FEC Approves Interim Rule Modifying Reporting Requirement
WASHINGTON — Individuals and entities who make independent expenditures to defeat or elect a federal candidate will now have to identify each person who made a contribution of $200 or more for the purpose of influencing the election, under an interim final rule approved by the Federal Election Commission.
The interim final rule will be effective as of Sept. 30, 2022. The agency is seeking comments on it through July 14.
The change from the old rule language, which used the phrasing “for the purpose of furthering the independent expenditure,” is subtle but important.
As explained by Christian Hilland, a spokesman for the agency, “A contribution to influence a federal election would be a more generic earmarking of funds than to further an independent expenditure and would require broader disclosure.
“For example, when individual contributors make contributions to PACs and party committee, they are generally making contributions to allow the recipient committees to determine how best to make use of those funds. This may include making contributions to other committees, paying staff, and travel expenses, campaign headquarters rent and utilities, etc.,” he said.
The Federal Election Campaign Act requires any person who is not a political committee and makes independent expenditures aggregating more than $250 per calendar year to report certain information about the funds raised and spent.
Among other things, the filer must identify “each person who made a contribution in excess of $200 … for the purpose of furthering an independent expenditure.”
The FEC regulation implementing that provision—11 CFR 109.10(e)(1)(vi)—required filers to identify “each person who made a contribution in excess of $200…for the purpose of furthering the reported independent expenditure.”
On Aug. 3, 2018, the U.S. District Court for the District of Columbia declared that regulation invalid because it conflicted with the statute.
The court found that the statute required significantly more disclosure than just those donors making contributions for the purposes of funding the independent expenditures made by the reporting entity.
The district court decision was affirmed by the U.S. Court of Appeals for the District of Columbia Circuit on Aug. 21, 2020.
In order to conform with the court decisions, the commission voted to amend 11 CFR 109.10 by removing paragraph (e)(1)(vi) and adding a note stating that the statute remains in effect.
In order for the interim final rule to take effect, 30 “legislative” days have to have passed since the rule was transmitted to Congress. The commission estimates this will occur on or about Sept. 30.
Additional information on independent expenditures can be found here.
Some helpful definitions are listed below:
A “person” in the language of the revision is any filer that is not a political committee. For example, an individual, group of people, partnerships, corporations, labor organizations or any other organization could be considered a person.
An “independent expenditure” is not coordinated or made on behalf of a candidate. Rather, the filer independently advocates the election or defeat of a federal candidate.
The “contribution” is made by the individual with knowledge that the funds raised will be used to pay for the independent expenditure.
Individuals wishing to submit a formal comment on the interim final rule may do so here.
Once on that page, they should click on a green option that reads “submit a formal comment.”
Dan can be reached at [email protected] and at https://twitter.com/DanMcCue.
