[Federal Register Volume 70, Number 187 (Wednesday, September 28, 2005)]
[Proposed Rules]
[Pages 56599-56606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19330]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 70, No. 187 / Wednesday, September 28, 2005 / 
Proposed Rules

[[Page 56599]]



FEDERAL ELECTION COMMISSION

11 CFR Part 300

[Notice 2005-24]


Definitions of ``Solicit'' and ``Direct''

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission requests comments on proposed 
revisions to its definitions of the terms ``to solicit'' and ``to 
direct'' for its regulations on raising and spending Federal and non-
Federal funds. Current Commission regulations define ``to solicit'' as 
``to ask that another person make a contribution, donation, transfer of 
funds, or otherwise provide anything of value.'' The regulations define 
``to direct'' as ``to ask a person who has expressed an intent to make 
a contribution, donation, or transfer of funds, or to provide anything 
of value, to make that contribution, donation, or transfer of funds, or 
to provide that thing of value.'' These rules were challenged in Shays 
v. FEC. Upholding a District Court decision, the Court of Appeals held 
that the Commission's definitions of ``to solicit'' and ``to direct'' 
were invalid because they violated Congress's intent. The Commission 
has filed a petition for a rehearing en banc of the Court of Appeals 
decision. At the same time, to comply with the decisions of the 
District Court and the Court of Appeals, the Commission is issuing this 
Notice of Proposed Rulemaking regarding its definitions of ``to 
solicit'' and ``to direct.'' No final decision has been made by the 
Commission on the issues presented in this rulemaking. Further 
information is provided in the supplementary information that follows.

DATES: Comments must be received on or before October 28, 2005. The 
Commission will hold a hearing on the proposed rules on November 14 or 
15, 2005, or both, at 10 a.m. Anyone wishing to testify at the hearing 
must file written comments by the due date and must include a request 
to testify in the written comments.

ADDRESSES: All comments must be in writing, must be addressed to Mr. 
Brad C. Deutsch, Assistant General Counsel, and must be submitted in 
either e-mail, facsimile, or paper copy form. Commenters are strongly 
encouraged to submit comments by e-mail or fax to ensure timely receipt 
and consideration. E-mail comments must be sent to either 
<a href="/cdn-cgi/l/email-protection#5b2834373238322f3f32293e382f1b3d3e38753c342d"><span class="__cf_email__" data-cfemail="d9aab6b5b0bab0adbdb0abbcbaad99bfbcbaf7beb6af">[email protected]</span></a> or submitted through the Federal eRegulations 
Portal at http://www.regulations.gov. If e-mail comments include an 
attachment, the attachment must be in either Adobe Acrobat (.pdf) or 
Microsoft Word (.doc) format. Faxed comments must be sent to (202) 219-
3923, with paper copy follow-up. Paper comments and paper copy follow-
up of faxed comments must be sent to the Federal Election Commission, 
999 E Street, NW., Washington, DC 20463. All comments must include the 
full name and postal service address of the commenter or they will not 
be considered. The Commission will post comments on its Web site after 
the comment period ends. The hearing will be held in the Commission's 
ninth-floor meeting room, 999 E Street, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Mr. Brad C. Deutsch, Assistant General 
Counsel, Mr. Jonathan Levin, Senior Attorney, or Mr. Ron B. Katwan, 
Attorney, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or 
(800) 424-9530.

SUPPLEMENTARY INFORMATION: The Bipartisan Campaign Reform Act of 2002 
(``BCRA''), Pub. L. 107-155, 116 Stat. 81 (2002), amended the Federal 
Election Campaign Act of 1971, as amended, 2 U.S.C. 431 et seq. (the 
``Act''), by adding to the Act new restrictions and prohibitions on the 
receipt, solicitation, and use of certain types of non-Federal funds 
(i.e., funds that do not comply with the amount limits, source 
prohibitions, and reporting requirements of the Act),\1\ which are 
commonly referred to as ``soft money.'' The terms ``to solicit'' and 
``to direct'' are central to three core provisions of BCRA. First, 
national parties ``may not solicit * * * or direct'' soft money. 2 
U.S.C. 441i(a)(1). Second, national, State, district, and local party 
committees may not solicit any non-Federal funds or direct any 
donations to certain entities organized under chapter 501(c) or 527 of 
the Internal Revenue Code. 2 U.S.C. 441i(d); 11 CFR 300.11 and 300.37. 
Third, Federal candidates and officeholders ``shall not * * * solicit'' 
or ``direct'' funds in connection with any election unless the funds 
comply with the Act's contribution limits and prohibitions. 2 U.S.C. 
441i(e)(1)(A) and (B); see also 2 U.S.C. 441i(e)(2)-(4). In addition, 
BCRA added prohibitions on soliciting contributions or donations from 
foreign nationals and on fraudulent solicitations. 2 U.S.C. 441e(a)(2) 
and 441h(b). However, neither BCRA nor FECA contains a definition of 
either ``to solicit'' or ``to direct.''
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    \1\ See 11 CFR 300.2(k).
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    On July 29, 2002, the Commission promulgated regulations 
implementing BCRA's new limits on raising and spending of non-Federal 
funds by party committees, and Federal candidates and officeholders. 
Final Rules and Explanation and Justification for Prohibited and 
Excessive Contributions: Non-Federal Funds or Soft Money, 67 FR 49064 
(July 29, 2002) (``Soft Money Final Rules''). These regulations for the 
first time defined the terms ``to solicit'' and ``to direct.'' Section 
300.2(m) defines ``to solicit'' as ``to ask that another person make a 
contribution, donation, transfer of funds, or otherwise provide 
anything of value, whether the contribution, donation, transfer of 
funds, or thing of value, is to be made or provided directly, or 
through a conduit or intermediary.'' 11 CFR 300.2(m). The Commission 
defined ``to direct'' as ``to ask a person who has expressed an intent 
to make a contribution, donation, or transfer of funds, or to provide 
anything of value, to make that contribution, donation, or transfer of 
funds, or to provide that thing of value, including through a conduit 
or intermediary.'' 11 CFR 300.2(n).

I. Overview of Court Decisions

    In Shays v. FEC, 337 F. Supp.2d 28 (D.D.C. 2004) (``Shays 
District''), aff'd, Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) (pet. 
for reh'g en banc filed Aug. 29, 2005), the District Court held that 
the Commission's definitions of ``to solicit'' and ``to direct'' did 
not survive

[[Page 56600]]

the second step of Chevron review.\2\ Shays District at 77, 79. The 
Court of Appeals for the D.C. Circuit affirmed the District Court's 
decision but instead held that the Commission's definitions of ``to 
solicit'' and ``to direct'' did not survive the first step of Chevron 
review.\3\ Shays v. FEC, 414 F.3d 76, 105-07 (D.C. Cir. July 15, 2005) 
(``Shays Appeal'').
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    \2\ The District Court described the first step of the Chevron 
analysis, which courts use to review an agency's regulations: ``a 
court first asks `whether Congress has directly spoken to the 
precise question at issue. If the intent of Congress is clear, that 
is the end of the matter; for the court, as well as the agency, must 
give effect to the unambiguously expressed intent of Congress.' '' 
See Shays District, at 51 (quoting Chevron, U.S.A., Inc. v. Natural 
Res. Def. Council, 467 U.S. 837, 842-43 (1984)). In the second step 
of the Chevron analysis, the court determines if the agency's 
interpretation is a permissible construction of the statute that 
does not ``unduly compromise'' FECA's purposes by ``creat[ing] the 
potential for gross abuse.'' See Shays District at 91, citing 
Orloski v. FEC, 795 F.2d 156, 164-65 (D.C. Cir. 1986) (internal 
citations omitted).
    \3\ See note 2.
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    The Court of Appeals held that the Commission's definition of ``to 
solicit'' was limited to explicit, direct requests for money and, 
consequently, left ``unregulated `a wide array of activity' * * * that 
the term `solicit' could plausibly cover.'' Id. at 104. Specifically, 
the Court of Appeals determined that the Commission's definition 
excluded indirect requests for money, ``coded statements,'' and ``winks 
and nods.'' Id. The Court of Appeals concluded that by limiting ``to 
solicit'' to explicit, direct requests for money, and thus permitting 
indirect requests for funds, the Commission's definition allows 
candidates and parties to circumvent BCRA's prohibitions and 
restrictions on non-Federal funds and thereby violates ``Congress's 
intent to shut down the soft-money system.'' Id. at 105-06.
    The Court of Appeals also concluded that the narrow definition of 
``to solicit'' was inconsistent with BCRA's rejection of the ``magic 
words'' standard for advocacy advertisements. Id. at 106. The court 
explained that ``whereas pre-BCRA law permitted unregulated financing 
of ads lacking `explicit words of advocacy of election or defeat of a 
candidate,' BCRA adopts more robust standards for communication 
oriented towards elections--a change understood to reflect Congress's 
judgment that the old standard was `functionally meaningless.' '' Id. 
(internal citations omitted). The Court of Appeals agreed with the 
District Court's observation that the Commission's ``interpretation of 
`solicit' and `direct' is similar to the pre-BCRA express advocacy test 
and would allow candidates and parties to avoid regulation by simply 
refraining from using certain `magic words.' '' Id.
    As to the term ``to direct,'' the District Court held that the 
Commission's definition was not a permissible construction of the 
statute on two grounds. First, the District Court determined that the 
term ``to direct'' had more than one meaning but that the Commission's 
definition of ``to direct'' did not comport with any dictionary 
definition of the term. Shays District at 76. Second, the District 
Court held that the Commission's definition of ``to direct'' was 
subsumed under its definition of `to solicit' because ``[t]he 
Commission's definition of ``solicit'' covers all requests, regardless 
of what expressions a requestee may or may not have made.'' Id. at 77. 
The District Court concluded that, as defined by the Commission, the 
term ``to direct'' had no meaningful function in the regulations. Id. 
Subsequently, the Court of Appeals held that the Commission's 
definition of ``to direct'' was invalid because it effectively defined 
``to direct'' as ``to ask'' (namely, to ask someone who has expressed 
an intent to make a contribution or donation) and thus, like the 
definition of ``to solicit'' and contrary to Congress's intent, limited 
``to direct'' to explicit requests for funds. The Court of Appeals did 
not reach the question of whether ``to avoid statutory redundancy, 
`direct' must mean more than `ask in response,' when `solicit' means 
`ask' plain and simple.'' Shays Appeal at 107.
    The Court of Appeals affirmed the District Court's order that had 
remanded both definitions to the Commission for further action 
consistent with its opinion. Id. The Commission has filed a petition 
for a rehearing en banc of the Court of Appeals decision. In the event 
the Commission prevails on rehearing, the Commission may terminate this 
rulemaking proceeding prior to adoption of final rules.

II. 11 CFR 300.2(m)--Definition of ``To Solicit''

    This NPRM proposes a revised definition of ``to solicit'' in 
section II-A below. The Commission is also considering several other 
alternatives, which are presented in section II-B below.

A. Proposed Revised Definition

    To comply with the Shays decisions, the Commission proposes to 
revise 11 CFR 300.2(m) by defining ``to solicit'' as ``to ask, suggest, 
or recommend that another person make a contribution, donation, 
transfer of funds, or otherwise provide anything of value, whether it 
is to be made or provided directly or through a conduit or 
intermediary. A solicitation is a written or oral communication, 
whether explicit or implicit, construed as a reasonable person would 
understand it in context.''
    By including the terms ``suggest'' and ``recommend'' and by 
explicitly incorporating a reasonable person standard into the revised 
definition of ``to solicit,'' the Commission seeks to clarify that ``to 
solicit'' covers not only communications that explicitly and directly 
request contributions or donations, but also communications that 
implicitly or indirectly attempt to motivate another person to make a 
contribution or donation and also covers all such communications 
regardless of whether they use certain ``magic words.'' Thus, the 
proposed amendments to the definition would make clear that the 
following communications cited by the Court of Appeals as examples of 
communications that would escape regulation under the current 
definition of ``solicit,'' are, in fact, solicitations under the 
current rules: (1) ``It's important for our State party to receive at 
least $100,000 from each of you in this election'' and (2) ``X is an 
effective State party organization; it needs to get as many $100,000 
contributions as possible.'' Shays Appeal at 103.
    The revised definition explicitly embodies two principles that 
already form the basis of the Commission's current definition of ``to 
solicit'': (1) A solicitation must involve an affirmative verbalization 
(whether written or oral) and (2) a communication is a solicitation 
only if a reasonable person would understand the communication to be 
asking another person to make a contribution or donation. First, as the 
Commission explained in the BCRA rulemaking on foreign national 
contributions and donations, ``[b]y using the term `ask,' the 
Commission defined `solicit' to require some affirmative verbalization 
or writing, thereby providing members of Congress, candidates and 
committees with an understandable standard.'' Final Rules and 
Explanation and Justification for Contribution Limitations and 
Prohibitions, 67 FR 69928, 69942 (Nov. 19, 2002) (``Foreign National 
Final Rules''). Under the current regulation, the focus of any 
determination as to whether a communication is a solicitation is the 
plain meaning of the words used in the communication. Similarly, in 
assessing which communications constitute solicitations for purposes of 
determining whether the funds received in response to the communication 
are contributions, the Commission focuses on ``the plain

[[Page 56601]]

meaning of the words used in the communication.'' Final Rules and 
Explanation and Justification for Political Committee Status, 
Definition of Contribution, and Allocation for Separate Segregated 
Funds and Nonconnected Committees, 69 FR 68056, 68057 (Nov. 23, 2004) 
(``Political Committee Status Final Rules'').
    Second, while requiring some affirmative verbalization, the 
Commission clarified in the Foreign National Final Rules that it does 
not intend to restrict the current definition of ``to solicit'' only to 
communications explicitly asking for contributions or donations but 
rather ``intended to include `a[ny] palpable communication reasonably 
understood to convey a request for some action * * *.' '' Foreign 
National Final Rules at 69942. However, the current rule is limited to 
communications that ask another person to make a contribution or 
donation, and does not include any other type of political speech, such 
as statements of political support.
    Thus, in determining whether a communication constitutes a 
solicitation, the Commission currently looks to whether, in context, 
the communication would be reasonably understood to ask that another 
person make a contribution or donation. The Commission believes that 
the Court of Appeals interpreted the current rule more narrowly than is 
warranted. The Commission does not regard the term ``ask'' as requiring 
the use of only certain specified ``magic words.'' Last year, in the 
Explanation and Justification for new rules regarding contributions 
received in response to solicitations, the Commission stated that 
solicitations are not limited to communications ``that use specific 
words or phrases that are similar to a list of illustrative phrases.'' 
Political Committee Status Final Rules at 68057.
    The Commission emphasizes that the reasonable person standard is an 
objective test that does not turn on subjective interpretations of a 
communication. Thus, focusing on the plain meaning of the words used in 
the communication as reasonably understood leaves the person making the 
communication with substantial control over whether the communication 
comes within the definition of ``solicit.''
    By revising the definition of ``to solicit'' to reflect explicitly 
these two principles, the proposed rule would address the Court of 
Appeals' concern that the Commission's current definition permits 
circumvention of the Act's limits and prohibitions by allowing 
solicitation through indirect requests for contributions or donations. 
The Commission seeks comment on this proposal. Would the proposed 
definition be too broad or too narrow? Would it reduce the 
opportunities for circumvention of the Act or the actuality or 
appearance of corruption? Would it properly effectuate Congressional 
intent? Would it provide sufficient guidance to candidates, their 
authorized committees, and political party committees, or their agents? 
Would it affect the exercise of political activity, and if so, how? 
Would it be practical to enforce?
    The proposed regulation defines ``to solicit'' as ``to ask, 
suggest, or recommend.'' This list is not intended to be comprehensive 
but, as explained above, is merely intended to make clear that ``to 
solicit'' encompasses both direct and indirect requests for 
contributions or donations. Nevertheless, the Commission seeks comment 
on whether additional terms should be added to the definition of ``to 
solicit'' or whether one or more of the terms included in the proposed 
definition should be removed.
    The Commission notes that the proposed rule at 11 CFR 300.2(m) 
would retain the statement, included in the current rule, that merely 
providing information or guidance as to the requirements of a 
particular law is not solicitation.

B. Alternative Proposals

    The Commission also seeks comment on the following five 
alternatives to the definition proposed above. First, the Commission 
seeks comment on whether to modify the definition of ``to solicit'' 
proposed in section II-A by not including an explicit reasonable person 
standard. Alternative One would thus revise the second sentence of the 
definition proposed in section II-A to provide that ``a solicitation is 
a written or oral communication, whether explicit or implicit.''
    Second, the Commission seeks comment on whether, instead, to begin 
with the current definition of ``to solicit'' (i.e. current 11 CFR 
300.2(m)) and to modify the current definition to make clear that the 
regulation applies not only to explicit requests or communications that 
use certain ``magic words'' but also to indirect, implied requests for 
contributions or donations. Alternative Two would provide that ``to 
solicit means to ask, explicitly or implicitly, that another person 
make a contribution, donation, transfer of funds, or otherwise provide 
anything of value.'' Alternative Two, like the current rule, would not 
include the terms ``suggest'' or ``recommend'' or an explicit 
reasonable person standard. The Explanation and Justification for 
Alternative Two would also make clear that a solicitation requires an 
actual request for funds and does not in any way apply to other types 
of political speech, such as statements of political support for an 
organization.
    The third alternative on which the Commission seeks comment would 
not change the current definition of ``to solicit'' at all. Instead, 
Alternative Three would revise the Explanation and Justification for 
the current definition to clarify that the current definition embodies 
the two principles set out above. Under Alternative Three, the 
Explanation and Justification would state that to qualify as a 
solicitation, a communication (1) must involve an affirmative 
verbalization (whether written or oral) and (2) must be reasonably 
understood in context to be asking another person to make a 
contribution or donation. The Commission seeks comment on whether this 
is a proper interpretation of the current rule and is otherwise 
appropriate. Would revising the Explanation and Justification for the 
current definition, without amending the definition itself, be 
consistent with the decision of the Court of Appeals in Shays? Would 
the current definition of ``to solicit,'' if explained with reference 
to these two principles, be too broad or too narrow? The Commission 
seeks comments on whether other statements should be added to the 
Explanation and Justification for the current definition to explain 
better what communications are covered by the current rules. Is there 
any evidence that the current definition of ``to solicit'' has led to 
circumvention of the Act or the actuality or appearance of corruption? 
Would the current definition, along with a revised Explanation and 
Justification, provide a standard that is sufficiently clear to make 
enforcement of the Commission's BCRA rules practical?
    Fourth, as indicated above, the Commission has filed a petition for 
a rehearing en banc of the Court of Appeals decision. In the event the 
Commission should prevail on rehearing, the Commission seeks comment on 
whether it should adopt a definition that limits solicitations to 
explicit requests for contributions or donations. Alternative Four 
would define ``to solicit'' to mean ``to ask explicitly, by oral or 
written communication, that another person make a contribution, 
donation, transfer of funds, or otherwise provide anything of value.'' 
Would such an alternative definition be consistent with, and should it 
draw on, the approach

[[Page 56602]]

adopted when the Commission promulgated 11 CFR 100.57(a), which 
provides that funds received in response to certain communications must 
be treated as contributions under the Act? As indicated above, the 
Explanation and Justification for 11 CFR 100.57(a) stated that the 
regulation ``requires an examination of only the text of a 
communication. The regulation turns on the plain meaning of the words 
used in the communication and does not encompass implied meanings or 
understandings. It does not depend on reference to external events, 
such as the timing or targeting of a solicitation, nor is it limited to 
solicitations that use specific words or phrases * * *.'' Political 
Committee Status Final Rules, 69 FR at 68057.
    The fifth alternative would be to provide no definition for ``to 
solicit.'' Several Commission regulations concerning corporate and 
labor organization activity in 11 CFR part 114 use the terms 
``solicit'' and ``solicitation'' without defining them. See, e.g., 11 
CFR 114.5(g), 114.6, 114.7, and 114.8. The Commission is considering 
whether, instead of revising its definition of ``to solicit,'' it 
should repeal that definition and leave the term undefined for purposes 
of 11 CFR part 300, allowing the meaning of ``to solicit'' to develop 
on a case-by-case basis through the advisory opinion and enforcement 
processes. The Commission seeks comment on whether the meaning of the 
term ``to solicit'' is sufficiently understandable to candidates, their 
authorized committees, political party committees, and others governed 
by BCRA such that a definition by regulation is unnecessary. Does the 
discussion of the meaning of ``to solicit'' in the Court of Appeals 
decision provide sufficient guidance to candidates, their authorized 
committees, and political party committees so that a definition through 
regulation is not needed? \4\ If the Commission decides not to define 
``to solicit,'' should it provide additional guidance by including 
examples of what would and would not be a solicitation in the 
Explanation and Justification?
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    \4\ See Shays Appeal at 105-07.
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C. Conduct

    The Court of Appeals observed that solicitations include indirect 
requests through conduct such as ``winks and nods.'' Shays Appeal at 
104-05 (relying on Wisconsin Dep't of Revenue v. William Wrigley, Jr. 
Co., 505 U.S. 214, 223 (1992) for the proposition that the term 
``solicitation of orders'' ``includes, not just explicit verbal 
requests for orders, but also any speech or conduct that implicitly 
invites an order''). The Commission notes that while the proposed 
definition retains the principle that a solicitation must involve an 
affirmative verbalization, it also takes into account the context in 
which the communication is made. Thus, words that would not by their 
plain meaning convey a solicitation, may in some contexts be reasonably 
understood as one when, for example, they are accompanied by ``winks 
and nods.'' Similarly, words that would by their plain meaning normally 
be understood as a solicitation, may not constitute one when taken in 
context, for example, when the words are used as part of a joke or 
parody. The Commission seeks comment on whether, in determining if a 
communication is a solicitation, it is appropriate to consider the non-
verbal context of that communication. Does BCRA require the Commission 
to consider the non-verbal aspects of a communication in determining 
whether a solicitation has occurred? If the Commission includes the 
non-verbal aspects of a communication in its definition of ``to 
solicit,'' will Federal officeholders, candidates, their authorized 
committees, political party committees, and their agents have adequate 
notice of the range of statements and actions that are covered by the 
definition?
    The Commission seeks comment on whether it should modify the 
definition of ``to solicit'' proposed in section II-A, above, by 
including solicitations conveyed largely through conduct. This 
modification would revise the second sentence of the rule proposed in 
section II-A to provide that ``a solicitation is a written or oral 
communication or conduct, whether explicit or implicit, construed as a 
reasonable person would understand it in context.'' Is the inclusion of 
conduct in the definition of ``to solicit'' necessary to comply with 
the decision of the Court of Appeals? Is it necessary to prevent 
circumvention of the Act, or actual or apparent corruption? The 
Commission seeks examples of communications largely conveyed through 
conduct that should constitute solicitations.
    If the Commission does not adopt the proposed definition of ``to 
solicit'' discussed in section II-A, but rather decides to adopt one of 
the alternatives discussed in section II-B, should it also include 
solicitations largely conveyed through conduct in that alternative?
    The Commission also invites comment regarding a Federal candidate 
or officeholder's appearance at a fundraising event (other than an 
event held by a State, district, or local party) where non-Federal 
funds are being raised. The Commission raised this issue in a related 
rulemaking, in which it decided to revise the Explanation and 
Justification for the Commission's rules at 11 CFR 300.64(b). These 
rules permit Federal candidates and officeholders to attend and speak 
at State, district, and local party fundraising events ``without 
restriction or regulation.'' \5\ See Revised Explanation and 
Justification for Final Rules on Candidate Solicitation at State, 
District, and Local Party Fundraising Events, 70 FR 37649 (June 30, 
2005).
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    \5\ 11 CFR 300.64 implements 2 U.S.C. 441i(e)(3).
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    In certain advisory opinions, the Commission has permitted 
attendance and participation by Federal candidates and officeholders at 
fundraising events for non-Federal funds held by State and local 
candidates, or by non-Federal political organizations, so long as the 
solicitations included, or were accompanied by, a disclaimer adequately 
indicating that the Federal candidate or officeholder was only asking 
for Federally permissible funds. See Advisory Opinions 2003-03, 2003-
05, and 2003-36.\6\ The Commission requests comment on whether these 
advisory opinions, allowing attendance and limited participation at 
such functions, subject to various restrictions and disclaimer 
requirements, struck the proper balance. Alternatively, are these 
advisory opinions inconsistent with BCRA's language or Congressional 
intent and should they therefore be superseded? Does the explicit 
permission granted in 2 U.S.C. 441i(e)(3) to attend, speak, or be a 
featured guest at State, district, and local party fundraising events, 
by implication, indicate that Congress sought to prohibit Federal 
candidates and officeholders from doing so at other fundraising events 
unless such events are exclusively raising Federal funds? \7\
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    \6\ Copies of these advisory opinions can be found at http://www.fec.gov/law/advisoryopinions.shtml.
    \7\ See 2 U.S.C. 441i(e)(1)(B) (permitting solicitations by 
Federal candidates for State candidates so long as such 
solicitations comply with the source prohibitions and amount 
restrictions under the Act for Federal candidates). See also 2 
U.S.C. 441i(e)(4) (permitting certain solicitations, with 
restrictions, by Federal candidates and officeholders for funds to 
be used by certain tax-exempt organizations for certain types of 
Federal election activity).
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    Should attendance by Federal candidates and officeholders at 
fundraising events (other than events held by State, district, or local 
party committees) where non-Federal funds are being raised constitute a 
solicitation in and of itself? Alternatively, should the disclaimer and 
other requirements set forth in Advisory Opinions 2003-03,

[[Page 56603]]

2003-05, and 2003-36 be incorporated into the Commission's regulations? 
If a Federal candidate or officeholder does not comply with the 
``disclaimer'' requirements set forth in Advisory Opinions 2003-03, 
2003-05 and 2003-36, does mere attendance at these fundraising events 
where non-Federal funds are being raised constitute a solicitation of 
non-Federal funds in and of itself? In the absence of any 
``disclaimers,'' would a ``pure policy'' speech delivered by a Federal 
officeholder or candidate at an event raising non-Federal funds be a 
solicitation if the Federal candidate or officeholder stands under a 
banner reading ``Support the 2005 State Democratic ticket tonight''?

D. Examples of Solicitation

    The Commission recognizes that the proposed definition of 
``solicit,'' like the current definition, may require the Commission to 
determine what constitutes solicitation on a case-by-case basis in 
enforcement matters or advisory opinion requests. In order to provide 
candidates and political party committees with additional guidance on 
how the proposed standard would be applied, the Commission is also 
considering whether to incorporate, either into the Explanation and 
Justification accompanying the final rule or into the regulation 
itself, two sets of examples--one of types of communications that would 
constitute solicitations, and one of types of communications that would 
not constitute solicitations.
    As indicated above, several Commission regulations concerning 
corporate and labor organization activity in 11 CFR part 114 use the 
terms ``solicit'' and ``solicitation'' without defining them. See, 
e.g., 11 CFR 114.5(g), 114.6, 114.7, and 114.8. However, several 
advisory opinions explain what would or would not constitute a 
solicitation of contributions to a corporation's separate segregated 
fund (``SSF''). See, e.g., Advisory Opinions 2003-14, 2000-07, 1999-06, 
1991-03, 1988-02, 1983-38, 1982-65, and 1979-13. In those advisory 
opinions, the Commission generally concluded that the mere publication 
of the activities conducted by an SSF was not in and of itself a 
solicitation if the publication did not encourage the recipient of the 
message to support the SSF, or if the information conveyed in the 
message did not facilitate the making of contributions to the SSF.
    Drawing in part on these advisory opinions and the broader 
principles expressed in them, the Commission is considering whether to 
include the following as examples of types of communications that would 
constitute solicitations:
    1. Informing a person how to contribute to a candidate, committee, 
or organization. For example:
    <bullet> ``Send all contributions to the following address:''
    <bullet> ``I am not permitted to ask for contributions, but 
unsolicited contributions can be accepted at the following address:''
    2. Informing a person of who, or how many persons, have contributed 
to a candidate, political committee, or organization, along with a 
favorable description of the candidate, political committee, or 
organization, or the goals or purposes of the candidate, committee, or 
organization.
    3. Informing a person of a fundraising event and recommending that 
the person attend, even where a contribution or donation is not 
required for admission.
    4. Informing a person at a fundraising event,\8\ or at some other 
event sponsored by a candidate, political committee, or organization, 
that the person is able to contribute to that candidate, political 
committee, or organization or to some other candidate, political 
committee, or organization. For example:
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    \8\ The Commission has interpreted section 441i(e)(3) to permit 
candidates and Federal officeholders to solicit non-Federal funds at 
State party fundraising events. See 11 CFR 300.64; Revised 
Explanation and Justification for Final Rules on Candidate 
Solicitation at State, District, and Local Party Fundraising Events, 
70 FR 37649.
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    <bullet> ``You are at the limit of what you can directly contribute 
to my campaign, but you can further help my campaign by assisting the 
State party.''
    5. A statement that those who contribute may incur some kind of 
benefit, however intangible. For example:
    <bullet> ``I will not forget those who contribute at this crucial 
stage.''
    <bullet> ``The Senator will be very pleased if we can count on you 
for $10,000.''
    6. Expressing to a person the need of the candidate, committee, or 
organization for funds or something of value. For example:
    <bullet> ``It's important for our State party to receive at least 
$100,000 from each of you in this election.''
    <bullet> ``X is an effective State party organization; it needs to 
get as many $100,000 contributions as possible.''
    7. Stating that (or how) a candidate, committee, or organization 
will benefit from a contribution or donation. For example:
    <bullet> ``The money we raise will allow us to communicate our 
strategy through Labor Day.''
    <bullet> ``Your immediate commitment to this project would mean a 
great deal to the entire party and to me personally.''
    <bullet> ``All contributions will help the party's election 
prospects in November.''
    8. Expressing hope that the donor will continue to support the 
donee financially. For example:
    <bullet> ``I appreciate all you've done in the past for our party 
in this State. Looking ahead, we face some tough elections. I'd be very 
happy if you could maintain the same level of commitment to (or support 
for) our State party this year.''
    9. A written communication that provides a method of making a 
contribution or donation regardless of the text of the communication. 
For example, providing an addressed envelope and a reply card allowing 
contributors to select the dollar amount of their contribution or 
donation to the candidate, political party committee or organization.
    The Commission is also considering whether to include the following 
as examples of types of communications that would not constitute 
``solicitations:''
    1. Describing or praising the activities of a candidate, committee, 
or organization in and of itself. For example:
    <bullet> ``Our Senator has done a great job for us this year. The 
policies she has vigorously promoted in the Senate have really helped 
the economy of this State.''
    2. Identifying the candidates a committee supported with past 
contributions it received, in and of itself. For example:
    <bullet> ``Thanks to your contributions we have been able to 
support our President, Senator, and Representative during the past 
election cycle.''
    3. Expressing gratitude for contributions and donations without 
expressing hope that the donor will make subsequent contributions or 
donations. For example:
    <bullet> ``Thank you for your support.''
    The Commission seeks comment on a number of issues related to the 
above examples. Should examples of what does or does not constitute a 
solicitation appear in the Explanation and Justification that would 
accompany the final rule containing a definition of ``to solicit'' or 
should they be incorporated into the rule itself? Would such a list of 
examples be helpful in providing guidance to candidates, political 
party committees, and other political organizations?
    The Commission also seeks comment on whether any of the above-
listed examples should not be incorporated

[[Page 56604]]

into either the Explanation and Justification or the rule. Are there 
other examples not included above, that should be incorporated into the 
Explanation and Justification or into the rule itself? With respect to 
the ninth example of communications that would constitute 
solicitations, should the rule or the Explanation and Justification 
specify that providing an addressed envelope and a reply card allowing 
contributors to select the dollar amount of their contribution or 
donation to the candidate, political party committee or organization is 
always a solicitation, regardless of the content of the written 
communication because it already constitutes facilitation of the making 
of a contribution under 11 CFR 114.2(f)(2)(ii)? Should the rule or 
Explanation and Justification also specify that providing the address 
of a Web page that is specifically dedicated to facilitating the making 
of contributions or donations online, or a phone number that is 
specifically dedicated to facilitating the making of contributions or 
donations, would always constitute a solicitation? Regarding the third 
example of communications that would not constitute solicitations, 
comment is also sought on whether a slightly modified version of that 
example would also not be a solicitation: ``Thank you for your 
continued/continuing support.'' Should the following be included as an 
example of what is not a solicitation: ``Thank you for your past 
support.''
    As explained above, some of the principles underlying the examples 
set out above are derived from advisory opinions addressing corporate 
solicitations for contributions to SSFs under 11 CFR part 114. The 
Court of Appeals concluded that the fact that these advisory opinions 
construed ``solicit'' broadly as covering indirect requests 
``reinforces our sense that Congress anticipated a similarly broad 
construction of that term here [i.e., BCRA's provisions regarding 
solicitation].'' Shays Appeal at 106. However, the Court of Appeals 
also noted that `` `solicit' could carry different meanings in 
different contexts.'' Id. Thus, solicitations of contributions from 
employees to a corporate SSF can raise concerns about the voluntariness 
of the solicited contributions that may differ from situations covered 
by 11 CFR part 300, which generally do not raise such concerns. The 
Commission seeks comment on the general issue of whether there are 
differences between these two types of situations that would make it 
inappropriate to apply principles derived from situations involving 
corporate solicitations to other solicitations by candidates, political 
parties, their agents, or entities directly or indirectly established, 
financed, maintained, or controlled by them. Alternatively, are these 
two contexts sufficiently similar such that it would be appropriate to 
apply the same principles to both?

E. 11 CFR Part 114--Corporate and Labor Organization Activity

    As indicated above, certain Commission regulations concerning 
corporate and labor-organization activity in 11 CFR part 114 use the 
terms ``solicit'' and ``solicitation'' without defining them. See, 
e.g., 11 CFR 114.5(g), 114.6, 114.7, and 114.8; see also 11 CFR 
104.7(b)(2). Should the Commission continue to leave the term ``to 
solicit'' undefined in the regulations governing corporate and labor-
organization activity? In the alternative, should it incorporate the 
proposed definition of ``to solicit'' for the regulations regarding 
non-Federal funds in 11 CFR part 300 into the corporate and labor-
organization regulations in 11 CFR part 114?

F. 11 CFR 110.20(a)(6)--Foreign Nationals

    The Commission notes that its regulations prohibiting 
contributions, donations, expenditures, independent expenditures, and 
disbursements by foreign nationals currently incorporate the definition 
of ``to solicit'' in the regulations regarding non-Federal funds. See 
11 CFR 110.20(a)(6). The Commission proposes to continue to use the 
same definition of ``to solicit'' for both the regulations regarding 
non-Federal funds and the foreign national prohibitions, but also 
invites comments on whether there are reasons for providing two 
different, independent definitions of the term.

III. 11 CFR 300.2(n)--Definition of ``To Direct''

    The Commission proposes to revise 11 CFR 300.2(n) by defining ``to 
direct'' as ``to guide a person who has expressed an intent to make a 
contribution, donation, transfer of funds, or otherwise provide 
anything of value, by identifying a candidate, political committee or 
organization, for the receipt of a contribution, donation, transfer of 
funds, or thing of value. The contribution, donation, transfer, or 
thing of value may be made or provided directly or through a conduit or 
intermediary.''
    As indicated above, although the Court of Appeals held that the 
Commission's definition of ``to direct'' was invalid because it 
effectively defined ``to direct'' as ``to ask'' and thus, like the 
definition of ``to solicit,'' limited ``to direct'' to explicit 
requests for funds, the court did not provide guidance on how ``to 
direct'' should be defined. However, the District Court did provide 
such guidance. Specifically, the District Court observed that the term 
``to direct'' has more than one meaning. It ``can mean `[t]o guide 
(something or someone),' as in to inform someone of where he or she can 
make a donation. The word can also mean `[t]o instruct someone with 
authority,' as in to order someone to make a donation.'' Shays District 
at 76 (quoting Black's Law Dictionary 471 (7th ed. 1999)).
    The Commission proposes to amend the definition of ``to direct'' to 
use the meaning, ``to guide.'' This meaning is consistent with BCRA's 
statutory language, which states in relevant part that the national 
committee of a political party may not ``direct to another person a 
contribution, donation, or transfer of funds or anything of value.'' 2 
U.S.C. 441i(a)(1) (emphasis added). See also 2 U.S.C. 441i(d) (``A 
national, State, district, or local committee of a political party * * 
* shall not solicit any funds * * * or direct any donations to an 
entity * * *.'') (emphasis added). The preposition ``to'' following the 
term ``to direct'' in these statutory provisions would appear to 
indicate that Congress intended the use of ``to direct'' in BCRA to 
mean ``to guide.'' The Commission seeks comment on whether this is a 
correct interpretation of the statute.
    Moreover, the second meaning of ``to direct'' as ``to instruct with 
authority'' would appear to be a form of asking, suggesting, or 
recommending--the terms proposed rule 300.2(m) uses to define ``to 
solicit.'' In other words, the definition of ``to solicit'' proposed in 
this NPRM already covers all forms of asking, suggesting, or 
recommending, regardless of whether they are backed by authority. 
Accordingly, to the extent that ``instructing someone with authority'' 
to make a contribution or donation is reasonably understood to be 
asking, suggesting, or recommending someone to make such a contribution 
or donation, it is already encompassed by the definition of ``to 
solicit'' proposed in this NPRM. Thus, defining ``to direct'' as to 
``instruct someone with authority'' would appear to deprive the term of 
a meaningful role in the regulation by subsuming it under the meaning 
of ``to solicit.'' \9\
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    \9\ See Shays District at 77.

---------------------------------------------------------------------------

[[Page 56605]]

    By making clear that ``to direct'' applies to different actions, 
the proposed revision is responsive to the holding in Shays District 
that the current definition of ``to direct'' is subsumed under the 
current definition of ``to solicit,'' and is therefore redundant. 
Specifically, under the proposed rule, ``to direct'' would encompass 
situations where a person has already expressed an intent to make a 
contribution or donation that would advance a particular interest, but 
lacks the identity of an appropriate candidate or organization to which 
to make that contribution or donation. The act of direction would 
consist of providing the contributor with the identity of an 
appropriate recipient for the contribution or donation. These actions 
are not covered by the term ``to solicit'' because soliciting, under 
both the current and the proposed definition, is an attempt to motivate 
a person to contribute or donate, but would not apply to a person who 
merely provides information about possible recipients to another person 
who has already expressed intent to contribute or donate.
    The proposed definition of ``to direct'' depends upon 
``identification'' of a candidate, political committee, or 
organization. Examples of such ``identification'' would include 
providing the names of such candidates, political committees, or 
organizations, as well as providing any other sufficiently detailed 
contact information such as a Web or mail address, phone number, or the 
name or other contact information of a committee's treasurer, campaign 
manager, or finance director.
    The Commission notes that the proposed rule at 11 CFR 300.2(n) 
would retain the statement, included in the current rule, that merely 
providing information or guidance on the requirements of particular law 
is not direction.
    The Commission invites comments on the proposed definition of 
``direct.'' Is the definition too broad or too narrow? Would the 
proposed revision reduce the opportunities for circumvention of the Act 
or actual or apparent corruption? Does it provide sufficient guidance 
to candidates and political party committees? Would it affect the 
exercise of political activity, and if so, how?
    The Commission also seeks comment on whether providing a person who 
has expressed intent to contribute or donate with a long list of 
candidates, political committees, or organizations constitutes 
direction. Specifically, is there a point at which a list might 
identify so many candidates, political committees, or organizations 
from which the person may choose that the list would no longer 
constitute ``direction?'
    Alternatively, understanding that ``to direct'' means ``to guide,'' 
the Commission is also considering whether to leave the term undefined 
for purposes of 11 CFR part 300, allowing the meaning of ``to direct'' 
to develop further through the advisory opinion and enforcement 
processes. The Commission seeks comment on this alternative proposal. 
As long as it is made clear that ``to direct'' means ``to guide,'' is 
the term ``to direct'' sufficiently clear to candidates, their 
authorized committees, and political party committees such that a 
definition by regulation is unnecessary?
    The Commission notes that the words ``directed'' and ``direction'' 
appear in the Commission's earmarking rules regarding contributions 
directed through a conduit or intermediary under 2 U.S.C. 441a(a)(8). 
See 11 CFR 110.6(a), (d). Neither the Act nor the Commission's 
regulations implementing the earmarking rules defines the words 
``directed'' and ``direction'' as they are used in these provisions. 
However, the Explanation and Justification for 11 CFR 110.6 states that 
in determining whether a person has direction or control, ``the 
Commission has considered such factors as whether the conduit or 
intermediary controlled the amount and timing of the contribution, and 
whether the conduit selected the intended recipient.'' Final Rules for 
Affiliated Committees, Transfers, Prohibited Contributions, Annual 
Contribution Limitations and Earmarked Contributions, 54 FR 34098, 
34108 (August 17, 1989). Thus, the word ``direction'' in the earmarking 
rules means ``instructing with authority.'' For the reasons explained 
above, this meaning for ``to direct'' would seem to be subsumed under 
the definition of ``to solicit.'' Nevertheless, the Commission seeks 
comment on whether the term ``to direct'' in BCRA should be interpreted 
to parallel the earmarking rules regarding contributions directed 
through a conduit or intermediary. The word ``direction'' in the 
Commission's earmarking rules has been applied, for example, in 
Advisory Opinions 2003-23, 1991-29, 1986-4, 1980-46, and 1975-10 and 
MURs 1028 and 2314. Do these precedents provide a sufficient frame of 
reference that renders unnecessary a definition for purposes of 11 CFR 
part 300?

Certification of No Effect Pursuant to 5 U.S.C. 605(b) [Regulatory 
Flexibility Act]

    The Commission certifies that the attached proposed rules if 
promulgated would not have a significant economic impact on a 
substantial number of small entities. The basis for this certification 
is that the organizations affected by these rules are the national, 
State, district, and local party committees of the two major political 
parties and other political committees, which are not small entities 
under 5 U.S.C. 601 because they are not small businesses, small 
organizations, or small governmental jurisdictions. National, State, 
district, and local party committees and any other political committees 
affected by these proposed rules are not-for-profit committees that do 
not meet the definition of ``small organization,'' which requires that 
the enterprise be independently owned and operated and not dominant in 
its field. State political party committees are not independently owned 
and operated because they are not financed and controlled by a small 
identifiable group of individuals, and they are affiliated with the 
larger national political party organizations. In addition, the 
National and State political party committees representing the 
Democratic and Republican parties have a major controlling influence 
within the political arena of their State and are thus dominant in 
their field. District and local party committees are generally 
considered affiliated with the State committees and need not be 
considered separately.
    Most other political committees affected by these rules are not-
for-profit committees that do not meet the definition of ``small 
organization.'' Most political committees are not independently owned 
and operated because they are not financed by a small identifiable 
group of individuals. Most political committees rely on contributions 
from a large number of individuals to fund the committees' operations 
and activities.
    To the extent that any State party committees representing minor 
political parties or any other political committees might be considered 
``small organizations,'' the number affected by this rule is not 
substantial.
    Finally, candidates and other individuals operating under these 
rules are not small entities.

List of Subjects in 11 CFR Part 300

    Campaign funds, Nonprofit organizations, Political candidates, 
Political committees and parties, Reporting and recordkeeping 
requirements.

    For the reasons set out in the preamble, the Federal Election 
Commission proposes to amend Subchapter C of Chapter I of Title 11 of

[[Page 56606]]

the Code of Federal Regulations as follows:

PART 300--NON-FEDERAL FUNDS

    1. The authority citation for part 300 would continue to read as 
follows:

    Authority: 2 U.S.C. 434(e), 438(a)(8), 441a(a), 441i, 453.

    2. Section 300.2 would be amended by revising paragraphs (m) and 
(n) to read as follows:


Sec.  300.2  Definitions.

* * * * *
    (m) To Solicit. For the purposes of part 300, to solicit means to 
ask, suggest, or recommend that another person make a contribution, 
donation, transfer of funds, or otherwise provide anything of value, 
whether it is to be made or provided directly or through a conduit or 
intermediary. A solicitation is a written or oral communication, 
whether explicit or implicit, construed as a reasonable person would 
understand it in context. A solicitation does not include merely 
providing information or guidance as to the requirement of particular 
law.
    (n) To Direct. For the purposes of part 300, to direct means to 
guide a person who has expressed an intent to make a contribution, 
donation, transfer of funds, or otherwise provide anything of value, by 
identifying a candidate, political committee or organization, for the 
receipt of a contribution, donation, transfer of funds, or thing of 
value. The contribution, donation, transfer, or thing of value may be 
made or provided directly or through a conduit or intermediary. 
Direction does not include merely providing information or guidance as 
to the requirement of particular law.
* * * * *

    Dated: September 22, 2005.
Scott E. Thomas,
Chairman, Federal Election Commission.
[FR Doc. 05-19330 Filed 9-27-05; 8:45 am]
BILLING CODE 6715-01-P


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