PANEL DECISION ISSUED JANUARY 21, 2016 

Nos. 15-5016 & 15-5017 

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

CHRISTOPHER VAN HOLLEN, JR. 

Plaintiff-Appellee,

v. 

FEDERAL ELECTION COMMISSION,

Defendant-Appellee,

CENTER FOR INDIVIDUAL FREEDOM, 

Intervenor for Defendant-Appellant 

in No. 15-5016, 

and 

HISPANIC LEADERSHIP FUND, 

Intervenor for Defendant-Appellant 

in No. 15-5017.

On Appeal from the United States District Court 

for the District of Columbia 

APPELLEE VAN HOLLEN’S PETITION FOR REHEARING EN BANC 

ROGER M. WITTEN

FIONA J. KAYE

STEPHANIE SIMON

WILMER CUTLER PICKERING

 HALE AND DORR LLP

7 World Trade Center 

New York, NY 10007 

(212) 230-8800 

March 4, 2016 

CATHERINE M.A. CARROLL

WILMER CUTLER PICKERING

 HALE AND DORR LLP

1875 Pennsylvania Avenue NW 

Washington, DC 20006 

(202) 663-6000

ADDITIONAL COUNSEL LISTED ON INSIDE COVER

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 1 of 70
FRED WERTHEIMER

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DONALD J. SIMON

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SCOTT L. NELSON

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TREVOR POTTER

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Washington, DC 20002 

(202) 736-2200 

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 2 of 70
TABLE OF CONTENTS 

Page 

TABLE OF AUTHORITIES .................................................................................... ii 

GLOSSARY .............................................................................................................. iv 

INTRODUCTION AND RULE 35(b)(1) STATEMENT ......................................... 1 

BACKGROUND ....................................................................................................... 3 

ARGUMENT ............................................................................................................. 6 

I. THE PANEL’S CONSTITUTIONAL RATIONALE—WHICH THE FEC

NEVER ADVANCED—CONFLICTS WITH SUPREME COURT 

PRECEDENT ....................................................................................................... 7 

II. THE PANEL’S ADMINISTRATIVE-LAW ANALYSIS FLOUTS 

PRECEDENT ....................................................................................................... 9 

III. THE PANEL REACHED THE WRONG RESULT IN AN 

EXCEPTIONALLY IMPORTANT CASE ................................................................ 12 

CONCLUSION ........................................................................................................ 15 

ADDENDUM 

 Opinion of the United States Court of Appeals for the District 

of Columbia Circuit (Jan. 21, 2016) 

 Federal Election Commission, Final Rule, 72 Fed. Reg. 72,899 

(Dec. 26, 2007) (JA299-315) 

 Certificate as to Parties and Amici 

CERTIFICATE OF SERVICE 

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ii 

TABLE OF AUTHORITIES*

CASES 

Page(s) 

American Radio Relay League v. FCC, 524 F.3d 227 (D.C. Cir. 2008) ................ 14 

Associated Gas Distributors v. FERC, 899 F.2d 1250 (D.C. Cir. 1990)................ 12 

Chemical Manufacturers Ass’n v. EPA, 217 F.3d 861 (D.C. Cir. 2000) ......... 10, 11 

Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 

837 (1984) ....................................................................................................... 5 

* Citizens United v. FEC, 558 U.S. 310 (2010)......................................... 1, 2, 7, 8, 12 

Continental Air Lines, Inc. v. Department of Transportation, 843 F.2d 

1444 (D.C. Cir. 1988) ................................................................................... 11 

FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27 

(1981) ............................................................................................................ 11 

FEC v. Wisconsin Right to Life, 551 U.S. 449 (2007) .............................................. 4 

Kerr-McGee Chemical Corp. v. U.S. Nuclear Regulatory 

Commission, 903 F.2d 1 (D.C. Cir. 1990) .................................................... 11 

Majors v. Abell, 361 F.3d 349 (7th Cir. 2004).......................................................... 8 

* McConnell v. FEC, 540 U.S. 93 (2003) .............................................. 2, 3, 7, 8, 9, 12 

McCutcheon v. FEC, 134 S. Ct. 1434 (2014) ................................................. 2, 7, 12 

Michigan v. EPA, 135 S. Ct. 2699 (2015) .......................................................... 9, 12 

Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile 

Insurance Co., 463 U.S. 29 (1983) ............................................................... 15 

Republican National Committee v. FEC, 76 F.3d 400 (D.C. Cir. 1996) ................ 14 

Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) ............................................................ 3 

* Shays v. FEC, 528 F.3d 914 (D.C. Cir. 2008) ................................ 2, 3, 9, 10, 11, 15 

 

* Authorities upon which we chiefly rely are marked with asterisks. 

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iii 

SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010) ...................................... 2, 7 

Village of Barrington v. Surface Transportation Board, 636 F.3d 650 

(D.C. Cir. 2011) .............................................................................................. 9 

STATUTES, RULES, AND REGULATIONS 

26 U.S.C. § 6033 ..................................................................................................... 15 

52 U.S.C. 

§ 30101 ........................................................................................................... 4 

§ 30104 ............................................................................................. 1, 3, 4, 13 

11 C.F.R. § 104.20 .................................................................................................... 1 

Treas. Reg. § 1.6033-2 ............................................................................................ 15 

67 Fed. Reg. 51,137 (Aug. 7, 2002)........................................................................ 14 

68 Fed. Reg. 404 (Jan. 3, 2003) .................................................................... 4, 13, 14 

Fed. R. App. P. 35 ............................................................................................... 2, 15 

OTHER AUTHORITIES 

147 Cong. Rec. 

4865 (2001) (statement of Sen. Jeffords) ....................................................... 3 

5001 (2001) (statement of Sen. Snowe) ......................................................... 3 

News Release, FEC Statement on Van Hollen v. FEC (July 27, 2012), 

http://fec.gov/press/press2012/20120727_VanHollen_v_FEC.s

html ............................................................................................................... 14 

Statement of Reasons of Chairman Petersen et al., In re Freedom’s 

Watch, Inc., MUR 6002 (FEC Aug. 13, 2010), http://eqs.fec.gov/

eqsdocsMUR/10044274536.pdf ..................................................................... 4

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GLOSSARY 

APA Administrative Procedure Act 

BCRA Bipartisan Campaign Reform Act of 2002 

FEC Federal Election Commission 

JA Joint Appendix 

WRTL FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) 

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INTRODUCTION AND RULE 35(b)(1) STATEMENT 

The Bipartisan Campaign Reform Act of 2002 (BCRA) requires “[e]very 

person” spending more than $10,000 per year on electioneering communications to 

disclose “all contributors” who contributed over $1,000 to that person in a 

specified period. 52 U.S.C. § 30104(f)(2)(F). A Federal Election Commission 

rule governing spending for electioneering communications by corporations and 

unions, in contrast, eliminates the duty to disclose any contributors, except those 

who give expressly “for the purpose of furthering electioneering communications.” 

11 C.F.R. § 104.20(c)(9). Because that rule allows donors to “avoid reporting 

altogether by transmitting funds but remaining silent about their intended use,” 

JA447, the district court twice invalidated it, and the FEC twice declined to appeal. 

But on intervenors’ appeal, the panel (Brown, J., joined by Sentelle and Randolph, 

S.JJ.) upheld it as a reasonable reading of BCRA and not arbitrary or capricious. 

Numerous errors pervade the panel opinion, but two in particular bring this 

case within the demanding Rule 35 standard. First, the panel sustained the rule on 

constitutional grounds the panel conceded were inconsistent with Supreme Court 

precedent. In the panel’s view, a disclosure rule any broader than the FEC’s would 

violate constitutional speech and privacy rights. Op. 24. That analysis—which 

appears nowhere in the FEC’s explanation for the rule—defies Supreme Court 

precedent consistently upholding BCRA’s disclosure requirements. Citizens 

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United v. FEC, 558 U.S. 310, 367 (2010); McConnell v. FEC, 540 U.S. 93, 196-

198 (2003); see also McCutcheon v. FEC, 134 S. Ct. 1434, 1459-1460 (2014); 

SpeechNow.org v. FEC, 599 F.3d 686, 696-697 (D.C. Cir. 2010). The panel 

acknowledged the conflict, but criticized that precedent as “‘based on the flimsiest 

of justifications’” and bound to collapse. Op. 25-26, 28. Second, the panel 

announced an administrative-law standard that conflicts with precedent 

invalidating regulations that frustrate statutory purpose. E.g., Shays v. FEC, 528 

F.3d 914 (D.C. Cir. 2008). The panel acknowledged that Shays supports the FEC 

rule’s invalidation but declined to follow it, calling it an outmoded “resultsoriented brand of purposivism” that no longer has any place in the law. Op. 13-14. 

When the Court believes, as the panel did here, that the law “has moved 

beyond” a mode of analysis employed by prior decisions, Op. 13—or that prior 

decisions “subsist[], ... for now, on a fragile arrangement” that should be 

abandoned, Op. 28—the proper mechanism for effectuating those views is the en 

banc process. Instead, the panel refused to apply controlling precedent, injecting 

conflict and confusion into otherwise settled and highly consequential areas of law. 

Fed. R. App. P. 35(a)(1). In doing so, it sustained a regulation that eviscerates 

BCRA’s disclosure requirements, undermining a campaign-finance system that 

hinges on the pairing of corporate spending with effective disclosure. Citizens 

United, 558 U.S. at 370; Fed. R. App. P. 35(a)(2). 

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BACKGROUND 

Congress enacted BCRA in response to a “‘“meltdown” of the campaign 

finance system,’” Shays, 528 F.3d at 918, caused in part by the use of soft money 

to fund “issue ads” that sought to influence federal elections but escaped existing 

disclosure requirements. McConnell, 540 U.S. at 129-132; Shays v. FEC, 414 F.3d 

76, 81-82 (D.C. Cir. 2005). Because the ads’ sponsors could “‘hid[e] behind 

dubious and misleading names’” without disclosing the sources of funding, the ads 

escaped “the scrutiny of the voting public.” McConnell, 540 U.S. at 197. In 

BCRA, Congress responded by requiring expanded disclosure to “inform the 

voting public of who is sponsoring and paying for” electioneering communications 

and to deter corruption by revealing “who is trying to influence the election.” 147 

Cong. Rec. 4865, 4895 (2001) (statement of Sen. Jeffords); see 147 Cong. Rec. 

5001, 5005 (2001) (statement of Sen. Snowe). 

To that end, BCRA identified a new category of campaign spending called 

“electioneering communications,” defined as broadcast, cable, or satellite ads that 

refer to an identified federal candidate, run shortly before an election, and target 

the relevant electorate. 52 U.S.C. § 30104(f)(3). BCRA requires “[e]very person” 

who spends over $10,000 for electioneering communications during the year to 

disclose “the names and addresses of all contributors who contributed an 

aggregate amount of $1,000 or more to the person making the disbursement” 

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during a specified time period. Id. § 30104(f)(2)(F) (emphasis added).1

 

Alternatively, if ads are paid for from a segregated bank account, BCRA requires 

disclosure of “all contributors” who gave over $1,000 “to that account” during the 

relevant period. Id. § 30104(f)(2)(E). In 2003, the FEC promulgated regulations 

mirroring BCRA’s disclosure provisions. 68 Fed. Reg. 404 (Jan. 3, 2003). 

This suit challenges a rule the FEC adopted in 2007 after FEC v. Wisconsin 

Right to Life, 551 U.S. 449 (2007) (“WRTL”), which invalidated BCRA’s provision 

banning corporations and unions from spending general funds on electioneering 

communications as applied to many ads. Although WRTL did not mention 

disclosure, the FEC revised its rules to require corporations and unions paying for 

electioneering communications out of general funds to disclose only those donors 

who donated specifically “for the purpose of furthering electioneering 

communications.” JA313 (reprinted in the Addendum). That limitation requires 

disclosure only when funds are “received in response to solicitations specifically 

requesting funds to pay for [electioneering communications]” or “specifically 

designated for [electioneering communications] by the donor.” JA311.2

 

 

1

 “[P]erson” includes corporations and unions. 52 U.S.C. § 30101(11). 

2

 For example, in 2010, the FEC dismissed a complaint alleging a disclosure 

violation because the complaint did not show that any donations were made 

specifically to support the ad at issue in the complaint. See Statement of Reasons 

of Chairman Petersen et al., In re Freedom’s Watch, Inc., MUR 6002 (Aug. 13, 

2010), http://eqs.fec.gov/eqsdocsMUR/10044274536.pdf. 

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The FEC gave two reasons for this limitation. First, the FEC posited that 

corporations’ general funds might derive from shareholders who purchase stock, 

customers who buy goods or services, or persons who donate to support a general 

mission. JA311. These persons, the FEC stated, “do not necessarily support” the 

corporation’s campaign ads. Id.

3

 Second, the FEC asserted that disclosing all 

donors who exceed the threshold amounts “would be very costly and require an 

inordinate amount of effort.” Id. The purpose test, the FEC stated, would inform 

the public about “those persons who actually support the message conveyed” 

without imposing “the significant burden of disclosing the identities of ... 

customers, investors, or members” who gave funds for unrelated purposes. Id. 

Congressman Van Hollen challenged the rule under Chevron U.S.A. Inc. v. 

Natural Resources Defense Council, 467 U.S. 837 (1984), and the Administrative 

Procedure Act (APA). Citing evidence that persons making electioneering 

communications in 2010 had disclosed the sources of less than 10 percent of their 

$79.9 million in spending, the complaint alleged that the FEC’s rule frustrates 

Congress’s intent and “creat[es] a major loophole in [BCRA’s] disclosure regime.” 

JA316; see also JA326 (showing that the 10 biggest spenders on electioneering 

communications disclosed the sources of only five percent of money spent). 

 

3

 Similarly, a labor union might receive dues from members who “may not 

necessarily support the organization’s electioneering communications.” JA311. 

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The Center for Individual Freedom and Hispanic Leadership Fund 

(Intervenors) intervened to support the FEC. The district court granted summary 

judgment to Van Hollen, holding at Chevron step one that BCRA plainly required 

disclosure of “all” contributors who gave over $1,000 during the reporting period. 

JA354-367. The FEC did not appeal. Intervenors appealed and sought a stay. 

This Court denied the stay, finding that Intervenors had failed to show a likelihood 

of success on the merits. JA379. But on appeal, a different panel reversed, 

holding that Congress had not anticipated the situation that arose after WRTL and 

that “contributors” could be read to entail a purpose element. JA385-386.4

 

On remand, the district court again invalidated the regulation as arbitrary 

and capricious and an unreasonable interpretation of BCRA. JA404-450. The 

FEC again declined to appeal. On Intervenors’ appeal, the panel reversed, holding 

that the FEC rule satisfies both Chevron step two and the APA. 

ARGUMENT 

The panel opinion contravenes precedent in at least two important areas. In 

doing so, it upholds a regulation that has gutted BCRA’s disclosure rules—an 

entirely predictable result the FEC completely ignored in its rulemaking. En banc 

review is necessary to secure the uniformity of the Court’s decisions and to correct 

an erroneous opinion with significant consequences for the electoral system. 

 

4

 The Court remanded with instructions to refer the matter to the FEC for 

further consideration, JA386, but the FEC took no action. 

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I. THE PANEL’S CONSTITUTIONAL RATIONALE—WHICH THE FEC NEVER 

ADVANCED—CONFLICTS WITH SUPREME COURT PRECEDENT

The panel placed “significant” weight on its view that the FEC had to 

“tailor[] the disclosure requirements to satisfy constitutional interests in privacy” 

because any broader rule would harm First Amendment rights. Op. 24, 26, 27. 

But “[t]he Supreme Court has consistently upheld ... reporting requirements” in 

light of the “governmental interest in ‘provid[ing] the electorate with information’ 

about the sources of political campaign funds.” SpeechNow, 599 F.3d at 696. In 

McConnell, the Supreme Court upheld BCRA’s disclosure requirements against 

facial attack. 540 U.S. at 196-199; id. at 321 (Kennedy, J., dissenting). The Court 

reaffirmed that view in rejecting an as-applied challenge in Citizens United, 558 

U.S. at 365-371. As Justice Kennedy noted—in a portion of Citizens United joined 

by seven other Justices—disclosure in fact promotes First Amendment values: 

The First Amendment protects political speech; and disclosure 

permits citizens and shareholders to react to the speech of corporate 

entities in a proper way. This transparency enables the electorate to 

make informed decisions and give proper weight to different speakers 

and messages. 

Id. at 371. And in McCutcheon, 134 S. Ct. at 1459-1460, the Court reiterated the 

importance of disclosure, emphasizing that it “minimizes the potential for abuse” 

and “offers ... robust protections against corruption.” 

Citing only dissents, the panel assailed those cases as a “startling intrusion” 

on constitutional rights and criticized the “‘Justices’ failure’” to elevate the interest 

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in anonymity above its other “‘flims[y] ... justifications.’” Op. 25-26 (citing 

Citizens United, 558 U.S. at 483 (Thomas, J., dissenting); McConnell, 540 U.S. at 

276 (Thomas, J., dissenting); Majors v. Abell, 361 F.3d 349, 356 (7th Cir. 2004) 

(Easterbrook, J., dubitante)). Based on this critique of the Supreme Court’s 

“fragile” jurisprudence, Op. 28, the panel sustained the FEC’s purpose requirement 

as a necessary “safeguard [of] the First Amendment,” Op. 24-27. That analysis 

contradicts consistent and near-unanimous decisions of the Supreme Court. 

Moreover, the FEC did not advance the panel’s rationale. While the FEC 

described its rule as “‘narrowly tailored’” to address “‘commenters’ concerns 

regarding individual donor privacy,’” Op. 23, it said so only in rejecting a 

proposed alternative rule that would have exempted many ads from disclosure 

altogether. JA425-427. Some commenters had championed that alternative based 

on constitutional objections to disclosure, but the FEC responded that it had “no 

mandate” to limit disclosure for constitutional reasons because “eight Justices in 

McConnell voted to uphold” BCRA’s reporting requirements and “McConnell

continues to be the controlling” precedent. JA301. “[P]rivacy interests,” the FEC 

stated, “are adequately protected” by as-applied challenges. Id. 

In explaining its reasons for adopting the purpose limitation, the FEC cited 

only two rationales: (1) that disclosure should be limited to “those persons who 

actually support the message conveyed,” and (2) that identifying all donors “would 

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be very costly and require an inordinate amount of effort.” JA311. The FEC never 

hinted that it was adopting the purpose limitation to avoid constitutional concerns. 

A court may consider “only the rationales the [agency] actually offered in its 

decision.” Village of Barrington v. Surface Transp. Bd., 636 F.3d 650, 660 (D.C. 

Cir. 2011); see Michigan v. EPA, 135 S. Ct. 2699, 2710 (2015). By relying instead 

on a discredited constitutional theory the FEC never advanced, the panel opinion 

creates conflict in a significant area. 

II. THE PANEL’S ADMINISTRATIVE-LAW ANALYSIS FLOUTS PRECEDENT

 The FEC’s rule allows funders of electioneering communications to evade 

disclosure, thwarting BCRA’s purposes. McConnell, 540 U.S. at 197. Many 

commenters raised this concern, JA216, 229, 237, 245-247, 256-258, but the FEC 

never addressed the likelihood that its rule would drastically reduce disclosure. 

“At Chevron step two and under the APA, [courts] must reject 

administrative constructions of [a] statute ... that frustrate the policy that Congress 

sought to implement.” Shays, 528 F.3d at 919; see also Village of Barrington, 636 

F.3d at 660 (court must “determine whether [the agency’s] interpretation is 

‘rationally related to the goals of’ the statute”). In Shays, the Court rejected a FEC 

rule implementing BCRA’s ban on coordinated communications between 

campaigns and outside groups because it “not only ma[de] it eminently possible 

for soft money to be ‘used in connection with federal elections,’ but also 

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provide[d] a clear roadmap for doing so, directly frustrating BCRA’s purpose” and 

“lead[ing] to the exact perception and possibility of corruption Congress sought to 

stamp out.” 528 F.3d at 925 (citation omitted); id. at 926-927 (rule “‘create[d] the 

potential for gross abuse’” and “‘unduly compromise[d]’ [BCRA’s] purpose”); id.

at 927-928 (rule created “enormous loophole” that “reopen[ed] the very ... 

floodgates BCRA aimed to close”). 

This case is indistinguishable from Shays. Like the coordinatedcommunication rule, the purpose test permits corporations and unions that wish to 

circumvent BCRA’s disclosure requirements to do so easily by soliciting money 

for general support and instructing (or merely permitting) donors to remain silent 

about their intent. Moreover, as in Shays, the FEC not only failed to consider the 

likelihood that its rule would allow BCRA to be evaded, but gave “savvy 

campaign operators” a “roadmap” of how to do so. Shays, 528 F.3d at 925, 928. 

Neither Intervenors nor the panel claimed that Shays could be distinguished. 

Indeed, the panel acknowledged that Shays supports the district court’s decision. 

Op. 13.5

 But the panel rejected the reasoning of Shays—decided in 2008—as a 

 

5

 The panel’s erroneous suggestion that the FEC had to “accommodat[e] ... 

conflicting policies” under the First Amendment, Op. 14, provides no basis for 

distinguishing Shays and related decisions, which invalidated agency action that 

frustrated congressional purpose even where statutes balanced rival objectives. 

See Shays, 528 F.3d at 925-926 (in accommodating First Amendment, FEC must 

“establish, consistent with APA standards,” that its rule “draw[s] a rational line” in 

light of congressional purpose); Chemical Mfrs. Ass’n v. EPA, 217 F.3d 861, 866 

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“particularly results-oriented brand of purposivism” that the law “has moved 

beyond.” Op. 13-14. Instead, the panel held that “overtures to ... ‘purpose’” are 

an improper basis for setting aside agency action. Op. 15-16. And it made mere 

linguistic possibility the touchstone of the reasonableness of an agency’s statutory 

construction, id., thereby collapsing Chevron’s second step into the first and 

ignoring whether the construction rationally serves the statute’s goals. 

That analysis contravenes not only Shays, but also the precedent on which it 

drew. See Shays, 528 F.3d at 919, 925 (citing Continental Air Lines, Inc. v. 

Department of Transp., 843 F.2d 1444, 1453 (D.C. Cir. 1988), and FEC v. 

Democratic Senatorial Campaign Comm., 454 U.S. 27, 32 (1981)). Under 

Continental Air Lines, “an agency interpretation d[oes] not merit judicial 

approbation if it actually frustrate[s] the policies Congress was seeking to 

effectuate.” 843 F.2d at 1453. This Court has frequently applied that principle to 

invalidate agency action. E.g., Chemical Mfrs. Ass’n v. EPA, 217 F.3d 861, 865-

867 (D.C. Cir. 2000) (invalidating rule where agency “violated the basic 

requirement that its actions must ‘not deviate from or ignore the ascertainable 

legislative intent’”); Kerr-McGee Chem. Corp. v. U.S. Nuclear Regulatory 

Comm’n, 903 F.2d 1, 6-8 (D.C. Cir. 1990) (invalidating regulation that “recreate[d] 

the regulatory gap that the [statute] was designed to eliminate” “by attaching the 

 

(D.C. Cir. 2000) (even when statute’s purpose was “constrained ... by” other 

goals, rule was invalid where agency did not reconcile its rule with that purpose). 

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narrowest possible meaning” to ambiguous language); Associated Gas Distribs. v. 

FERC, 899 F.2d 1250, 1261 (D.C. Cir. 1990) (holding agency interpretation 

unreasonable in light of its “potential wholly to undermine the [statutory] 

regime”). The Supreme Court has done so as well. E.g., Michigan v. EPA, 135 S. 

Ct. 2699, 2707-2712 (2015) (although statute was “capacious[]” and “flexib[le],” 

agency interpretation that clashed with statutory context, “‘fail[ed] to consider an 

important aspect of the problem,’” and “overlook[ed] the whole point” of the 

statutory provision was unreasonable). If the law “has moved beyond” the 

reasoning employed in those decisions, Op. 13, that is for the en banc Court to say. 

III. THE PANEL REACHED THE WRONG RESULT IN AN EXCEPTIONALLY 

IMPORTANT CASE

Effective disclosure was a centerpiece of BCRA and has become a linchpin 

of campaign-finance jurisprudence. Citizens United, 130 S. Ct. at 368-371; 

McCutcheon, 134 S. Ct. at 1459-1460; McConnell, 540 U.S. at 196-199. After 

careful review of the administrative record, the district court invalidated the FEC 

rule on several grounds, including that it “create[s] an easily exploited loophole,” 

with “little or no[]” support in the record, that threatens “to swallow [BCRA’s 

disclosure] rule entirely.” JA406-407, 447. In reversing that decision, the panel 

committed several additional errors and ignored entire arguments. And as a result 

of those errors, the panel sustained a rule that cripples BCRA’s disclosure regime. 

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Among the other errors, the panel found the purpose test reasonable because 

it mirrors language Congress included in reporting requirements applicable to 

independent expenditures. Op. 12.6

 But the FEC rejected that very approach in its 

2003 rulemaking, finding that the rules governing independent expenditures should 

not apply to electioneering communications under BCRA given several differences 

between the statutes. 68 Fed. Reg. at 413. For example, the FEC emphasized in 

2003 that BCRA omits any reference to purpose and that its requirements are 

tailored in other ways that reduce any burden associated with disclosure. Id. In 

2007, the FEC neither acknowledged its reversal nor explained why it was no 

longer inappropriate to import a limitation from other provisions that Congress 

omitted in BCRA. The panel ignored this gap in the FEC’s reasoning. 

The panel also credited the FEC’s “burden” and “support” theories—which 

the panel conceded were “difficult to discern,” left many questions unanswered, 

and “were not corroborated with any hard evidence,” Op. 20, 23—without 

addressing the fact that funders of electioneering communications can avoid those 

alleged concerns by using a segregated bank account. 52 U.S.C. § 30104(f)(2)(E). 

Many commenters noted that option, JA214-215, 238-240, 256-258, and the FEC 

cited it in 2003 as a basis to reject a narrow disclosure rule for corporate spenders, 

 

6

 Pre-BCRA provisions governing “independent expenditures”—a separate 

category of campaign spending—require disclosure of contributions “made for the 

purpose of furthering an independent expenditure.” 52 U.S.C. § 30104(c)(2)(C). 

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68 Fed. Reg. at 413.7

 But in 2007, the FEC ignored that option without addressing 

or explaining its about-face. Cf. American Radio Relay League v. FCC, 524 F.3d 

227, 242 (D.C. Cir. 2008) (agency must “consider responsible alternatives to its 

chosen policy” and “give a reasoned explanation” for rejecting them); Republican 

Nat’l Comm. v. FEC, 76 F.3d 400, 412 (D.C. Cir. 1996) (Sentelle, J., concurring in 

part and dissenting in part) (where agency rejects suitable alternatives without 

discussion, “court cannot reassure itself that the agency did not act arbitrarily”). 

The FEC could also have avoided any concern, as commenters suggested, by 

clarifying that shareholders and customers are not “donors” and that business 

income or funds that entail no “truly ... donative act” are not “donations” or 

“contributions” and need not be disclosed. JA189-191, 194, 205-206, 212-213, 

216-218, 310-311. The FEC did not address that option. The panel excused that 

failure by asserting that exempting business income and similar revenue from 

disclosure “was not ... viable.” Op. 22-23. But the FEC never advanced that 

view; to the contrary, it took a similar approach in 2003 and in the period between 

the district court’s first decision and this Court’s first reversal.8

 And neither the 

 

7

 Even in 2003, BCRA’s disclosure rules applied to some nonprofit 

corporations, as well as unincorporated trade associations and membership groups, 

partnerships, and other unincorporated organizations. 67 Fed. Reg. 51,137 (Aug. 

7, 2002). 

8

 See 68 Fed. Reg. at 414; News Release, FEC Statement on Van Hollen v. 

FEC (July 27, 2012), http://fec.gov/press/press2012/20120727_VanHollen_ 

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 20 of 70
15 

FEC nor the panel explained why substituting a massively underinclusive regime 

for one perceived to be overinclusive was consistent with BCRA’s objectives. 

Finally, the panel ignored the FEC’s failure to consider that its rule would 

facilitate evasion of any duty to disclose. Agency action is arbitrary and capricious 

if the agency “entirely failed to consider an important aspect of the problem.” 

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 

(1983). Commenters warned that a narrow approach “w[ould] lead again to a 

proliferation of issue ads by entities with misleading names,” JA43, as the decline 

in disclosure has confirmed, JA326; see Shays, 528 F.3d at 927 (“BCRA reflects 

‘the hard lesson of circumvention’ Congress has learned from ‘the entire history of 

campaign finance regulation’”). The FEC’s failure to consider that outcome was 

arbitrary and capricious. Yet the panel did not even address that point. 

These consequential errors—and the panel’s express repudiation of settled 

precedent—warrant en banc review to secure the uniformity of the Court’s 

decisions and to ensure a correct determination of the validity of this exceptionally 

important regulation. Fed. R. App. P. 35(a). 

CONCLUSION 

The Court should grant rehearing en banc and affirm the district court.

 

v_FEC.shtml. Moreover, to maintain tax-exempt status, § 501(c) organizations 

must already distinguish donations from unrelated business taxable income and 

other revenue. 26 U.S.C. § 6033(b)(5); Treas. Reg. § 1.6033-2(a)(2)(ii)(f). 

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 21 of 70
Respectfully submitted, 

/s/ Catherine M.A. Carroll 

FRED WERTHEIMER

DEMOCRACY 21 

2000 Massachusetts Avenue NW 

Washington, DC 20036 

(202) 355-9610 

CATHERINE M.A. CARROLL

WILMER CUTLER PICKERING

 HALE AND DORR LLP

1875 Pennsylvania Avenue NW 

Washington, DC 20006 

(202) 663-6000 

DONALD J. SIMON

SONOSKY CHAMBERS SACHSE

 ENDRESON & PERRY, LLP

1425 K Street NW, Suite 600 

Washington, DC 20005 

(202) 682-0240 

ROGER M. WITTEN

FIONA J. KAYE

STEPHANIE SIMON

WILMER CUTLER PICKERING

 HALE AND DORR LLP

7 World Trade Center 

New York, NY 10007 

(212) 230-8800 

SCOTT L. NELSON

PUBLIC CITIZEN

 LITIGATION GROUP

1600 20th Street NW 

Washington, DC 20009 

(202) 588-1000 

TREVOR POTTER

J. GERALD HEBERT 

PAUL S. RYAN

TARA MALLOY

CAMPAIGN LEGAL CENTER

215 E Street NE 

Washington, DC 20002 

(202) 736-2200 

March 4, 2016 

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 22 of 70
ADDENDUM 

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 23 of 70
United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 20, 2015 Decided January 21, 2016

No. 15-5016

CHRISTOPHER VAN HOLLEN, JR.,

APPELLEE

v.

FEDERAL ELECTION COMMISSION,

APPELLEES

CENTER FOR INDIVIDUAL FREEDOM AND HISPANIC 

LEADERSHIP FUND,

INTERVENOR-APPELLANTS

Consolidated with 15-5017

Appeals from the United States District Court

for the District of Columbia

(No. 1:11-cv-00766)

Thomas W. Kirby argued the cause for appellant Center 

for Individual Freedom. With him on the briefs were Jan 

Witold Baran, Caleb P. Burns, and Samuel B. Gedge.

Jason Torchinsky was on the brief for appellant Hispanic 

Leadership Fund.

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2

Daniel Z. Epstein and Joshua N. Schopf were on the brief 

for amicus curiae Cause of Action in support of appellants.

Catherine M.A. Carroll argued the cause for appellee 

Christopher Van Hollen Jr. With her on the brief were Roger 

M. Witten, Donald J. Simon, Trevor Potter, J. Gerald Hebert, 

Fred Wertheimer, and Scott L. Nelson.

Kevin A. Deeley, Acting Associate General Counsel, 

Harry J. Summers, Assistant General Counsel, Holly J. Baker 

and Seth E. Nesin, Attorneys, Federal Election Commission, 

were on the brief for appellee Federal Election Commission. 

Before: BROWN, Circuit Judge, SENTELLE and 

RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: The arc of campaign finance law 

has been ambivalent, bending toward speech and disclosure.

Indeed what has made this area of election law so challenging

is that these two values exist in unmistakable tension. 

Disclosure chills speech. Speech without disclosure risks

corruption. And the Supreme Court’s track record of 

expanding who may speak while simultaneously blessing 

robust disclosure rules has set these two values on an 

ineluctable collision course.

That tension is on full display in this appeal. At issue is 

whether to uphold the FEC’s rule requiring corporations and 

labor organizations to disclose only those donations “made for 

the purpose of furthering electioneering communications” or 

whether the Bipartisan Campaign Reform Act requires 

disclosure of all donations irrespective of donative purpose.

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Christopher Van Hollen, Jr.—a member of the United States 

House of Representatives—challenged this rule under the 

familiar Chevron and State Farm frameworks. In a previous 

judgment, we reversed the district court and held the rule 

survived Chevron Step One. We now consider whether the 

rule survives Step Two and State Farm’s “arbitrary and 

capricious” test. We hold that it does.

I

Congressman Van Hollen’s challenge to the FEC’s 

disclosure rules is best understood in its broader context, the 

century-long conflict over campaign finance reform. That 

context is a protean cascade of perspectives, supplied by each 

branch of government, on how best to safeguard democracy 

without unnecessarily sacrificing liberty. 

Throughout the twentieth and early twenty-first centuries, 

campaign finance reform efforts endeavored both to ban 

corporate contributions and to expand disclosure 

requirements. These efforts date as far back as President 

Theodore Roosevelt’s State of the Union address in 1905.

Nine years earlier, William McKinley defeated populist 

William Jennings Bryan with a war chest of $16 million, 

dwarfing Bryan’s paltry $600,000. Public opinion steadily 

galvanized in favor of campaign finance reform, prompting 

Roosevelt to champion the cause. Roosevelt urged Congress 

to forbid “[a]ll contributions by corporations . . . for any 

political purpose” and to “secure by law the full and verified 

publication in detail of all [political contributions].” President 

Theodore Roosevelt, State of the Union Address (Dec. 5, 

1905), available at http://www.presidency.ucsb.edu/ws/index.

php?pid=29546. Two years later, Congress heeded his call 

with the Tillman Act of 1907. See Ch. 420, 34 Stat. 864.

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The Tillman Act was just the beginning. Over the 

ensuing decades, Congress passed, in piecemeal fashion,

several reform measures. The Federal Corrupt Practices Act, 

the Hatch Act, the Smith-Connolly Act of 1943, and the TaftHartley Act of 1947 each contained provisions aimed at 

tackling political corruption in campaign finance, either 

through restricting speech or requiring disclosure. And in 

1974, Congress completed a massive campaign finance 

overhaul with passage of the Federal Election Campaign Act 

(FECA).

FECA confronted headlong the “who” and “how much” 

of campaign contributions. The Act established caps on

contributions and expenditures, restricted corporations and 

unions from making independent expenditures, and required 

that the identities of any individuals making a contribution or 

expenditure be disclosed to the newly created Federal 

Elections Commission. The Supreme Court blessed most of 

FECA’s reforms in Buckley v. Valeo, 424 U.S. 1 (1976), 

striking only the caps on individual, candidate, and campaign 

expenditures. But critically, while upholding FECA’s 

disclosure requirements, the Court construed them narrowly 

to reach only “contributions earmarked for political purposes” 

and “expenditures for communications that expressly 

advocate the election or defeat of a clearly identified 

candidate.” Id. at 80. 

The Court’s gloss on FECA’s disclosure requirements 

turned out to be a pyrrhic victory for campaign finance 

reformers. The “express advocacy” carve-out opened a 

gaping new loophole: advertising expenditures that eschewed

magic words like “elect Mary Smith” or “defeat John Brown” 

could now go undisclosed. Corporations, unions, and political 

parties took full advantage by sponsoring “issue ads,” which 

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5

were functionally equivalent to express advocacy but 

comfortably skirted FECA’s disclosure requirements.

Determined to close this loop, Congress passed the 

Bipartisan Campaign Reform Act (BCRA) in 2002. BCRA 

recognized and regulated a new category of political 

advertising called “electioneering communications,” defined 

as communications that “refer[] to a clearly identified 

candidate” “made within” sixty days of a general election or 

thirty days of a primary election. 2 U.S.C. § 434(f)(3)(A)(i)

(2002). These communications were precisely the sort left 

unregulated by Buckley’s construction of FECA, and BCRA 

now subjected them to robust disclosure requirements. It 

required any person making an expenditure (referred to as a 

“disbursement”) totaling more than $10,000 to disclose “all 

persons sharing the costs of the disbursement.” Id. §§ 

434(f)(2)(A), (B), and (D). BCRA also went one step further: 

it altogether banned corporations and unions from using their 

general treasuries to fund electioneering communications. Id.

§ 441b(b)(2). These provisions were upheld by a sharply 

divided Court in McConnell v. FEC, 540 U.S. 93 (2003). 

In BCRA’s wake, the FEC promulgated several rules 

to enforce the various reforms, two of which are relevant 

to today’s appeal. First, the FEC promulgated a rule enforcing

BCRA’s ban on corporate and union expenditures 

for electioneering communications. Electioneering 

Communications, 67 Fed. Reg. 65190, 65190 (Oct. 23, 2002).

Second, the FEC promulgated a rule to enforce BCRA’s 

requirement for disclosure of “the names and addresses of all 

contributors who contributed an aggregate amount of $1,000 

or more to the person making the disbursement.” 52 U.S.C. 

434(f)(2)(E)–(F). The FEC’s rule mirrored this language 

almost identically but replaced the words “contributor” and 

“contributed” with “donor” and “donated.” Bipartisan 

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6

Campaign Reform Act of 2002 Reporting, 68 Fed. Reg. 404, 

420 (Jan. 3, 2003). Whatever the import of that choice, it is 

clear that as of 2003, (1) corporations and unions could not 

fund electioneering communications out of their general 

treasuries, and (2) with certain exceptions not relevant to this 

opinion, persons making disbursements for electioneering 

communications had to disclose the names of anyone who 

donated $1,000 or more to them.

But the Supreme Court would soon deliver a heavy 

blow to BCRA’s attempt to regulate electioneering 

communications. With its ruling in FEC v. Wisconsin Right to 

Life, Inc., 551 U.S. 449 (2007), another sharply divided 

decision, and this time without even a majority opinion, the 

Court held corporations and unions could not be barred from 

electioneering communications unless they are “the functional 

equivalent of express advocacy.” Id. at 465. And an ad is only 

the functional equivalent of express advocacy, the Court said,

when it “is susceptible of no reasonable interpretation other 

than as an appeal to vote for or against a specific candidate.” 

Id. at 469–70. The three ads before the Court in Wisconsin 

Right to Life couldn’t satisfy this exacting test, and neither, it 

seems, could the vast majority of issue ads funded through 

independent expenditures. See Id. at 476. For restrictions on 

core political speech, the Court announced it would “give the 

benefit of the doubt to speech, not censorship.” Id. at 482.

BCRA’s prohibition on corporate- and union-funded 

electioneering communications, beaten and tattered by 

Wisconsin Right to Life, was left on life support.1

 1 The Court’s subsequent decision in Citizens United v. FEC pulled 

the plug on this ban once and for all, ruling unconstitutional the 

prohibition on corporate- and union-funded “express advocacy.” 

558 U.S. 310, 365 (2010). 

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The FEC was now left to decide how BCRA’s disclosure 

requirements should apply to a class of speakers Congress 

never expected would have anything to disclose. The FEC 

published a Notice of Proposed Rulemaking (NPRM) and 

requested comments on proposed rules that “would 

implement the Supreme Court’s decision in Wisconsin Right 

to Life.” 72 Fed. Reg. 50261, 50262 (Aug. 31, 2007). That

NPRM advanced two proposals for applying BCRA’s 

disclosure provisions to corporations and unions. Under the 

first, the FEC would simply apply the existing disclosure 

requirements for individuals and qualified nonprofit 

corporations (QNCs) to corporations and unions, which would 

require disclosure of all $1,000 contributors. Id. Under the 

second, the FEC proposed to exempt corporations and unions 

from the disclosure requirements altogether. Id.

The FEC received twenty-seven comments and held a 

two-day hearing. Rather than embracing either of the 

NPRM’s proposals, it adopted a middle path. See 

Electioneering Communications, 72 Fed. Reg. 72899, 72900

(Dec. 26, 2007). Corporations and unions would not be 

altogether exempted, but neither would they be required to 

disclose every donation totaling $1,000 or more. Id. Rather, 

corporations and unions would be required to disclose all 

donations totaling $1,000 or more that were “made for the 

purpose of furthering electioneering communications.” Id. at 

72911. This new “purpose requirement” set corporate and 

union electioneering communications apart from 

communications funded by other persons, who were still 

required to disclose all donations regardless of purpose.

Representative Christopher Van Hollen challenged the 

FEC’s new purpose requirement and persuaded the district 

court that it violated BCRA’s text. Van Hollen v. FEC, 851 

F.Supp.2d 69 (D.D.C. 2012); see Chevron, USA, Inc. v. Nat. 

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8

Res. Def. Council, Inc., 467 U.S. 837 (1984). That decision 

was appealed to and reversed by a panel of this court, which 

concluded BCRA’s disclosure provisions were ambiguous, 

and the FEC’s rule cleared Chevron Step One. Ctr. for 

Individual Freedom v. Van Hollen, 694 F.3d 108, 111 (D.C. 

Cir. 2012). Congress’s use of the terms “contributors” and 

“contributed,” the panel said, is “anything but clear.” Id. The 

panel did “not agree with the District Court that the[se] words 

. . . cannot be construed to include a ‘purpose’ requirement.” 

Id. However, it concluded that it was “in no position to assess 

the parties’ arguments on whether § 104.20(c)(9) is 

reasonable, and thus entitled to deference under Chevron Step 

Two, or whether the regulation survives arbitrary and 

capricious review.” Id. at 112. The panel sent the case back to 

the district court to sort these questions out.

2

On remand, the district court concluded that the FEC’s 

rule failed at both the Chevron Step Two and arbitrary and 

capricious stages. The Center for Individual Freedom filed its 

notice of appeal shortly thereafter.3 We review the FEC’s 

action de novo, according no particular deference to the 

 2 Technically, the panel instructed that the matter be referred back 

to the FEC in order to give it a chance to revisit and clarify its rule. 

Ctr. for Individual Freedom, 694 F.3d at 112. But when the FEC 

declined to comment further, Van Hollen’s challenge in district 

court resumed.

3 Our previous ruling affirmed the Center for Individual Freedom’s 

and the Hispanic Leadership Fund’s standing to appeal the district 

court’s judgment. Ctr. for Individual Freedom, 694 F.3d at 110 

(“We are satisfied that the Intervenors have standing to pursue this 

appeal, for they have convincingly demonstrated that the District 

Court's decision . . . has caused them injury that will be redressed 

by a favorable decision from this court.”). As the posture of this 

appeal is identical to the previous, we have neither the occasion nor 

inclination to reconsider our prior determination. 

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9

district court’s judgment. Fox v. Clinton, 684 F.3d 67, 74 

(D.C. Cir. 2012).

II

Our analysis of Van Hollen’s challenge picks up where 

our prior judgment left off. Van Hollen argues the FEC’s 

disclosure rule is both an impermissible construction of 

BCRA and an arbitrary and capricious use of the FEC’s

regulatory authority, and the district court agreed on both 

scores. For the reasons outlined below, we do not. 

A

We are first asked to decide whether the FEC’s purpose 

requirement is “based on a permissible construction of 

[BCRA] in light of its language, structure, and purpose.” Nat’l 

Treasury Emp. Union v. FLRA, 754 F.3d 1031, 1042 (D.C. 

Cir. 2014). This inquiry, often called Chevron Step Two, 

“does not require the best interpretation, only a reasonable 

one.” Am. Forest and Paper Ass’n v. FERC, 550 F.3d 1179, 

1183 (D.C. Cir. 2008). “We are bound to uphold agency 

interpretations . . . regardless whether there may be other 

reasonable, or even more reasonable, views.” Gentiva 

Healthcare Corp. v. Sebelius, 723 F.3d 292, 296 (D.C. Cir. 

2013). In this case, BCRA is ambiguous, and the FEC’s 

construction of it is reasonable. We defer accordingly.

The starting place for any Chevron Step Two inquiry is 

the text of the statute. BCRA states, in relevant part: 

“Every person who makes a disbursement for 

the direct costs of producing and airing 

electioneering communications in an aggregate 

amount in excess of $10,000 during any 

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10

calendar year shall . . . file with the Commission 

a statement containing . . . the names and 

addresses of all contributors who contributed an 

aggregate amount of $1,000 or more to the 

person making the disbursement.”

52 U.S.C. § 30104(f) (emphasis added). This provision directs

the disclosure of “all contributors” and omits any explicit 

mention of a purpose requirement. By contrast, the

neighboring section governing express advocacy directs 

disclosure of “each person who made a contribution . . . for 

the purpose of furthering an independent expenditure.” Id. § 

30104(c)(2)(C). The nonparallel nature of these two related

provisions, Van Hollen contends, renders impermissible the 

FEC’s purpose requirement. At the same time, FECA 

elsewhere defines “contribution,” a term derived from the 

same root as the words in the challenged section, as a 

donation “by any person for the purpose of influencing any 

election for Federal office.” 52 U.S.C. § 30101(8)(A)(i)

(emphasis added). And the FEC intentionally drew upon the 

express advocacy purpose requirement as precedent for 

resolving the ambiguity in the electioneering communications 

provision. See 72 Fed. Reg. at 72911 n.22. Our question, then, 

is this: Does BCRA’s text permit the FEC’s purpose 

requirement?

To answer this, we must first remember what we’ve 

already settled. In our previous ruling, we concluded 

Congress did not have “an intention on the precise question” 

whether a purpose requirement is permissible as “it is 

doubtful that . . . Congress even anticipated the circumstances

that the FEC faced when it promulgated [this regulation].”

Ctr. for Individual Freedom, 694 F.3d at 111. We noted “it 

was due to the complicated situation that confronted the 

agency in 2007 and the absence of plain meaning in the 

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11

statute that the FEC acted . . . to fill ‘a gap’ in the statute.” Id.

But while we might have stopped there, our analysis went 

beyond merely highlighting BCRA’s ambiguity. We also 

weighed in on the precise interpretive question relevant to

Step Two. We disagreed with the district court “that the 

words ‘contributors’ and ‘contributed’ . . . cannot be 

construed to include a ‘purpose’ requirement” and cited 

multiple dictionaries that “define ‘contribute’ in a way that is 

consistent with the regulation.” Id. at 110–11. In other words, 

we held that whether corporations and unions should be

required to disclose every person who gave $1,000 or more or 

only those who gave for the purpose of influencing 

electioneering communications was an open policy question, 

one Congress left for the FEC to decide.

That decision largely foreordains our Chevron Step Two 

answer. In deciding the Step One question, we did not limit 

our analysis to whether BCRA is ambiguous; we specifically 

concluded the FEC’s interpretation of “contributors” was 

within the range of linguistically permissible constructions. 

Having thus already concluded section 30104(f) could be 

construed to include a purpose requirement, it would be odd 

for us to reverse course now and declare it could not.

But even setting aside that we all but answered the Step 

Two question last time around, the FEC’s purpose 

requirement is more than just a permissible construction of 

BCRA; it’s a persuasive one. For one, as suggested above, the

FEC’s purpose requirement is consistent with the purposeladen definition of “contribution” set forth in FECA’s very 

own definitional section. See 52 U.S.C. § 30101(8)(A)(i)

(defining “contribution” as “anything of value made . . . for 

the purpose of influencing [a federal] election”). ”

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Moreover, the FEC’s purpose requirement regulates 

electioneering communication disclosures in precisely the 

same way BCRA itself regulates express advocacy

disclosures. In a neighboring provision, BCRA requires a 

person making an express advocacy expenditure to disclose

only those “person[s] who made a contribution . . . for the 

purpose of furthering an independent expenditure.” Id. § 

30104(c)(2)(C). Thus, to resolve the ambiguity it faced in 

Wisconsin Right to Life’s wake, the FEC simply opted for an 

approach already endorsed by Congress in a related context. 

That “Congress codified the very approach” the FEC now

adopts in a similar context is “highly persuasive in 

demonstrating” the FEC’s construction of BCRA “does not 

reflect an unreasonable interpretation of the statute.” Public 

Citizen v. Carlin, 184 F.3d 900, 906 (D.C. Cir. 1999). 

Van Hollen counters this point, arguing Congress’s 

failure to include a purpose requirement in the electioneering 

communication context—which it included for express 

advocacy— textually precludes the FEC from later doing so.

This is a classic invocation of the expressio unius canon of 

construction, and if we were interpreting this statute directly 

rather than filtered through an agency’s construction, Van 

Hollen’s argument would have serious bite. However, as is 

usually the case, the procedural posture matters. The 

expressio unius canon operates differently in our review of 

agency action than it does when we are directly interpreting a 

statute. See Tex. Rural Legal Aid, Inc. v. Legal Servs. Corp., 

940 F.2d 685, 694 (D.C. Cir. 1991) (“[T]his canon has little 

force in the administrative setting.”); Cheney R.R. Co. v. ICC, 

902 F.2d 66, 69 (D.C. Cir. 1990) (“Whatever [expressio 

unius’s] general force, we think it an especially feeble helper 

in an administrative setting, where Congress is presumed to 

have left to reasonable agency discretion questions that it has 

not directly resolved.”). In scenarios of precisely this ilk, “we 

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13

have consistently recognized that a congressional mandate in 

one section and silence in another often suggests not a 

prohibition but simply a decision not to mandate any solution 

in the second context, i.e., to leave the question to agency 

discretion.” Catawba Cnty., N.C. v. EPA, 571 F.3d 20, 36 

(D.C. Cir. 2009). This approach dovetails appropriately with 

the wide latitude we afford agencies when interpreting 

statutes: we do not demand the best interpretation, only a 

reasonable one. 

Nor do Van Hollen’s other arguments persuade us that 

the FEC’s purpose requirement was an impermissible 

construction of BCRA. Van Hollen contends the requirement 

“frustrate[s] the policy that Congress sought to implement” 

and therefore must be rejected. See Shays v. FEC, 528 F.3d 

914, 919 (D.C. Cir. 2008). Specifically, he asserts the FEC’s 

rule violates BCRA’s primary purpose of “improv[ing] 

disclosure” and “curtail[ing] circumvention of campaign 

finance rules,” allowing contributors to “avoid reporting 

altogether” by simply “transmitting funds but remaining silent 

about their intended use.” Van Hollen Br. at 27–28. And here, 

his invocation of our Shays decision does lend a measure of

credibility. A panel of this court invalidated a regulation 

allowing “candidates to evade—almost completely—BCRA’s 

restrictions on the use of soft money” because it “frustrate[d] 

Congress’s goal of prohibiting soft money” in federal 

elections. 528 F.3d at 925. According to Van Hollen (and the 

district court), since “the legislative history of the BCRA 

makes it clear that the purpose behind the disclosure 

requirements was to enable voters to be informed about who 

was trying to influence their decisions,” the purpose 

requirement’s “limiting language” similarly frustrates BCRA. 

Van Hollen, 74 F.Supp.3d at 433–34.

But the art of statutory construction has moved beyond 

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14

this particularly results-oriented brand of purposivism. Just 

because one of BCRA’s purposes (even chief purposes) was 

broader disclosure does not mean that anything less than 

maximal disclosure is subversive.4 Statutes are hardly, if ever, 

singular in purpose. Rather, most laws seek to achieve a 

variety of ends in a way that reflects the give-and-take of the 

legislative process. See Patel v. USCIS, 732 F.3d 633, 636 

(6th Cir. 2013) (“[I]t is folly to talk about ‘the purpose’ of the 

statute when the statute reflects a compromise between 

multiple purposes.”). That BCRA seeks more robust

disclosure does not mean Congress wasn’t also concerned 

with, say, the conflicting privacy interests that hang in the 

balance. In fact, Congress “took great care in crafting . . . 

language to avoid violating the important p[]rinciples in the 

First Amendment.” 147 CONG. REC. S3033 (daily ed. Mar. 28, 

2001) (statement of Sen. Jeffords). Chevron demands our

deference when an agency’s interpretation is “a reasonable 

accommodation of conflicting policies that were committed to 

the agency’s care by the statute.” 467 U.S. at 845.

Moreover, the district court’s invocation of such a 

sweeping disclosure purpose contradicts the very statute 

whose purposes it purports to protect. BCRA does not require 

disclosure at all costs; it limits disclosure in a number of 

 4 At oral argument, Van Hollen’s counsel conceded that BCRA did 

not call for unbounded disclosure. The district court, however, was 

less sanguine, suggesting unbounded disclosure was BCRA’s aim:

[I]t was contrary to the policy goal that Congress intended 

to implement for the Commission to add limiting language 

to its regulations when the aim of that language was—as the 

FEC put it—‘to ensure that disclosure of the newlypermitted electioneering communications would be 

narrowly tailored.’ Congress did not call for narrow 

tailoring; it called for just the opposite.

Van Hollen, 74 F.Supp.3d at 434. 

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ways. For example, for electioneering communications under 

$10,000, no disclosures are necessary, see 52 U.S.C. § 

30104(f)(1), and for those over $10,000, BCRA does not 

require disclosure of those who contribute $999 or less, see id.

§ 30104(f)(2)(E). These disclosure limitations suggest 

Congress’s purposes were far more nuanced than the district 

court’s characterization concedes.

To be sure, a statute’s purpose is relevant to Chevron’s

Step Two inquiry. See UC Health v. NLRB, 803 F.3d 669, 

675 (D.C. Cir. 2015) (requiring deference so long as an 

agency construction is “reasonable and consistent with the 

statute’s purpose”). But we are judges, not legislators, and it 

behooves us to maintain a healthy sense of modesty regarding 

our ability to discern the scope and priority of purposes the 

BCRA Congress pursued. “What judges believe Congress 

‘meant’ (apart from the text) has a disturbing but entirely 

unsurprising tendency to be whatever judges think Congress 

must have meant, i.e., should have meant.” Zuni Pub. Sch.

Dist. No. 89 v. Dep’t of Educ., 550 U.S. 81, 117 (2007) 

(Scalia, J., dissenting). What matters here is that Congress left 

the meaning of “contributor” ambiguous. Congressional 

silence of this sort is, in Chevron terms, “an implicit 

delegation from Congress to the agency to fill in the statutory 

gaps.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 

120, 159 (2000) (emphasis added). It is a transfer of authority 

to the FEC, whose task it then became “not to find the best 

meaning of the text, but to formulate legally binding rules to 

fill in gaps based on policy judgments made by the agency 

rather than Congress.” Michigan v. EPA, 135 S. Ct. 2699, 

2713 (2015) (Thomas, J., concurring) (emphasis added). The 

FEC did precisely that, deciding to fill the gap left in BCRA 

with the same purpose-requirement Congress adopted in 

related contexts. We are loathe to upset such a policy 

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judgment based on nothing more than highly generalized 

overtures to BCRA’s “primary purpose.”

Because the FEC’s purpose requirement is consistent 

with BCRA’s text, history, and purposes, it easily clears the 

Chevron Step Two hurdle.

B

We are next asked to decide whether the FEC’s purpose 

requirement is “arbitrary and capricious.” The Administrative 

Procedure Act deems unlawful any agency action found to be 

“arbitrary, capricious, an abuse of discretion, or otherwise not 

in accordance with law,” 5 U.S.C. § 706(2), but to invalidate a 

regulation under State Farm review, see Motor Vehicle Mfrs. 

Ass’n, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 

(1983), a challenger must show the agency action is not a

product of reasoned decisionmaking, see Fox, 684 F.3d at 74–

75. This is “a heavy burden,” since State Farm entails a “very 

deferential scope of review” that forbids a court from 

“substitut[ing] its judgment for that of the agency.” 

Transmission Access Policy Study Grp. v. FERC, 225 F.3d 

667, 714 (D.C. Cir. 2000). The APA’s arbitrary and 

capricious standard requires, inter alia, that an agency 

adequately explain its action so that a reviewing court can

“evaluate the agency’s rationale at the time of decision.” 

Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654 

(1990).

This appeal presents two State Farm challenges. First, the 

district court held the FEC acted unreasonably in revisiting its 

original 2003 rule, concluding the FEC’s subsequent action

was unnecessary because the Supreme Court’s Wisconsin 

Right to Life decision left existing disclosure provisions 

“untouched.” Van Hollen, 74 F.Supp.3d at 419. Second, Van 

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17

Hollen contends the FEC failed to adequately explain its 

decision to adopt the purpose requirement. 

1

The district court held “it was unreasonable for the FEC 

to alter the statutory reporting requirements on the stated 

grounds that it was implementing the Supreme Court’s 

decision in [Wisconsin Right to Life]” as “nothing” in that 

decision “required narrowing the disclosure requirements.”

Van Hollen, 74 F. Supp. 3d at 419.5

But in focusing on the opinion’s silence regarding 

disclosure, id. at 418–19, the district court downplays 

Wisconsin Right to Life’s disruptive import. Before 2007, the 

modus operandi of campaign finance law had always been 

that Congress could restrict corporate and union speech in the 

interest of deterring “corruption” or “the appearance of 

corruption.” See Buckley, 424 U.S. at 26. But Wisconsin Right 

to Life marked the first chink in that conventional wisdom’s 

armor, an onslaught that would ultimately culminate in the 

most expansive, speech-protective campaign finance decision 

in American history, Citizens United. After Wisconsin Right 

to Life, corporations and unions suddenly could expend 

general treasury funds for issue ads, a result Congress had 

explicitly prohibited under BCRA. An entirely new class of 

 5 The court apparently proceeds under Chevron Step Two, but 

curiously concludes “[t]he starting point of the second step of the 

Chevron analysis must be the stated reason behind the regulation,” 

and attempts to assess the adequacy of that explanation. See Van 

Hollen, 74 F. Supp. 3d at 415. This seems more like State Farm

than Chevron. So, while the district court speaks of the FEC’s 

“unreasonable” action, we think it more appropriate to consider 

whether its decision to revisit its previous regulation was 

“arbitrary.”

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previously silenced speakers was now subject to BCRA’s 

disclosure requirements. And just as the FEC was authorized 

to decide how to implement BCRA’s disclosure provisions for 

qualified speakers in 2003, it was authorized to decide how to

implement BCRA’s disclosure provisions for these newly 

qualified speakers in 2007, too.

It is true Wisconsin Right to Life “said absolutely 

nothing” about the challenged disclosure provisions, but that 

does not mean the FEC was barred from promulgating a new 

regulation. An agency “must consider varying interpretations 

and the wisdom of its policy on a continuing basis . . . in 

response to changed factual circumstances.” See Nat’l Cable 

& Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 

981 (2005). The Supreme Court’s decision brought an entirely 

new class of speakers within reach of BCRA’s disclosure 

requirements, a class altogether different from those already 

subjected to them. Constitutional decisions of this magnitude 

unquestionably justify an agency in updating its existing 

regulations to appropriately compensate for changed 

circumstances.

2

Van Hollen also argues, and the district court agreed, that 

the FEC failed to adequately explain its decision to adopt the 

purpose requirement. While an agency is required to 

adequately explain its decision, this does not mean that its 

explanation “must be a model of analytical precision.” 

Dickson v. Sec. of Defense, 68 F.3d 1396, 1404 (D.C. Cir. 

1995). It is enough that a reviewing court can reasonably 

discern the agency’s analytical path. Bowman Transp. Inc. v. 

Ark.-Best Freight Sys. Inc., 419 U.S. 281, 286 (1974). That 

low hurdle is cleared where the agency “examine[d] the 

relevant data and articulate[d] a satisfactory explanation for 

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19

its action including a rational connection between the facts 

found and the choice made.” State Farm, 463 U.S. at 43. 

Here, we acknowledge the FEC’s explanation was not

one of “ideal clarity,” but, again, ideal clarity is not the 

standard. The FEC advanced three explanations for its 

purpose requirement, which we refer to as the “support,” 

“burden,” and “privacy” rationales. 72 Fed. Reg. at 72901, 

72911. Because we can reasonably discern the FEC’s 

analytical path from these three rationales, we uphold its 

purpose requirement against Van Hollen’s challenge. 

1. The Support Rationale

The FEC was concerned that some individuals who 

contribute to a union or corporation’s general treasury may 

not support that entity’s electioneering communications, and a 

robust disclosure rule would thus mislead voters as to who 

really supports the communications. The agency explained, 

A corporation’s general treasury funds are often 

largely comprised of funds received from 

investors such as shareholders who have 

acquired stock in the corporation and customers 

who have purchased the corporation’s products 

or services, or in the case of a non-profit 

corporation, donations from persons who 

support the corporation’s mission. These 

investors, customers, and donors do not 

necessarily support the corporation’s 

electioneering communications. Likewise, the 

general treasury funds of labor organizations and 

incorporated membership organizations are 

composed of member dues obtained from 

individuals and other members who may not 

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20

necessarily support the organization's 

electioneering communications.

72 Fed. Reg. at 72911 (emphases added). It’s hard to escape 

the intuitive logic behind this rationale. Imagine the following 

not unlikely scenario. A Republican donates $5,000 to the 

American Cancer Society (ACS), eager to fund the ongoing 

search for a cure. Meanwhile, Republicans in Congress, aware 

of a growth in private donations to ACS, push for fewer 

federal grants to scientists studying cancer in order to reduce 

the deficit. In response to their push, the ACS runs targeted 

advertisements against those Republicans, leading to the 

defeat of several candidates in the upcoming election. 

Wouldn’t a rule requiring disclosure of ACS’s Republican 

donor, who did not support issue ads against her own party,

convey some misinformation to the public about who 

supported the advertisements?

Granted, as Van Hollen is quick to point out, the FEC’s 

assertions here were not corroborated with any hard evidence 

showing contributors who disagree with their chosen

corporation’s electioneering communications. But these 

assertions “are, at the very least, speculation based firmly in 

common sense and economic reality.” Verizon v. FCC., 740 

F.3d 623, 646 (D.C. Cir. 2014); see also San Luis Obispo 

Mothers for Peace v. NRC, 789 F.2d 26, 44 (D.C. Cir. 1986) 

(“[T]he Commission is not required to hold a hearing to prove 

what common sense shows.”). Here, the FEC’s assertion that 

some number of a corporation’s investors, a nonprofit’s 

donors, or a union’s members may generally support the 

entity but not its electioneering communications seems fairly 

intuitive, at least enough to pass State Farm’s “very 

deferential scope of review.” Transmission Access, 225 F.3d 

at 714.

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2. The Burden Rationale

This second rationale displayed the FEC’s concern not 

for the interests of contributors or the public, but with the

onus placed on the disclosing entity to curate an exhaustive 

list of every individual who provided more than $1,000. The 

FEC explained, 

Furthermore, witnesses at the Commission’s 

hearing testified that the effort necessary to 

identify those persons who provided funds 

totaling $1,000 or more to a corporation or labor 

organization would be very costly and require an 

inordinate amount of effort. Indeed, one witness 

noted that labor organizations would have to 

disclose more persons to the Commission under 

the ECs rules than they would disclose to the 

Department of Labor under the Labor 

Management Report and Disclosure Act.

72 Fed. Reg. at 72911. As further support for its explanation, 

the FEC noted that “all commenters who addressed disclosure 

of electioneering communications stated that corporations and 

labor organizations should not be required to report the 

sources of funds that made up their general treasury funds.” 

Id. And one commenter urged an exemption for nonprofits, 

stating that “nonprofit corporations have a wide variety of 

sources of income, and unlimited disclosure would create a 

heavy burden for them.” Id.

Van Hollen suggests this explanation is inadequate for a 

couple of reasons. First, he argues the FEC did not support its 

assertion that identifying contributors would be “very costly 

and require an inordinate amount of effort” with anything 

more than “conclusory assertions.” Van Hollen Br. at 39. But 

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this isn’t entirely accurate. The Commission cited to one 

commenter who testified “that labor organizations would have 

to disclose more persons to the Commission under the 

[electioneering communications] rules than they would 

disclose to the Department of Labor,” and another commenter 

who testified that the “reporting requirements would far 

exceed all other reporting requirements that currently apply to 

nonprofit organizations, such as reporting to the Internal 

Revenue Service.” 72 Fed. Reg. at 72911. These assertions,

relied upon by the FEC, are uncontradicted in the record, and 

“[w]ithout any contrary evidence to disprove these findings,” 

Van Hollen has “not shown any arbitrary and capricious 

action.” Agape Church v. FCC, 738 F.3d 397, 410 (D.C. Cir. 

2013). 

Second, Van Hollen suggests the FEC could have 

mitigated the cost of compliance by clarifying that business 

income (such as from customers or shareholders) and union 

dues do not entail “truly donative acts” and are therefore 

exempt from disclosure. Van Hollen Br. at 43. He points out 

that the FEC took a similar approach in promulgating the 

2003 version of the disclosure rules, clarifying that

“individuals are required to disclose donations received, 

which does not include salary, wages, or other compensation 

for employment.” 68 Fed. Reg. at 414. By exempting these 

sources of revenue, which are less relevant to voters anyway, 

the overall compliance costs of the regulation would drop. 

But this alternative would only reduce the disclosure burdens 

borne by for-profit corporations and unions. Nonprofit 

corporations, which, as we’ve already noted, faced reporting 

requirements that “would far exceed all other reporting 

requirements that currently apply to nonprofit[s],” obtain no 

benefit from this alternative, and the FEC was justifiably 

concerned about their compliance costs, too. Accordingly, this 

was not a viable alternative. Since agencies are only required 

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to consider “significant and viable” alternatives, Nat’l 

Shooting Sports Found., Inc. v. Jones, 716 F.3d 200, 215 

(D.C. Cir. 2013) (emphasis added), we find no error in the 

FEC’s decision not to adopt this only partially mitigating 

alternative. 

To be sure, the FEC’s explanation was far from ideal, and 

it is more difficult to discern its analytical path on this point. 

For instance, what are the Department of Labor’s disclosure 

requirements, and how much more burdensome was the 

existing rule? The IRS’s? Would different rules for nonprofits 

solve most concerns? What is actually more burdensome 

about disclosing all donations as opposed to only a subset of 

donations? And does that justify a change in policy that will 

have a markedly decreased effect on the amount of 

disclosures? The answers to these questions may exist and 

may likely support the rule, but the FEC’s explanation did not 

provide them. Ultimately, however, State Farm’s standard is 

“[n]ot particularly demanding,” and the FEC’s burden 

rationale leaves just enough detail for us to see “what major 

issues of policy were ventilated and why the agency reacted to 

them as it did.” Republican Nat’l Cmte v. FEC, 76 F.3d 400, 

407 (D.C. Cir. 1996). 

3. The Privacy Rationale

The FEC’s final explanation centered on its effort to 

tailor the regulations such that they both effectuate BCRA’s 

purpose in disclosure while also minding carefully the 

constitutional interests in privacy also at stake. The FEC 

reasoned that the revised purpose requirement is “narrowly 

tailored to address many of the commenters’ concerns 

regarding individual donor privacy.” 72 Fed. Reg. at 72901.

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This explanation is significant. The FEC is “[u]nique 

among federal administrative agencies,” having “as its sole 

purpose the regulation of core constitutionally protected 

activity—the behavior of individuals and groups only insofar 

as they act, speak and associate for political purposes.” AFLCIO v. FEC, 333 F.3d 168, 170 (D.C. Cir. 2003). Thus, more 

than other agencies whose primary task may be limited to 

administering a particular statute, every action the FEC takes 

implicates fundamental rights. By tailoring the disclosure 

requirements to satisfy constitutional interests in privacy, the 

FEC fulfilled its unique mandate. 

And the FEC’s concerns about the competing interests in 

privacy and disclosure were legitimate. We began this opinion 

by acknowledging the unmistakable tension that exists in 

campaign finance law between speech rights and disclosure 

rules. The Supreme Court has vigorously protected the 

public’s right to speak anonymously, even recognizing that 

anonymous speech has “played an important role in the 

progress of mankind.” Talley v. California, 362 U.S. 60, 64 

(1960). “Anonymity,” the Court elsewhere observed, “is a 

shield from the tyranny of the majority” and “exemplifies the 

purpose behind the Bill of Rights and of the First Amendment 

in particular: to protect unpopular individuals from 

retaliation—and their ideas from suppression—at the hand of 

an intolerant society.” McIntyre v. Ohio Elections Comm’n, 

514 U.S. 334, 357 (1995). This is not to say the Court is naïve 

to the potential downsides that may accompany this right to 

anonymity. Much to the contrary, the McIntyre Court 

acknowledged “political speech by its nature will sometimes 

have unpalatable consequences,” but, vindicating the right to 

speak anonymously, declared “our society accords greater 

weight to the value of free speech than to the dangers of its 

misuse.” Id.

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And yet, the Court has sanctioned startling intrusions on 

this right to anonymity by upholding mandatory disclosure 

requirements. The Court held in Buckley that such 

requirements “appear to be the least restrictive means of 

curbing the evils of campaign ignorance and corruption that 

Congress found to exist,” all the while recognizing “public 

disclosure of contributions to candidates and political parties 

will deter some individuals who otherwise might contribute” 

and “expose contributors to harassment or retaliation.” 424 

U.S. at 68. Ironically, these two values the Buckley Court 

acknowledged would be harmed by the disclosure 

requirements were the very same values the McIntyre Court 

later believed “exemplifie[d] the purpose behind the Bill of 

Rights and of the First Amendment in particular”—namely, 

“protect[ing] unpopular . . . ideas from suppression” and 

“individuals from retaliation.” McIntyre, 514 U.S. at 357. But 

even after McIntyre, the Court upheld the disclosure 

requirements in McConnell, and again in Citizens United, 

without much more than a passing citation to McIntyre or any 

of the Court’s other precedents establishing the right to speak 

anonymously.6 As one dissenting justice observed in 

McConnell, “The Court now backs away from [McIntyre], 

allowing the established right to anonymous speech to be 

stripped away based on the flimsiest of justifications.” 540 

U.S. at 276 (Thomas, J. dissenting). 

Both an individual’s right to speak anonymously and the 

public’s interest in contribution disclosures are now firmly 

entrenched in the Supreme Court’s First Amendment 

jurisprudence. And yet they are also fiercely antagonistic. The 

 6 Judge Easterbrook, dubitante in Majors v. Abell, 361 F.3d 349, 

356 (7th Cir. 2004), also noted “the Justices’ failure to discuss 

McIntyre” and concluded it was therefore “impossible for courts at 

our level to make an informed decision—for the Supreme Court has 

not told us what principle to apply.” 

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deleterious effects of disclosure on speech have been ably 

catalogued. “Disclaimer and disclosure requirements enable 

private citizens and elected officials to implement political 

strategies specifically calculated to curtail campaign-related 

activity and prevent the lawful, peaceful exercise of First 

Amendment rights.” Citizens United, 558 U.S. at 483 

(Thomas, J., dissenting) (highlighting how mandatory 

disclosure of contributors to California’s controversial “Yes 

on Proposition 8” campaign led to their being singled out for 

ruthless retaliation and intimidation). “[T]he advent of the 

Internet enables prompt disclosure of expenditures, which 

provides political opponents with the information needed to 

intimidate and retaliate against their foes.” Id. at 484 (internal 

quotation marks omitted). “Disclosure also makes it easier to 

see who has not done his bit for the incumbents, so that arms 

may be twisted and pockets tapped.” Majors v. Abell, 361 

F.3d 349, 356 (7th Cir. 2004) (Easterbrook, J., dubitante).

In addition to these general burdens, the specific 

disclosure requirement Van Hollen advocates here would 

present its own unique harms. For instance, an American 

Cancer Society donor who supports cancer research but not 

ACS’s political communications must decide whether a 

cancer cure or her associational rights are more important to 

her. This is categorically distinct from deciding whether a 

political issue, such as tax reform, is as important as one’s 

associational right. Cancer research isn’t a political issue, but 

disclosure rules of this sort would undeniably transform it into 

one. These disclosure rules also burden privacy rights in 

another crucial way: modest individuals who’d prefer the 

amount of their charitable donations remain private lose that 

privilege the minute their nonprofit of choice decides to run 

an issue ad. The Supreme Court routinely invalidates laws 

that chill speech far less than a disclosure rule that might 

scare away charitable donors. See Watchtower Bible and 

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27

Tract Soc’y of New York, Inc. v. Stratton, 536 U.S. 150 (2002) 

(striking a law requiring religious canvassers to obtain a 

permit before advocating door-to-door on private property).

The ones who would truly bear the burden of Van 

Hollen’s preferred rule would not be the wealthy corporations 

or the extraordinarily rich private donors that likely motivated 

Congress to compel disclosure in the first place. Such 

individuals would have “little difficulty complying” with 

these laws, as they can readily hire “legal counsel who 

specialize in election matters,” who “not only will assure 

compliance but also will exploit the inevitable loopholes.” 

Majors, 361 F.3d at 357–58 (Easterbrook, J., dubitante). 

Instead, such requirements “have their real bite when flushing 

small groups, political clubs, or solitary speakers into the 

limelight, or reducing them to silence.” Id. at 358. 

By affixing a purpose requirement to BCRA’s disclosure 

provision, the FEC exercised its unique prerogative to 

safeguard the First Amendment when implementing its

congressional directives. See AFL-CIO, 333 F.3d at 170. Its 

tailoring was an able attempt to balance the competing values 

that lie at the heart of campaign finance law. We therefore do 

not find this rationale inadequate.

 

* * *

At the close of its explanation, the FEC succinctly 

defended its decision to adopt a purpose requirement for 

corporate and union electioneering communications: 

In the Commission’s judgment, requiring 

disclosure of funds received only from those 

persons who donated specifically for the purpose 

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28

of furthering [electioneering communications]

appropriately provides the public with 

information about those persons who actually 

support the message conveyed by the 

[electioneering communications] without 

imposing on corporations and labor organizations 

the significant burden of disclosing the identities 

of the vast numbers of customers, investors, or 

members, who have provided funds for purposes 

entirely unrelated to the making of 

[electioneering communications].

72 Fed. Reg. at 72911. In light of its three rationales—the 

support, burden, and privacy rationales—we conclude the 

FEC’s purpose requirement is neither arbitrary nor capricious.

III

Holding, as we do here, that the FEC’s purpose 

requirement satisfies both Chevron Step Two and State Farm

review has the benefit both of being a correct application of 

black letter administrative law and of forestalling to some 

other time an answer to the important constitutional questions 

bubbling beneath the surface of this case. As our discussion of 

the FEC’s rule has shown, the Supreme Court's campaign 

finance jurisprudence subsists, for now, on a fragile 

arrangement that treats speech, a constitutional right, and 

transparency, an extra-constitutional value, as equivalents. 

But “the centre cannot hold.” William Butler Yeats, The 

Second Coming (1919). Until then, however, the FEC’s 

purpose requirement survives, and the judgment of the district 

court is therefore

Reversed.

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This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

72899 

Vol. 72, No. 246 

Wednesday, December 26, 2007 

1Pub. L. 107–155, 116 Stat. 81 (2002). 

2 2 U.S.C. 431 et seq. 

3The Commission revised its rule defining 

‘‘electioneering communication’’ in 2005, in 

response to Shays v. FEC, 337 F. Supp. 2d 28 

(D.D.C. 2004), aff’d, 414 F.3d 76 (D.C. Cir. 2005), 

reh’g en banc denied, No. 04–5352 (D.C. Cir. Oct. 

21, 2005). See Final Rules and Explanation and 

Justification for Regulations on Electioneering 

Communications, 70 FR 75713 (Dec. 21, 2005). 

4The exemptions in 11 CFR 100.29(c)(1) (nonbroadcast communications), 100.29(c)(2) (news 

stories, commentaries or editorials), 100.29(c)(3) 

(expenditures and independent expenditures) and 

100.29(c)(4) (candidate debates or forums) are based 

on the express language of the Act. See 2 U.S.C. 

434(f)(3)(B)(i) to (iii). Section 100.29(c)(5) exempts 

communications paid for by State or local 

candidates that do not PASO any Federal candidate. 

FEDERAL ELECTION COMMISSION 

11 CFR Part 104, 114 

[Notice 2007–26] 

Electioneering Communications 

AGENCY: Federal Election Commission. 

ACTION: Final rule and transmittal of 

rule to Congress. 

SUMMARY: The Federal Election 

Commission is revising its rules 

governing electioneering 

communications. These revisions 

implement the Supreme Court’s 

decision in FEC v. Wisconsin Right to 

Life, Inc., which held that the 

prohibition on the use of corporate and 

labor organization funds for 

electioneering communications is 

unconstitutional as applied to certain 

types of electioneering communications. 

Further information is provided in the 

supplementary information that follows. 

DATES: Effective Date: December 26, 

2007. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Ron B. Katwan, Assistant General 

Counsel, Mr. Anthony T. Buckley, or 

Ms. Margaret G. Perl, Attorneys, 999 E 

Street, NW., Washington, DC 20463, 

(202) 694–1650 or (800) 424–9530. 

SUPPLEMENTARY INFORMATION: The 

Commission is revising 11 CFR parts 

104 and 114 to implement the recent 

U.S. Supreme Court decision in FEC v. 

Wisconsin Right to Life, Inc., 127 S. Ct. 

2652 (June 25, 2007). 

I. Background 

A. Statutory and Regulatory Provisions 

Governing Electioneering 

Communications 

The Bipartisan Campaign Reform Act 

of 2002 (‘‘BCRA’’) 1 amended the 

Federal Election Campaign Act of 1971, 

as amended (the ‘‘Act’’ or ‘‘FECA’’),2 by 

adding a new category of political 

communications, ‘‘electioneering 

communications,’’ to those already 

governed by the Act. See 2 U.S.C. 

434(f)(3). Electioneering 

communications (‘‘ECs’’) are broadcast, 

cable or satellite communications that 

refer to a clearly identified candidate for 

Federal office, are publicly distributed 

within sixty days before a general 

election or thirty days before a primary 

election, and are targeted to the relevant 

electorate. See 2 U.S.C. 434(f)(3)(A)(i). 

Individuals and entities that make ECs 

are subject to certain reporting 

obligations. See 2 U.S.C. 434(f)(1) and 

(2). Corporations and labor 

organizations are prohibited from using 

general treasury funds to finance ECs, 

directly or indirectly. See 2 U.S.C. 

441b(b)(2). Finally, all ECs must include 

a disclaimer including the name of the 

individual or entity who paid for the EC 

and a statement as to whether or not the 

EC was authorized by a candidate. See 

2 U.S.C. 441d(a). 

The Act exempts certain 

communications from the definition of 

‘‘electioneering communication’’ found 

in 2 U.S.C. 434(f)(3)(B)(i) to (iii), and 

specifically authorizes the Commission 

to promulgate regulations exempting 

other communications as long as the 

exempted communications do not 

promote, support, attack or oppose 

(‘‘PASO’’) a candidate. See 2 U.S.C. 

434(f)(3)(B)(iv), citing 2 U.S.C. 

431(20)(A)(iii). 

The Commission promulgated 

regulations to implement BCRA’s EC 

provisions. Final Rules and Explanation 

and Justification for Regulations on 

Electioneering Communications, 67 FR 

65190 (Oct. 23, 2002) (‘‘EC E&J’’).3 See 

also 11 CFR 100.29 (defining 

‘‘electioneering communication’’); 

104.20 (implementing EC reporting 

requirements); 110.11(a) (requiring 

disclaimers in all ECs); 114.2 

(prohibiting corporations and labor 

organizations from making ECs); 114.10 

(allowing qualified non-profit 

corporations (‘‘QNCs’’) to make ECs); 

114.14 (restricting indirect corporate 

and labor organization funding of ECs). 

Commission regulations exempt five 

types of communications from the 

definition of ‘‘electioneering 

communication.’’ See 11 CFR 

100.29(c).4

B. U.S. Supreme Court Precedent 

Regarding Electioneering 

Communications 

In McConnell v. FEC, 540 U.S. 93 

(2003) (‘‘McConnell’’), the U.S. Supreme 

Court upheld all of BCRA’s EC 

provisions against various constitutional 

challenges. Id. at 194, 201–02, 207–08. 

Specifically, the Supreme Court held 

that the prohibition on the use of 

general treasury funds by corporations 

and labor organizations to pay for ECs 

in 2 U.S.C. 441b(b)(2) was not facially 

overbroad. Id. at 204–06. In Wisconsin 

Right to Life, Inc. v. FEC, 546 U.S. 410 

(2006) (‘‘WRTL I’’), the U.S. Supreme 

Court explained that McConnell’s 

upholding of section 441b(b)(2) against 

a facial constitutional challenge did not 

preclude further as-applied challenges 

to the corporate and labor organization 

funding prohibitions. See WRTL I, 546 

U.S. at 411–12. 

Subsequently, in FEC v. Wisconsin 

Right to Life, Inc., 127 S. Ct. 2652 (2007) 

(‘‘WRTL II’’), the Supreme Court 

reviewed an as-applied challenge 

brought by a non-profit corporation 

seeking to use its own general treasury 

funds, which included donations it had 

received from other corporations, to pay 

for broadcast advertisements referring to 

Senator Feingold and Senator Kohl 

during the EC period before the 2004 

general election, in which Senator 

Feingold, but not Senator Kohl, was on 

the ballot. The plaintiff argued that 

these communications were genuine 

issue advertisements run as part of a 

grassroots lobbying campaign on the 

issue of Senate filibusters of judicial 

nominations. WRTL II, 127 S. Ct. at 

2660–61. The Supreme Court held that 

section 441b(b)(2) was unconstitutional 

as applied to the plaintiff’s 

advertisements because the 

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advertisements were not the ‘‘functional 

equivalent of express advocacy.’’ Id. at 

2670, 2673. A communication is the 

‘‘functional equivalent of express 

advocacy’’ only if it ‘‘is susceptible of 

no reasonable interpretation other than 

as an appeal to vote for or against a 

specific candidate.’’ Id. at 2667. Thus, 

WRTL II limited the reach of the EC 

funding prohibitions to communications 

that were the ‘‘functional equivalent of 

express advocacy’’ as determined under 

this newly articulated test. 

C. The Commission’s Rulemaking After 

WRTL II 

The Commission published a Notice 

of Proposed Rulemaking in August 2007 

seeking public comment on alternative 

proposed rules implementing the WRTL 

II decision. See Notice of Proposed 

Rulemaking on Electioneering 

Communications, 72 FR 50261, 50262 

(August 31, 2007) (‘‘NPRM’’). The 

Commission sought public comment 

generally regarding the effect of the 

WRTL II decision on the Commission’s 

rules governing corporate and labor 

organization funding of ECs, the 

definition of ‘‘electioneering 

communication,’’ and the rules 

governing reporting of ECs, as well as 

comment on the specific requirements 

of the proposed rules. The Commission 

also requested public comment 

regarding specific examples of 

communications that should be covered 

by the proposed rules and those that 

should not be. Id. at 50267–69. Finally, 

the Commission sought public comment 

regarding the impact, if any, of the 

WRTL II decision on other parts of the 

Commission’s regulations, such as the 

definition of ‘‘express advocacy’’ in 11 

CFR 100.22. Id. at 50263. The comment 

period ended on October 1, 2007. The 

Commission received twenty-seven 

written comments on the proposed 

rules. The Commission held a public 

hearing to discuss the proposed rules on 

October 17 and 18, 2007 at which fifteen 

witnesses testified. All written 

comments and hearing transcripts are 

available at http://www.fec.gov/law/ 

law_rulemakings.shtml under the 

heading ‘‘Electioneering 

Communications (2007).’’ For purposes 

of this document, the terms ‘‘comment’’

and ‘‘commenter’’ apply to both written 

comments and oral testimony at the 

public hearing. 

After consideration of the comments, 

the Commission has decided to 

implement the WRTL II decision by 

promulgating an exemption from the 

corporate and labor organization 

funding prohibitions in part 114 of the 

Commission’s rules. Under the final 

rule, ECs that qualify for the WRTL II 

exemption may be funded with 

corporate and/or labor organization 

funds, including general treasury funds, 

but are subject to EC reporting and 

disclaimer requirements. The EC 

reporting requirements in 11 CFR 

104.20 are also being revised to 

accommodate both reporting by 

corporations and labor organizations for 

ECs permissible under the new 

exemption, and reporting the use of 

corporate and labor organization 

donations by individuals and 

unincorporated entities to pay for ECs 

permissible under the new exemption. 

The Commission has decided to leave 

open possible revisions to the definition 

of ‘‘express advocacy’’ in 11 CFR 100.22 

and to address the issue at a later date. 

II. Effective Date and Transmittal of 

Final Rules to Congress 

The final rule is effective immediately 

upon publication under 5 U.S.C. 

553(d)(1) and (d)(3). Typically, rules 

must be published not less than thirty 

days before their effective dates under 

the Administrative Procedure Act 

(‘‘APA’’). See 5 U.S.C. 553(d). However, 

a rule that ‘‘grants or recognizes an 

exemption or relieves a restriction’’ is 

exempted from this requirement under 

5 U.S.C. 553(d)(1). This final rule grants 

an exemption and relieves the funding 

restrictions for certain communications 

that meet the definition of 

‘‘electioneering communications.’’

Therefore, this final rule meets this 

exception to the APA, is not required to 

be published thirty days prior to its 

effective date, and will therefore be 

effective immediately upon publication. 

In addition, 5 U.S.C. 553(d)(3) states 

that an agency may make a rule effective 

immediately ‘‘for good cause found and 

published with the rule.’’ The U.S. 

Supreme Court’s decision in WRTL II 

was issued on June 25, 2007, less than 

six months before the first EC periods 

began (thirty days before various state 

Presidential caucuses and primaries in 

January 2008). The Commission has 

worked diligently to promulgate the 

final rule in time to provide guidance to 

organizations as to the permissible 

funding and required reporting for 

communications broadcast within the 

EC periods, which began in early 

December 2007 for certain states. The 

final rule implementing the WRTL II 

decision should apply to all EC periods 

for the 2008 election cycle and it would 

be contrary to the public interest to 

delay the effective date of the final rule 

until some time after the first EC periods 

start. Therefore, the Commission has 

‘‘good cause’’ under section 553(d)(3) to 

make the final rule effective 

immediately. 

Under the Congressional Review of 

Agency Rulemaking Act, 5 U.S.C. 

801(a)(1), agencies must submit final 

rules to the Speaker of the House of 

Representatives and the President of the 

Senate before they take effect. The final 

rule that follows was transmitted to 

Congress on December 17, 2007. 

III. Explanation and Justification 

A. Scope of the WRTL II Electioneering 

Communications Exemption 

The NPRM included two alternative 

proposals implementing the WRTL II 

decision in the rules governing ECs. 

Alternative 1 incorporated the new 

exemption into the rules prohibiting the 

use of corporate and labor organization 

funds for ECs in 11 CFR part 114. See 

NPRM at 50262. This alternative 

required corporations and labor 

organizations to comply with the 

reporting and disclaimer requirements 

for all ECs that qualify for the 

exemption. Alternative 2 incorporated 

the new exemption into the definition of 

‘‘electioneering communication’’ in 11 

CFR 100.29. This alternative removed 

all reporting and disclaimer 

requirements for these communications, 

whether run by corporations and labor 

organizations, or individuals and 

unincorporated entities not subject to 

the funding prohibitions in part 114. 

See NPRM at 50262–63. 

The commenters were divided in their 

support for each alternative. 

Commenters supporting Alternative 1 

pointed out that the plaintiffs in WRTL 

II did not challenge the EC reporting 

and disclaimer requirements, the Court 

did not address the issue of whether the 

EC reporting requirements were 

constitutional as applied to genuine 

issue advertisements, and the EC 

reporting requirements had been upheld 

against a facial challenge in McConnell. 

These commenters also contended that 

disclosure requirements are held to a 

less rigorous constitutional standard 

than funding prohibitions, and that a 

broader exemption would violate the 

Commission’s statutory authority. In 

contrast, commenters supporting 

Alternative 2 argued that WRTL II held 

that the communications at issue were 

protected from any regulation 

(including disclosure), that the 

constitutionality of disclosure 

requirements is linked to the 

constitutionality of the funding 

restrictions on the communication, and 

that the costs of compliance with 

reporting obligations would chill speech 

by small nonprofit organizations. Some 

commenters stated their policy 

preference would be to adopt 

Alternative 2 and remove reporting 

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5The coordinated communication rules set forth 

a three-prong test: A payment prong, a content 

prong and a conduct prong. See 11 CFR 109.21(a). 

If a communication meets one of the standards 

under the content or conduct prong, it is deemed 

to have met that prong. Any communication that 

meets all three prongs is considered an in kind 

contribution to the candidate or political party with 

which the coordination occurs. See 11 CFR 

109.21(b). Portions of the coordination regulations 

at 11 CFR 109.21 were held invalid in Shays v. FEC, 

508 F. Supp.2d 10 (2007). However, the 

Commission is appealing the ruling and the current 

regulations remain in full force and effect pending 

the outcome of the proceeding. 

requirements for communications 

qualifying for the WRTL II exemption, 

but argued that the Commission’s 

authority was confined to creating an 

exemption from the funding restrictions 

on ECs unless the EC reporting and 

disclaimer provisions are successfully 

challenged in court. 

After consideration of the comments, 

the Commission has decided to adopt a 

revised version of Alternative 1 and 

create an exemption solely from the 

prohibition on the use of corporate and 

labor organization funds to finance ECs. 

Accordingly, the revisions to 11 CFR 

114.2 and new section 114.15 do not 

create (1) an exemption from the overall 

definition of ‘‘electioneering 

communication’’ in section 100.29, (2) 

an exemption from the EC reporting 

requirements in section 104.20, or (3) an 

exemption from the EC disclaimer 

requirements in section 110.11. 

Corporations and labor organizations are 

permitted to use general treasury funds 

for ECs that are permissible under 

section 114.15, but are also required to 

file EC disclosure reports once they 

spend more than $10,000 in a calendar 

year on such communications. See 

revised 11 CFR 104.20. 

The plaintiff in WRTL II challenged 

only BCRA’s corporate and labor 

organization funding restrictions in 

section 441b(b)(2) and did not contest 

either the separate statutory definition 

of ‘‘electioneering communication’’ in 

section 434(f)(3), the separate reporting 

requirement in section 434(f)(1), or the 

separate disclaimer requirement in 

section 441d. See WRTL II, 127 S. Ct. at 

2658–59; see also Verified Complaint 

for Declaratory and Injunctive Relief, 

¶ 36 (July 28, 2004) in Wisconsin Right 

to Life, Inc. v. FEC (No. 04–1260), 

available at http://fecds005.fec.gov/law/ 

litigation_related.shtml#wrtl_dc 

(‘‘WRTL does not challenge the 

reporting and disclaimer requirements 

for electioneering communications, only 

the prohibition on using its corporate 

funds for its grass-roots lobbying 

advertisements.’’). Nor did any of the 

four separate opinions issued by the 

Justices in WRTL II discuss the EC 

reporting or disclaimer requirements. 

Accordingly, the Commission agrees 

with the commenters who argued that 

WRTL II’s holding that the Act’s EC 

funding restrictions are unconstitutional 

as applied to certain advertisements 

does not extend to the EC reporting or 

disclaimer requirements. 

Because WRTL II did not address the 

issue, McConnell continues to be the 

controlling constitutional holding 

regarding the EC reporting and 

disclaimer requirements. McConnell 

held that the overall definition of 

‘‘electioneering communication’’ in 

section 434(f)(3) is facially valid. 

McConnell, 540 U.S. at 193–94. 

Moreover, eight Justices in McConnell 

voted to uphold the EC reporting 

requirements (including three Justices 

who separately voted to strike down the 

EC funding prohibitions). Id., 540 U.S. 

at 196 (Stevens, J.) and 321 (Kennedy, 

J.). The EC disclaimer requirements 

were similarly upheld as constitutional 

by a vote of 8–1. McConnell, 540 U.S. 

at 230 (Rehnquist, C.J., joined by all 

Justices except Thomas, J.). Thus, 

because McConnell has upheld the 

definition of ECs, as well as the 

reporting and disclaimer requirements, 

as facially valid, and because WRTL II 

did not address these provisions, the 

Commission has no mandate to revise 

the underlying definition of 

‘‘electioneering communication’’ or 

remove the reporting and disclaimer 

requirements. WRTL II requires that the 

Commission implement an as-applied 

exemption to the EC funding 

requirements and nothing more. By 

adopting a revised version of 

Alternative 1, the Commission is acting 

in accordance with WRTL II. 

The Commission disagrees with the 

comments that contended that 

Alternative 2 is more consistent with 

the Congressional intent because they 

believed BCRA did not contemplate 

reporting by corporations and labor 

organizations. While it is true that under 

BCRA, corporations and labor 

organizations were prohibited from 

funding any ECs, the statute requires 

every ‘‘person’’ (which by definition 

includes corporations and labor 

organizations) funding ECs over the 

reporting threshold to report. 2 U.S.C. 

431(11). Moreover, incorporating the 

WRTL II exemption into the regulatory 

definition would remove certain ECs 

that are currently subject to reporting 

and disclaimer requirements when run 

by individuals, QNCs, or 

unincorporated entities from public 

disclosure entirely. While Congress 

provided for certain possible effects of 

judicial review of the definition of 

‘‘electioneering communication’’ (see 2 

U.S.C. 434(f)(3)(A)(ii)), Congress did not 

expressly address the consequences for 

the reporting provisions in the event of 

a successful as applied challenge to the 

funding restrictions. Thus, the 

Commission cannot conclude that 

Congress has spoken directly to this 

issue. 

Finally, while understanding that 

some nonprofit organizations and their 

donors have privacy interests and that 

some donors request to remain 

anonymous, the Commission disagrees 

with the commenters who argue the 

only constitutional way to protect those 

interests is to adopt Alternative 2, 

thereby allowing all ECs that qualify for 

the WRTL II exemption to be run 

without any disclaimers or reporting. 

First, under revised section 104.20 

described below, the reporting 

requirements for corporations and labor 

organizations funding ECs that qualify 

for the WRTL II exemption are narrowly 

tailored to address many of the 

commenters’ concerns regarding 

individual donor privacy. See Section D 

below. Second, as some commenters 

noted, there are other ways of protecting 

donor privacy. When upholding the EC 

reporting requirements, McConnell 

recognized that these privacy interests 

are adequately protected on a case-bycase basis for certain organizations that 

espouse positions such that their donors 

or members might be subject to reprisal 

or harassment. See McConnell, 540 U.S. 

at 198–99 (citing Brown v. Socialist 

Workers ’74 Campaign Comm. (Ohio), 

459 U.S. 87, 98–99 (1982)). 

Organizations with significant and 

serious threats of reprisal or harassment 

may seek as-applied exemptions to the 

disclosure requirements under Socialist 

Workers through advisory opinions and 

court filings. See, e.g., Advisory 

Opinion 2003–02 (Socialist Workers 

Party). Therefore, the Commission 

believes that the carefully designed 

reporting requirements detailed below 

do not create unreasonable burdens on 

the privacy rights of donors to nonprofit 

organizations. 

The Commission notes that the final 

rule does not affect the coordinated 

communications rules in section 109.21, 

because ECs that are permissible under 

section 114.15 would still meet the 

‘‘electioneering communication’’

content standard in 11 CFR 

109.21(c)(1).5 Thus, an EC that may be 

paid for with corporation or labor 

organization funds under the new 

exemption in section 114.15 may 

nevertheless be a prohibited corporate 

or labor organization in-kind 

contribution to a candidate or political 

party if that EC is coordinated with a 

candidate or party under the 

coordinated communications rules. In 

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6To increase clarity and readability, the final rule 

also revises the title of section 114.2 to include ECs 

explicitly, and to renumber paragraph (b)(2)(iii) as 

paragraph (b)(3) with conforming changes as 

necessary in the text of that paragraph. 

addition, the revisions to section 114.14 

clarify that individuals and 

unincorporated entities may receive and 

spend corporate or labor organization 

funds for ECs that are permissible under 

new section 114.15. However, 

individuals and unincorporated entities 

are still subject to the general 

prohibition on using such funds to pay 

for any EC that is not permissible under 

section 114.15. 

B. Revised 11 CFR 114.2—General 

Prohibition on Corporations and Labor 

Organizations Making Electioneering 

Communications 

Section 114.2(b)(2)(iii) implements 

the funding restrictions of 2 U.S.C. 

441b(b)(2) by prohibiting corporations 

and labor organizations from ‘‘[m]aking 

payments for an electioneering 

communication to those outside the 

restricted class.’’ However, as explained 

in the NPRM, placing a detailed 

exemption based on the WRTL II 

decision within section 114.2(b) could 

be confusing and difficult for the reader 

to locate. See id. Therefore, in the 

NPRM, the Commission proposed to 

place the exemption in new section 

114.15. None of the commenters 

opposed the placement of the 

exemption in new section 114.15. 

The final rule follows the approach 

proposed in the NPRM by setting forth 

the WRTL II exemption in new section 

114.15, and amending section 114.2(b) 

to include a cross-reference to this new 

section. Revised section 114.2(b) states 

that corporations and labor 

organizations are prohibited from 

making ECs ‘‘unless permissible under 

11 CFR 114.10 or 114.15.’’ See revised 

11 CFR 114.2(b)(3) (adding the new 

WRTL II exemption reference to the 

existing reference to the QNC exemption 

in section 114.10).6 The language of the 

final rule is slightly changed from the 

proposed rule to conform the crossreference in section 114.2(b)(3) to 

similar revisions in other sections of 

part 114. See, e.g., revised 11 CFR 

104.20(c)(7) and 114.14(a)(1) discussed 

below. 

C. New 11 CFR 114.15—Permissible Use 

of Corporate and Labor Organization 

Funds for Certain Electioneering 

Communications 

The exemption proposed in the 

NPRM was substantively the same 

under both Alternative 1 and 2. See 

NPRM at 50264. Under Alternative 1, 

proposed section 114.15(a) set forth the 

general standard for determining 

whether the use of corporate and labor 

organization funds for an EC is 

permissible under WRTL II. Proposed 

section 114.15(b) included safe harbor 

provisions for two common types of 

ECs: Grassroots lobbying 

communications and commercial and 

business advertisements. The NPRM 

explained that the safe harbors were 

intended to provide additional guidance 

as to which ECs would qualify for the 

general exemption and that an EC that 

did not qualify for the safe harbor could 

still come within the general exemption. 

See id. Finally, proposed section 

114.15(c) addressed reporting 

obligations for corporations and labor 

organizations that choose to use general 

treasury funds to pay for ECs 

permissible under section 114.15. See 

id. 

Some commenters favored the 

proposed rule’s approach of including 

both a general exemption and one or 

more safe harbors. A few commenters 

suggested that the final rule should 

include not only safe harbors, but also 

‘‘capture nets or red flags’’ that would 

indicate when an EC would generally be 

considered to be the functional 

equivalent of express advocacy and 

therefore not qualify for the general 

exemption. Other commenters were 

concerned that the safe harbors would 

become the de facto rule and groups 

would feel chilled from making ECs that 

do not qualify for one of the safe harbors 

without additional guidance in the 

general rule. Some commenters thought 

that the safe harbor provisions were too 

narrow to be useful. Some commenters 

also suggested that the Commission 

include a list of those factors that the 

Commission would consider in 

determining whether an EC qualifies for 

the exemption. 

After consideration of the comments, 

the Commission has decided to modify 

the NPRM’s proposed approach by 

adopting a rule that both incorporates a 

safe harbor for certain types of EC and 

sets forth a multi-step analysis for 

determining whether ECs that do not 

qualify for the safe harbor nevertheless 

qualify for the general exemption. First, 

the final rule includes a revised 

articulation of the general exemption in 

new section 114.15(a). Second, the 

Commission is broadening the safe 

harbor to provide more detailed 

guidance as to which ECs qualify for the 

exemption under the safe harbor. See 11 

CFR 114.15(b). Third, the final rule 

contains a provision explaining the 

Commission’s rules of interpretation for 

determining if an EC that does not 

qualify for the safe harbor in section 

114.15(b) is nonetheless permissible 

under the general exemption in section 

114.15(a). See 11 CFR 114.15(c). The 

final rule also includes three additional 

paragraphs. First, new paragraph (d) 

explains what contextual information 

the Commission may consider in its 

analysis of ECs under the general 

exemption and safe harbor. Second, new 

paragraph (e) indicates that a list of 

examples of ECs analyzed under the 

general exemption and safe harbor will 

be placed on the Commission’s Web 

site. Lastly, new paragraph (f) states that 

corporations and labor organizations 

funding ECs that are permissible under 

section 114.15(a) are subject to certain 

reporting requirements under 11 CFR 

104.20. 

1. 11 CFR 114.15(a)—Articulation of the 

WRTL II Exemption 

In the NPRM, proposed section 

114.15(a) provided that corporations 

and labor organizations may make an EC 

(as defined in 11 CFR 100.29) without 

violating the prohibition in section 

114.2(b)(3), ‘‘if the communication is 

susceptible of a reasonable 

interpretation other than as an appeal to 

vote for or against a clearly identified 

Federal candidate.’’ See NPRM at 50264. 

Many commenters agreed with this 

proposed implementation of the WRTL 

II test as a general exemption. However, 

some commenters urged the 

Commission to use the exact words used 

in the WRTL II decision and phrase the 

general exemption so that corporations 

or labor organizations may make an EC 

‘‘unless the communication is 

susceptible of no reasonable 

interpretation other than as an appeal to 

vote for or against a clearly identified 

Federal candidate.’’ These commenters 

argued that the NPRM’s formulation of 

the standard shifted the burden of 

proving whether an EC qualifies for the 

exemption from the Commission to the 

speaker making the EC. 

While the Commission disagrees with 

those commenters who argued that the 

effect of the NPRM’s language was to 

shift the burden of proof, it appears that 

the formulation proposed in the NPRM 

could be misunderstood. Therefore, in 

the final rule, paragraph (a) tracks the 

WRTL II decision’s language: 

‘‘Corporations or labor organizations 

may make an electioneering 

communication, as defined in 11 CFR 

100.29, to those outside the restricted 

class unless the communication is 

susceptible of no reasonable 

interpretation other than as an appeal to 

vote for or against a clearly identified 

Federal candidate.’’ See 11 CFR 

114.15(a). 

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2. 11 CFR 114.15(b)—Safe Harbor 

Provision 

As proposed in the NPRM, the final 

rule supplements the general exemption 

in section 114.15(a) with a safe harbor 

provision in section 114.15(b). 

Satisfying the safe harbor provision 

demonstrates that the EC is susceptible 

of a reasonable interpretation other than 

as an appeal to vote for or against a 

Federal candidate. Accordingly, an EC 

that qualifies for the safe harbor would 

be deemed to be permissible under 

section 114.15(a) and may be paid for 

with corporate or labor organization 

funds. However, an EC that does not 

qualify for the safe harbor may still 

come within the general exemption 

under the analysis described below in 

section 114.15(c). 

The NPRM’s proposed safe harbor 

provisions for grassroots lobbying 

communications and commercial and 

business advertisements each contained 

four prongs, all of which would have 

had to be met for an EC to qualify for 

the proposed safe harbor. The first two 

prongs of both proposed safe harbors 

would have focused on the content of 

the communication, while the last two 

prongs of both safe harbors would have 

focused on the presence of ‘‘indicia of 

express advocacy’’ as described in the 

WRTL II decision. See NPRM at 50265, 

50269. 

In order to simplify the final rule, the 

Commission has adopted one safe 

harbor provision with three prongs. An 

EC qualifies for the safe harbor if it (1) 

does not mention ‘‘any election, 

candidacy, political party, opposing 

candidate, or voting by the general 

public;’’ (2) does not take a position on 

the candidate’s ‘‘character, 

qualifications, or fitness for office;’’ and 

(3) either ‘‘focuses on a legislative, 

executive or judicial matter or issue’’ or 

‘‘proposes a commercial transaction.’’

See 11 CFR 114.15(b)(1)–(3). An EC will 

qualify for the safe harbor only if it 

satisfies all three prongs. The safe 

harbor provision in the final rule 

applies both to ECs that would have 

been considered ‘‘grassroots lobbying 

communications’’ and to ECs that would 

have been considered ‘‘commercial and 

business advertisements’’ under the rule 

proposed in the NPRM. 

a. 11 CFR 114.15(b)(1) and (2)—

Mentioning an Election or Candidacy 

and Taking a Position on Character or 

Qualifications 

The Supreme Court determined that 

WRTL’s advertisements were not the 

‘‘functional equivalent of express 

advocacy’’ because the communications’

content was ‘‘consistent with that of a 

genuine issue ad’’ and the 

communications lacked ‘‘indicia of 

express advocacy.’’ WRTL II, 127 S. Ct. 

at 2667. The Court found that WRTL’s 

communications lacked ‘‘indicia of 

express advocacy’’ because they did not 

mention ‘‘an election, candidacy, 

political party, or challenger,’’ and the 

communications did not ‘‘take a 

position on a candidate’s character, 

qualifications, or fitness for office.’’ Id. 

The first two prongs of the safe harbor 

in the final rule incorporate the factors 

the Court used to determine whether a 

communication lacks ‘‘indicia of 

express advocacy.’’ In order to satisfy 

the safe harbor’s first prong, the EC must 

not ‘‘mention any election, candidacy, 

political party, opposing candidate, or 

voting by the general public.’’ See 11 

CFR 114.15(b)(1). To satisfy the safe 

harbor’s second prong, the EC must not 

‘‘take a position on any candidate or 

officeholder’s character, qualifications, 

or fitness for office.’’ See 11 CFR 

114.15(b)(2). 

The NPRM included these same 

provisions as the last two prongs of the 

proposed safe harbors for grassroots 

lobbying communications and 

commercial and business 

advertisements. See NPRM at 50266–67, 

50270. Some commenters believed that 

these provisions adequately limited the 

scope of the proposed rule. A few 

commenters urged the Commission to 

refrain from adding anything to the list 

of references in the WRTL II decision, 

such as the reference to ‘‘voting by the 

general public’’ proposed in the NPRM. 

However, the final rule retains this 

addition, which applies to ECs that 

include tag lines that suggest voting by 

the general public in elections, such as 

‘‘Vote. It’s important to your future,’’ but 

does not apply to other references to 

voting such as ‘‘ask Congressman Smith 

to support the Voting Rights Bill.’’

The NPRM sought public comment on 

whether certain examples constitute 

‘‘mentioning’’ elections, candidacy, 

political parties, or opposing 

candidates, or take a position on a 

candidate’s character, qualifications or 

fitness for office sufficient to transform 

an EC into the functional equivalent of 

express advocacy or to remove them 

from the proposed new safe harbors. See 

NPRM at 50266–67. Some commenters 

noted that many of the examples were 

actually references to officeholder status 

or to an officeholder’s conduct of his or 

her official duties and should not be 

construed as mentioning a ‘‘candidacy’’

or taking a position on ‘‘character.’’

Other commenters believed that 

everything in the proposed list of 

references that would constitute indicia 

of express advocacy should be allowed 

in an EC so long as the EC focuses on 

issue advocacy. Some commenters 

argued that issue advocacy groups 

should be free to run ECs that comment 

on officeholders’ character and fitness 

for office in order to hold those 

officeholders accountable. Other 

commenters argued that condemning 

the record or past actions of a candidate 

or officeholder should automatically 

disqualify an EC from the exemption. 

The following is a non-exclusive list 

of examples that will be considered to 

‘‘mention’’ an election, candidacy, 

political party, opposing candidate or 

voting by the general public under 

section 114.15(b)(1), thereby causing an 

EC to fail to satisfy the first prong of the 

safe harbor. The Commission notes that 

because these examples only apply to 

the safe harbor provisions and to one 

factor in the rules of interpretation for 

the general exemption, use of these 

words or phrases will not necessarily 

disqualify any EC from the general 

exemption in section 114.15(a). 

• Specific references to an election 

date such as ‘‘Support gun rights this 

November 5’’ or references to electionrelated themes, such as pictures of a 

ballot or voting booth. 

• General references to voting such as 

‘‘Remember to vote to protect the 

environment.’’

• Specific references to the named 

candidate’s office or candidacy, such as 

‘‘Bob Jones is running for Senate.’’

• References to political parties by 

official names, such as ‘‘Democrats,’’ or 

by nicknames or proxy descriptions 

such as ‘‘GOP.’’

• Comparative references to 

incumbent and opposing candidate, 

such as ‘‘Bob Smith supports our troops; 

Bill Jones cut veteran’s benefits by 

20%.’’

• Implied references to incumbents 

such as ‘‘It’s time to take out the trash, 

select real change with Bob Smith’’ or 

‘‘This November, we can do better.’’

The Commission agrees with the 

many commenters who argued that a 

reference to the past voting record of the 

officeholder or candidate on a particular 

issue does not by itself constitute taking 

a position on a candidate’s or 

officeholder’s character, qualifications, 

or fitness for office. Therefore, in 

determining whether an EC takes a 

position on the candidate’s or 

officeholder’s ‘‘character, qualifications, 

or fitness for office’’ under section 

114.15(b)(2) the Commission will 

examine the entirety of the content of 

the EC. The Commission is providing 

examples of ECs below (see section 

114.15(e)) that illustrate this analysis. 

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b. 11 CFR 114.15(b)(3)—Lobbying 

Communications or Commercial 

Advertisements 

The third prong of the final rule’s safe 

harbor combines the first two prongs of 

the NPRM’s proposed grassroots 

lobbying communications safe harbor 

and the commercial and business 

advertisements safe harbor. In order to 

satisfy the third prong, an EC must meet 

either section 114.15(b)(3)(i) describing 

certain lobbying communications or 

section 114.15(b)(3)(ii) describing 

certain commercial advertisements. 

In addition to finding an absence of 

‘‘indicia of express advocacy,’’ the 

WRTL II decision concluded that 

WRTL’s communications contained 

content ‘‘consistent with that of a 

genuine issue ad’’ because they ‘‘focus 

on a legislative issue, take a position on 

the issue, exhort the public to adopt the 

position, and urge the public to contact 

public officials with respect to the 

matter.’’ See WRTL, 127 S. Ct. at 2667. 

Based on the Court’s analysis, the 

NPRM’s proposed safe harbor for 

grassroots lobbying communications 

covered any EC that ‘‘exclusively 

discusses a pending legislative or 

executive matter or issue’’ and ‘‘urges an 

officeholder to take a particular position 

or action with respect to the matter or 

issue, or urges the public to adopt a 

particular position and to contact the 

officeholder with respect to the matter 

or issue.’’ See NPRM at 50265–66. 

Many commenters argued that the 

first prong of the safe harbor would be 

too narrow in several respects, 

including: (1) It required that the EC 

discuss the issue ‘‘exclusively;’’ (2) it 

required that the issue be ‘‘pending;’’

and (3) it was limited to ECs discussing 

‘‘legislative or executive’’ issues. Some 

commenters also argued that the second 

prong of the safe harbor would be too 

narrow because it would be limited to 

officeholders and would not cover ECs 

that urged the public to contact the 

candidate simply to ascertain the 

candidate’s position on a particular 

issue. Other commenters supported the 

proposed safe harbor’s prongs as written 

and urged the Commission to limit the 

scope of the safe harbor. These 

commenters noted that a safe harbor 

should be narrower than the general 

exemption. 

In response to some of these 

comments, the final rule incorporates 

certain modifications in the third prong 

of the safe harbor. Section 

114.15(b)(3)(i) covers any EC that 

‘‘focuses on a legislative, executive or 

judicial matter or issue’’ and either 

‘‘urges a candidate to take a particular 

position or action with respect to the 

matter or issue’’ or ‘‘urges the public to 

adopt a particular position and to 

contact the candidate with respect to the 

matter or issue.’’ See 11 CFR 

114.15(b)(3)(i)(A)–(B). This formulation 

adopts the WRTL II decision’s language 

that describes issue advertisements as 

ECs that ‘‘focus’’ on an issue rather than 

the NPRM’s more narrow language that 

limits the safe harbor to ECs that 

‘‘exclusively discuss’’ the issue. Thus, 

under this prong, an EC may qualify for 

the safe harbor even if it mentions other 

issues in addition to focusing on matters 

or issues listed in the safe harbor. In 

addition, the Commission agrees with 

the commenters that the safe harbor 

should cover not only legislative and 

executive issues as proposed in the 

NPRM, but also judicial matters. 

Furthermore, the final rule does not, as 

did the proposed rule, limit the subject 

matter of the EC to ‘‘pending’’ issues or 

matters. Instead, the new rule covers 

ECs that focus on any legislative, 

executive or judicial issue regardless of 

whether it is pending before one or 

more branches of government. This 

revision allows organizations to address, 

for example, issues that they believe 

should be placed on the legislative, 

executive, or judicial agenda in the 

future. 

Finally, the Commission agrees with 

those commenters who pointed out that 

issue advocacy groups may urge a 

candidate who is not a sitting 

officeholder to take a certain position on 

a legislative, executive, or judicial issue, 

not because they want to advocate the 

candidate’s election or defeat, but 

because they want the candidate to 

commit to taking action on a certain 

issue if the candidate is elected. 

Therefore, unlike the rule proposed in 

the NPRM, the final rule includes not 

only references to sitting officeholders 

but also references to any Federal 

candidates. However, in order to qualify 

for the safe harbor, the EC must either 

urge the candidates themselves to take 

a position, or urge the public to take a 

position and contact the candidates. 

General appeals to the public to 

‘‘educate themselves’’ or to contact an 

organization to learn more about the 

issue will not satisfy this prong of the 

safe harbor. Appeals to the public to 

donate to the organization to help 

spread the word about the issue will not 

alone satisfy this prong of the safe 

harbor. However, such appeals to learn 

more or contribute will not disqualify 

from the safe harbor a communication 

which also includes exhortations to 

candidates or to the public to contact 

candidates. In addition, an appeal to 

learn about issues or to raise awareness 

(such as asking for donations to ‘‘help 

spread the word’’) may qualify as a ‘‘call 

to action or other appeal’’ under 11 CFR 

114.15(c)(2)(iii) (see below). 

The second part of the safe harbor’s 

third prong in section 114.15(b)(3)(ii) is 

also based upon the safe harbor for 

commercial and business 

advertisements proposed in the NPRM, 

but includes slightly revised language. 

The NPRM proposed a safe harbor for 

any EC that ‘‘exclusively advertises a 

Federal candidate’s or officeholder’s 

business or professional practice or any 

other product or service’’ and that ‘‘is 

made in the ordinary course of business 

of the entity paying for the 

communication.’’ See NPRM at 50270. 

Many commenters supported the 

creation of a commercial and business 

advertisements safe harbor as consistent 

with the WRTL II decision. However, 

some commenters supporting the safe 

harbor argued that the proposed 

provision was too narrow to be useful to 

the business community. Specifically, a 

few commenters argued that the 

Commission should remove the 

‘‘ordinary course of business’’ prong in 

the proposed rule. Another commenter 

criticized the proposed safe harbor as 

too ambiguous and difficult for 

advertisers to apply when deciding 

whether a particular EC may be run. 

Other commenters urged the 

Commission not to adopt any additional 

safe harbors besides one for grassroots 

lobbying communications as 

specifically addressed in the WRTL II 

decision. However, the language of the 

Supreme Court’s general test for 

determining whether an EC is exempt 

from the EC funding restrictions is not 

limited just to grassroots lobbying 

advertisements but covers any EC that is 

susceptible of a reasonable 

interpretation other than as an appeal to 

vote. As explained in the NPRM, many 

ECs could reasonably be interpreted as 

having a non-electoral, business or 

commercial purpose. Therefore, the 

Commission believes that explaining 

how the WRTL II exemption applies to 

commercial and business 

advertisements is helpful to provide 

adequate guidance to those seeking to 

comply with the EC provisions. 

Accordingly, the last part of the safe 

harbor’s third prong applies to an EC 

that ‘‘proposes a commercial 

transaction, such as purchase of a book, 

video or other product or service, or 

such as attendance (for a fee) at a film 

exhibition or other event.’’ See 11 CFR 

114.15(b)(3)(ii). The final rule 

substitutes ‘‘proposes a commercial 

transaction’’ for the ‘‘in the ordinary 

course of business’’ requirement 

proposed in the NPRM. As several 

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7The Commission notes that these 

communications may nevertheless be subject to the 

Commission’s coordination regulations. 11 CFR 

109.21 

commenters pointed out, determining 

whether an EC is made in the ordinary 

course of business would require the 

Commission to look beyond the four 

corners of the EC and probe into the 

outside business affairs of the speaker. 

By contrast, the new ‘‘proposes a 

commercial transaction’’ language 

appropriately focuses the Commission’s 

inquiry on the objective meaning of the 

content of the EC. 

This prong of the safe harbor will be 

satisfied regardless of whether the 

product or service is provided by a 

business owned or operated by, or 

employing, the candidate referred to in 

the EC.7 Both ECs advertising a Federal 

candidate’s appearance to promote a 

business or other commercial product or 

service, and ECs in which the Federal 

candidate is referred to as the subject of 

a book, video, or movie will be eligible 

for the safe harbor. The final rule 

clarifies that an advertisement urging 

the public to attend a film exhibition or 

other commercial event for a fee is also 

eligible for the safe harbor. By contrast, 

advertisements for non-commercial 

events, such as for charities or political 

events, do not meet this prong and do 

not qualify for the safe harbor, although 

they may qualify for the general 

exemption. 

The Commission is providing 

examples of ECs that illustrate the 

analysis of this third prong of the safe 

harbor provision below (see section 

114.15(e)). 

3. 11 CFR 114.15(c)—Rules of 

Interpretation for Electioneering 

Communications That Do Not Qualify 

for the Safe Harbor 

The Commission has added new 

section 114.15(c) to explain how the 

Commission will analyze ECs that do 

not qualify for the safe harbor, given 

that the safe harbor does not include 

every EC that is permissible under 

section 114.15(a). Specifically, 

paragraph (c) of the final rule states that 

if an EC does not qualify for the safe 

harbor in section 114.15(b), the 

Commission will consider: ‘‘whether the 

communication includes any indicia of 

express advocacy and whether the 

communication has an interpretation 

other than as an appeal to vote for or 

against a clearly identified Federal 

candidate in order to determine 

whether, on balance, the 

communication is susceptible of no 

reasonable interpretation other than as 

an appeal to vote for or against a clearly 

identified Federal candidate.’’ As with 

the three prongs of the safe harbor, this 

analysis is drawn from the WRTL II 

decision’s analysis of ‘‘indicia of 

express advocacy’’ and the content of 

WRTL’s communications. 

Sections 114.15(c)(1) and (c)(2) 

describe in more detail the two factors 

that the Commission will consider in 

determining whether an EC qualifies for 

the general exemption in section 

114.15(a). The Commission will 

consider both factors in all cases and 

will balance the findings under both 

parts of the test to determine whether an 

EC has no reasonable interpretation 

other than as an appeal to vote and is 

therefore not permissible under section 

114.15(a). 

For example, even if the Commission 

found that an EC includes no ‘‘indicia 

of express advocacy,’’ it could still 

determine that the EC does not have 

content that would support a 

determination the EC has an 

interpretation other than as an appeal to 

vote, and conclude overall that the EC 

is not permissible under section 

114.15(a) because, on balance, the EC 

has no reasonable interpretation other 

than as an appeal to vote. Conversely, 

even if the Commission found that an 

EC does include ‘‘indicia of express 

advocacy,’’ it could determine that the 

EC nevertheless has content that would 

support a determination that a EC has 

an interpretation other than a call to 

electoral action, and conclude overall 

that the EC is permissible under section 

114.15(a) because, on balance, that 

interpretation is reasonable despite the 

presence of indicia of express advocacy. 

The Commission could also find no 

indicia of express advocacy in an EC, 

decide that there is content in the EC to 

support an interpretation of the EC as 

something other than a call to electoral 

action, but conclude overall that the EC 

is not permissible under section 

114.15(a) because, on balance, that 

interpretation is not reasonable. 

a. 11 CFR 114.15(c)(1)—Indicia of 

Express Advocacy 

Section 114.15(c)(1) states that under 

the first factor of this analysis, an EC 

‘‘includes indicia of express advocacy’’

if it ‘‘mentions any election, candidacy, 

political party, opposing candidate, or 

voting by the general public’’ or ‘‘takes 

a position on any candidate’s or 

officeholder’s character, qualifications, 

or fitness for office.’’ See 11 CFR 

114.15(c)(1)(i)–(ii). This list is taken 

from the WRTL II decision, and is a 

combination of the two lists contained 

in the first two prongs of the safe harbor 

in section 114.15(b). 

The Commission agrees with the 

many commenters who argued that 

mentioning an election or opposing 

candidate, referring to a candidate’s 

qualifications, or commenting on a 

sitting officeholder’s character should 

not by itself disqualify an EC from the 

general exemption in section 114.15(a). 

Thus, although an EC that includes any 

one of the references on the list is 

automatically disqualified from the safe 

harbor, such an EC may still qualify for 

the general exemption under the 

analysis in section 114.15(c). 

b. 11 CFR 114.15(c)(2)—Content of 

Communications 

The second factor in paragraph (c)(2) 

states: ‘‘Content that would support a 

determination that a communication has 

an interpretation other than as an appeal 

to vote for or against a clearly identified 

Federal candidate includes’’ three types 

of content. See 11 CFR 114.15(c)(2). 

This list of the three types of content is 

non-exhaustive and the Commission 

may also consider other types of content 

to determine whether an EC has some 

other interpretation besides urging 

electoral action. 

The first type of content that supports 

a determination that an EC has an 

interpretation other than as an appeal to 

vote is content that ‘‘focuses on a public 

policy issue and either urges a 

candidate to take a position on the issue 

or urges the public to contact the 

candidate about the issue.’’ See 11 CFR 

114.15(c)(2)(i). This provision is broader 

than the issue advocacy provision of the 

safe harbor in section 114.15(b) in two 

ways. First, it considers whether the EC 

focuses on a ‘‘public policy issue’’

rather than, as required by the safe 

harbor, a ‘‘legislative, executive, or 

judicial matter.’’ Thus, an EC’s content 

may support a determination that it has 

an interpretation other than as an appeal 

to vote if it discusses any matter of 

public importance even if the matter is 

not a ‘‘legislative, executive, or judicial 

matter,’’ but is instead, for example, a 

State action or an international event. 

Second, this provision considers 

whether an EC urges viewers to contact 

the candidate about the issue, rather 

than, as required by the safe harbor, 

urge viewers ‘‘to adopt a particular 

position’’ and contact the candidate 

about the issue. 

Paragraph (c)(2)(ii) sets out the second 

type of content that supports a 

determination that an EC has an 

interpretation other than as an appeal to 

vote. This consists of content that 

‘‘proposes a commercial transaction, 

such as purchase of a book, video or 

other product or service, or such as 

attendance (for a fee) at a film exhibition 

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8The Commission notes that these 

communications may nevertheless be subject to the 

Commission’s coordination regulations. 11 CFR 

109.21. 

9The Commission must also consider certain 

basic facts such as the timing and targeting of the 

communication in order to determine whether a 

communication satisfies the basic definition of EC 

under BCRA and section 100.29(a) (i.e., whether the 

communication was broadcast within the last thirty 

or sixty days before a Federal election within the 

district of the referenced Federal candidate). 

or other event.’’ This provision is 

identical to the commercial transaction 

provision of the safe harbor in section 

114.15(b)(3)(ii). However, the 

Commission might have to analyze an 

EC that satisfies the commercial 

transaction provision of the safe harbor 

under the rules of interpretation in 

section 114.15(c), because the EC 

included references to candidacies or 

elections that preclude qualification for 

the safe harbor. For example, a 

commercial advertisement for a book 

with the title ‘‘50 Reasons Not to Vote 

for Congressman Smith’’ would not 

satisfy the first prong of the safe harbor 

in section 114.15(b)(1). Therefore, the 

Commission would analyze such an 

advertisement under section 

114.15(c)(2)(ii). 

Section 114.15(c)(2)(iii) is a more 

general provision intended to apply to 

other types of ECs not covered by the 

public policy issue and commercial 

transaction provisions. The final rule 

states that an EC has content supporting 

a determination of an interpretation 

other than as an appeal to vote if it 

‘‘includes a call to action or other 

appeal that interpreted in conjunction 

with the rest of the communication as 

urging action other than voting for or 

against or contributing to a clearly 

identified Federal candidate or political 

party.’’ See 11 CFR 114.15(c)(2)(iii). The 

Commission will look at the entire 

content of the EC to determine whether 

an EC includes such a ‘‘call to action.’’

This third provision was added, in 

part, to respond to commenters who 

urged the Commission to create a safe 

harbor provision for other categories of 

ECs, such as public service 

announcements. See NPRM at 50270–

71. These commenters argued that 

public service announcements and 

charity advertisements can easily be 

interpreted as something other than an 

appeal to vote even though they simply 

provide information to the public 

without any specific ‘‘call to action.’’

For example, an EC that urges the public 

to sign up for a preventative screening 

for a particular type of cancer and 

includes a Federal candidate endorsing 

the organization’s work on cancer 

research, would likely be deemed to 

have content that supports a 

determination that the EC has an 

interpretation other than as an appeal to 

vote.8 Another common example is an 

EC that urges viewers to ‘‘find out 

more’’ or visit a Web site for ‘‘more 

information.’’ In analyzing this type of 

EC, the Commission will look to the 

actual content of the EC itself to 

determine whether the ‘‘find out more’’

call to action can be interpreted as 

something other than a call to vote for 

or against a Federal candidate. Other 

possible ‘‘calls to action’’ under this 

provision are requests to donate money 

to a particular charitable organization or 

disaster relief fund. However, the final 

rule excludes from this provision 

requests to make contributions to any 

clearly identified Federal candidate or 

political party. Finally, as discussed 

above, the Commission will analyze ECs 

promoting charity events under this 

provision. 

c. 11 CFR 114.15(c)(3)—Interpreting the 

Communication 

Several commenters argued that in 

analyzing whether an EC qualifies for 

the WRTL exemption, the Commission 

should be guided by the principle, 

articulated by the Supreme Court in 

WRTL II, that ‘‘[w]here the First 

Amendment is implicated, the tie goes 

to the speaker.’’ See WRTL II, 127 S. Ct. 

at 2669. New section 114.15(c)(3) 

incorporates the principle that ‘‘the tie 

goes to the speaker’’ by providing that 

‘‘in interpreting a communication under 

paragraph (a), any doubt will be 

resolved in favor of permitting the 

communication.’’ See 11 CFR 

114.15(c)(3). The Commission intends to 

follow this principle in determining 

whether, on balance, the EC is 

susceptible of a reasonable 

interpretation other than as an appeal to 

vote and therefore is permissible under 

section 114.15(a). 

4. 11 CFR 114.15(d)—Information 

Permissibly Considered 

As the NPRM explained, the 

exemption in section 114.15(a) is 

objective, focusing on the substance of 

the EC rather than ‘‘amorphous 

considerations of intent and effect.’’

WRTL II, 127 S. Ct. at 2666. In 

determining whether a particular EC is 

susceptible of a reasonable 

interpretation other than as an appeal to 

vote for or against a clearly identified 

Federal candidate, the Commission may 

consider ‘‘basic background information 

that may be necessary to put an ad in 

context.’’ Id. at 2669.9 According to the 

WRTL II decision, this information 

could include whether a 

communication ‘‘describes a legislative 

issue that is either currently the subject 

of legislative scrutiny or likely to be the 

subject of such scrutiny in the near 

future.’’ Id. (internal citation omitted). 

See also NPRM at 50264. However, the 

Court cautioned that inquiry into such 

relevant background should not require 

burdensome or broad inquiries with 

extensive discovery. See WRTL II, 127 S. 

Ct. at 2669. 

Many commenters urged the 

Commission to clarify in the rule the 

extent to which the Commission would 

consider contextual information outside 

the actual text and visuals of the EC 

itself when applying the WRTL II 

exemption. The final rule in new 

section 114.15 includes a new 

paragraph (d), which limits the 

contextual information the Commission 

will consider when analyzing ECs under 

the WRTL II exemption. Some 

commenters urged the Commission to 

include in the rule text a list of the types 

of information that the Commission 

would consider in evaluating ECs, such 

as legislative calendars and news 

stories, and a list of the types of 

contextual information that the 

Commission would not consider in its 

analysis, such as timing of the EC, prior 

communications or outside activities of 

the speaker, and the EC’s actual effect 

on elections. Instead of attempting to 

create exhaustive lists that would fit 

every circumstance, the final rule sets 

forth general principles that will guide 

the Commission’s consideration of 

‘‘external facts’’ beyond the four corners 

of the EC. 

Specifically, section 114.15(d) states 

that when evaluating an EC under the 

general exemption or the safe harbor, 

the Commission may consider only the 

EC itself and ‘‘basic background 

information that may be necessary to 

put the communication in context and 

which can be established with minimal, 

if any, discovery.’’ See 11 CFR 

114.15(d). The rule provides the 

following examples of such basic 

background information: Whether a 

named individual is a candidate or 

whether an EC describes a public policy 

issue. The Commission will also 

consider similar background facts about 

the public policy issue, commercial 

product or service, or other topics 

discussed in the EC, so long as these 

facts may be established with minimal 

discovery. 

5. 11 CFR 114.15(e)—Examples of 

Communications 

In the NPRM, the Commission 

included a number of examples of 

communications that would, and would 

not, qualify for the proposed grassroots 

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10 ‘‘Loan,’’ Wisconsin Right to Life, Inc. v. FEC, 

466 F. Supp. 2d 195, 198 n.4 (D.D.C. 2006). The 

Supreme Court held that this advertisement was not 

the ‘‘functional equivalent of express advocacy. 

WRTL II, .127 S. Ct at 2670. 

11 ‘‘Crossroads,’’ Verified Complaint for 

Declaratory and Injunctive Relief, Exhibit A (Apr. 

3, 2006), Civic Christian League of Maine v. FEC, 

443 F. Supp. 2d 81 (D.D.C. 2006) (No. 06–0614), 

available at http://www.fec.gov/law/litigation/ 

christian_civic_league_complaint.pdf. The 

Commission filed a joint motion asking the Court 

to hold this advertisement meets the WRTL II 

exemption. See ‘‘Joint Motion’’ (July, 13, 2007), 

Civic Christian League of Maine v. FEC, (No. 06–

0614). 

12This example is drawn from one of the 

advertisements in Advisory Opinion (‘‘AO’’) 2004–

31 (Darrow), Attachment A at 3 (Sept. 10, 2004), in 

which the Commission found that under the 

particular facts of this advisory opinion, the 

advertisements did not meet the definition of 

‘‘electioneering communication’’ because the use of 

the name ‘‘Russ Darrow’’ referred to a business or 

another individual (in this case, the candidate’s 

son) who was not a Federal candidate. 

lobbying communications safe harbor. 

See NPRM at 50267–69. The 

Commission sought public comment on 

whether the final rule should include 

such examples in the E&J or the rule text 

itself. See NPRM at 50267. The 

Commission also asked whether there 

were additional examples of 

communications that should be 

included in the list. The commenters 

that discussed the question of where 

examples of communications should be 

published all favored inclusion of those 

examples in the E&J instead of the rule 

text. 

After consideration of the comments, 

the Commission has decided to include 

examples of communications in the E&J 

instead of the rule. In addition, section 

114.15(e) includes a statement to direct 

readers of the regulation to the 

Commission’s web site on which the 

Commission will place the examples 

discussed in this E&J. The Commission 

intends to update this web page to 

include examples from court cases, 

advisory opinions and enforcement 

matters that apply the WRTL II 

exemption in the future. 

The following examples are 

illustrative only and are not intended to 

create a requirement for any particular 

words or phrases to be included before 

an EC will be permissible under the 

WRTL II exemption. These examples are 

drawn from past court cases and 

Commission advisory opinions and 

enforcement matters. 

a. Examples of Communications that 

Qualify for the Safe Harbor in 11 CFR 

114.15(b) 

Example 1 

LOAN OFFICER: Welcome Mr. and Mrs. 

Shulman. We’ve reviewed your loan 

application, along with your credit report, 

the appraisal on the house, the inspections, 

and well * * * 

COUPLE: Yes, yes * * * we’re listening. 

OFFICER: Well, it all reminds me of a time 

I went fishing with my father. We were on 

the Wolf River Waupaca * * * 

VOICE-OVER: Sometimes it’s just not fair 

to delay an important decision. 

But in Washington, it’s happening. A group 

of Senators is using the filibuster delay tactic 

to block federal judicial nominees from a 

simple ‘‘yes’’ or ‘‘no’’ vote. So qualified 

candidates aren’t getting a chance to serve. 

It’s politics at work, causing gridlock and 

backing up some of our courts to a state of 

emergency. 

Contact Senators Feingold and Kohl and 

tell them to oppose the filibuster. 

Visit: BeFair.org 

Paid for by Wisconsin Right to Life 

(befair.org), which is responsible for the 

content of this advertising and not authorized 

by any candidate or candidate’s committee.10

All commenters that discussed the 

examples agreed with the NPRM’s 

assessment that this example would 

qualify for the proposed grassroots 

lobbying communications safe harbor. 

See NPRM at 50267. This example also 

qualifies for the final rule’s safe harbor. 

First, the communication does not 

mention any election, candidacy, 

political party, opposing candidate, or 

voting by the general public (section 

114.15(b)(1)). Second, the 

communication does not take a position 

on the character, qualifications, or 

fitness for office of either Senator 

Feingold or Senator Kohl (section 

114.15(b)(2)), or any other candidate. 

Third, this communication satisfies 

section 114.15(b)(3)(i) because it focuses 

on the legislative matter of Senate 

filibuster votes on judicial nominees, 

and urges the public to oppose the 

filibuster and to contact Senators 

Feingold and Kohl to take a position 

with respect to the filibuster issue. 

Therefore, this example qualifies for the 

safe harbor and is permissible under 

section 114.15(a). 

Example 2 

Our country stands at the crossroads—at 

the intersection of how marriage will be 

defined for future generations. Marriage 

between a man and a woman has been 

challenged across this country and could be 

declared unconstitutional at any time by 

rogue judges. We must safeguard the 

traditional definition of marriage by putting 

it beyond the reach of all judges—by writing 

it into the U.S. Constitution. Unfortunately, 

your senators voted against the Marriage 

Protection Amendment two years ago. Please 

call Sens. Snowe and Collins immediately 

and urge them to support the Marriage 

Protection Amendment when it comes to a 

vote in early June. Call the Capitol 

switchboard at 202–224–3121 and ask for 

your senators. Again, that’s 202–224–3121. 

Thank you for making your voice heard. 

Paid for by the Christian Civic League of 

Maine, which is responsible for the content 

of this advertising and not authorized by any 

candidate or candidate’s committee.11

All commenters that discussed the 

examples agreed with the NPRM’s 

statement that this example would 

qualify for the proposed grassroots 

lobbying communications safe harbor. 

See NPRM at 50268. This example also 

qualifies for the final rule’s safe harbor. 

First, the communication does not 

mention any election, candidacy, 

political party, opposing candidate, or 

voting by the general public under the 

first prong in section 114.15(b)(1). The 

communication also satisfies the second 

prong in section 114.15(b)(2) because it 

criticizes the Senators’ past voting 

records only as part of a broader 

discussion of particular legislation, not 

as an attack on their personal character, 

qualifications, or fitness for office. 

Finally, this example satisfies the third 

prong of the safe harbor in section 

114.15(b)(3)(i) because it focuses on the 

legislative issue of the legal definition of 

marriage, and urges the public to 

support a constitutional amendment, 

and to contact Senators Snowe and 

Collins to urge them to support the 

upcoming vote on the Marriage 

Protection Amendment. Therefore, this 

example satisfies all three prongs of the 

safe harbor and is an EC permissible 

under section 114.15(a). 

Example 3 

[VOICE OVER SPEAKING WHILE 

SHOWING VARIOUS FOOTAGE OF 

DEALERSHIP]: Cadillac. Style. luxury. Visit 

Joe Smith Cadillac in Waukesha. Where we 

uphold the Cadillac legacy of style, luxury 

and performance everyday. At Joe Smith 

Cadillac, you’ll find a huge selection of 

Cadillacs and receive award-winning service 

every time you bring your Cadillac in. 

Whether you’re in the market for a classic 

sedan or SUV, you can be sure Joe Smith 

Cadillac has it. And while shopping for your 

Cadillac, a single detail won’t be missed. We 

know the importance of taking care of our 

customers. That’s why you’ll always find 

incredible service specials to help to 

maintain your Cadillac. When it comes to 

care for your Cadillac, you shouldn’t settle 

for anything less than the best. 

We’re Wisconsin’s all-time sales leader and 

we want to be your Cadillac dealership. 

[VOICE OVER SPEAKING WHILE VIDEO 

OF INSIDE DEALERSHIP ZOOMS IN ON 

FRAMED PICTURE ON WALL OF JOE 

SMITH]: Stop into Joe Smith Cadillac, on 

Highway 18 in Waukesha, and see what 

Cadillac style really is all about.12

The NPRM provided this 

communication as an example that 

would qualify for the proposed 

commercial and business 

advertisements safe harbor. The few 

commenters who addressed this 

example agreed that it would qualify for 

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13The Commission notes that these 

communications may nevertheless be subject to the 

Commission’s coordination regulations. 11 CFR 

109.21. 

14See McConnell v. FEC, 251 F. Supp. 2d 176, 

876 (D.D.C. 2003) (Leon, J.), available at http:// 

www.fec.gov/pages/bcra/mem_opinion_leon.pdf. 

15At least one commenter argued that this 

example should meet the proposed safe harbor 

because it does not include any critique of the 

candidate’s character, qualifications or fitness for 

office. This commenter argued that the information 

about contributions from corporations merely 

provides background information to the viewer 

about the past positions of the candidate on 

environmental issues, not an attempt to impugn 

character. 

16This example is drawn from the sample 

advertisement in AO 2006–10 (EchoStar), Exhibit A 

(June 30, 2006). Under the particular facts of that 

advisory opinion, these advertisements were not 

analyzed as ECs because the requestor stated these 

advertisements would not be broadcast during the 

EC time period. 

the proposed safe harbor. Assuming that 

Joe Smith is a Federal candidate, this 

example also qualifies for the final 

rule’s safe harbor. First, the 

communication does not mention any 

election, candidacy, political party, 

opposing candidate, or voting by the 

general public (section 114.15(b)(1)). 

Second, this communication does not 

take a position on the character, 

qualifications, or fitness for office of the 

candidate, Joe Smith (section 

114.15(b)(2)). Third, the communication 

‘‘proposes a commercial transaction’’ by 

advertising the car dealership owned by 

candidate Joe Smith and inviting 

viewers to purchase cars at that business 

(section 114.15(b)(3)(ii)). The external 

facts that Joe Smith is a candidate and 

that he owns this business are 

permissible background facts that the 

Commission may consider in its 

analysis of this communication 

pursuant to section 114.15(d). These 

facts may be established with minimal, 

if any, discovery. Thus, this example 

qualifies for the safe harbor and is 

permissible under section 114.15(a).13

b. Examples of Communications that Do 

Not Qualify for the Safe Harbor in 11 

CFR 114.15(b), but are Permissible 

Under 11 CFR 114.15(a) 

Example 1: 

It’s our land; our water. America’s 

environment must be protected. But in just 

18 months, Congressman Ganske has voted 

12 out of 12 times to weaken environmental 

protections. Congressman Ganske even voted 

to let corporations continue releasing cancercausing pollutants into our air. Congressman 

Ganske voted for the big corporations who 

lobbied these bills and gave him thousands 

of dollars in contributions. Call Congressman 

Ganske. Tell him to protect America’s 

environment. For our families. For our 

future.14

The NPRM asked for public comment 

as to whether this example should 

qualify for the proposed grassroots 

lobbying safe harbor or the general 

exemption. See NPRM at 50268. Most 

commenters generally agreed that this 

example does not qualify for the 

proposed safe harbor because it does not 

discuss a pending legislative issue 

(proposed first prong) and criticizes 

Representative Ganske’s character and 

fitness for office (proposed fourth 

prong).15 However, the commenters 

disagreed as to whether this example 

nonetheless qualifies for the general 

exemption proposed in the NPRM. 

Some commenters argued that because 

the communication focuses on the issue 

of air pollution and related legislative 

matters, it can reasonably be interpreted 

as seeking support for certain 

environmental issues. These 

commenters thought that the example 

should qualify for the general 

exemption as a ‘‘genuine issue 

advertisement,’’ even though it criticizes 

the Representative Ganske’s past 

position on environmental issues. Other 

commenters contended that there was 

no reasonable interpretation of this 

communication other than as an appeal 

to vote against Representative Ganske 

because it includes a personal attack on 

Representative Ganske’s character. 

The Commission has determined that 

this example does not qualify for the 

safe harbor in section 114.15(b), but is 

permissible under the general 

exemption in section 114.15(a). The 

example satisfies the first prong of the 

safe harbor because it does not mention 

any election, candidacy, political party, 

opposing candidate, or voting by the 

general public (section 114.15(b)(1)). 

Under the second prong, the 

communication’s criticism of 

Representative Ganske’s past voting 

record in the context of a broader 

discussion of the issue of environmental 

protection does not constitute taking a 

position on Representative Ganske’s 

character, qualifications, or fitness for 

office (section 114.15(b)(2)). However, 

the communication’s statement that 

Representative Ganske voted for 

particular environmental bills 

supported by corporations who gave 

contributions to Representative Ganske 

is an attack on his character and fitness 

for office because, without reference to 

any external facts, the statement 

suggests that his past votes are a sign of 

corruption. Therefore, the example fails 

the second prong in section 114.15(b)(2) 

and does not qualify for the safe harbor. 

The example must then be analyzed 

under the general exemption in section 

114.15(a), using the two-factor approach 

described in section 114.15(c). As 

discussed above, this communication 

takes a position on Representative 

Ganske’s character and fitness for office. 

Therefore, the communication includes 

‘‘indicia of express advocacy’’ under the 

second provision in the first factor 

(section 114.15(c)(1)(ii)). Under section 

114.15(c)(2)(i), the communication 

includes content that would support a 

determination that the communication 

has an interpretation other than as an 

appeal to vote against Representative 

Ganske because its content focuses on 

the public policy matter of 

environmental regulation of air 

pollutants and urges the public to call 

Representative Ganske about the issue 

and tell him to take action on the issue 

in the future. Finally, the Commission 

must balance both the presence of 

indicia of express advocacy under the 

first factor and the finding of content 

supporting another interpretation under 

the second factor to determine whether 

the communication is susceptible of no 

reasonable interpretation other than as 

an appeal to vote against Representative 

Ganske. Keeping in mind that any doubt 

is to be resolved in favor of finding the 

communication permissible under 

section 114.15(c)(3), the Commission 

determines that this communication is 

permissible under section 114.15(a) 

because it is susceptible of a reasonable 

interpretation other than as an appeal to 

vote for or against a Federal candidate, 

despite the presence of indicia of 

express advocacy. 

Example 2: 

Announcer: Hello, I’m Sally Smith. Most of 

us think of heart disease as a problem that 

mostly affects men. But today, heart disease 

is one of the leading causes of death among 

American women. It doesn’t have to stay that 

way. Lower cholesterol, daily exercise, and 

regular visits to your doctor can help you 

fight back. So have heart, America, and 

together we can reduce the risk of heart 

disease. 

Voice Over: This message brought to you 

by DISH Network.16

This example was not included in the 

NPRM for public comment. Assuming 

that Sally Smith is a Federal candidate, 

the Commission concludes that this 

example does not qualify for the safe 

harbor in section 114.15(b), but is 

permissible under the general 

exemption in section 114.15(a). The 

example satisfies the first two prongs of 

the safe harbor because it does not 

mention any election, candidacy, 

political party, opposing candidate, or 

voting by the general public (section 

114.15(b)(1)) and it does not take a 

position on Sally Smith’s character, 

qualifications, or fitness for office 

(section 114.15(b)(2)). However, the 

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17 ‘‘Bill Yellowtail,’’ McConnell v. FEC, 540 U.S. 

93, 193 n.78 (2003). The Court noted that this 

advertisement was ‘‘clearly intended to influence 

the election.’’ Id. 

18Adapted from McConnell v. FEC, 251 F. Supp. 

2d 176, 918 (D.D.C. 2003) ( Leon, J.), available at 

http://www.fec.gov/pages/bcra/ 

mem_opinion_leon.pdf. 

communication does not satisfy the 

third prong of the safe harbor because it 

does not focus on a ‘‘legislative, 

executive or judicial matter’’ (section 

114.15(b)(3)(i)) or ‘‘propose[] a 

commercial transaction’’ (section 

114.15(b)(3)(ii)). Thus, this example 

does not qualify for the safe harbor. 

Nonetheless, this communication is 

permissible under the two-factor 

analysis for the general exemption in 

section 114.15(a). First, the 

communication does not include indicia 

of express advocacy because it does not 

mention any election, candidacy, 

political party, opposing candidate, or 

voting by the general public (section 

114.15(c)(1)(i)), or take a position on 

Sally Smith’s character, qualifications, 

or fitness for office, (section 

114.15(c)(1)(ii)). Nor does the example 

include any other content that would 

constitute indicia of express advocacy. 

Second, this example contains content 

that would support a determination that 

the communication has an 

interpretation other than as an appeal to 

vote for or against Sally Smith under the 

third provision in section 

114.15(c)(2)(iii). The communication’s 

‘‘call to action’’ is an appeal to viewers 

to lower their cholesterol, participate in 

daily exercise, and visit their doctors 

regularly. The rest of the 

communication is focused on heart 

disease and the risk of heart disease for 

women. In conjunction with the rest of 

the communication, the call to action 

can be interpreted as urging action 

separate from electoral activity. 

Balancing both factors, this 

communication is permissible under 

section 114.15(a) because it is 

susceptible of a reasonable 

interpretation other than as an appeal to 

vote for or against a Federal candidate. 

c. Examples of Communications that are 

Not Permissible under 11 CFR 114.15(a) 

Example 1: 

Who is Bill Yellowtail? He preaches family 

values but took a swing at his wife. And 

Yellowtail’s response? He only slapped her. 

But ‘‘her nose was not broken.’’ He talks law 

and order * * * but is himself a convicted 

felon. And though he talks about protecting 

children, Yellowtail failed to make his own 

child support payments—then voted against 

child support enforcement. Call Bill 

Yellowtail. Tell him to support family 

values.17

All commenters that discussed the 

examples agreed with the NPRM’s 

statement that this example would not 

qualify for the proposed grassroots 

lobbying communications safe harbor. 

See NPRM at 50268. The commenters 

were also in agreement that this 

example has ‘‘no reasonable 

interpretation other than as an appeal to 

vote for or against a specific candidate’’

and should not qualify for the general 

exemption. Some commenters noted 

that the Supreme Court in McConnell 

held that this advertisement was the 

functional equivalent of express 

advocacy and that it should serve as a 

model for the types of character attacks 

that will not be permissible under the 

final rule. 

The Commission has determined that 

this example does not qualify for the 

safe harbor and is not permissible under 

the final rule’s general exemption. 

Although the example meets the first 

prong of the safe harbor because it does 

not mention any election, candidacy, 

political party, opposing candidate, or 

voting by the general public (section 

114.15(b)(1), this communication 

attacks Bill Yellowtail’s character by 

referring to alleged actions he took 

against his spouse, as well as his 

supposed delinquent child-support 

payments, and his past felony 

conviction. Such statements clearly 

constitute taking a position on the 

candidate’s character, qualifications, or 

fitness for office under the second prong 

(section 114.15(b)(2)). Therefore, the 

example does not qualify for the safe 

harbor. 

Nor is the example permissible under 

the two-factor analysis for the general 

exemption in section 114.15(a). Under 

the first factor, the communication 

includes indicia of express advocacy 

because it attacks the candidate’s 

character (section 114.15(c)(1)(ii)). This 

example also does not have any of the 

types of content supporting a 

determination that the communication 

has an interpretation other than as an 

appeal to vote against Bill Yellowtail. 

First, although a past vote ‘‘against child 

support enforcement’’ is mentioned, the 

communication does not focus on any 

public policy issue under section 

114.15(c)(2)(i). Instead, the 

communication focuses on the 

candidate’s own personal and legal 

history. The communication does not 

propose any commercial transaction 

under section 114.15(c)(2)(ii). Finally, 

the communication appears to include a 

‘‘call to action’’: ‘‘Call Bill Yellowtail. 

Tell him to support family values.’’

However, when examined in 

conjunction with the rest of the 

communication that focuses on personal 

character attacks against Bill Yellowtail, 

this vague appeal does not provide an 

interpretation other than urging the 

public to vote against the candidate. 

Balancing both the presence of indicia 

of express advocacy and the lack of 

content supporting another 

interpretation, this communication is 

not permissible under section 114.15(a) 

because it is susceptible of no 

reasonable interpretation other than as 

an appeal to vote for or against a Federal 

candidate. 

Example 2: 

What’s important to America’s families? 

[middle-aged man, interview style]: ‘‘My 

pension is very important because it will 

provide a significant amount of my income 

when I retire.’’ And where do the candidates 

stand? Congressman Charlie Bass voted to 

make it easier for corporations to convert 

employee pension funds to other uses. Arnie 

Arnesen supports the ‘‘Golden Trust Fund’’

legislation that would preserve pension 

funds for retirees. When it comes to your 

pension, there is a difference. Call or visit our 

Web site to find out more.18

The NPRM requested public comment 

as to whether this example should 

qualify for the proposed grassroots 

lobbying safe harbor or the general 

exemption. See NPRM at 50269. The 

commenters generally agreed that this 

example did not qualify for the 

proposed safe harbor because it 

mentioned the Representative Bass 

candidacy and his opposing candidate 

in the election, Arnie Arnesen 

(proposed third prong). However, the 

commenters disagreed as to whether 

this example qualified for the proposed 

general exemption. Some commenters 

argued that this communication was an 

issue advertisement focusing on pension 

protection and merely contrasted the 

candidates’ different positions on that 

issue. These commenters argued that the 

example can be reasonably interpreted 

as providing information about the 

pensions issue and the candidates’

positions on that issue. In contrast, most 

commenters thought that this example 

is the ‘‘functional equivalent of express 

advocacy’’ and does not qualify for the 

general exemption. These commenters 

noted that the discussion of candidacies 

in the communication made it 

unreasonable to interpret the 

communication in any way other than 

as urging the viewer to vote for one 

candidate over the other. 

The Commission has determined that 

this example does not qualify for the 

safe harbor and is not permissible under 

the final rule’s general exemption. The 

example fails the first prong of the safe 

harbor in section 114.15(b)(1) because it 

specifically discusses ‘‘the candidates,’’

including Representative Bass and his 

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19The communication does not have content 

supporting another interpretation under the second 

provision in section 114.15(c)(2)(ii) because it does 

not propose any commercial transaction. 

20 In addition to complying with the reporting 

obligations under section 104.20, all ECs that are 

permissible under section 114.15 must contain a 

disclaimer. See 2 U.S.C. 441d and 11 CFR 

110.11(a)(4). The disclaimer must include the full 

name and permanent street address, telephone 

number, or World Wide Web address of the person 

who paid for the communication, as well as a 

statement that the communication is not authorized 

by any candidate or candidate’s committee. See 11 

CFR 110.11(b)(3). The disclaimer must be clear and 

conspicuous and must include both audio and 

written statements identifying the person 

responsible for the communication. See 11 CFR 

110.11(c)(1) and (c)(4)(i)–(iii). 

opponent, Arnie Arnesen. The fact that 

Arnie Arnesen is running against 

Representative Bass is the type of 

external background fact that the 

Commission may consider in its 

analysis under section 114.15(d) 

because it requires minimal, if any, 

discovery. Therefore, the 

communication does not qualify for the 

safe harbor. 

The Commission then applies the 

two-factor analysis in section 114.15(c) 

to determine if the communication is 

permissible under the general example 

in section 114.15(a). Under the first 

factor, the communication includes 

indicia of express advocacy because, as 

discussed above, it mentions a 

candidacy and an opposing candidate 

(section 114.15(c)(1)(i)). Moreover, this 

example does not have any of the types 

of content listed in the second factor 

that support an interpretation other than 

as an appeal to vote against 

Representative Bass. Although the 

communication discusses the public 

policy issue of pension funds generally, 

and the ‘‘Golden Trust Fund’’ legislation 

specifically, it does not urge the 

candidate(s) to take a particular position 

on that issue or urge the public to 

contact the candidate(s) about that issue 

(section 114.15(c)(2)(i)). Instead, the 

communication urges the public to 

‘‘Call or visit our Web site to find out 

more.’’ This type of call to action is 

analyzed under the third provision in 

section 114.15(c)(2)(iii).19 The 

Commission may not consider the 

content of the external Web site 

referenced in the communication, but 

must examine the communication’s 

appeal to the public to ‘‘find out more’’

in conjunction with the rest of the 

communication. See 11 CFR 114.15(d). 

The communication characterizes 

Representative Bass’s position on the 

issue negatively and Arnie Arnesen’s 

position on the issue positively. 

Moreover, it describes these two 

positions as ‘‘where the candidates 

stand’’ (emphasis added) rather than as 

where an officeholder stands. Thus, in 

conjunction with the rest of the 

communication, the call to action here 

does not constitute content that 

supports an interpretation other than as 

an appeal to vote. Considering both 

factors, this communication is not 

permissible under section 114.15(a) 

because it is susceptible of no 

reasonable interpretation other than as 

an appeal to vote for or against a Federal 

candidate. 

6. 11 CFR 114.15(f)—Corporate and 

Labor Organization Reporting 

Requirement 

New section 114.15(f) states that 

corporations and labor organizations 

that make electioneering 

communications permissible under 

section 114.15(a) aggregating in excess 

of $10,000 in a calendar year must file 

statements according to the EC reporting 

requirements in 11 CFR 104.20. The 

final rule adopts the NPRM’s proposed 

language, which was not discussed by 

any of the commenters. Details 

regarding the reporting obligations for 

these entities are discussed below.20

D. Revisions to the Reporting 

Requirements for Electioneering 

Communications 

The Act and current Commission 

regulations require any person that has 

made ECs aggregating in excess of 

$10,000 in a calendar year to file a 

disclosure statement. See 2 U.S.C. 

434(f)(1); 11 CFR 104.20(b). Generally, 

these statements must disclose the 

identities of the persons making the EC, 

the cost of the EC, the clearly identified 

candidate appearing in the EC and the 

election in which he or she is a 

candidate, and the disclosure date. See 

2 U.S.C. 434(f)(2)(A)–(D); 11 CFR 

104.20(c)(1)–(6). Persons making ECs 

must also disclose the names and 

addresses of each person who donated 

an amount aggregating $1,000 or more 

during the period beginning on the first 

day of the preceding calendar year and 

ending on the disclosure date. See 2 

U.S.C. 434(f)(2)(F); 11 CFR 104.20(c)(8). 

However, the Act and Commission 

regulations provide the option that 

persons making ECs may create a 

segregated bank account for funding ECs 

in order to limit reporting to the donors 

to that account. See 2 U.S.C. 

434(f)(2)(E); 11 CFR 104.20(c)(7). The 

segregated bank account may only 

include funds contributed by 

individuals who are U.S. citizens or 

nationals, or permanent residents. Id. If 

a person does not create a segregated 

bank account and funds ECs from its 

general account, that person must 

disclose all donors of over $1,000 to the 

entity during the current and preceding 

calendar year. See 2 U.S.C. 434(f)(2)(F); 

11 CFR 104.20(c)(8). Moreover, persons 

that do not use a segregated bank 

account must be able to demonstrate 

through a reasonable accounting method 

that no corporate or labor organization’s 

funds were used to pay any portion of 

an EC. See 11 CFR 114.14(d)(1). 

Alternative 1, proposed in the NPRM, 

would have required corporations and 

labor organizations making ECs that are 

permissible under proposed section 

114.15 to comply with the same 

reporting requirements as other entities 

making ECs. Thus, under Alternative 1, 

corporations and labor organizations 

would have been required to disclose 

the names and addresses of each person, 

including corporations and labor 

organizations, who donated an amount 

aggregating $1,000 or more during the 

period beginning on the first day of the 

preceding calendar year and ending on 

the disclosure date. In addition, the 

proposed regulations would have 

allowed any person making an EC 

permissible under section 114.15, 

including corporations and labor 

organizations, to establish a segregated 

bank account to accept funds for that 

purpose. 

All commenters who addressed 

disclosure of ECs stated that 

corporations and labor organizations 

should not be required to report the 

sources of funds that made up their 

general treasury funds. However, 

commenters disagreed on what specific 

EC reporting requirements should apply 

to corporations and labor organizations. 

Some commenters proposed that 

disclosure by corporations and labor 

organizations should be limited to funds 

that are either designated for ECs or 

received in response to solicitations that 

specifically request donations for 

making ECs. Another commenter 

suggested that the current reporting 

rules for individuals, unincorporated 

entities, and qualified nonprofit 

corporations making ECs also be applied 

to corporations making ECs. This 

commenter’s proposal would allow a 

corporation or labor organization to 

establish an account pursuant to 11 CFR 

114.14(d)(2)(i) and report the identities 

of only those persons who contributed 

to that account. Without such an 

account, however, a corporation or labor 

organization would have to report the 

identities of everyone who donated 

$1,000 or more to that corporation or 

labor organization. If a corporation or 

labor organization receives no 

donations, and it paid for an EC out of 

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21A QNC making an electioneering 

communication pursuant to 11 CFR 114.10, rather 

than pursuant to 11 CFR 114.15, would be required 

to report under 11 CFR 104.20(c)(7) or (8). 

22The ‘‘for the purpose of furthering’’ standard in 

11 CFR 104.20(c)(9) is drawn from the reporting 

requirements that apply to independent 

expenditures made by persons other than political 

committees. See 2 U.S.C. 434(c)(2)(C), 11 CFR 

109.10(e)(1)(vi). 

its general treasury funds, it would only 

have to report that fact. 

One commenter argued that the 

concepts of ‘‘donor’’ and ‘‘donate’’

should exclude membership dues, 

investment income, or other commercial 

or business income. This commenter 

also suggested that use of general 

treasury money by a labor organization, 

i.e. funds derived from union dues, 

should not require a labor organization 

to report individual union members as 

donors, and that labor organizations 

should only have to report the source of 

funds as general treasury funds. The 

same commenter further asserted that 

segregated bank accounts are not a 

meaningful alternative for labor 

organizations, and argued that 

disclosing the sources of their general 

treasury funds would impose a heavy 

burden on labor organizations. 

Finally, one commenter argued that 

disclosure by nonprofit corporations 

should be limited to those amounts 

listed on line 1 of the corporation’s IRS 

Form 990, which includes 

‘‘[c]ontributions, gifts, grants, and 

similar amounts received’’ by an 

organization exempt from income tax, 

because nonprofit corporations have a 

wide variety of sources of income, and 

unlimited disclosure would create a 

heavy burden for them. This commenter 

also argued that more extensive 

reporting requirements would far 

exceed all other reporting requirements 

that currently apply to nonprofit 

organizations, such as reporting to the 

Internal Revenue Service. This 

commenter also suggested that 

corporations and labor organizations 

should be required to report only grants 

and donations that are designated to 

support ECs. 

As discussed in detail below, after 

consideration of the comments, the 

Commission has decided to depart from 

the rules proposed in the NPRM and 

instead to require corporations and 

labor organizations to disclose only the 

identities of those persons who made a 

donation aggregating $1,000 or more 

specifically for the purpose of furthering 

ECs made by that corporation or labor 

organization pursuant to 11 CFR 114.15. 

The Commission emphasizes that all the 

other reporting requirements that apply 

to any person making ECs, which are set 

forth at 2 U.S.C. 434(f)(2)(A)–(E) and 11 

CFR 104.20(c)(1)–(6), apply also to 

corporations and labor organizations 

making ECs permissible under section 

114.15. Thus, like all persons making 

ECs that cost, in aggregate, more than 

$10,000, corporations and labor 

organizations must also disclose their 

identities as the persons making the 

ECs, the costs of the ECs, the clearly 

identified candidates appearing in the 

communications and the elections in 

which the candidates are participating, 

and the disclosure dates. 

1. Revised 104.20(c)(8) and New 11 CFR 

104.20(c)(9)—Reporting the Use of 

Corporate and Labor Organization 

Funds To Pay for Permissible 

Electioneering Communications 

A corporation’s general treasury funds 

are often largely comprised of funds 

received from investors such as 

shareholders who have acquired stock 

in the corporation and customers who 

have purchased the corporation’s 

products or services, or in the case of a 

non-profit corporation, donations from 

persons who support the corporation’s 

mission. These investors, customers, 

and donors do not necessarily support 

the corporation’s electioneering 

communications. Likewise, the general 

treasury funds of labor organizations 

and incorporated membership 

organizations are composed of member 

dues obtained from individuals and 

other members who may not necessarily 

support the organization’s 

electioneering communications. 

Furthermore, witnesses at the 

Commission’s hearing testified that the 

effort necessary to identify those 

persons who provided funds totaling 

$1,000 or more to a corporation or labor 

organization would be very costly and 

require an inordinate amount of effort. 

Indeed, one witness noted that labor 

organizations would have to disclose 

more persons to the Commission under 

the ECs rules than they would disclose 

to the Department of Labor under the 

Labor Management Report and 

Disclosure Act. 

For these reasons, the Commission 

has determined that the policy 

underlying the disclosure provisions of 

BCRA is properly met by requiring 

corporations and labor organizations to 

disclose and report only those persons 

who made donations for the purpose of 

funding ECs. Thus, new section 

104.20(c)(9) does not require 

corporations and labor organizations 

making electioneering communications 

permissible under 11 CFR 114.15 to 

report the identities of everyone who 

provides them with funds for any 

reason.21 Instead, new section 

104.20(c)(9) requires a labor 

organization or a corporation to disclose 

the identities only of those persons who 

made a donation aggregating $1,000 or 

more specifically for the purpose of 

furthering ECs pursuant to 11 CFR 

114.15, during the reporting period. 

This period begins on the first day of the 

preceding calendar year and runs 

through the disclosure date. Donations 

made for the purpose of furthering an 

EC include funds received in response 

to solicitations specifically requesting 

funds to pay for ECs as well as funds 

specifically designated for ECs by the 

donor.22

In the Commission’s judgment, 

requiring disclosure of funds received 

only from those persons who donated 

specifically for the purpose of furthering 

ECs appropriately provides the public 

with information about those persons 

who actually support the message 

conveyed by the ECs without imposing 

on corporations and labor organizations 

the significant burden of disclosing the 

identities of the vast numbers of 

customers, investors, or members, who 

have provided funds for purposes 

entirely unrelated to the making of ECs. 

The Commission is also making a 

conforming amendment to 11 CFR 

104.20(c)(8), which sets forth reporting 

requirements for ECs that were not paid 

for exclusively from a segregated bank 

account, by inserting the phrase ‘‘and 

were not made by a corporation or labor 

organization pursuant to 11 CFR 

114.15,’’ after the phrase ‘‘described in 

paragraph (c)(7) of this section.’’ This 

modification clarifies that the preexisting reporting requirements that 

apply to individuals, QNCs, and 

unincorporated organizations making 

ECs do not apply to corporations and 

organizations making ECs permissible 

under new section 114.15. 

2. Revised 11 CFR 104.20(c)(7) and 

114.14(d)(2)—Using Segregated Bank 

Accounts for Electioneering 

Communications 

Previously, section 104.20(c)(7) only 

addressed segregated bank accounts 

containing funds solely from 

individuals who are ‘‘United States 

citizens, United States nationals, or who 

are lawfully admitted for permanent 

residence under 8 U.S.C. 1101(a)(20).’’

Following the approach proposed in the 

NPRM, the Commission has decided to 

divide section 104.20(c)(7) into 

paragraphs (c)(7)(i) and (c)(7)(ii). New 

paragraph (c)(7)(i) is substantially the 

same as former paragraph (c)(7) and sets 

forth the reporting requirements that 

apply to a segregated bank account used 

by individuals, unincorporated 

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associations, and QNCs to pay for any 

ECs that do not come under new section 

114.15. Corporations and labor 

organizations continue to be prohibited 

from donating to such an account. 

In contrast, new paragraph (c)(7)(ii) 

sets forth the reporting requirements for 

a segregated bank account to be used to 

pay for ECs that are permissible under 

11 CFR 114.15. Because this second 

type of account is used exclusively to 

pay for ECs permissible under new 

section 114.15, paragraph (c)(7)(ii) 

provides that such an account may 

contain corporate and labor organization 

funds. The reporting requirements that 

apply to a person setting up a segregated 

bank account to pay for ECs that are 

permissible under section 114.15 are the 

same as they are under previous 

paragraph (c)(7) and new paragraph 

(c)(7)(i), that is, such a person must 

report the identity of every person who 

donates an amount aggregating $1,000 

or more to the person making the 

disbursement during the preceding 

calendar year. 

Additionally, as proposed in the 

NPRM, the Commission is making 

conforming changes to 11 CFR 

114.14(d)(2), which applies to the use of 

segregated bank accounts by persons 

that receive funds from corporations or 

labor organizations. Specifically, 

consistent with the changes to section 

104.20(c)(7), the Commission is dividing 

section 114.14(d)(2) into two 

paragraphs. Paragraph (d)(2)(i) allows 

any person, other than corporations and 

labor organizations, wishing to make 

ECs permissible under 11 CFR 114.15 to 

establish a segregated bank account for 

that exclusive purpose. Such an account 

would report only donations made to 

the account for the purpose of making 

ECs, pursuant to 11 CFR 104.20(c)(7)(ii). 

Consistent with new section 

104.20(c)(7)(ii), an account set up under 

section 114.14(d)(2)(i) may contain 

corporate and labor organization funds. 

The Commission notes that QNCs, like 

all corporations, are excluded from 

setting up a segregated account under 

paragraph (d)(2)(i) because they are, by 

definition, prohibited from accepting 

any corporate or labor organization 

funds. 

Revised paragraph (d)(2)(ii) is 

substantially the same as former 

paragraph (d)(2) and continues to allow 

persons other than corporations (except 

for QNCs) and labor organizations to 

establish a segregated bank account to 

be used exclusively to pay for ECs that 

do not come under the new exception 

in section 114.15. 

The Commission believes that if 

organizations that are not corporations 

or labor organizations intend to use 

corporate or labor organization funds to 

make some ECs that comply with the 

new WRTL II exemption, and intend to 

make other ECs that do not, or might 

not, come within the exemption, they 

would be well-advised to establish two 

separate bank accounts to ensure that 

corporate and labor organization funds 

are only accepted and used to fund 

exempt ECs. Please note, however, that 

separate bank accounts are not 

mandatory because organizations need 

only show that they used a reasonable 

accounting method to separate corporate 

and labor organization funds under 11 

CFR 114.14(d)(1). 

E. Conforming Revisions to Other 

Commission Regulations 

1. Revisions to 11 CFR 114.4—

Communications Beyond the Restricted 

Class 

Paragraph 114.4(c) sets out the types 

of communications that corporations 

and labor organizations may make either 

to the general public or to all employees 

and members. Such communications 

include registration and voting 

communications, official registration 

and voting information, voting records, 

and voting guides. The Commission is 

adding new paragraph (c)(8) to state that 

any corporation or labor organization 

may make ECs to the general public that 

fall within the new exemption in 

section 11 CFR 114.15. Paragraph (c)(8) 

also makes clear that QNCs may make 

ECs regardless of whether they are 

permissible under 11 CFR 114.15. In 

addition, the Commission is making a 

conforming change to section 

114.4(c)(1), which lists the paragraphs 

that describe communications that 

corporations and labor organizations 

may make to the general public, by 

adding a reference to paragraph (c)(8). 

2. Revisions to 11 CFR 114.14—Further 

Restrictions on the Use of Corporate and 

Labor Organization Funds for 

Electioneering Communications 

Former section 114.14 prohibited 

corporations and labor organizations 

from providing general treasury funds to 

pay for any ECs whatsoever. The 

Commission’s revisions to this section 

limit this prohibition to ECs that do not 

come within the new WRTL II 

exemption in section 114.15, consistent 

with the proposed changes to the 

general prohibition on the use of 

corporate and labor organization funds 

in section 114.2. 

Former paragraphs (a)(1) and (a)(2) of 

this section contained a general ban on 

corporations and labor organizations 

providing funds to any other person for 

the purpose of financing an EC. 

Likewise, former paragraphs (b)(1) and 

(b)(2) of this section prohibited persons 

that accept funds from corporations and 

labor organizations from using those 

funds to pay for ECs, or from providing 

those same funds to any other person for 

the purpose of paying for an EC. Former 

paragraph (d)(1) of this section requires 

any person that receives funds from 

corporations and labor organizations, 

and that makes ECs, to demonstrate by 

a reasonable accounting method that no 

corporate or labor organization funds 

were used to pay for the EC. 

Paragraphs (a)(1), (b)(1) and (2), and 

(d)(1) are being modified by adding the 

phrase ‘‘that is not permissible under 11 

CFR 114.15’’ after the word 

‘‘communication’’ in each paragraph. 

Paragraph (a)(2) is being modified by 

adding the word ‘‘such’’ after the phrase 

‘‘pay for.’’ These changes implement 

WRTL II by limiting the prohibition on 

the use of corporate and labor 

organization funds to those ECs that are 

the functional equivalent of express 

advocacy, and therefore are not 

permissible under new 11 CFR 114.15. 

Paragraph (d)(1) is being further revised 

by adding the phrase ‘‘other than 

corporations and labor organizations’’

after the word ‘‘Persons.’’ The 

Commission is making this change to 

avoid any suggestion that corporations 

or labor organizations may make ECs 

that do not come within the new 

exception articulated in WRTL II. 

IV. The Definition of Express Advocacy 

in 11 CFR 100.22 

The NPRM sought public comment on 

whether WRTL II also provided 

guidance as to the scope of other 

provisions in the Act, such as the 

definition of ‘‘express advocacy’’ in 11 

CFR 100.22. See NPRM at 50263. 

Specifically, the NPRM asked whether 

WRTL II required the Commission to 

revise or repeal any portion of the twopart definition in section 100.22. The 

commenters were divided as to what, if 

any, guidance WRTL II decision 

provided the Commission with respect 

to the proper scope of the ‘‘express 

advocacy’’ definition in section 100.22. 

The Commission has decided to leave 

open the issue of the impact, if any, of 

WRTL II on the definition of ‘‘express 

advocacy’’ and to address the question 

at a later time. 

Certification of No Effect Pursuant to 5 

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

Act) 

The Commission certifies that the 

attached final rule does not have a 

significant economic impact on a 

substantial number of small entities. 

The basis for this certification is that 

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any small entities affected should not 

feel a significant economic impact from 

the final rule. Overall, the final rule 

relieves a funding restriction that the 

prior rules placed on corporations and 

labor organizations and therefore has a 

positive economic impact for any 

affected small entities. The final rule 

allows small entities to engage in 

activity they were previously prohibited 

from funding with corporation or labor 

organization funding. Moreover, this 

activity (making and funding ECs) is 

entirely voluntary, and any reporting 

obligations are only triggered based on 

entities choosing to engage in this 

activity above a threshold of $10,000 per 

calendar year. The reporting obligations 

are also limited to donations made for 

the purpose of furthering electioneering 

communications and should not have a 

significant economic impact on any 

reporting entity. 

In addition, there may be few ‘‘small 

entities’’ that are affected by this final 

rule. The Commission’s revisions affect 

for-profit corporations, labor 

organizations, individuals and some 

non-profit organizations. Individuals 

and labor organizations are not ‘‘small 

entities’’ under 5 U.S.C. 601(6). Most, if 

not all, for-profit corporations that are 

affected by the final rule are not ‘‘small 

businesses’’ under 5 U.S.C. 601(3). Large 

national and state-wide non-profit 

organizations that might produce 

electioneering communications are not 

‘‘small organizations’’ under 5 U.S.C. 

601(4) because they are not 

independently owned and operated and 

they are dominant in their field. 

List of Subjects 

11 CFR Part 104 

Campaign funds, political committees 

and parties, reporting and 

recordkeeping requirements. 

11 CFR Part 114 

Business and industry, Elections, 

Labor. 

■ For the reasons set out in the 

preamble, the Federal Election 

Commission is amending Subchapter A 

of Chapter 1 of Title 11 of the Code of 

Federal Regulations as follows: 

PART 104—REPORTS BY POLITICAL 

COMMITEES AND OTHER PERSONS (2 

U.S.C. 434) 

■ 1. The authority citation for part 104 

continues to read as follows: 

Authority: 2 U.S.C. 431(1), 431(8), 431(9), 

432(i), 434, 438(a)(8) and (b), 439a, 441a, and 

36 U.S.C. 510. 

■ 2. In § 104.20, paragraphs (c)(7) and 

(c)(8) are revised and paragraph (c)(9) is 

added to read as follows: 

§ 104.20 Reporting electioneering 

communications (2 U.S.C. 434(f)). 

* * * * * 

(c) * * * 

(7)(i) If the disbursements were paid 

exclusively from a segregated bank 

account established to pay for 

electioneering communications not 

permissible under 11 CFR 114.15, 

consisting of funds provided solely by 

individuals who are United States 

citizens, United States nationals, or who 

are lawfully admitted for permanent 

residence under 8 U.S.C. 1101(a)(20), 

the name and address of each donor 

who donated an amount aggregating 

$1,000 or more to the segregated bank 

account, aggregating since the first day 

of the preceding calendar year; or 

(ii) If the disbursements were paid 

exclusively from a segregated bank 

account established to pay for 

electioneering communications 

permissible under 11 CFR 114.15, the 

name and address of each donor who 

donated an amount aggregating $1,000 

or more to the segregated bank account, 

aggregating since the first day of the 

preceding calendar year. 

(8) If the disbursements were not paid 

exclusively from a segregated bank 

account described in paragraph (c)(7) of 

this section and were not made by a 

corporation or labor organization 

pursuant to 11 CFR 114.15, the name 

and address of each donor who donated 

an amount aggregating $1,000 or more to 

the person making the disbursement, 

aggregating since the first day of the 

preceding calendar year. 

(9) If the disbursements were made by 

a corporation or labor organization 

pursuant to 11 CFR 114.15, the name 

and address of each person who made 

a donation aggregating $1,000 or more to 

the corporation or labor organization, 

aggregating since the first day of the 

preceding calendar year, which was 

made for the purpose of furthering 

electioneering communications. 

* * * * * 

PART 114—CORPORATE AND LABOR 

ORGANIZATION ACTIVITY 

■ 3. The authority citation for part 114 

continues to read as follows: 

Authority: 2 U.S.C. 431(8), 431(9), 432, 

434, 437d(a)(8), 438(a)(8), 441b. 

■ 4. In § 114.2, the section heading and 

paragraph (b)(2) are revised and 

paragraph (b)(3) is added to read as 

follows: 

§ 114.2 Prohibitions on contributions, 

expenditures and electioneering 

communications.

* * * * * 

(b) * * * 

(2) Except as provided at 11 CFR 

114.10, corporations and labor 

organizations are prohibited from: 

(i) Making expenditures as defined in 

11 CFR part 100, subpart D; or 

(ii) Making expenditures with respect 

to a Federal election (as defined in 11 

CFR 114.1(a)), for communications to 

those outside the restricted class that 

expressly advocate the election or defeat 

of one or more clearly identified 

candidate(s) or the candidates of a 

clearly identified political party. 

(3) Corporations and labor 

organizations are prohibited from 

making payments for an electioneering 

communication to those outside the 

restricted class unless permissible under 

11 CFR 114.10 or 114.15. However, this 

paragraph (b)(3) shall not apply to State 

party committees and State candidate 

committees that incorporate under 26 

U.S.C. 527(e)(1), provided that: 

(i) The committee is not a political 

committee as defined in 11 CFR 100.5; 

(ii) The committee incorporated for 

liability purposes only; 

(iii) The committee does not use any 

funds donated by corporations or labor 

organizations to make electioneering 

communications; and 

(iv) The committee complies with the 

reporting requirements for 

electioneering communications at 11 

CFR part 104. 

* * * * * 

■ 5. In § 114.4, paragraph (c)(1) is 

amended by adding the phrase ‘‘and 

(c)(8)’’ after ‘‘(c)(5),’’ and paragraph 

(c)(8) is added to read as follows: 

§ 114.4 Disbursements for 

communications beyond the restricted 

class in connection with a Federal election. 

* * * * * 

(c) * * * 

(8) Electioneering communications. 

Any corporation or labor organization 

may make electioneering 

communications to the general public 

that are permissible under 11 CFR 

114.15. Qualified nonprofit 

corporations, as defined in 11 CFR 

114.10(c), may make electioneering 

communications in accordance with 11 

CFR 114.10(d). 

* * * * * 

■ 6. In § 114.14, paragraphs (a), (b) and 

(d) are revised to read as follows: 

§ 114.14 Further restrictions on the use of 

corporate and labor organization funds for 

electioneering communications. 

(a)(1) Corporations and labor 

organizations shall not give, disburse, 

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donate or otherwise provide funds, the 

purpose of which is to pay for an 

electioneering communication that is 

not permissible under 11 CFR 114.15, to 

any other person. 

(2) A corporation or labor 

organization shall be deemed to have 

given, disbursed, donated, or otherwise 

provided funds under paragraph (a)(1) 

of this section if the corporation or labor 

organization knows, has reason to know, 

or willfully blinds itself to the fact, that 

the person to whom the funds are given, 

disbursed, donated, or otherwise 

provided, intended to use them to pay 

for such an electioneering 

communication. 

(b) Persons who accept funds given, 

disbursed, donated or otherwise 

provided by a corporation or labor 

organization shall not: 

(1) Use those funds to pay for any 

electioneering communication that is 

not permissible under 11 CFR 114.15; or 

(2) Provide any portion of those funds 

to any person, for the purpose of 

defraying any of the costs of an 

electioneering communication that is 

not permissible under 11 CFR 114.15. 

* * * * * 

(d)(1) Persons other than corporations 

and labor organizations who receive 

funds from a corporation or a labor 

organization that do not meet the 

exceptions of paragraph (c) of this 

section, must be able to demonstrate 

through a reasonable accounting method 

that no such funds were used to pay any 

portion of any electioneering 

communication that is not permissible 

under 11 CFR 114.15. 

(2)(i) Any person other than a 

corporation or labor organization who 

wishes to pay for electioneering 

communications permissible under 11 

CFR 114.15 may, but is not required to, 

establish a segregated bank account into 

which it deposits only funds donated or 

otherwise provided for the purpose of 

paying for such electioneering 

communications as described in 11 CFR 

part 104. Persons who use funds 

exclusively from such a segregated bank 

account to pay for any electioneering 

communication permissible under 11 

CFR 114.15 shall be required to only 

report the names and addresses of those 

persons who donated or otherwise 

provided an amount aggregating $1,000 

or more to the segregated bank account, 

aggregating since the first day of the 

preceding calendar year. 

(ii) Any person, other than 

corporations that are not qualified 

nonprofit corporations and labor 

organizations, who wishes to pay for 

electioneering communications not 

permissible under 11 CFR 114.15 may, 

but is not required to, establish a 

segregated bank account into which it 

deposits only funds donated or 

otherwise provided by individuals as 

described in 11 CFR part 104. Persons 

who use funds exclusively from such a 

segregated bank account to pay for any 

electioneering communication shall 

satisfy paragraph (d)(1) of this section. 

Persons who use funds exclusively from 

such a segregated bank account to pay 

for any electioneering communication 

shall be required to only report the 

names and addresses of those persons 

who donated or otherwise provided an 

amount aggregating $1,000 or more to 

the segregated bank account, aggregating 

since the first day of the preceding 

calendar year. 

■ 7. Section 114.15 is added to read as 

follows: 

§ 114.15 Permissible use of corporate and 

labor organization funds for certain 

electioneering communications. 

(a) Permissible electioneering 

communications. Corporations and 

labor organizations may make an 

electioneering communication, as 

defined in 11 CFR 100.29, to those 

outside the restricted class unless the 

communication is susceptible of no 

reasonable interpretation other than as 

an appeal to vote for or against a clearly 

identified Federal candidate. 

(b) Safe harbor. An electioneering 

communication is permissible under 

paragraph (a) of this section if it: 

(1) Does not mention any election, 

candidacy, political party, opposing 

candidate, or voting by the general 

public; 

(2) Does not take a position on any 

candidate’s or officeholder’s character, 

qualifications, or fitness for office; and 

(3) Either: 

(i) Focuses on a legislative, executive 

or judicial matter or issue; and 

(A) Urges a candidate to take a 

particular position or action with 

respect to the matter or issue, or 

(B) Urges the public to adopt a 

particular position and to contact the 

candidate with respect to the matter or 

issue; or 

(ii) Proposes a commercial 

transaction, such as purchase of a book, 

video, or other product or service, or 

such as attendance (for a fee) at a film 

exhibition or other event. 

(c) Rules of interpretation. If an 

electioneering communication does not 

qualify for the safe harbor in paragraph 

(b) of this section, the Commission will 

consider whether the communication 

includes any indicia of express 

advocacy and whether the 

communication has an interpretation 

other than as an appeal to vote for or 

against a clearly identified Federal 

candidate in order to determine 

whether, on balance, the 

communication is susceptible of no 

reasonable interpretation other than as 

an appeal to vote for or against a clearly 

identified Federal candidate. 

(1) A communication includes indicia 

of express advocacy if it: 

(i) Mentions any election, candidacy, 

political party, opposing candidate, or 

voting by the general public; or 

(ii) Takes a position on any 

candidate’s or officeholder’s character, 

qualifications, or fitness for office. 

(2) Content that would support a 

determination that a communication has 

an interpretation other than as an appeal 

to vote for or against a clearly identified 

Federal candidate includes content that: 

(i) Focuses on a public policy issue 

and either urges a candidate to take a 

position on the issue or urges the public 

to contact the candidate about the issue; 

or 

(ii) Proposes a commercial 

transaction, such as purchase of a book, 

video or other product or service, or 

such as attendance (for a fee) at a film 

exhibition or other event; or 

(iii) Includes a call to action or other 

appeal that interpreted in conjunction 

with the rest of the communication 

urges an action other than voting for or 

against or contributing to a clearly 

identified Federal candidate or political 

party. 

(3) In interpreting a communication 

under paragraph (a) of this section, any 

doubt will be resolved in favor of 

permitting the communication. 

(d) Information permissibly 

considered. In evaluating an 

electioneering communication under 

this section, the Commission may 

consider only the communication itself 

and basic background information that 

may be necessary to put the 

communication in context and which 

can be established with minimal, if any, 

discovery. Such information may 

include, for example, whether a named 

individual is a candidate for office or 

whether a communication describes a 

public policy issue. 

(e) Examples of communications. A 

list of examples derived from prior 

Commission or judicial actions of 

communications that have been 

determined to be permissible and of 

communications that have been 

determined not to be permissible under 

paragraph (a) of this section is available 

on the Commission’s Web site, http:// 

www.fec.gov. 

(f) Reporting requirement. 

Corporations and labor organizations 

that make electioneering 

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Federal Register / Vol. 72, No. 246 / Wednesday, December 26, 2007 / Rules and Regulations 72915 

communications under paragraph (a) of 

this section aggregating in excess of 

$10,000 in a calendar year shall file 

statements as required by 11 CFR 

104.20. 

Dated: December 17, 2007. 

Robert D. Lenhard, 

Chairman, Federal Election Commission. 

[FR Doc. E7–24797 Filed 12–21–07; 8:45 am] 

BILLING CODE 6715–01–P

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 23 

Airworthiness Standards: Normal, 

Utility, Acrobatic, and Commuter 

Category Airplanes 

CFR Correction 

In Title 14 of the Code of Federal 

Regulations, Parts 1 to 59, revised as of 

January 1, 2007, on page 227, in 

§ 23.561, remove the five paragraphs 

beginning with the second paragraph 

(d)(1)(i) through paragraph (d)(1)(v). 

[FR Doc. 07–55522 Filed 12–21–07; 8:45 am] 

BILLING CODE 1505–01–D

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2007–28876; Directorate 

Identifier 2000–NE–08–AD; Amendment 39–

15311; AD 2007–26–09]

RIN 2120–AA64

Airworthiness Directives; Hartzell 

Propeller Inc. Compact Series 

Propellers

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The FAA is superseding an 

existing airworthiness directive (AD) for 

all Hartzell Propeller Inc. models ( )

HC–( )( )Y( )–( )( )( ) compact 

series, constant speed or feathering 

propellers with Hartzell manufactured 

‘‘Y’’ shank aluminum blades. That AD 

currently requires initial blade 

inspections, with no repetitive 

inspections; rework of all ‘‘Y’’ shank 

aluminum blades including cold rolling 

of the blade shank retention radius, 

blade replacement and modification of 

pitch change mechanisms for certain 

propeller models; and changing the 

airplane operating limitations with 

specific models of propellers installed. 

This AD requires the same actions but 

clarifies certain areas of the compliance, 

and updates a certain service bulletin 

(SB) reference to the most recent SB. 

This AD results from operators 

requesting clarification of certain 

portions of AD 2002–09–08. We are 

issuing this AD to prevent failure of the 

propeller blade from fatigue cracks in 

the blade shank radius, which can result 

in damage to the airplane and loss of 

airplane control. 

DATES: This AD becomes effective 

January 30, 2008. The Director of the 

Federal Register previously approved 

the incorporation by reference of certain 

publications listed in the regulations as 

of June 13, 2002 (67 FR 31113, May 9, 

2002). The Director of the Federal 

Register approved the incorporation by 

reference of certain publications listed 

in the regulations as of January 30, 2008. 

ADDRESSES: You can get the service 

information identified in this AD from 

Hartzell Propeller Inc. Technical 

Publications Department, One Propeller 

Place, Piqua, OH 45356; telephone (937) 

778–4200; fax (937) 778–4391. 

The Docket Operations office is 

located at Docket Management Facility, 

U.S. Department of Transportation, 1200 

New Jersey Avenue, SE., West Building 

Ground Floor, Room W12–140, 

Washington, DC 20590–0001. 

FOR FURTHER INFORMATION CONTACT: Tim 

Smyth, Senior Aerospace Engineer, 

Chicago Aircraft Certification Office, 

FAA, Small Airplane Directorate, 2300 

East Devon Avenue, Des Plaines, IL 

60018–4696; e-mail: 

timothy.smyth@faa.gov; telephone (847) 

294–8110; fax (847) 294–7132. 

SUPPLEMENTARY INFORMATION: The FAA 

proposed to amend 14 CFR part 39 by 

superseding AD 2002–09–08, 

Amendment 39–12741 (67 FR 31113, 

May 9, 2002) with a proposed AD. The 

proposed AD applies to Hartzell 

Propeller Inc. models ( )HC–( )( )Y 

( )–( )( )( ) compact series, 

constant speed or feathering propellers 

with Hartzell manufactured ‘‘Y’’ shank 

aluminum blades. We published the 

proposed AD in the Federal Register on 

August 14, 2006 (71 FR 46413). That 

action proposed to require the same 

actions as AD 2002–09–08, but would 

clarify certain areas of the compliance 

and would update a certain SB reference 

to the most recent SB. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Operations office between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. The AD docket 

contains this AD, the regulatory 

evaluation, any comments received, and 

other information. The street address for 

the Docket Operations office (telephone 

(800) 647–5527) is provided in the 

ADDRESSES section. Comments will be 

available in the AD docket shortly after 

receipt. 

Comments 

We provided the public the 

opportunity to participate in the 

development of this AD. We have 

considered the comment received. 

Incorporate Service Documents by 

Reference and Publish Them in the 

Document Management System 

The Modification and Replacement 

Parts Association requests that all 

service documents deemed essential to 

the accomplishment of the AD be 

incorporated by reference into the 

regulatory instrument, and published in 

the Docket Management System. We 

partially agree. We have incorporated 

pertinent service material into the 

regulatory section of this AD. However, 

at this time, the FAA does not post 

service material on the Federal Docket 

Management System. We are in the 

process of reviewing issues surrounding 

the posting of service bulletins on the 

Federal Docket Management System as 

part of an AD docket. Once we have 

thoroughly examined all aspects of this 

issue and have made a final 

determination, we will consider 

whether our current practice needs to be 

revised. 

Format Changes 

We changed the propeller blade shank 

cold rolling information from being a 

note, to paragraphs. We also added 

paragraphs to the alternative methods of 

compliance, to make the information 

more readable. 

Conclusion 

We have carefully reviewed the 

available data, including the comment 

received, and determined that air safety 

and the public interest require adopting 

the AD with the changes described 

previously. 

Costs of Compliance 

We estimate that this AD will affect 

35,750 propellers installed on airplanes 

of U.S. registry. We expect this AD will 

cost about $700 per propeller. Total cost 

to U.S. operators for this AD would be 

about $25.025 million. However, we 

also expect that all of the affected 

propellers should have already been 

inspected to comply with the existing 

AD’s requirements to inspect, and 

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CERTIFICATE AS TO PARTIES AND AMICI 

Pursuant to D.C. Circuit Rules 28(a)(1)(A) and 35(c), Rep. Chris Van Hollen 

submits this Certificate as to Parties and Amici. 

The Appellants are Center for Individual Freedom and Hispanic Leadership 

Fund, who were intervenors in the district court. The Appellee is Rep. Chris Van 

Hollen, who was the plaintiff in the district court. The Federal Election 

Commission, who was the defendant in the district court, is an appellee. 

No amicus briefs were filed in the district court. Cause of Action filed an 

amicus brief in this Court in support of Appellants. No other amicus curiae briefs 

were filed. 

USCA Case #15-5016 Document #1602481 Filed: 03/04/2016 Page 69 of 70
CERTIFICATE OF SERVICE 

I certify that on March 4, 2016, the foregoing Petition for Rehearing En 

Banc was filed using the Appellate CM/ECF system, and service was 

accomplished through the CM/ECF system on all participants in this case. 

/s/ Catherine M.A. Carroll 

CATHERINE M.A. CARROLL

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