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[Federal Register Volume 87, Number 63 (Friday, April 1, 2022)]
[Proposed Rules]
[Page 19026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06898]

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FEDERAL ELECTION COMMISSION

11 CFR Part 115

[NOTICE 2022-09]

Federal Contractors

AGENCY: Federal Election Commission.

ACTION: Notice of disposition of Petition for Rulemaking.

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SUMMARY: The Commission announces its disposition of a Petition for 
Rulemaking filed on November 18, 2014, by Public Citizen. The 
petitioner asked that the Commission amend its regulations regarding 
federal contractors to include certain factors for determining whether 
entities of the same corporate family are distinct business entities 
for purposes of the prohibition on contributions by federal 
contractors. Because there were not four affirmative votes in support 
of the petition, the Commission is not initiating a rulemaking.

DATES: April 1, 2022.

ADDRESSES: All comments must be in writing, addressed to Mr. Robert 
Mark Knop, Assistant General Counsel, and submitted in hard copy form 
to the Federal Election Commission, 1050 First St. NE, Washington, DC 
20463.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General 
Counsel, or Mr. Joseph P. Wenzinger, Attorney, Office of General 
Counsel, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: Part 115 of the Commission's regulations 
prohibits federal contractors from making contributions or expenditures 
to any political party, political committee, or federal candidate, or 
to any person for any political purpose or use. 11 CFR 115.2(a); see 
also 52 U.S.C. 30119(a)(1). Part 115 further prohibits any person from 
knowingly soliciting a contribution from any federal contractor. 11 CFR 
115.2(c); see also 52 U.S.C. 30119(a)(2). On November 18, 2014, the 
Commission received a Petition for Rulemaking from Public Citizen 
asking the Commission to amend 11 CFR part 115 to include certain 
factors for determining whether entities of the same corporate family 
are distinct business entities for purposes of these prohibitions.
    The Commission published a Notice of Availability (``NOA'') on 
March 30, 2015 to ask for public comment on the petition. 80 FR 16595 
(Mar. 30, 2015). The Commission received approximately 19,750 comments 
on the NOA.
    After considering the comments received, the Commission voted on a 
motion to initiate a rulemaking to adopt the regulations proposed by 
the petition. Three Commissioners voted to initiate a rulemaking based 
on the petition, and three Commissioners voted against initiating a 
rulemaking. Certification, Motion to Open a Rulemaking on REG 2014-09 
in Response to Public Comment, Agenda Document 15-60-A (Nov. 13, 2015) 
at 2, https://sers.fec.gov/fosers/showpdf.htm?docid=346292.
    Commissioners voting to initiate a rulemaking explained that new 
rules may be necessary to prevent federal contractors from creating 
``nominal subsidiaries'' to make political contributions. See Audio 
Recording of Discussion on REG 2014-09 Amendment of 11 CFR 115 (Nov. 
10, 2015) (``Audio Recording'') at 1:51-4:10, https://www.fec.gov/resources/audio/2015/2015111004.mp3 (statement of Commissioner Ellen L. 
Weintraub) (stating that Act's restrictions ``are at risk of being 
rendered unenforceable if corporations can skirt the law by creating 
nominal subsidiaries to make political contributions''); Statement of 
Commissioner Ann M. Ravel on REG 2014-09 (Amendment of 11 CFR part 115) 
at 2, https://sers.fec.gov/fosers/showpdf.htm?docid= (stating that 
Act's restrictions could be ``easily evaded by technical legal 
maneuvering that leaves the intent of the law completely thwarted''). 
On the other hand, a Commissioner voting against initiating a 
rulemaking explained that he was ``persuaded by comments'' arguing that 
Congress passed the federal-contractor ban ``against a background of 
common-law corporate principles'' that the Commission should not 
disrupt in the absence of direction by Congress. Audio Recording at 
4:13-8:43 (statement of Vice Chairman Matthew S. Petersen) (stating 
that Commission has not ``been instructed by Congress to disrupt that 
background understanding, though they've amended the law on a number of 
different occasions'' in the ``nearly four decades'' the Commission has 
been applying the federal-contractor ban).
    The Act requires an affirmative vote of at least four Commissioners 
to take any action to amend a regulation. See 52 U.S.C. 30106(c) and 
30107(a)(8). Accordingly, the Commission is not initiating a 
rulemaking. See also Definition of ``Express Advocacy,'' Notice of 
Disposition of Petition for Rulemaking, 64 FR 27478 (May 20, 1999) 
(denying a petition to initiate a rulemaking because it did not garner 
the affirmative vote of four Commissioners).
    Copies of the comments, the NOA, the Petition for Rulemaking, and 
related documents are available on the Commission's website, https://www.fec.gov/fosers/ (reference REG 2014-09 Amendment of 11 CFR 115).

    Dated: March 28, 2022.

    On behalf of the Commission.
Allen J. Dickerson,
Chairman, Federal Election Commission.
[FR Doc. 2022-06898 Filed 3-31-22; 8:45 am]
BILLING CODE 6715-01-P
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