the ordinary course of

business and at the usual and normal

charge. In this event, the requirements

of paragraph (c)(7)(ii) of this section are

not applicable.

(ii) Use of facilities at no charge or at

less than the usual and normal charge.

An incorporated nonprofit educational

institution exempt from federal taxation

under 26 U.S.C. 501(c)(3), such as a

school, college or university, may

sponsor appearances by candidates,

candidates’ representatives or

representatives of political parties at

which such individuals address or meet

the institution’s academic community or

the general public (whichever is invited)

on the educational institution’s

premises at no charge or at less than the

usual and normal charge, if:

(A) The educational institution makes

reasonable efforts to ensure that the

appearances constitute speeches,

question and answer sessions, or similar

communications in an academic setting,

and makes reasonable efforts to ensure

that the appearances are not conducted

as campaign rallies or events; and

(B) The educational institution does

not, in conjunction with the appearance,

expressly advocate the election or defeat

of any clearly identified candidate(s) or

candidates of a clearly identified

political party, and does not favor any

one candidate or political party over any

other in allowing such appearances.

(d) Registration and get-out-the-vote

drives. A corporation or labor

organization may support or conduct

voter registration and get-out-the-vote

drives which are aimed at employees

outside its restricted class and the

general public in accordance with the

conditions set forth in paragraphs (d)(1)

through (d)(6) of this section.

Registration and get-out-the-vote drives

include providing transportation to the

polls or to the place of registration.

(1) The corporation or labor

organization shall not make any

communication expressly advocating

the election or defeat of any clearly

identified candidate(s) or candidates of

a clearly identified political party as

part of the voter registration or get-outthe-vote drive.

(2) The registration or get-out-the-vote

drive shall not be coordinated with any

candidate(s) or political party.

(3) The registration drive shall not be

directed primarily to individuals

previously registered with, or intending

to register with, the political party

favored by the corporation or labor

organization. The get-out-the-vote drive

shall not be directed primarily to

individuals currently registered with the

political party favored by the

corporation or labor organization.

(4) These services shall be made

available without regard to the voter’s

political preference. Information and

other assistance regarding registering or

voting, including transportation and

other services offered, shall not be

withheld or refused on the basis of

support for or opposition to particular

candidates or a particular political

party.

(5) Individuals conducting the

registration or get-out-the-vote drive

shall not be paid on the basis of the

number of individuals registered or

transported who support one or more

particular candidates or political party.

(6) The corporation or labor

organization shall notify those receiving

information or assistance of the

requirements of paragraph (d)(4) of this

section. The notification shall be made

in writing at the time of the registration

or get-out-the-vote drive.

(e) Incorporated membership

organizations, incorporated trade

associations, incorporated cooperatives

and corporations without capital stock.

An incorporated membership

organization, incorporated trade

association, incorporated cooperative or

corporation without capital stock may

permit candidates, candidates’

representatives or representatives of

political parties to address or meet

members and employees of the

organization, and their families, on the

organization’s premises or at a meeting,

convention or other function of the

organization, in accordance with the

conditions set forth in paragraphs (b)(1)

(i) through (viii) of this section.

(f) Candidate debates. (1) A nonprofit

organization described in 11 CFR

110.13(a)(1) may use its own funds and

may accept funds donated by

corporations or labor organizations

under paragraph (f)(3) of this section to

defray costs incurred in staging

candidate debates held in accordance

with 11 CFR 110.13.

(2) A broadcaster, bona fide

newspaper, magazine or other

periodical publication may use its own
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / Rules and Regulations 64279

funds to defray costs incurred in staging

public candidate debates held in

accordance with 11 CFR 110.13.

(3) A corporation or labor

organization may donate funds to

nonprofit organizations qualified under

11 CFR 110.13(a)(1) to stage candidate

debates held in accordance with 11 CFR

110.13 and 114.4(f).

16. 11 CFR part 114 is amended by

revising the title of section 114.12, and

by removing and reserving paragraph (b)

of section 114.12 to read as follows:

§ 114.12 Incorporation of political

committees; Payment of fringe benefits.

* * * * *

(b) [Reserved]

* * * * *

17. 11 CFR part 114 is amended by

adding section 114.13 to read as follows:

§ 114.13 Use of meeting rooms.

Notwithstanding any other provisions

of part 114, a corporation or labor

organization which customarily makes

its meeting rooms available to clubs,

civic or community organizations, or

other groups may make such facilities

available to a political committee or

candidate if the meeting rooms are made

available to any candidate or political

committee upon request and on the

same terms given to other groups using

the meeting rooms.

Dated: December 8, 1995.

Danny L. McDonald,

Chairman, Federal Election Commission.

[FR Doc. 95–30381 Filed 12–13–95; 8:45 am]

BILLING CODE 6715–01–M