Source: http://thefederalregister.com/2007/11/06/E7-21711.html
Timestamp: 2018-10-19 22:29:58
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Federal Register | Reporting Contributions Bundled by Lobbyists, Registrants and
11 CFR Parts 100 and 104
[Notice 2007-23]
SUMMARY: The Federal Election Commission requests comments on proposed rules implementing new statutory provisions regarding the disclosure of information about bundled contributions provided by certain lobbyists and registrants. The proposed rules would require authorized committees, leadership PACs and political committees of political parties to disclose certain information about lobbyists and registrants and lobbyists' and registrants' political committees that provide bundled contributions. No final decisions have been made by the Commission on any of the proposed regulations in this Notice. Further information is provided in the supplementary information that follows.
DATES: Comments must be received on or before November 30, 2007. The Commission will announce the date of a hearing at a later date. Anyone seeking to testify at the hearing must file written comments by the due date and must include in the written comments a request to testify.
ADDRESSES: All comments must be in writing, must be addressed to Ms. Amy L. Rothstein, Assistant General Counsel, and must be submitted in 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 tobundling07@fec.gov. If e-mail comments include an attachment, the attachment must be in 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.
FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant General Counsel, or Ms. Cheryl A.F. Hemsley, Attorney, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
The Commission is proposing changes to its rules to implement section 204 of Public Law 110-81, 121 Stat. 735, the “Honest Leadership and Open Government Act of 2007,” signed September 14, 2007. The new law amended the Federal Election Campaign Act of 1971, as amended (2 U.S.C. 431et seq.) (“the Act”) by requiring certain political committees to disclose information about each lobbyist and registrant, and each political committee established or controlled by a lobbyist or registrant (“lobbyist/registrant PAC”1 ), that forwards, or is credited with raising, two or more bundled contributions aggregating in excess of $15,000 during a specific period of time.2 See2 U.S.C. 434(i) (henceforth referred to as the “new law” or “new 2 U.S.C. 434(i)”). The Commission uses the term “lobbyist/registrant” to refer to registrants and lobbyists under the Lobbying Disclosure Act of 1995 (“LDA”).
1“PAC” is an acronym often used to refer to a political action committee other than an authorized committee or a political committee of a political party.
2As discussedinfra, the new law requires the reporting of information about certain bundled contributions that have been “provided” to certain political committees, and defines a “bundled contribution” as a contribution that is either “forwarded” to the political committee by a lobbyist/registrant or lobbyist/registrant PAC, or that is received by the political committee from the contributor but “credited” to the lobbyist/registrant or lobbyist/registrant PAC that “raised” it. 2 U.S.C. 434(i)(1), (8)(A). To clarify that the reporting requirement does not apply only to contributions that have been provided directly to a political committee by a lobbyist/registrant or lobbyist/registrant PAC, this NPRM describes the reporting requirement as applying to lobbyist/registrants or lobbyist/registrant PACs that have either forwarded, or that have been credited with raising, bundled contributions.
The Commission proposes to implement these provisions by adding a new subparagraph to 11 CFR 100.5(e) and adding a new section to the reporting rules at 11 CFR Part 104. The proposed reporting requirements would apply only to authorized committees of Federal candidates, political committees of political parties, and political committees directly or indirectly established, financed, maintained or controlled by a candidate or an individual holding Federal office (“leadership PACs”3 ).
3The new law provides a definition of leadership PAC that the Commission proposed to implement as 11 CFR 100.5(e)(6) in a separate rulemaking regarding candidate travel.See72 FR 59953 (October 23, 2007). The Commission assumes that a definition will be promulgated in the travel rulemaking before these disclosure rules are promulgated and thus, cites to 11 CFR 100.5(e)(6).
I. Background A. The Current Statutory and Regulatory Framework
Currently, the Act and Commission regulations impose certain reporting and recordkeeping requirements for contributions received and forwarded by any person to a political committee. Each person who receives and forwards contributions to a political committee must also forward certain information identifying the original contributor.See2 U.S.C. 432(b); 11 CFR 102.8.
New 2 U.S.C. 434(i) requires authorized committees of Federal candidates, leadership PACs and political committees of political parties to disclose certain information about any person reasonably known by the committee to be a lobbyist/registrant or lobbyist/registrant PAC that forwards, or is credited with raising, two or more bundled contributions aggregating in excess of $15,000 to the committee within a “covered period” of time. 2 U.S.C. 434(i)(1), (2), (3) and (8). Reporting committees must disclose the name and address of the lobbyist/registrant or lobbyist/registrant PAC, the lobbyist/registrant's employer (for individual persons), and the aggregate amount of contributions bundled to the committee within the covered period. 2 U.S.C. 434(i)(1).
Currently, 11 CFR 100.5(e) provides examples of types of political committees. Proposed 11 CFR 100.5(e)(7) would add the term “lobbyist/registrant PAC” as an example, and would define the term as “any political committee established or controlled” by a lobbyist/registrant, as defined in proposed 11 CFR 104.22(a)(3). This definition is consistent with the new law.See2 U.S.C. 434(i)(7)(C). Political committees that meet this definition would have to identify themselves as such on their Statements of Organization.See11 CFR 102.2(a)(1) (requiring each political committee to disclose its name, address and type on its Statement of Organization). Further, the Commission anticipates that any political committee that is already registered with the Commission and that fits this proposed definition would be required to amend its Statement of Organization to reflect its status as a lobbyist/registrant PAC.4
The Commission requests comments on this approach. When would a nonconnected committee be considered to be “controlled” by a lobbyist/registrant? Is a committee whose treasurer is a lobbyist/registrantper se“controlled” by the lobbyist/registrant? What if that treasurer serves only in a ministerial or custodial function?
As discussed further in Part III, the law requires disclosure of bundling by either an individual who registers as a lobbyist under the LDA or a “registrant” under that Act, which includes any organization that employs in-house lobbyists. Thus, the Commission proposes to define “lobbyist/registrant” to include both lobbyists and registrants under the LDA. Moreover, since the SSF of a corporation, labor organization or other connected organization (see11 CFR 100.6) that employs in-house lobbyists would be, by definition, controlled by a registrant, the Commission proposes to include such SSFs within the ambit of “lobbyist/registrant PACs.” The Commission requests comment on this approach.
The Commission currently requires committees to identify themselves as only one type of committee.SeeFEC Form 1 Statement of Organization, Question 5 (“Type of Committee (Check One)”). How should an organization that is both an SSF and a “lobbyist/registrant PAC” identify itself on FEC reports? Should one type of registration control? Alternatively, should the Commission allow committees to identify themselves as more than one type of committee? Of note, allowing multiple registrations could affect the Commission's current disclosure processes.
A. Definitions 1. Reporting Committee
The new law also provides the Commission with the authority to require reporting committees filing their campaign finance reports more frequently than on a quarterly basis5 to disclose information about lobbyist/registrants who provide bundled contributions in excess of $15,000 on a quarterly basis, rather than monthly.See2 U.S.C. 434(i)(5)(A).
The Commission presents both a proposed and an alternative definition of “covered period.” Each definition would exercise the Commission's statutory authority to place monthly filers on the same schedule as committees that file quarterly campaign finance reports. 2 U.S.C. 434(i)(5)(D). For ease of public consumption of disclosed bundled contributions, consistent disclosure periods would provide the public with semi-annual aggregate snapshots for all categories of filers. Does the language in 2 U.S.C. 434(i)(5)(A) permit the Commission also to require aggregate semi-annual disclosure from these monthly filers? Should the Commission, instead, not exercise its statutory authority, and require monthly filers to disclose information about bundled contributions on a monthly and semi-annual basis?See2 U.S.C. 434(i)(2).
Thus, under the proposed rule, any committee that receives more than $15,000 in bundled contributions from a lobbyist/registrant or lobbyist/registrant PAC during the first or third calendar quarter would have to disclose information about the bundler twice:once for the report covering the quarter during which the committee received the bundled contributions from a lobbyist/registrant or lobbyist/registrant PAC, and again at the end of the six-month period.
4The Commission notes that this same identification requirement would apply to political committees that meet the definition of leadership PAC.See11 CFR 100.5(e)(6). In conjunction with this rulemaking, the Commission anticipates amending FEC Form 1, the Statement of Organization, to include both “lobbyist/registrant PAC” and “leadership PAC” as types of political committees.
5National committees of political parties (including the national congressional campaign committees) must report monthly in all calendar years.See2 U.S.C. 434(a)(4)(B); 11 CFR 104.5(c)(4). State, district and local committees of political parties are required to file monthly if they exceed certain levels of Federal election activity.See2 U.S.C. 434(e)(4); 11 CFR 300.36(c). Further, some authorized committees of presidential candidates are required to file monthly during presidential election years.See2 U.S.C. 434(a)(3); 11 CFR 104.5(b).
The new law applies only to contributions bundled by “a current registrant under section 4(a) of the [LDA] [2 U.S.C. 1603(a)];6 an individual who is listed on a current registration filed under section 4(b)(6) of such Act [2 U.S.C. 1603(b)(6)] or a current report under section 5(b)(2)(C) of such Act [2 U.S.C. 1604(b)(2)(C)]; or a political committee established or controlled by such a registrant or individual.” 2 U.S.C. 434(i)(7).
6TheWeb sitesof the Secretary of the Senate and the Clerk of the House of Representatives provide the following guidance regarding who is a “registrant”: A lobbying firm or an organization employing in-house lobbyists that files a registration pursuant to Section 4 of the Lobbying Disclosure Act of 1995.See http://www.senate.gov/legislative/common/briefing/lobby_disc_briefing.htm#3;http://lobbyingdisclossure.house.gov/lda_guide.html.
Under proposed 11 CFR 104.22(a)(4)(ii), a contribution must be both received by the reporting committee and credited to a lobbyist/registrant or lobbyist/registrant PAC to satisfy proposed 11 CFR 104.22(a)(4)(ii). The mere crediting of a contribution to a lobbyist/registrant or lobbyist/registrant PAC would not satisfy proposed 11 CFR 104.22(a)(4)(ii) if the contribution is not received. In the alternative, should the amount credited control? With respect to thesecontributions, should the rule apply to in-kind contributions as well?
Proposed 11 CFR 104.22(a)(5) provides that the term “candidate involved” means, for authorized committees, the candidate for whom the committee is authorized; and for leadership PACs, the candidate or individual holding Federal office who directly or indirectly establishes, maintains, finances or controls the leadership PAC. This is consistent with the language of the new law in describing who would credit, designate or otherwise recognize a lobbyist/registrant or lobbyist/registrant PAC with having raised contributions in excess of $15,000 during the covered period.See2 U.S.C. 434(i)(8)(A)(ii). The Commission requests comments on whether the proposed provision would be helpful in providing guidance to the regulated community.
There is seemingly some incongruity in statements made by some of the new law's supporters and the section-by-section analysis of the legislation provided by the three principal Senate authors of the bill (the “section-by-section analysis”).See153 CONG. REC. S10709 (daily ed. August 2, 2007). For example, in a colloquy on the Senate floor, Senator Feingold and Senator Obama indicated that the disclosure requirement would be triggered by contributions bundled by an employee of a lobbyist, if that employee is acting as an agent of the lobbyist, even if the employee is not listed on a current registration or report filed under the LDA. 153 CONG. REC. S10699 (daily ed. Aug. 2, 2007) (statements of Sen. Feingold and Sen. Obama). On the other hand, the section-by-section analysis states that the statute “covers only contributions credited to registered lobbyists.” 153 CONG. REC. S10709 (daily ed. Aug. 2, 2007). The Commission requests comments on whether the new requirements should cover employees who are agents of lobbyist/registrants or lobbyist/registrant PACs, even if such individuals are not listed as registered lobbyists under the LDA. How should the Commission give content to the statutory requirement that bundling by registrant organizations be disclosed?
Proposed 11 CFR 104.22(a)(6) would explain the meaning of “designations or other means of recognizing.” The proposed rule provides that “designations or other means of recognizing” a lobbyist/registrant or lobbyist/registrant PAC's fundraising would include “titles based on levels of fundraising, access to events reserved exclusively for those who generate a certain level of contributions, or similar benefits provided as a reward for successful fundraising.” The Commission requests comments on this approach and also requests other examples of records, designations or other means of recognizing a lobbyist/registrant or lobbyist/registrant PAC's fundraising. Should service by an individual on a host committee of a fundraising event serve as “designation or other means of recognizing that a certain amount of money has been raised by the person”? Should honorary titles within the reporting committee be deemed a “designation or other means of recognizing that a certain amount of money has been raised by the person”?See153 CONG. REC. 510699 (daily ed. Aug. 2, 2007) (statement of Sen. Obama);id.at 510709. Would such an approach encompass individuals who have no actual role in fundraising? Further, would any “other means of recognizing” have to be designated in writing?
B. Reporting Requirement 1. Required Disclosure
Proposed 11 CFR 104.22(b), consistent with the new law, requires reporting committees to disclose on a new form certain information about any person reasonably known to be a lobbyist/registrant or lobbyist/registrant PAC that forwards, or is credited with raising, two or more bundled contributions in excess of $15,000 to the reporting committee during the covered period. 2 U.S.C. 434(i)(1). Specifically, the reporting committee must disclose the name of the lobbyist/registrant or lobbyist/registrant PAC, the address of the lobbyist/registrant or lobbyist/registrant PAC, the employer of the lobbyist/registrant who provided the bundled contributions (for individual lobbyist/registrants), and the amount of bundled contributions provided during the covered period.Id.
In conjunction with this rulemaking, the Commission intends to create a new form for disclosing information about lobbyists and lobbyist PACs that provide bundled contributions. The form would be filed with the Form 3 (House and Senate authorized committees), Form 3P (Presidential authorized committees) and Form 3X (leadership PACs and political party committees) following the appropriate covered period.
Under current 11 CFR Part 105, authorized committees of candidates for the House of Representatives, the principal campaign committees of Presidential candidates, and any other political committees that support such candidates must file their regular campaign finance reports with the Commission.See11 CFR 105.1, 105.3 and 105.4. Authorized committees of candidates for the Senate and any other political committees that support only Senate candidates must file their reports with the Secretary of the Senate.See11 CFR 105.2. Proposed 11 CFR 104.22(c) would require the form required by the new law to be filed in accordance with 11 CFR Part 105. The Commission requests comments on this proposal.
On March 21, Lobbyist/Registrant Z, although he does not occupy a significant position in Candidate A's campaign,7 hosts a fundraiser on Candidate A's behalf, at which Candidate A makes a speech. At the fundraiser, five contributors hand checks totaling $10,000 directly to Candidate A.
7An individual who occupies a significant position within a campaign may be exempt from the earmarking regulations. See 11 CFR 110.6(b)(2)(i)(E).
On June 5, Lobbyist/Registrant Z delivers to the authorized committee five checkstotaling $6,000 that he collected on Candidate A's behalf during the preceding week.
A leadership PAC files campaign finance reports on a monthly basis.8
8The same hypothetical applies to a political party committee.
Current Commission regulations implement certain statutory recordkeeping requirements that also apply to certain bundled contributions. For example, committees must keep a record and account of each contribution exceeding $50 for three years after filing the report to which the record or account relates.See2 U.S.C. 432(c)(2) and (d); 11 CFR 102.9(a) and (c). In addition, any person who receives and forwards contributions to any political committee must also forward certain information about the original contributor.See2 U.S.C. 432(c) and 434a(a)(8); 11 CFR 102.8(c). Any authorized committee that receives contributions forwarded by a “conduit” is subject to additional recordkeeping and reporting requirements.See2 U.S.C. 434a(a)(8); 11 CFR 110.6(c).
New 2 U.S.C. 434(i)(3)(b) requires that the $15,000 disclosure threshold be indexed for inflation annually, using the Consumer Price Index as verified by the Secretary of Labor. The proposed rule at 11 CFR 104.22(f) would require that the $15,000 disclosure threshold be indexed in the same manner as certain contribution limits under the Act and Commission regulations.See2 U.S.C. 441a(c) and 11 CFR 110.17. The Commission proposes regulatory language that is identical to that already in portions of 11 CFR 110.17, but proposes placing the new requirementin new 11 CFR 104.22 rather than in 11 CFR 110.17 because the dollar amount in this instance is merely a threshold for disclosure rather than a contribution limit covered under 11 CFR Part 110. The Commission requests comments on this approach.
List of Subjects 11 CFR Part 100
Campaign funds, political committees and parties, reporting and recordkeeping requirements.
For the reasons set out in the preamble, the Federal Election Commission proposes to amend Subchapter A of Chapter 1 of Title 11 of theCode of Federal Regulationsas follows:
2 U.S.C. 431, 434, and 438(a)(8), and 439a(c).
2. Section 100.5 is amended by adding a new paragraph (e)(7) to read as follows:
§ 100.5 Political committee (2 U.S.C. 431(4), (5), (6)).
(7)Lobbyist/Registrant PACmeans any political committee established or controlled by a “lobbyist/registrant,” as that term is defined at 11 CFR 104.22(a)(3).
§ 104.22 Disclosure of bundling by Lobbyist/Registrants (2 U.S.C. 434(i)).
(a)Definitions—Reporting committeemeans:
(2)Covered periodmeans:
(3)Lobbyist/Registrant.For purposes of this section, lobbyist/registrant means a person who, at the time a contribution is forwarded to, or is received by, a reporting committee, is:
(i) A current registrant under Section 4(a) of the Lobbying DisclosureAct of 1995 (2 U.S.C. 1603(a)); or
(4)Bundled contributionmeans any contribution:
(i) Forwarded from the contributor or contributors to the reporting committeeby a lobbyist/registrant or lobbyist/registrant PAC ; or
(5)The committee or candidate involvedmeans: The reporting committee; the candidate by whom the authorized committee is authorized; or the candidate or individual holding Federal office who directly or indirectly established, finances, maintains or controls the leadership PAC.
(b)Reporting requirement.
(1) Each reporting committee must file a form listing each person reasonably known by the committee to be a lobbyist/registrant or lobbyist/registrant PAC that provides two or more bundled contributions (see11 CFR 104.22(a)(4)) to the reporting committee aggregating in excess of $15,000 during the covered period. Each form shall set forth:
(c)Where to file. Reporting committees shall file either with the Secretary of the Senate or with the Federal Election Commission in accordance with 11 CFR Part 105.
(d)When to file. Reporting committees must file the forms required under this section with the first report required under 11 CFR 104.5 following the end of each covered period.
(e)Recordkeeping. In addition to any requirements to maintain records and accounts under 11 CFR 102.8, 102.9 and 110.6, each reporting committee must maintain for three years after the filing of the report to which the information relates a record of any bundled contributions (see11 CFR 104.22(a)(4)) provided by a lobbyist/registrant or lobbyist/registrant PAC that aggregate in excess of $15,000 for any covered period. The information required to be maintained is:
(f)Price index increase.
Dated: October 30, 2007. Robert D. Lenhard, Chairman, Federal Election Commission.