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      FEC Record: Advisory opinions
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      AO 2006-04: Candidate contributions to ballot initiative committee

FEC Record: Advisory opinionsAO 2006-04: Candidate contributions to ballot initiative committeeMay 1, 2006 The Tancredo for Congress Committee may donate funds to Defend Colorado Now (DCN), a state ballot initiative committee. However, donations in the proposed amounts would constitute “financing” of DCN by the Tancredo Committee. As a result, DCN would be subject to the soft money fundraising ban that applies to federal candidates and their campaigns. The Tancredo committee may produce and disseminate communications in which Representative Tancredo endorses the ballot initiative, but any polling data that DCN gives to the Tancredo committee would be an in-kind contribution subject to the limits of the Federal Election Campaign Act (the Act). Background The Act permits federal candidates to use contributions in several ways, including “otherwise authorized expenditures in connection with the campaign for federal office of the candidate” and “for any other lawful purpose.” 2 U.S.C. 439a(a)(1) and (6) and 11 CFR 113.2(a). According to Advisory Opinion 2004-29, donation of campaign funds to a ballot initiative committee that shares the policy goals of the candidate is considered to be in connection with one’s campaign for federal office and is, therefore, permissible. The Act also states that any entity “directly or indirectly established, financed, maintained, or controlled” by a federal candidate or officeholder shall not solicit, receive, direct, transfer or spend funds in connection with an election for federal or nonfederal office unless these funds comply with the contribution limits and source prohibitions of the Act. Analysis The Tancredo for Congress Committee proposes to contribute campaign funds to DCN. It asks if Representative Tancredo would be considered to have “financed” DCN if it gave DCN 50% or 25% of DCN’s total receipts, up to a maximum of $50,000, or if it gave vendors up to $50,000 for collecting signatures to qualify the initiative for the ballot. Through the end of 2005, DCN had over $9,000; it had received pledges for an additional $45,000, but had not yet received these funds. The Commission considers the ten factors contained in 11 CFR 300.2(c)(2)(i)-(x), and any other relevant factors, in the context of the overall relationship between the two entities to determine whether the ballot initiative committee is directly or indirectly established, financed, maintained, or controlled by the candidate committee. The key factor in this case is whether the Tancredo committee would provide funds “in a significant amount” to DCN. Donations from the Tancredo committee to DCN of either 50% or 25% of DCN’s total receipts would represent substantial “seed money” and would result in DCN depending in large part on the Tancredo committee for its initial existence. Given the overall relationship between DCN and the Tancredo committee, the Commission finds that the proposed donations are significant and would result in DCN being “financed” by the Tancredo committee. The third option of providing $50,000 to vendors for collecting signatures to qualify the initiative for the ballot would be the same as contributing $50,000 to DCN, and therefore is subject the same analysis as donations made directly to DCN. Tancredo for Congress Committee may use campaign contributions to pay for communications in which Representative Tancredo endorses the ballot initiative, since an advertisement in which a candidate endorses a ballot initiative on an issue with which they are closely associated is an expenditure in connection with a campaign for federal office. Lastly, the Tancredo committee may accept polling data from DCN, but the provision of that data would constitute a contribution from DCN to the Tancredo committee and is subject to the prohibitions and limitations of the Act. 11 CFR 110.1(b)(1).
 Author
          Carlin Bunch


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This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


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