Proposed Rule2024-08695
Contributions From Corporations and Other Organizations to Political Committees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 24, 2024
Issuing agencies
Federal Election Commission
Abstract
The Commission announces its disposition of a Petition for Rulemaking filed on May 14, 2015. The Petition asks the Commission to revise existing rules concerning the reporting of contributions to political committees from corporations and other organizations. For the reasons described below, the Commission is not initiating a rulemaking at this time.
Full Text
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<title>Federal Register, Volume 89 Issue 80 (Wednesday, April 24, 2024)</title>
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[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Proposed Rules]
[Pages 31116-31117]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08695]
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FEDERAL ELECTION COMMISSION
11 CFR Parts 102, 104, 110
[NOTICE 2024-11]
Contributions From Corporations and Other Organizations to
Political Committees
AGENCY: Federal Election Commission.
ACTION: Notification of disposition of petition for rulemaking.
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SUMMARY: The Commission announces its disposition of a Petition for
Rulemaking filed on May 14, 2015. The Petition asks the Commission to
revise existing rules concerning the reporting of contributions to
political committees from corporations and other organizations. For the
reasons described below, the Commission is not initiating a rulemaking
at this time.
DATES: April 24, 2024.
FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General
Counsel, or Mr. Luis M. Lipchak, Attorney, 1050 First Street NE,
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Federal Election Campaign Act, 52 U.S.C.
30101-45 (the ``Act''), and Commission regulations require all
political committees to abide by certain organizational, record-
keeping, and reporting requirements.\1\ This includes maintaining
records of contribution receipts and disbursements, reporting
independent expenditures, and filing periodic disclosure reports that
identify the source of each contribution exceeding $200.\2\ Commission
regulations also require every person who makes electioneering
communications aggregating in excess of $10,000 in a calendar year and
every person (other than a political committee) that makes independent
expenditures in excess of $250 with respect to a given election in a
calendar year to report certain information to the Commission.\3\
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\1\ See 52 U.S.C. 30102, 30103, 30104; 11 CFR 102.1, 102.2,
102.7, 104.3.
\2\ See 11 CFR 104.3(a)(4)(i), 104.4, 104.5(c).
\3\ 11 CFR 104.20(b) and (c), 109.10(b), (e); 52 U.S.C.
30104(c)(1) and (2), (f).
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On May 14, 2015, the Federal Election Commission received a
Petition for Rulemaking from Make Your Laws PAC, Inc. and Make Your
Laws Advocacy, Inc. (``Petition''). The Petition asked the Commission
to modify its regulations requiring disclosure of contributions from
corporations and other organizations to political committees. The
Petition requested that the Commission establish a new rule requiring
that ``any person, other than a natural person, contributing an
aggregate of more than $1,000 in any calendar year to any political
committee, whether directly or indirectly'' (emphasis omitted), must do
so from an account subject to certain reporting requirements.
Specifically, the Petition asked the Commission to require that these
accounts disclose ``the original source of all election-related
contributions and expenditures, traceable through all intermediary
entities to a natural person, regardless of the amounts or entities
involved'' (emphasis omitted). The Petition also asked the Commission
to apply to these accounts the identification requirements of 11 CFR
100.12; the Act's prohibition on foreign national contributions, 52
U.S.C. 30121; allocation rules for administrative expenses; and, in
some circumstances, the Act's limitations on contributions to political
committees.
The Petition argued that for disclosure requirements to be
effective, disclosure must be required for ``the original source of all
election-related contributions and expenditures, traceable through all
intermediary entities to a natural person, regardless of the amounts or
entities involved'' (footnote omitted).\4\ The Petition asserted that
under existing regulations independent expenditure only political
committees can hide the ``original source'' of contributions because
they are permitted to receive contributions from corporations,
including 501(c)(4) corporations, that are not subject to reporting
obligations under the Act.\5\ The Petition argued that these sources
can make political contributions while hiding the ``true source'' of
contributions because ``the FEC only requires political committees to
report the identity of the proximate source of a contribution, rather
than the original source.'' \6\ Furthermore, the Petition asserted that
foreign nationals could circumvent the prohibition on indirect
political contributions by foreign nationals by making contributions to
501(c)(4) corporations knowing that their funds will be used to make
contributions to political committees.\7\
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\4\ Petition at 4.
\5\ Petition at 2.
\6\ Id.
\7\ See id.
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The Commission published a Notice of Availability (``NOA'') on July
29, 2015, asking for public comment on the Petition.\8\ The Commission
received 13 substantive comments on the Petition and one non-
substantive comment (from an individual commenting on a tangential
matter). Of the 13 substantive comments, three were from individuals
supporting the Petition and 10 were from commenters who opposed the
Petition. The three comments supporting the Petition included a broad
statement of support for the Petition, and two of those individual
commenters expressed general concern about the influence of corporate
contributions on the political process.
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\8\ See Notice of Availability, 80 FR 45115 (July 29, 2015).
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The 10 comments opposed to initiating a rulemaking were received
from four individuals and six organizations/professionals. Of the four
comments from individuals opposing the Petition, one was from an
individual who broadly opposed the proposed rulemaking, two were from
individuals who contended that the proposed rules were beyond the
Commission's statutory authority, and one was from an individual who
believed the proposed rules did not address the issue raised by the
Petition of identifying the original source of funds contributed to
independent expenditure-only political committees. The primary and
common
[[Page 31117]]
themes of the organizational/professional comments were that the
Petition sought to address a problem that does not exist, that
promulgating new regulations would lead to confusion and burdens that
would unnecessarily implicate the First Amendment, and that the
Commission lacked the statutory authority to promulgate the proposed
regulations.
In deciding whether to initiate a rulemaking in response to a
petition, the Commission generally considers five factors: (1) the
Commission's statutory authority; (2) policy considerations; (3) the
desirability of proceeding on a case-by-case basis; (4) the necessity
or desirability of statutory revision; and (5) available agency
resources.\9\ After considering these factors and reviewing the
comments received on the petition, the Commission has decided not to
initiate a rulemaking at this time.
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\9\ 11 CFR 200.5.
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First, and most significantly, the Commission lacks the statutory
authority to promulgate a rule sought by the Petition. The Act empowers
the Commission to ``make, amend, or repeal such rules . . . as are
necessary to carry out the provisions of [the] Act.'' \10\ And as the
Petition acknowledges, the Act does not require corporations and other
organizations (except for political committees) to make contributions
from a separate account subject to the prohibitions and reporting
requirements of the Act.\11\ Nor does the Act require such entities to
disclose, as the Petition proposes, ``the original source of all
election-related contributions and expenditures, traceable through all
intermediary entities to a natural person.'' The Commission may not
impose such requirements without a statutory mandate to do so.
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\10\ 52 U.S.C. 30107(a)(8).
\11\ Corporations and labor organizations are prohibited from
making contributions to candidates and party committees. 52 U.S.C.
30118(a), (b)(2); 11 CFR 114.2(b). Corporations may, however, make
contributions to nonconnected political committees that make only
independent expenditures and to non-contribution accounts of hybrid
political committees. See, e.g., Citizens United v. FEC, 558 U.S.
310 (2010); <a href="http://SpeechNow.org">SpeechNow.org</a> v. FEC, 599 F.3d 686 (D.C. Cir. 2010) (en
banc); Advisory Opinion 2011-11 (Colbert).
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Second, the vast majority of the commenters, across the political
spectrum, opposed the Petition. Given the public opposition to the
Petition, and the fact that the Commission lacks statutory authority to
implement the Petition's proposal, there is no policy interest in
pursuing a rulemaking, nor would it be a good use of Commission
resources.
Furthermore, declining to pursue the proposed rulemaking will not
require the Commission to proceed on a case-by-case-basis because the
information sought by the petition is not required to be disclosed
under the Act and Commission regulations.\12\
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\12\ 52 U.S.C. 30104, 30116, 30118, 30119, 30121, 30122; see
also 11 CFR part 104, 11 CFR 110.1, 110.4, 110.20, 114.2, 115.2.
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Lastly, the ``necessity or desirability of statutory revision''
weighs against pursuing the proposed rulemaking because the changes
sought by Petitioners would require a statutory revision given that the
Commission lacks the statutory authority to promulgate the rules
proposed by Petitioners.\13\ Accordingly, after considering the
comments received regarding the Petition and in consideration of each
of the factors discussed, the Commission declines to initiate a
rulemaking in response to the Petition.
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\13\ 11 CFR 200.5.
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Copies of the comments and the Petition for Rulemaking are
available on the Commission's website, <a href="https://www.fec.gov/fosers/">https://www.fec.gov/fosers/</a> (REG
2015-03 Contributions from Corporations and Other Organizations to
Political Committees (2015)) and at the Commission's Public Records
Office, 1050 First Street NE, Washington, DC 20463, Monday through
Friday between the hours of 9 a.m. and 5 p.m.
Dated: April 18, 2024.
On behalf of the Commission.
Sean J. Cooksey,
Chairman, Federal Election Commission.
[FR Doc. 2024-08695 Filed 4-23-24; 8:45 am]
BILLING CODE P
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