[Federal Register Volume 60, Number 240 (Thursday, December 14, 1995)]
[Rules and Regulations]
[Pages 64260-64279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30381]
[[Page 64259]]
_______________________________________________________________________
Part IV
Federal Election Commission
_______________________________________________________________________
11 CFR Part 100, et al.
Corporate and Labor Organization Activity; Express Advocacy and
Coordination With Candidates; Final Rule
Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 /
Rules and Regulations
[[Page 64260]]
FEDERAL ELECTION COMMISSION
11 CFR Parts 100, 102, 109, 110, and 114
[Notice 1995-23]
Corporate and Labor Organization Activity; Express Advocacy and
Coordination With Candidates
AGENCY: Federal Election Commission.
ACTION: Final rule and transmittal of regulations to Congress.
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SUMMARY: The Commission is issuing revised regulations regarding
expenditures by corporations and labor organizations. The new rules
implement the Supreme Court's opinion in Federal Election Commission v.
Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986) (MCFL), by
substituting an express advocacy standard for the previous partisan/
nonpartisan standard with respect to corporate and labor organization
expenditures. Consequently, in many respects, the revised rules permit
corporations and labor organizations to engage in a broader range of
activities than was permitted under the previous rules. New provisions
are also being added to provide corporations and labor organizations
with guidance regarding endorsements of candidates, activities which
facilitate the making of contributions, and candidate appearances at
colleges and universities.
DATES: Further action, including the publication of a document in the
Federal Register announcing an effective date, will be taken after
these regulations have been before Congress for 30 legislative days
pursuant to 2 U.S.C. 438(d).
FOR FURTHER INFORMATION CONTACT:
Ms. Susan E. Propper, Assistant General Counsel, or Ms. Rosemary C.
Smith, Senior Attorney, 999 E Street NW., Washington, D.C. 20463, (202)
219-3690 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is publishing today the final
text of revisions to its regulations at 11 CFR 109.1(b)(4), 110.12,
110.13, 114.1 (a) and (j), 114.2, 114.3, 114.4, 114.12(b) and 114.13.
These provisions implement 2 U.S.C. 431(17) and 441b, provisions of the
Federal Election Campaign Act of 1971, as amended (the Act or FECA), 2
U.S.C. 431 et seq. Also included are conforming amendments to 11 CFR
100.7(b)(21), 100.8 (b)(3) and (b)(23) and 102.4(c)(1). Section 438(d)
of Title 2, United States Code, requires that any rule or regulations
prescribed by the Commission to carry out the provisions of Title 2 of
the United States Code be transmitted to the Speaker of the House of
Representatives and the President of the Senate 30 legislative days
before they are finally promulgated. These regulations were transmitted
to Congress on December 8, 1995.
Explanation and Justification
The new and revised rules reflect recent judicial and Commission
interpretations of 2 U.S.C. 441b. This section of the FECA prohibits
corporations and labor organizations from using general treasury monies
to make contributions or expenditures in connection with federal
elections. The new and amended rules contain the following changes:
1. The partisan/nopartisan standards in previous 11 CFR part 114
have been replaced by new language at section 114.2, 114.3, and 114.4,
prohibiting corporations and labor organizations from making
expenditures for communications to the general public expressly
advocating the election or defeat of federal candidates. This new
language applies only to expenditures.
2. The provisions regarding candidate debates, candidate
appearances, distributing registration and voting information, voter
guides, voting records, and conducting voter registration and get-out-
vote drives in sections 110.13, 114.3, 114.4 and 114.13 have been
revised and updated.
3. New provisions have been added to sections 110.12, 114.1.,
114.2, and 114.4 to define ``restricted class,'' and to address
candidate appearances at colleges and universities, endorsements of
candidates, and activities which facilitate the making of
contributions.
4. New language has been added to 11 CFR 114.2, 114.3 and 114.4 to
address the question of when coordination between a candidate and a
corporation or labor organization will cause an activity to become a
prohibited contribution.
Please note that at an earlier stage of this rulemaking, the
Commission revised the definition of express advocacy in accordance
with the judicial interpretations found in Buckley v. Valeo, 424 U.S.
1, 44 n. 52 (1976) (Buckley, MCFL and Federal Election Commission v.
Furgatch, 807 F 2d 857 (9th Cir.), cert. denied, 484 U.S. 850 (1987)
(Furgatch) and moved it to 11 CFR 100.22. See Explanation and
Justification for 11 CFR 100.17, 100.22, 106.1, 109.1 and 114.10, 60 FR
35292 (July 6, 1995). At that time, the definition of ``clearly
identified,'' in 11 CFR 100.17, was also updated. In addition, new
section 114.10 was added to allow qualified nonprofit corporations
possessing certain essential features to use general treasury funds for
independent expenditures, and to set out reporting obligations for
qualified nonprofit corporations making independent expenditures.
Section 114.10 implements the Supreme Court's decisions in MCFL and
Austin v. Michigan Chamber of Commerce, 494 U.S.C. 652 (1990) (Austin).
The history of this rulemaking, including the Petition for
Rulemaking and the comments and public testimony, are discussed in more
detail in the previously published Explanation and Justification at 60
FR 35292 (July 6, 1995), and in the Notice of Proposed Rulemaking at 57
FR 33548 (July 29, 1992) (Notice or NPRM). The promulgation of these
regulations, after the close of the thirty legislative day period, will
complete the Commission's consideration of the National Right to Work
Committee's Petition for Rulemaking.
Section 100.7(b)(21) Contribution
Paragraph (b)(21) of this section is being amended by removing the
term ``nonpartisan'' in describing candidate debates because that term
is no longer used in the debate rules at 11 CFR 110.13. In addition,
the cite to section 114.4(e) is being changed to 111.4(f) to correspond
to the renumbering of that section.
Section 100.8 (b)(3) and (b)(23) Expenditure
Paragraph (b)(3) of section 100.8 is being amended to delete the
term ``nonpartisan'' in describing the type of voter drive activity
which fall outside the definition of ``expenditure.'' In order for this
exception to apply, such activity must still be conducted without any
effort to determine party or candidate preference. A reference to
section 114.3(c)(4) has also been added for the convenience of readers
concerned with corporate or labor organization voter drives aimed at
the restricted class.
Paragraph (b)(23) of this section is being amended by removing the
term ``nonpartisan''in describing candidate debates because that term
is no longer used in the debate rules at 11 CFR 110.13. In addition,
the cite to section 114.4(e) is being changed to 114.4(f) to correspond
to the renumbering of that section.
Section 102.4(c)(1) Administrative Termination
The citation to the rules governing debt settlement procedures is
being changed from 11 CFR 114.10 to 11 CFR part 116. Section 114.10 now
covers qualified nonprofit corporations, not debt settlement.
[[Page 64261]]
Section 109.1(b)(4) Coordination with Candidates
The Notice suggested revising 11 CFR 109.1(b)(4) to indicate that
the limited types of communication with candidates and their campaign
staff which are described in 11 CFR 114.2(c), 114.3 and 114.4 do not
constitute coordination if they comply with the requirements of those
sections. Upon further reflection, this proposal has been dropped
because 11 CFR part 109 covers all persons, and the Commission's
concerns regarding the coordination of corporate or labor organization
activity is more appropriately addressed in 11 CFR 114.2 through 114.4,
which are discussed below.
Section 110.12 Candidate Appearance on Public Educational Institution
Premises
New section 110.12 of the regulations addresses candidate
appearances on the premises of public educational institutions. This
section generally follows new paragraph (c)(7) of section 114.4, which
is discussed more fully below. It has been included in the regulations
so that public colleges and universities may continue to invite
candidates to appear and address either the academic community or the
general public in the same manner as incorporated private colleges and
universities. A number of commenters pointed out that private schools
should be treated the same as public educational institutions. Please
note, however, that these institutions are also governed by state law
which may impose additional requirements in this area.
Section 110.13 Candidate Debates
The Commission has revised its regulations at 11 CFR 110.13
governing the staging of candidate debates in several respects. First,
the previous requirement that debates be ``nonpartisan'' has been
removed. However, the rules continue to specify that candidate debates
may not be structured to promote or advance a particular candidate.
Also, debates may not be coordinated with a candidate in a manner that
would result in the making of an in-kind contribution.
In the NPRM, the Commission has proposed several additional
requirements, such as a restriction on discussing campaign strategy and
tactics with the candidate or agents of the candidate. The NPRM also
included restrictions on giving one candidate more time during the
debate or more advance information as to the questions to be asked.
Several commenters were critical of these proposals. While this
language has been deleted from the final rules, these restrictions are
subsumed within the requirement that the debate not be structured to
promote or advance a particular candidate over the others.
The Commission also considered including language stating that
staging organizations may not expressly advocate the election or defeat
of any clearly identified candidate during the debates. That language
does not need to be included in the final rule because the rules
already state that the debates may not be structured to promote or
advance one candidate over another. Please note that no portion of the
entire event, including any pre-debate or post-debate commentary and
analysis, may be structured to promote or advance a particular
candidate. Nevertheless, a news organization that stages a candidate
debate may produce a separate editorial containing express advocacy
under the news story exception to the definitions of contribution and
expenditure in 11 CFR 100.7(b)(2) and 100.8(b)(2).
1. Definition of Staging Organization
Section 110.13(a) addresses several issues that have been raised
regarding nonprofit groups and media organizations that wish to be
staging organizations for candidate debates. First, this provision was
rewritten to clarify that nonprofit organizations described in 26
U.S.C. 501 (c)(3) and (c)(4) may stage debates even if they have not
received official confirmation from the Internal Revenue Service of
their status as nonprofit organizations. In addition, the previous
language may have been confusing because it described these entities as
``exempt from Federal taxation'', when they may be required to pay
taxes on their nonexempt function income. Please note that under
section 110.13, it is possible for a candidate debate to be sponsored
by multiple staging organizations. The Internal Revenue Service
commented that while the requirements in the FEC's rules are not
identical to the factors the IRS considers, they do not conflict with
the IRS's rules regarding political activity carried out by 501(c)
organizations. Another commenter questioned the reason for
disqualifying nonprofit organizations from staging debates if they
endorsed candidates, as long as the debate is fair. The Commission is
retaining this requirement because it is needed to ensure the integrity
of candidate debates.
Section 110.13(a)(2) follows the previous provision by indicating
that broadcasters and the print media may stage candidate debates, but
it does not indicate whether local cable stations or cable networks may
stage debates. However, questions involving cable debates will be
addressed in a separate NPRM. This area is currently subject to many
changes, and the Commission intends to consult further with the Federal
Communications Commission before addressing it.
Two comments questioned the use of the term ``bona fide'' to
describe newspapers who may qualify as debate staging organizations,
and the Commission's authority to determine what is a bona fide
newspaper or magazine under the First Amendment guarantee of freedom of
the press. Bona fide newspapers and magazines include publications of
general circulation containing news, information, opinion, and
entertainment, which appear at regular intervals and derive their
revenues from subscriptions and advertising. This term is explained in
more detail in the Explanation and Justification for the 1979 rules on
funding and sponsorship of federal candidate debates. See 44 FR 76734
(December 27, 1979). These rules were transmitted to Congress on
December 20, 1979, together with the Explanation and Justification.
They became effective on April 1, 1980, after neither house of Congress
disapproved them under 2 U.S.C. 438(d)(2). (An earlier version of the
candidate debate rules was disapproved by Congress on September 18,
1979. See 44 FR 39348 (July 5, 1979).) This is, as the Supreme Court
has noted, an ``indication that Congress does not look favorably'' upon
the Commission's construction of the Act. FEC v. Democratic Senatorial
Campaign Committee, 454 U.S. 27, 34 (1981). See also, e.g., Sibbach v.
Wilson, 312 U.S. 1, 16 (1941) (``That no adverse action was taken by
Congress indicates, at least, that no transgression of legislative
policy was found''). Accordingly, the revised rules follow the previous
provisions by retaining the term ``bona fide'' to describe newspapers
and magazines that may stage candidate debates.
Finally, please note that the purpose of section 110.13 and
114.4(f) is to provide a specific exception so that certain nonprofit
organizations and the news media may stage debates, without being
deemed to have made prohibited corporate contributions to the
candidates taking part in debates. This exception is consistent with
the traditional role these organizations have played in the political
process. Individuals and unincorporated entities wishing to stage
debates are not covered by the exception.
[[Page 64262]]
2. Debate Structure and Selection of Candidates
The rules in section 110.13(b)(1) continue the previous policy of
permitting staging organizations to decide which candidates to include
in a debate, so long as the debate includes at least two candidates.
Please note that a face-to-face appearance or confrontation by the
candidates is an inherent element of a debate. Hence, a debate does not
consist of a series of candidates appearances at separate times over
the course of a longer event. See AO 1986-37. Nevertheless, the
requirement of including two candidates would be satisfied, for
example, if two candidates were invited and accepted, but one was
unable to reach the debate site due to bad weather conditions, and the
staging organization held the debate with only the other candidate
present. Other situations will be addressed on a case-by-case basis.
The Commission does not intend to penalize staging organizations for
going forward with debates when circumstances beyond their control
result in only one candidate being present and it is not feasible to
reschedule. Please note that in some situations, the rules in 11 CFR
114.4 regarding candidate appearance may also be applicable.
Many comments, and much public testimony, was received on whether
the Commission should establish reasonable, objective,
nondiscriminatory criteria to be used by staging organizations in
determining who must be invited to participate in candidate debates. In
the alternative, it was suggested that the Commission could allow
staging organizations to use their own pre-established sets of
reasonable, objective, nondiscriminatory criteria, provided the
criteria are subject to Commission review and are announced to the
candidates in advance.
In response to the comments and testimony, new paragraph (c) has
been added to section 110.13 to require all staging organizations to
use pre-established objective criteria to determine which candidates
are allowed to participate in debates. Given that the rules permit
corporate funding of candidate debates, it is appropriate that staging
organizations use pre-established objective criteria to avoid the real
or apparent potential for a quid pro quo, and to ensure the integrity
and fairness of the process. The choice of which objective criteria to
use is largely left to the discretion of the staging organization. The
suggestion that the criteria be ``reasonable'' is not needed because
reasonableness is implied. Similarly, the revised rules are not
intended to permit the use of discriminatory criteria such as race,
creed, color, religion, sex or national origin.
Although the new rules do not require staging organizations to do
so, those staging debates would be well advised to reduce their
objective criteria to writing and to make the criteria available to all
candidates before the debate. This will enable staging organizations to
show how they decided which candidates to invite to the debate. Staging
organizations must be able to show that their objective criteria were
used to pick the participants, and that the criteria were not designed
to result in the selection of certain pre-chosen participants. The
objective criteria may be set to control the number of candidates
participating in a debate if the staging organization believes there
are too many candidates to conduct a meaningful debate.
Under the new rules, nomination by a particular political party,
such as a major party, may not be the sole criterion used to bar a
candidate from participating in a general election debate. But, in
situations where, for example, candidates must satisfy three of five
objective criteria, nomination by a major party may be one of the
criteria. This is a change from the Explanation and Justification for
the previous rules, which had expressly allowed staging organizations
to restrict general election debates to major party candidates. See
Explanation and Justification, 44 FR 76735 (December 27, 1979). In
contrast, the new rules do not allow a staging organization to bar
minor party candidates or independent candidates from participating
simply because they have not been nominated by a major party.
The final rules which follow also continue the previous policy that
sponsoring a primary debate for candidates of one political party does
not require the staging organization to hold a debate for the
candidates of any other party. See Explanation and Justification, 44 FR
76735 (December 27, 1979).
Section 114.1 Definitions
1. Contribution and Expenditure
The revised regulations in 11 CFR 114.1 (a)(1) and (a)(2) recognize
that the MCFL decision necessitates certain distinctions between the
terms ``contribution'' and ``expenditure.'' The previous rules had
treated these terms as coextensive. The distinction arises because the
Court read an express advocacy standard into the 2 U.S.C. 441b
definition of expenditure. However, payments which are coordinated with
candidates constitute expenditures and in-kind contributions to those
candidates even if the communications do not contain express advocacy.
See AO 1988-22.
One commenter urged the Commission to continue to interpret the
term ``contribution or expenditure'' to cover the same disbursements.
The comment argued that the MCFL decision applies equally to
contributions and expenditures. The Commission disagrees with this
interpretation of MCFL, given that the case only involved the issue of
whether corporate expenditures were made. In MCFL, the parties did not
raise, and the Supreme Court did not resolve, the factual question of
whether corporate contributions had been made by MCFL, Inc. However,
the MCFL Court reaffirmed the First Amendment distinction between
independent expenditures and contributions, which was recognized in the
Buckley opinion. In Buckley, the Supreme Court generally struck down
the Act's limitations on independent campaign expenditures by
individuals and organizations (Buckley, 424 U.S. at 39-51), but upheld
the constitutionality of the Act's restrictions on contributions to
candidates. Id. at 23-38. Subsequently, the Court stated in NCPAC that
``there was a fundamental constitutional difference between money spent
to advertise one's views independently of the candidate's campaign and
money contributed to the candidate to be spent on his campaign.''
Federal Election Comission v. National Conservation PAC, 470 U.S. 480,
497 (1985). Similarly, the Court indicated that ``a corporation's
expenditures to propagate its views on issues of general public
interest are of a different constitutional stature than corporate
contributions to candidates.'' Id., at 495-96. In light of this
judicially-recognized distinction, the final version of section
114.1(a)(1) and (a)(2) is being modified to recognize that the terms
``contribution'' and ``expenditure'' are not coextensive.
The attached rules also include two technical amendments to section
114.1(a)(1). First, the reference to the National (sic) Savings and
Loan Insurance Corporation has been deleted, because that entity no
longer exists. Paragraph (a)(2)(ii) of section 114.1 is also being
amended to remove the reference to ``nonpartisan'' voter drives.
2. Restricted Class
New paragraph (j) of section 114.1 contains a definition of
``restricted class'' for purposes of receiving
[[Page 64263]]
corporate or labor organization communications containing express
advocacy. It has been included to avoid describing everyone in the
restricted class in numerous places throughout the regulations where it
would be more convenient to simply use the term ``restricted class.''
The definition does not change who is considered to be within the
restricted class. It also does not change who is an executive or
administrative employee under section 114.1(c) or who is a member of a
membership association under section 114.1(e).
For most corporations and labor organizations, the restricted class
is the same as the solicitable class. However, for incorporated trade
associations and certain cooperatives, there are differences in who can
receive solicitations and who can receive express advocacy
communications. For example, a trade association's restricted class
includes member corporations who are not in its solicitable class,
since corporations may not make contributions under section 441b of the
FECA. Conversely, however, a trade association may solicit its member
corporations' stockholders and executive and administrative personnel,
even though these individuals are not in its restricted class, if the
member corporations have approved the solicitations. See, e.g., AO
1991-24 and 11 CFR 114.8.
Section 114.2 Prohibitions on Contributions and Expenditures
1. Express Advocacy
The final rules incorporate an express advocacy standard in several
sections of 11 CFR part 114. First, new language in paragraphs (a) and
(b) of section 114.2 prohibits corporations and labor organizations
from making expenditures for communications to the general public that
expressly advocate the election or defeat of one or more clearly
identified candidates. Please note that some portions of the
regulations refer to ``communications containing express advocacy.''
This term has the same meaning as the references elsewhere to
``communications expressly advocating the election or defeat of one or
more clearly identified candidates.''
For the reasons explained above, the express advocacy standard in
the revised rules applies to independent expenditures, but not
contributions. The prohibition against contributions made by
corporations and labor organizations in connection with federal
elections remains unaffected by MCFL. Most, but not all, commenters
supported the adoption of an express advocacy standard for evaluating
independent expenditures under section 441b of the FECA.
The provision prohibiting expenditures for communications
containing express advocacy applies to all corporations and labor
organizations except for qualified nonprofit corporations meeting the
criteria set out in new section 114.10. Thus, these qualified nonprofit
corporations may use general treasury funds to make independent
expenditure communications to the general public which contain express
advocacy. These could include registration and voting communications,
official registration and voting information, voting records and voter
guides. See also 11 CFR 114.4(c)(1)(i) and (ii).
2. Coordination With Candidates
A new paragraph (c) has been added to 11 CFR 114.2 to address the
topic of coordination of corporate or labor organization activity with
candidates or their authorized committees or agents, which results in
the making of an in-kind contribution. Previous paragraphs (c) and (d)
have been redesignated as paragraphs (d) and (e), respectively.
a. Initial Proposals. In Buckley v. Valeo, the Supreme Court made a
distinction between independent expenditures and contributions. The
Court observed, ``[u]nlike contributions, such independent expenditures
may well provide little assistance to the candidate's campaign and
indeed may prove counterproductive. The absence of prearrangement and
coordination of an expenditure with the candidate or his agent not only
undermines the value of the expenditure to the candidate, but also
alleviates the danger that expenditures will be given as a quid pro quo
for improper commitments from the candidate.'' Buckley, 424 U.S. at 47.
Thus, Buckley could be interpreted to prohibit all contacts with
candidates. However, the NPRM recognized that it is justifiable to
allow some forms of contact to preserve the previous range of
permissible activity, such as sponsoring candidate appearances. The
prohibition against corporate contributions was expressly reaffirmed in
MCFL. 479 U.S. at 260. Therefore, the NPRM sought to draw a distinction
between permissible contacts with candidates which are necessary to
conduct these activities, and more extensive coordination that will
result in in-kind contributions in some circumstances. The proposals in
the NPRM would have defined coordination to include discussions of
specific campaign strategy or tactics.
The proposed rules include new language in section 114.2(c)
indicating when corporate and labor organization disbursements will be
treated as impermissible in-kind contributions to particular
candidates. Prior to the MCFL decision, the Commission had not needed
to examine the extent to which such payments by corporations and labor
organizations could be treated as in-kind contributions, because they
were simply treated as prohibited corporate or labor organization
expenditures in connection with federal elections, unless permitted by
a specific exemption.
b. Comments and Testimony. Numerous commenters expressed a wide
variety of views on this topic. Many were confused as to how such a
standard would work in practice. Some pointed out that this was an area
not addressed by the MCFL decision, and that it appeared as though the
Commission was trying to find a way to impose new requirements that
would be at least as restrictive as the former partisan/nonpartisan
standard. They argued that section 441b(b)(2)(A) of the FECA excludes
communications with the restricted class on any subject from the
definition of contribution or expenditures. Others favored a more
restrictive rule allowing no contacts except for arranging the
logistics of candidate debates and appearances, or obtaining responses
for voter guides.
c. Revised Rules. In response to these concerns, new section
114.2(c) has been rewritten to clarify what types of contacts with
candidates are considered impermissible coordination, and what types
are permissible. The comments received in response to these proposals
illustrated the need to clarify and simplify the operation of these
provisions. Under revised section 114.2, a corporation or labor
organization that only makes communications to its restricted class
does not run the risk of having its expenditures treated as in-kind
contributions. On the other hand, a corporation or labor organization
that engages in election-related activities directed at the general
public must avoid most forms of coordination with candidates, as this
will generally result in prohibited in-kind contributions, and will
compromise the independence of future communications to the general
public. For example, a prohibited in-kind contribution would result if
a voter guide is prepared and distributed after consulting with the
candidate regarding his or her plans, projects or needs regarding the
campaign. Please note that, in the case of a communication just to the
restricted class, coordination will not cause that activity or future
communications to the restricted class to be considered in-kind
contributions.
[[Page 64264]]
However, such coordination may compromise the ability of a
corporation's or labor organization's separate segregated fund to make
independent expenditures to those outside the restricted class in the
future.
Additional changes to the rules covering candidate debates,
candidate appearances, colleges and universities, voting records,
voting guides, voter registration and get-out-the-vote drives,
endorsements, trademarks and letterhead, and facilitation are described
below.
3. Facilitating the Making of Contributions
As part of the revisions to 11 CFR Part 114, the Commission has
reassessed the prohibition against corporations and labor organizations
facilitating the making of contributions, and is adding a new provision
which modifies its prior interpretation. Previously, in AOs 1987-29,
1986-4 and 1982-2, MUR 3540 and in the 1989 and 1977 Explanation and
Justifications of sections 110.6 and 114.3, the Commission has stated
that corporations and labor organizations may not facilitate the making
of contributions to particular candidates or political committees other
than their own separate segregated funds. Explanation and Justification
of Regulations, H. Doc. No. 95-44, 95th Cong., 1st Sess. at 104-105
(1977); 54 F.R. 34106 (Aug. 17, 1989).
The NPRM contemplated adding new language to 11 CFR 114.3(d) to set
forth the current policies regarding facilitating the making of
contributions. Please note that the new facilitation rules have been
relocated to 11 CFR 114.2(f), since section 114.3 covers activities
involving only the restricted class, and facilitation can involve
activities that are directed to the restricted class or that go beyond
the restricted class.
The comments addressing this topic reflected a diversity of
opinion. Some felt it was helpful to include the Commission's policies
on facilitation in the regulations. Others felt the proposals would
restrict the ability of corporations to engage in activities that were
permissible, and would drive political fundraising underground, and
thwart public disclosure. Another concern was that the rules would
discourage corporations and labor organization from supporting the
political activities of their employees in situations where the
corporation or labor organizations does not take a position on the
election. The Internal Revenue Service found no conflict with its
requirements covering nonprofit corporations.
The revised facilitation provisions attempt to address a variety of
concerns. First, section 114.2(f)(1) sets out the general prohibition,
and explains that facilitation means using corporate resources or
facilities to engage in fundraising for candidates. However, this is
not intended to negate the range of permissible activities found in
other portions of the rules. For example, individual volunteer activity
using corporate or labor organization facilities is still permissible
under 11 CFR 100.7, 1008, and 114.9 (a), (b), and (c), provided it
meets the conditions set forth in those rules. Similarly, there are no
changes to the regulations governing the rental or use of corporate or
labor organization facilities or aircraft by other persons. 11 CFR
114.9 (d) and (e).
The new rules at 11 CFR 114.2(f)(1) also explain that commercial
vendors, such as hotels or caterers, would not facilitate the making of
corporate contributions if in the ordinary course of their business
they provide meeting rooms or food for a candidate's fundraiser and
receive the usual and normal charge. The term ``commercial vendor'' is
defined in 11 CFR 116.1(c).
In the past, the Commission has also addressed situations where a
candidate owns or operates a corporation. E.g. AOs 1995-8, 1994-8 and
1992-24. Nothing in the new facilitation rules would modify the
conclusions of these opinions that these corporations may serve as a
commercial vendor or lessor to the candidate's committee as long as the
transactions are consistent with the corporation's ordinary course of
business.
New paragraph (f)(2) of section 114.2 gives several examples of
facilitation. Some of these include activities that do not fall within
the ``safe harbors'' provided by other regulations. For example,
facilitation would occur if a corporation or labor organization makes
its meeting room available for a candidate's fundraiser, but has not
made the room available for community or civic groups. Compare 11 CFR
114.2(f)(2)(i)(D) with 11 CFR 114.13. The permissibility of using such
room when the corporation or labor organization receives payment would
be governed by 11 CFR 114.9(a), (b) or (d). Similarly, facilitation
would result if other facilities, such as telephones and copiers, are
used by campaign committee staff for a fundraiser, and the corporation
is not reimbursed within a commercially reasonable time for the normal
and usual rental charge. Compare 11 CFR 114.2(f)(2)(i)(B) with 11 CFR
114.9(d).
Other examples of facilitation include directing corporate or union
employees to work on a fundraiser for a candidate; using a mailing,
telephone or computer list of customers, vendors, or others outside the
restricted class to distribute invitations and solicit contributions;
and providing in-house or external catering and food services for the
fundraiser. 11 CFR 114.2(f)(2)(i) (A), (C), and (E). However, in these
three situations, the new rules allow either the candidate, or the
organization's separate segregated fund, or the official directing the
activity to pay the corporation or labor organization in advance for
the fair market value of the services or the list. Such payment by a
separate segregated fund or official would constitute an in-kind
contribution subject to the individual's or the separate segregated
fund's contribution limits, and is not treated as facilitation. The
candidate's authorized committee must report receiving these in-kind
contributions.
A more limited advance payment method was approved by the
Commission with regard to employee services in AO 1984-37. The new
rules go beyond this advisory opinion with regard to the source of the
advance payment and the types of services for which advance payment may
be made. ``In advance'' means prior to when the list is provided, or
the catering or food services are obtained, or the employees perform
the work. Fair market value consists of the price that would normally
be paid in the marketplace where the corporation or labor organization
would normally obtain these goods or services, if reasonably
ascertainable. However, in no case is the fair market value less than
the corporation's or labor organization's actual cost, which includes
total compensation earned by all employees directed or ordered to
engage in fundraising, plus benefits and overhead.
These new rules modify, to some extent, the interpretation applied
in prior enforcement matters, including MUR 3540. The conciliation
agreement for MUR 3540 stated that, ``[t]he `individual volunteer
activity' exemption does not, however, extend to collective enterprises
where the top executives of a corporation direct their subordinates in
fundraising projects, use the resources of the corporation, such as
lists of vendors and customers, or solicit whole classes of corporate
executives and employees. See MURs 1690 and 2668. The individual
volunteer activity exemption also does not apply when an employee uses
the facilities of a corporation in connection with a Federal election
and the corporation is reimbursed by a political committee or
[[Page 64265]]
a candidate's committee [emphasis added]. See MUR 2185.''
However, the new facilitation regulations now provide another
exemption where an individual or a candidate's committee or other
political committee pays in advance for the use of corporate personnel
who are directed to organize or conduct a fundraiser for the candidate
as part of their job, and hence are not volunteers. Although employees
may be asked to undertake such activity, under new language in
paragraph (f)(2)(iv) of this section, it is not permissible to use
coercion, threats, force or reprisal to urge any individual to
contribute to a candidate or engage in fundraising activities. Thus,
employees who are unwilling to perform these services as part of their
job have a right to refuse to do so.
Under new paragraphs (f)(2)(iii) and (f)(4)(iii), facilitation
includes corporate or labor organization solicitation of earmarked
contributions that will be collected and forwarded by the
organization's separate segregated fund (whether or not deposited in
the separate segregated fund's account), unless the earmarked
contributions are treated as contributions both by and to that separate
segregated fund. The corporation or labor organization may name in the
solicitation the candidate(s) for whom an earmarked contribution is
sought. Space may be left on the contribution response card for
contributors to designate candidates of their choice, but no candidates
are suggested in the accompanying solicitation materials. The latter
situation was presented in AO 1995-15. In both cases, under new
paragraphs (f)(2)(iii) and (f)(4)(iii), the contributions must be
counted against the separate segregated fund's limits to avoid
facilitation, which is impermissible. Hence these new provisions
supersede those portions of AOs 1991-29, 1981-57 and 1981-21 which
indicate that a conduit separate segregated fund's contribution limits
under 2 U.S.C. 441a are only affected if it exercises direction or
control over the choice of the recipient candidate. Please note that 11
CFR 110.6(b)(2)(ii) has not been changed, and therefore continues to
prohibit corporations or labor organizations, themselves, from acting
as conduits for contributions earmarked to candidates. See AO 1986-4.
However, in AO 1983-18, the Commission recognized that a trade
association political action committee may collect and forward
contributions to other trade association political action committees
where directed by member corporation executives. A corporation or union
employee may still utilize the volunteer exemption found at 11 CFR
100.7(b)(3) to collect earmarked contributions on their own time and
forward such contributions to a specific candidate or committee. Such
earmarked contributions would not be considered as contributions by the
separate segregated fund.
Paragraph (f)(3) lists two examples of separate segregated fund
activity that do not constitute corporate or labor organization
facilitation. First, separate segregated funds may continue to solicit
or make contributions in accordance with the requirements of 11 CFR
110.1, 110.2, and 114.5 through 114.8. Secondly, separate segregated
funds may continue to solicit, collect and forward earmarked
contributions to candidates under 11 CFR 110.6. The money expended by
the separate segregated fund to solicit earmarked contributions must
come from permissible funds received under the FECA, and will count
against the separate segregated fund's contribution limit for the
candidate(s) involved. These examples contrast with new paragraphs
(f)(2)(iii) and (f)(4)(iii), under which a solicitation by the
corporation or labor organization would either constitute facilitation
or result in the contribution being counted against the separate
segregated fund's contribution limits.
In addition to the latter example discussed above, paragraph (f)(4)
lists two other examples of corporate or labor organization activity
which do not result in facilitation. The first preserves the practice
of enrolling the restricted class in a payroll deduction plan or check-
off system, or an employee participation plan. No changes are being
made in the operation of employee participation plans under 11 CFR
114.11 or payroll deduction plans. The second example permits
solicitations of the restricted class for contributions that
contributors will send directly to candidates, without being bundled or
forwarded through the separate segregated fund. This situation was
presented in AO 1989-29, and falls within the corporation's or labor
organization's right to communicate with its restricted class on any
subject under 2 U.S.C. 441b(b)(2)(A).
Section 114.3 Disbursements for Communications to the Restricted Class
in Connection With a Federal Election
1. Express Advocacy, Coordination, and Reporting Internal
Communications
The revised rules preserve several distinctions between
communications and other activities directed solely to the restricted
class (set forth at 11 CFR 114.3) and those directed to the general
public or other individuals outside the restricted class (set forth at
11 CFR 114.4). Section 114.3 continues to recognize that the FECA
permits corporations and labor organizations to communicate with their
restricted classes on any subject. 2 U.S.C. 441b(b)(2)(A). However, in
light of the MCFL decision, the references to ``partisan'' activities
have been replaced with narrower provisions that only apply to
communications containing express advocacy. For example, in paragraph
(c) of section 114.3, revised language makes clear that communications
directed solely to the restricted class may contain express advocacy.
In addition, amended section 114.3(b) now states more explicitly that
only communications expressly advocating the election or defeat of a
clearly identified candidate are subject to the reporting requirements
of 11 CFR 100.8(b)(4) and 104.6. Similarly, the revisions delete the
more restrictive language in previous section 114.3(a)(1) that had
prohibited corporate and labor organization expenditures for
``partisan'' communications to the general public because revised
section 114.4 establishes that such communications are only prohibited
if they contain express advocacy or are impermissibly coordinated with
candidates or political committees.
In contrast, under revised section 114.3(a)(1), communications
directed solely to the restricted class may be coordinated with
candidates and political committees. For example, they may involve
discussions with campaign staff regarding a candidate's plans,
projects, or needs. Such coordination will not transform that
restricted class communication into an in-kind contribution. Nor will
it affect subsequent activities directed only to the restricted class.
However, communications to the restricted class that are based on a
candidate's plans, projects and needs may jeopardize the independence
of subsequent communications or activities, including those financed
from the separate segregated fund, which extend to anyone outside the
restricted class.
One witness at the hearing objected to labor organizations' use of
general treasury funds which could come from compulsory union dues to
subsidize new forms of election-related activity, or even the
activities set out in sections 114.3 and 114.4. This is an area over
which the Department of Labor has jurisdiction, and recently it issued
final rules removing 29 CFR part 470, in response to Executive Order
12836 revoking Executive Order 12800. 58 FR
[[Page 64266]]
15402 (March 22, 1993). The Commission does not have jurisdiction over
whether dues and assessments are paid as a condition of employment or
whether they are voluntary.
2. Candidate Appearances
Paragraph (c)(2) of 11 CFR 114.3 governs corporate and labor
organization funding of candidate appearances before the restricted
class. The NPRM sought to resolve several issues not addressed in the
previous rules and to clarify language on which the Commission has
received a number of questions. For example, the Notice proposed that
instead of allowing ``limited invited guests and observers'' to attend
candidate appearances, the rule should refer to guests who are being
honored or speaking or participating in the event. This is intended to
cover individuals who are part of the program.
One commenter was concerned that this language would interfere with
its ability to allow its members to attend a candidate appearance.
Under these provisions, which have been retained in the final rules,
all those who qualify as members, and are therefore in an
organization's restricted class, may attend. As noted above, nothing in
the attached revisions to the rules affects the definition of who is a
member.
In addition, these amendments do not adversely affect the ability
of corporations or labor organizations to invite their restricted
class, other employees or the general public to attend a speech given
by an officeholder or other prominent individual who is also a federal
candidate, if the speech is not campaign-related and the individual is
not appearing in his or her capacity as a candidate for Federal office.
See, e.g., AOs 1980-22 and 1992-6.
Two issues which generated considerable debate in this area were
the solicitation and collection of contributions, and the presence of
the news media, during restricted class candidate appearances.
a. Collection of Contributions by Candidates and Party Representatives
During the Appearance
The NPRM sought comment on whether candidates and party
representatives should continue to be able to solicit contributions
during an appearance before the restricted class. This had been
specifically allowed under previous section 114.3(c)(2) for appearances
before the restricted class. The NPRM sought comments on whether the
candidate should be able to collect contributions at appearances, such
as by ``passing the hat'' or placing donation boxes in the meeting
room. Given that the proposed rules sought to incorporate the
Commission's established policy that corporations and labor
organizations are not permitted to facilitate the making of
contributions to candidates or political committees other than their
separate segregated funds, the NPRM questioned whether allowing
candidates to accept contributions during their appearances should be
viewed as impermissible facilitation.
Some comments supported allowing candidates to request
contributions. The Internal Revenue Service found no conflict between
the provisions regarding candidate appearances and its rules.
Section 114.3(c)(2) of the final rules provides that a candidate or
party representative may ask for and collect contributions before,
during or after the appearance while on corporate or union premises.
Candidates and party representatives may also provide information on
how to make contributions, such as by giving out a phone number or
mailing address or by leaving envelopes or other campaign materials.
However, this provision also specifies that corporate or labor
organization officials may not collect contributions during the event.
The collection of contributions by such officials would go beyond the
right to communicate with the restricted class on any subject, and in
essence, turn the candidate appearance into a fundraising event
sponsored by the corporation or labor organization. As explained above,
under new section 114.2(f), corporations and labor organizations may
not facilitate the making of contributions to candidates.
b. Presence of the News Media
Several issues have arisen regarding section 114.3(c)(2), which
governs the presence of news media representatives at candidate
appearances before only the restricted class. For example, a news
organization may wish to reprint or broadcast the candidate's
appearance in its entirety. Concerns have been raised that a candidate
appearance before a corporation's or labor organization's restricted
class would be transformed by this type of gavel-to-gavel coverage into
a general public appearance. Accordingly, the Commission sought
comments on two alternative proposals. Under Alternative C-1, such
coverage was contemplated for appearances before the restricted class,
provided that two conditions were met. First, if the corporation or
labor organization permits one media representative to cover the
appearance, all bona fide media organizations who request to cover the
appearance must be given the opportunity to do so. This could be
accomplished through pooling arrangements, if necessary. Secondly, if
the corporation or labor organization permits the news media to cover
an appearance by one candidate, the news media must be given the
opportunity to cover all other candidates who appear on the same or
different occasions. Alternative C-2 indicated that the corporation or
labor organization may not permit the media to cover such candidate
appearances before just the restricted class. Instead, under
Alternative C-2, in addition to the two requirements on media access,
media coverage of candidate appearances would be permissible only if
all rank and file employees may also attend, all candidates for the
same seat who request to appear are given a similar opportunity, and
the corporation or labor organization does not expressly advocate, or
encourage the audience to expressly advocate, the election or defeat of
any candidate.
One commenter felt that gavel-to-gavel coverage indicated that the
candidate's speech is newsworthy, and that there is no evidence of a
problem involving the exclusion of the news media. Others objected that
the proposed rule would interfere with their ability to have
officeholders address employees on topics of interest to the employees
when the officeholders are candidates for office.
The Commission has concluded that a modified version of Alternative
C-1 is preferable and has been included in section 114.3(c)(2)(iv). The
proposed language of Alternative C-2 which would have required the
organization open the event to all rank and file employees, not just
the restricted class, has been dropped because this would be
administratively difficult to accomplish. However, the requirements in
Alternative C-1 that candidates for the same office be treated
similarly, and that different news organizations also be treated
fairly, have been retained. These new provisions are intended to ensure
that the corporation or labor organization does not manipulate the news
media coverage of newsworthy events that are subsequently broadcast to
the general public in a way that ensures favorable coverage for certain
candidates, and no coverage or unfavorable coverage for others. Please
note, however, that nothing in the amended rules will force
corporations or labor organizations to invite the media to events that
they would otherwise prefer to limit to the restricted class.
[[Page 64267]]
3. Registration and Get-Out-the-Vote Drives
Section 114.3(c)(4) sets forth provisions governing voter
registration and get-out-the-vote drives aimed at a corporation's or
labor organization's restricted class. The NPRM included one revision
to this provision. The proposed languaged stated explicitly that
express advocacy is permissible in voter drive communications aimed
solely at a corporation's or labor organization's restricted class.
Consequently, the proposed revisions to section 114.3(c)(4) also
retained the former language specifically permitting voter drive
communications to urge the restricted class to vote for particular
candidates and to register with a particular party. The proposed rules
also contemplated continuing the long-standing policy that information
and assistance in registering and voting shall not be withheld on the
basis of support for or opposition to particular candidates or
political parties.
The Internal Revenue Service indicated that while the FEC's
proposed rules regarding candidate appearances are more specific than
theirs, they do not impinge upon the Internal Revenue Service's ``facts
and circumstances'' test.
Some commenters opposed removing the ``nonpartisan'' requirement
from section 114.3(c)(4) because section 441b(b)(2)(B) of the Act
requires that drives aimed at a corporation's or labor organization's
restricted class be nonpartisan. The Commission believes the basic
purpose of this statutory provision will be maintained by continuing to
require corporations and labor organizations to make the same voter
registration and voter drive services available to those who do not
support the organization's preferred candidates or political party.
Consequently, the final voter driver rules in this section follow the
previous proposals, with one change. The revised rules specify that
voter registration efforts may include transportation to the place of
registration in addition to transportation to the polls.
Section 114.4 Disbursement for Communications Beyond the Restricted
Class in Connection With a Federal Election
1. Express Advocacy and Coordination
The provisions of section 114.4 regarding communications by
corporations and labor organizations to persons outside the restricted
class have also been substantially revised and reorganized. First, the
nonpartisan standards found in the previous regulations have been
replaced by language prohibiting corporations and labor organizations
from including express advocacy in communications directed outside the
restricted class when: (1) holding candidate appearances; (2) issuing
registration and get-out-the-vote communications; (3) distributing
registration and voting information, forms, or absentee ballots; (4)
producing voter guides or voting records; or (5) conducting voter
registration and get-out-the-vote drives.
Second, in response to the concerns expressed by several commenters
which are discussed above, the Commission has substantially revised the
concept of coordination in section 114.4. The MCFL decision addressed
the scope of the FECA's prohibition against corporate expenditures.
However, the prohibition against corporate contributions was expressly
reaffirmed in MCFL. 479 U.S. at 260. Accordingly, the final rules which
follow preserve the statutory ban on contributions made by corporations
and labor organizations in connection with federal elections.
Prohibited contributions include in-kind contributions resulting from
the coordination of election-related corporate or union communications
with candidates, except for certain activities described in this
section and 11 CFR 114.3, which may involve limited types of
coordination with candidates.
Under revised section 114.4(a), communications to the general
public or to employees outside the restricted class that are based on
information about a candidate's plans, projects and needs provided by
the candidate or the candidate's agent are considered coordinated, and
hence, in-kind contributions. Such coordination may also jeopardize the
independence of subsequent communications to the general public, but
will not affect future communications to the restricted class.
Qualified nonprofit corporations under 11 CFR 114.10 are subject to
the same restriction on coordinating their communications directed to
the general public. Consequently, they may not include express advocacy
in coordinated communications directed beyond the restricted class.
Conversely, if they do include express advocacy in communications to
the general public, these communications may not be coordinated with
any candidate or political party. The purpose of the limited exception
the Supreme Court recognized in MCFL was to avoid impermissibly
infringing on these organizations' First Amendment rights when making
independent expenditures.
2. Candidate and Party Appearances
The NPRM sought comments on several questions and possible
amendments regarding corporate and labor organization funding of
candidate appearances before employees who are not in the restricted
class. Section 114.4(b), as set out in the Notice, followed the
previous rules at 11 CFR 114.4(a)(2) by allowing rank and file
employees who are not in the restricted class to attend candidate
appearances organized by corporations or labor organizations. Please
note that corporate appearances are covered in paragraph (b)(1), and
parallel provisions for labor organizations are found in paragraph
(b)(2).
As explained above, certain contacts with the candidate's campaign
may be necessary to arrange the appearance. However, because these
communications are being made beyond the restricted class, discussions
of the candidate's plans, projects or needs relating to the campaign go
beyond the permissible level of coordination, and hence would transform
the appearance into an in-kind contribution. Likewise, corporations and
labor organizations are also not permitted to expressly advocate the
election or defeat of any clearly identified candidates in conjunction
with the appearance. Nor should they promote or encourage express
advocacy by the audience, thereby transforming the appearance into
little more than a campaign rally.
a. Notifying and Inviting Other Candidates; Audience
In situations where one candidate appears at a corporate or labor
organization event, the proposed rules in section 114.4(b) would have
followed the previous provisions by requiring corporations and labor
organizations to let the other candidates for that office come and
speak if they so request. However, comments were sought on possibly
requiring a corporation to notify the other candidates in advance
whenever they invite a candidate to appear. The commenters expressed
concern that such a requirement would be unworkable. Accordingly, the
final rules do not contain a prior notice provision.
Instead, the final rules on candidate appearances generally follow
the candidate debate rules in the case of Presidential candidates by
requiring corporations and labor organizations to establish, in
advance, objective criteria for deciding which Presidential and Vice
Presidential candidates may appear, upon request. Under section
114.4(b)(1)(i), appearances by House
[[Page 64268]]
and Senate candidates remain subject to the requirement that all
candidates for the seat must be given a similar opportunity to appear,
upon request. Similarly, the provisions governing appearances by
political party representatives in paragraph (b)(1)(iii) generally
follow the previous regulations.
Comments were also requested on new language in section
114.4(b)(1)(vi) that would not allow the corporation or labor
organization to favor one candidate through the structure or format of
the candidate appearance. One example cited was giving rank and file
employees time off to listen to one candidate but not to listen to
others. Another example arises where candidates receive unequal time or
facilities, unless it is clearly impractical to provide all candidates
with similar opportunities, such as where a candidate requests to
appear after a labor organization's convention is over. In response to
another comment which objected to consideration of the format and
timing of a candidate appearance, the Commission is revising the
language in section 114.4(b)(1)(vi) to clarify that candidates cannot
be given unequal amounts of time or substantially different locations
for their appearances, unless the corporation can show it is
impractical to give each candidate a similar time and location.
In addition, paragraph (b)(1) of section 114.4 allows guests who
are being honored or speaking or participating in the event (i.e. those
who are part of the program), to be present during the candidate
appearance. This provision follows similar language in 11 CFR
114.3(c)(2)(i).
b. Collection of Contributions by Candidates and Party Representatives
During the Appearance
A question presented in the NPRM was whether the candidate or party
representative may solicit and collect contributions during an
appearance before employees who are not in the restricted class.
Although this has been specifically allowed under section 114.3(c)(2)
for appearances before the restricted class, there was no provision in
former section 114.4 either allowing or disallowing this practice when
the audience extends to all employees. The NPRM sought comments on
whether the candidate should be able to pass the hat or place donation
boxes in the room.
Some comments supported allowing candidates to request
contributions, but indicated that the rules needed to clarify that this
would not constitute facilitation by the corporation or labor
organization. The Internal Revenue Service found no conflict between
the provisions regarding candidate appearances and its rules.
Section 114.4(b)(1)(iv) of the final rules provides that a
candidate or party representative may ask for contributions, may
provide information on how to make contributions, and may leave
campaign materials and envelopes for making contributions. See, e.g.,
AO 1987-29, n. 2. However, this provision also specifies that
candidates and party representatives may not collect contributions
during the event.
Moreover, the corporation or labor organization, and its officers
and employees, may not solicit or collect these contributions. This
restriction includes corporate and union officials who may also serve
on a fundraising committee for the candidate or otherwise be active in
the campaign. The collection of contributions by corporate or union
officials would, in essence, turn the candidate appearance into a
general fundraising even sponsored by the corporation or labor
organization, in violation of the new facilitation regulations of
section 114.2(f).
c. Presence of the News Media
The Notice presented several issues regarding the presence of news
media at candidate appearances before employees outside the restricted
class. For the reasons stated above, the final rules regarding these
appearances follow the new regulations applicable to appearances before
the restricted class. See discussion of 11 CFR 114.3(c)(2)(iv),
including NPRM and comments, supra.
3. Use of Logos, Trademarks and Letterhead
Another topic addressed in this rulemaking concerns the use of
corporate or labor organization logos, trademarks and letterhead. The
Commission has encountered situations in which executives of
corporations or labor organizations use official corporate or labor
organization stationery, whether or not reproduced at the executive's
personal expense, to solicit funds or support for a candidate. E.g.,
MURs 3066, 1690 and 1261. The question presented in the NPRM was
whether such a logo, trademark or letterhead may be used if the
corporation or labor organization is reimbursed for the intangible
value of the item(s), or whether their use (except through ordinary
commercial transactions in the usual course of business) should be
prohibited.
Comments were sought on two alternative approaches. The first
option, Alternative B-1, was to amend the definition in section
114.1(a)(1) to treat logos, trademarks and letterhead as something of
value and a contribution or expenditure if provided without charge or
at less than the fair market value. That approach would have allowed
individuals and candidates to reimburse corporations and labor
organizations for the cost of the stationery plus the value of using
the corporate or union symbol, name, etc. One difficulty, however,
would have been ascertaining the fair market value, given subjective
consideration such as goodwill. Thus, the second option, which was set
forth as Alternative B-2 in section 114.4(c)(1), was to prohibit such
uses, whether or not the corporation or labor organization is
reimbursed, with four exceptions for: corporations qualifying for the
MCFL exception; communications to the restricted class, as described
under 11 CFR 114.3; communications beyond the restricted class, as
permitted under 11 CFR 114.4; and solicitations made in accordance with
11 CFR 114.5 through 114.8.
The Commission received comments supporting and opposing both
options. The Internal Revenue Service stated that alternative B-1 may
conflict with the Internal Revenue Code requirements applicable to
section 501(c)(3) corporations. Other commenters claimed that logos and
letterhead were not corporate resources, or were of no value or of de
minimis value, or that it is too difficult to assign a monetary value.
The Commission considered the alternatives regarding the use of
logos, letterhead and trademarks when it prepared the final rules, but
could not reach a majority decision by the required four affirmative
votes. See 2 U.S.C. 437c(c). Consequently, neither alternative has been
included in the final rules.
Both alternatives in the NPRM also indicated that when individuals
make communications either by using personal stationery or by appearing
in a campaign ad, the letter or advertisement cannot indicate that the
individual is acting on behalf of the corporation or labor
organization, and cannot include references to the individual's
official title at that organization. Thus, these proposals were
intended to preclude an individual from including an identification
such as ``Vice President of XYZ Automobile Corporation.'' However, a
general identification such as ``auto maker'' would be acceptable.
Several commenters opposed this restriction on various grounds,
including that the corporate title is part of the individual's
identity, the use of
[[Page 64269]]
the title enhances disclosure of those who are making the communication
and it would encourage fraud if identifications were not allowed, and
because the speech of people associated with nonprofit groups would be
inhibited.
The Commission considered the use of corporate or labor
organization titles in individual communications and advertisements on
behalf of a candidate when it prepared the final rules, but could not
reach a majority decision by the required four affirmative votes. See 2
U.S.C. 437c(c). Consequently, the proposed language has not been
included in the final rules.
4. Registration and Voting Communications; Official Registration and
Voting Information
The provisions of previous paragraphs (b)(2) and (b)(3) of section
114.4 regarding the distribution of registration and voting
communications and information to the general public have been moved to
new paragraphs (c)(2) and (c)(3), respectively. In addition to the
changes regarding express advocacy and coordination with candidates,
which are discussed above, revised paragraph (c)(3)(ii) no longer
contains a reference to ``applicable state law'' permitting voter
registration by mail. That language was made obsolete by the National
Voter Registration Act of 1993, 42 U.S.C. 1973gg-1 et seq.
Please also note that section 114.4(c)(2), regarding voting
communications, does not change the Commission's decision in AO 1980-20
that corporations may place newspaper or magazine advertisements simply
urging the general public to register to vote.
5. Voting Records
Provisions regarding the dissemination of voting records of Members
of Congress are being moved from previous section 114.4(b)(4) to new
section 114.4(c)(4). In response to the MCFL decision, the NPRM
proposed modifying these rules in two respects. First, new language was
put forth prohibiting voting records, and all accompanying
communications to the general public, from expressly advocating the
election or defeat of one or more clearly identified candidates or the
candidates of a clearly identified political party. The proposed
amendments also sought to disallow coordination with candidates in
distributing voting records. The Internal Revenue Service commented
that although their standards were different than the FEC's, the FEC's
proposed rules do not impinge on the test used by the Internal Revenue
Service to determine whether voting records or voter guides constitute
political activity. Another commenter believed there was no need to
discuss these matters with candidates.
The revised version of section 114.4(c)(4) is substantially similar
to the proposed rules. However, new language has been included to
indicate that the decision as to the content of a voting record also
may not be coordinated with a candidate or political party. The NPRM
raised the question of whether to include language preventing
corporations and labor organizations from obtaining voting record
information directly from Members of Congress or political parties. The
Commission has decided not to include such a restriction in the revised
regulations.
6. Voter Guides
In Faucher v. Federal Election Commission, 928 F.2d 468 (1st Cir.
1991), cert. denied sub nom. Federal Election Commission v. Keefer et
al., 502 U.S. 820 (1991), the Court of Appeals for the First Circuit
invalidated the Commission's previous voter guide regulations at 11 CFR
114.4(b)(5)(i). The Court concluded that the previous provisions of
section 114.4(b)(5)(i) exceed the regulatory boundaries imposed by the
FECA as interpreted by the Supreme Court. 928 F.2d at 472.
Consequently, the NPRM proposed revisions, located in section
114.4(c)(5), to allow corporations and labor organizations to prepare
and distribute to the general public their own voter guides or to
obtain voter guides prepared by nonprofit organizations that are tax-
exempt under 26 U.S.C. 501 (c)(3) or (c)(4). The proposed rules would
have required that the same amount of space be provided for each
candidate's response, that the voter guide not contain express
advocacy, and that contact with candidates be limited to the
preparations reasonably necessary to produce the guide, such as written
communications regarding the candidate's positions on issues. The
proposed revisions also sought to eliminate the previous restrictions
on the geographic area in which voter guides could be distributed, and
to prohibit coordination of the distribution of voter guides with
candidates.
Several commenters and witnesses challenged these proposals as
contrary to the intent of the court in Faucher. In particular, they
questioned the need to reprint the candidates' responses verbatim, the
restriction that contacts with campaigns be in writing, the prohibition
on coordinating the distribution of the guides, and the prohibition on
distributing voter guides prepared by 501(c) organizations that endorse
candidates, when the corporation or labor organization can make its own
endorsements.
In view of these comments, the Commission has substantially revised
the final rules to provide a choice of two different ways of issuing
and distributing voter guides, which are intended to comport with
Faucher. Revised section 114.4(c)(5) begins by explaining that voter
guides consist of candidates' positions on campaign issues, and may
include biographical information on the candidates. Voter guides are
similar to candidate debates in that they must include at least two
candidates in the same election. However, no particular format is
required for either type of voter guide.
Under the new rules, both types of voter guides may be obtained
from nonprofit organizations described in 26 U.S.C. 501 (c)(3) or
(c)(4), regardless of whether the nonprofit group endorses candidates.
Please note however, that a comment from the Internal Revenue Service
indicates that nonprofit corporations organized under 26 U.S.C.
501(c)(3) cannot endorse candidates. The previous rules referred to
these groups as ``tax exempt,'' which may be confusing given that they
may pay tax on certain categories of income.
The first type of permissible voter guide, which is described in
paragraph (c)(5)(i), is one that is prepared and distributed without
any contact, cooperation, coordination or consultation with the
candidate. the candidate's campaign or the candidate's agent. Hence,
the information regarding the candidate's position on issues must be
obtained from news articles, voting records, or other non-campaign
sources. The voter guide also must not expressly advocate the election
or defeat of any clearly identified candidate.
The second type of permissible voter guide, which is described in
paragraph (c)(5)(ii), is subject to further restrictions because it
contemplates limited written contact with the candidate's campaign
committee to obtain the candidate's responses to issues included in the
voter guide. For example, further coordination with a candidate or his
or her agents, such as a discussion of the candidate's plans, projects,
or needs relating to the campaign, does not fall within this limited
exception, and would thus result in an in-kind contribution. The
Faucher decision does not mandate eliminating all restrictions on voter
guides save for the prohibition on express advocacy. Accordingly,
organizations preparing the second type
[[Page 64270]]
of voter guide must give all candidates in the election (except for
Presidential candidates) an equal opportunity to respond to the
questions posed. Moreover, no candidate may receive greater prominence
or substantially more space than other candidates participating in the
voter guide. This requirement is similar to the candidate debate
situation in which the forum may not be structured to promote one
candidate over others.
The second type of voter guide must not contain an electioneering
message. See, Federal Election Commission v. Colorado Republican
Federal Campaign Committee, 59 F. 3d 1015 (1th Cir. 1995), petition for
cert. filed, No. 95-489 (Sept. 21, 1995) (statement that an office
holder has a right to run for the Senate, but doesn't have the right to
change the facts constituted an electioneering message); and AOs 1985-
14 and 1984-15. Similarly, the voter guide must not score or rate the
candidates' responses in a way that conveys an electioneering message,
such as by indicating that certain responses are ``right'' or ``wrong''
or receive a higher or lower grade than others.
7. Endorsements
The NPRM proposed adding new paragraph (c)(6) to section 114.4 to
reflect the Commission's policy regarding public endorsements of
candidates by corporations and labor organizations. In AO 1984-23, the
Commission permitted a corporation to include an endorsement in a
publication directed to its restricted class. In addition, the NPRM
indicated that the endorsement could be made during the candidate's
appearance before the restricted class. One comment objected to
enhancing the publicity corporate endorsements will receive. Another
comment opposed these restrictions on corporate endorsements because
labor organization endorsements receive wider media coverage. The
Commission believes these concerns are misplaced. Media coverage of
endorsements by corporations or labor organizations is similar to media
coverage of candidate appearances in that both are governed by the news
media's determination as to the newsworthiness of the event.
The NPRM also sought comment on two alternative approaches
regarding further corporate or labor efforts to publicize the
endorsement through press releases and press conferences. Alternative
D-1 sought to follow AO 1984-23 by allowing the corporation or labor
organization to spend a de minimis amount to issue a press release
regarding the endorsement to its usual media contacts. This language
also explicitly recognized that the press release may be accompanied by
a routine press conference. In contrast, Alternative D-2 would have
permitted the corporation or labor organization to publicize the
endorsement only by responding to quesitons posed during a routine
press conference.
Several comments preferred Alternative D-1, believing that
Alternative D-2 could be easily manipulated, and is an artificial
distinction. The Commission agrees, and has therefore decided to adopt
Alternative D-1.
The proposed rules would also have permitted corporations and labor
organizations to have contact with candidates to the limited extent
necessary to make the endorsement, without treating these
communications as impermissible in-kind contributions. The Commission
sought comment, however, on whether this limitation on candidate
contact would inhibit the corporation's or labor organization's ability
to obtain the information needed to make an endorsement decision. While
one commenter expressed concern that these discussions with candidates
and their campaign staff were unnecessary and provided an opportunity
to coordinate endorsements with candidates, another commenter believed
that organizations need to know the nature and viability and
organization of the campaign, and thus the candidate's likelihood of
success.
The Commission agrees that organizations need to discuss various
issues with candidates and their staff when deciding who to endorse.
Hence, the language in section 114.4(c)(6)(ii) has been revised to
allow a greater range of discussion with the candidate or campaign
staff prior to the endorsement. However, the public announcement of the
endorsement may not be coordinated with the candidate or the
candidate's agents or authorized committee.
Finally, the new rules advise consulting the Internal Revenue Code
and IRS regulations regarding restrictions and prohibitions on
endorsements by nonprofit corporations. The Internal Revenue Service
indicated in its comment that nonprofit corporations organized under 26
U.S.C. 501(c)(3) cannot endorse candidates.
8. Candidate Appearances on Educational Institution Premises
The FECA prohibits corporations from making contributions to or
giving anything of value to a federal candidate, including free use of
facilities, such as halls and auditoriums. Since most private colleges
and universities are incorporated, this prohibition applies to them.
The NPRM included draft provisions to clarify the Commission's
interpretation of this statutory prohibition as it applies to
incorporated educational institutions. In the proposed rules, section
114.4(c)(7) included an exception to permit colleges, universities, and
other incorporated nonprofit educational institutions which are exempt
from federal taxation under 26 U.S.C. 501(c)(3) to make their premises
available to groups that are associated with the school and wish to
invite candidates to address students, faculty and the general public,
under certain conditions.
Several comments and witnesses expressed an overall concern that
the Commission was attempting to over-regulate political speech on
campuses. They pointed out that historically, universities have sought
to promote the free exchange and debate of ideas in an intellectual
environment, and have tried to stimulate student interest in democratic
processes and institutions. They were also concerned that the new rules
could affect classroom discussions. The Internal Revenue Service
indicated that the proposed FEC rules were more specific than the
``facts and circumstances'' test used by the IRS, but did not conflict
with that test.
The Commission has now revised new paragraph (c)(7) of section
114.4 in a number of respects to clarify the intent of the new rules.
First, language has been added at paragraph (c)(7)(i) to clarify that
educational institutions may continue to charge candidates the usual
and normal charge for the use of their facilities. Secondly, private
colleges, universities, and other incorporated nonprofit educational
institutions may make their premises available to candidates who wish
to address students, faculty, the academic community, or the general
public (whomever is invited) at no cost or for less than the usual and
normal charge. See 11 CFR 114.4(c)(7)(ii). However, the school must
make reasonable efforts to ensure that the appearances are conducted as
speeches, question and answer sessions, or other academic events, and
do not constitute campaign rallies. Incorporated educational
institutions may also continue to allow individuals who are candidates
to appear in another capacity, such as officeholders or prominent
speakers on particular issues, if they do not refer to the campaign or
their status as candidates. See, e.g., AO 1992-6. The new rules also do
not prevent candidates from participating in campus
[[Page 64271]]
events in other capacities, such as when the candidate is also a
faculty member.
Although the proposed rules in the Notice covered candidate
appearances on college campuses, they did not specifically address
candidate debates. As noted by the commenters, there is a long
tradition of holding candidate debates in college auditoriums. The
Commission did not intend to curtail this practice, and the final rules
do not prevent such debates from being held. Colleges and universities
that qualify for tax-exempt status under 26 U.S.C. 501(c)(3) may stage
candidate debates in accordance with the requirements set out in 11 CFR
110.13 and 114.4(f).
The proposed rules in section 114.4(c)(7)(i) would have required
educational institutions to have an established policy allowing
associated organizations, such as student groups, to sponsor candidate
appearances so long as the policy does not favor one candidate or party
over any other. Several commenters questioned the need for such a
policy, and expressed concern that colleges and universities would be
forced to grant access to their facilities to groups not connected with
the educational institution. Consequently, the language in new section
114.4(c)(7) is being amended to include a more general requirement that
the educational institution does not favor any one candidate or
political party in allowing the appearances.
The proposed rules also sought to ensure that admission to a
candidate's appearance would not be based on party affiliation, or any
other indications of support for or opposition to the candidate by
requiring either the educational institution or the sponsoring group to
control access to the facility, rather than the candidate's campaign
committee. This proposal has been dropped as impracticable.
The NPRM indicated that one objective was to ensure that these
candidate appearances will not become campaign rallies, fundraising
events, or opportunities for the school or group issuing the invitation
to expressly advocate, or encourage the audience to expressly advocate,
the election or defeat of the candidate who is appearing. Accordingly,
the proposals sought to restrict the presence of campaign banners,
posters, balloons and other similar items which would be viewed as
indicative of a campaign rally. Several commenters and witnesses
recognized the necessity for educational institutions to refrain from
express advocacy, so as to avoid jeopardizing their nonprofit status.
However, the comments also emphasized the practical difficulties in
trying to control expressions of support or opposition by the audience,
and trying to ensure that a campaign rally atmosphere does not ensue.
They also questioned distinctions between posters and hats or buttons.
Finally, they argued that colleges are public fora, and the
government's ability to restrict speech in public fora is limited.
The revised rules in paragraph (c)(7)(ii)(B) retain the prohibition
against the educational institution engaging in express advocacy.
However, the language regarding a campaign rally atmosphere has been
modified to require the educational institution to make reasonable
efforts to ensure that the appearance does not turn into a campaign
rally. This does not require the college or university to monitor
buttons or campaign materials brought in or worn by members of the
audience. These provisions are consistent with the requirement that
exempt organizations under 26 U.S.C. 501(c)(3) refrain from
participating in or intervening in political campaigns.
The NPRM also proposed a prohibition against candidates collecting
contributions during the appearance, coupled with language allowing
candidates to ask for contributions to be sent to their campaign
committees. The Notice also suggested a provision barring educational
institutions from soliciting contributions. The comments generally
supported these proposals as consistent with the nonprofit status of
these educational institutions under the Internal Revenue Code. They
also suggested that candidates be informed in advance that they may not
collect contributions.
It is not necessary to include in the final rules these
restrictions on soliciting and collecting contributions. They are
already subsumed within the requirement that the educational
institution make a reasonable effort to ensure the candidate appearance
does not become a campaign rally. In addition, candidate appearances at
incorporated private colleges and universities are already subject to
additional requirements under the Internal Revenue Code and regulations
issued thereunder.
The NPRM also included provisions allowing educational institutions
to invite the media to cover these candidate appearances and to
broadcast them to the general public, provided the schools follow the
same guidelines that would apply to other corporations, as set forth in
section 114.3(c)(2)(iii) and section 114.4(b)(1)(viii). The Commission
has decided not to include this provision in the final rules and to
allow educational institutions and the news media to work out their own
arrangements.
9. Candidate Appearances in Churches
The NPRM presented the possibility of issuing rules regarding
candidate appearances in churches and religious facilities. However,
this topic received little attention from the commenters. The large
number of other more immediate issues in this rulemaking may have
overshadowed considerations of candidate appearances in religious
settings. At this point, the Commission has decided to defer this
matter for further consideration.
10. Registration and Get-Out-The-Vote Drives
Voter registration and get-out-the-vote drives aimed at the general
public or at employees outside the restricted class have been moved
from previous paragraph (c) to renumbered paragraph (d) of section
114.4. The NPRM included several revisions to this provision, most of
which are included in the attached final rules. First, the regulations
distinguish between the speech and nonspeech components of voter
drives. Thus, the rules conform to the MCFL decision by applying an
express advocacy standard to the speech components of voter drives.
Hence, new language in paragraph (d)(1) indicates that communications
containing express advocacy may not be made during voter drives aimed
at employees outside the restricted class, or during voter drives aimed
more broadly at the general public.
The revised voter drive rules also include changes regarding the
nonspeech components of voter drives. Under section 114.4(d),
corporations and labor organizations may conduct voter registration and
get-out-the-vote drives without the involvement of a nonprofit
organization which is described in 26 U.S.C. 501 (c)(3) or (c)(4). To
the extent that AO 1978-102 indicates that such drives must be jointly
sponsored with a civic or nonprofit organization, that opinion is
superseded by the regulatory changes to this section. However, the
validity of AO 1980-45, which affirmed the ability of a 501(c)(3)
nonprofit corporation to conduct a voter registration drive, is not
affected by the revised rules. Paragraph (d)(2) specifies that these
drives cannot be coordinated with any candidate or political party.
Moreover, under paragraph (d)(5), workers cannot be paid only to
register voters supporting a particular candidate or political party.
Both the proposed and the final rules in section 114.4(d)(4)
contemplate
[[Page 64272]]
continuing the long-standing policy that information and assistance in
registering and voting shall not be withheld on the basis of support
for or opposition to particular candidates or political parties. New
language in paragraph (d)(6) indicates that those receiving information
or assistance must be notified in writing that their party or candidate
preferences may not be a basis for refusing them assistance. This
requirement can be easily satisfied simply by posting a sign at a voter
registration table or in a vehicle used to take voters to the polls.
The comments and testimony revealed little, if any, consensus
regarding these proposals. There was opposition to section 114.4(d) on
the grounds that voter drives are something of value to candidates, and
are therefore contributions or expenditures. There was also concern
that the proposals did not contain sufficient safeguards against
electioneering and coordination with candidates. On the other hand,
others believed that the Commission has no authority to prohibit
coordinating voter registration and get-out-the-vote drive
communications with candidates, and that the only restriction on this
activity should be that the organization must refrain from express
advocacy. The provisions requiring certain notifications to the targets
of the drive were thought to be unnecessary and expensive. The Internal
Revenue Service indicated that while the FEC's rules are more specific
than theirs, they do not impinge upon the Internal Revenue Service's
``facts and circumstances'' test.
After carefully considering the comments, the Commission has
decided that the proposals in the NPRM are in keeping with the FECA and
the MCFL decision. Thus, the final rules follow the proposed rules,
with two minor changes. First, paragraph (d)(3) has been modified to
clarify that voter registration and get-out-the-vote drives cannot be
targeted primarily at individuals who will register with, or vote for,
the party preferred by the drive sponsor. Second, the rules specify
that voter registration efforts may include transportation to the place
of registration in addition to transportation to the polls.
11. Membership Organizations, Trade Associations, Cooperatives and
Corporations Without Capital Stock
Paragraph (e) of section 114.4 generally follows previous paragraph
(d) by specifying that these organizations may hold candidate
appearances under the same conditions as other corporations.
12. Candidate Debates
Provisions governing the funding of candidate debates, which were
previously located in section 114.4(e), are now located in section
114.4(f). These rules have been revised in two respects. First, these
debates are no longer referred to as ``nonpartisan.'' Second, the term
``bona fide'' has been moved so that it modifies ``newspaper, magazine
and other periodical publication,'' instead of modifying
``broadcaster.'' This change conforms to the wording of the candidate
debate rules in 11 CFR 110.13.
Section 114.12 Incorporation of Political Committees; Payment of
Fringe Benefits
This section has been renamed to make it easier for the reader to
locate the topics covered. In addition, paragraph (b) of section
114.12, which pertains to candidates using corporate and labor
organization meeting rooms, has been moved to new section 114.13.
Section 114.13 Use of Meeting Rooms
This new section replaces previous 11 CFR 114.12(b). It permits
corporations and labor organizations to make meeting rooms available to
a candidate or political committee if the room is customarily made
available to clubs, civic or community groups, and if the rooms are
made available to any other candidate or committee upon request. It
differs from the previous rule, however, in that it does not not refer
to making rooms available on a ``nonpartisan basis.'' One commenter
objected to this provision arguing that it sanctions the political use
of labor organization facilities paid for, in part, with the forced
dues of employees. Issues involving compulsory union dues are more
properly within the jurisdiction of the Department of Labor.
Certification of no Effect Pursuant to 5 U.S.C. 605(b) [Regulatory
Flexibility Act]
The attached final rules will not, if promulgated, have a
significant economic impact on a substantial number of small entities.
The basis for this certification is that, few, if any, small entities
will be affected by these final rules. In addition, any small entities
affected are already required to comply with the requirements of the
Federal Election Campaign Act.
List of Subjects
11 CFR Part 100
Elections.
11 CFR Part 102
Political committees and parties, Reporting and recordkeeping
requirements.
11 CFR Part 109
Elections, Reporting and recordkeeping requirements.
11 CFR Part 110
Campaign funds, Political committees and parties.
11 CFR Part 114
Business and industry, Elections, Labor.
For the reasons set out in the preamble, Subchapter A, Chapter I of
Title 11 of the Code of Federal Regulations is amended as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
1. The authority citation for Part 100 continues to read as
follows:
Authority: 2 U.S.C. 431, 438(a)(8).
2. 11 CFR part 100 is amended by revising paragraph (b)(21) of
section 100.7 to read as follows:
Sec. 100.7 Contribution (2 U.S.C. 431(8)).
* * * * *
(b) * * *
(21) Funds provided to defray costs incurred in staging candidate
debates in accordance with the provisions of 11 CFR 110.13 and
114.4(f).
* * * * *
3. 11 CFR Part 100 is amended by revising paragraphs (b)(3) and
(b)(23) of section 100.8 to read as follows:
Sec. 100.8 Expenditure (2 U.S.C. 431(9)).
* * * * *
(b) * * *
(3) Any cost incurred for activity designed to encourage
individuals to register to vote or to vote is not an expenditure if no
effort is or has been made to determine the party or candidate
preference of individuals before encouraging them to register to vote
or to vote, except that corporations and labor organizations shall
engage in such activity in accordance with 11 CFR 114.4 (c) and (d).
See also 11 CFR 114.3(c)(4).
* * * * *
(23) Funds used to defray costs incurred in staging candidate
debates in accordance with the provisions of 11 CFR 110.13 and
114.4(f).
* * * * *
[[Page 64273]]
PART 102--REGISTRATION, ORGANIZATION, AND RECORDKEEPING BY
POLITICAL COMMITTEES (2 U.S.C. 433)
4. The authority citation for Part 102 continues to read as
follows:
Authority: 2 U.S.C. 432, 433, 438(a)(8), 441d.
5. 11 CFR part 102 is amended by revising paragraph (c)(1) of
section 102.4 to read as follows:
Sec. 102.4 Administrative termination (2 U.S.C. 433(d)(2)).
* * * * *
(c) * * *
(1) The committee has complied with the debt settlement procedures
set forth at 11 CFR part 116.
* * * * *
PART 109--INDEPENDENT EXPENDITURES (2 U.S.C. 431(17), 434(c))
6. The authority citation for part 109 continues to read as
follows:
Authority: 2 U.S.C. 431(17), 434(c), 438(a)(8), 441d.
7. 11 CFR part 109 is amended by revising paragraph (b)(4) of
section 109.1 to read as follows:
Sec. 109.1 Definitions (2 U.S.C. 431(17)).
* * * * *
(b) * * *
(4) Made with the cooperation or with the prior consent of, or in
consultation with, or at the request or suggestion of, a candidate or
any agent or authorized committee of the candidate--
(i) Means any arrangement, coordination, or direction by the
candidate or his or her agent prior to the publication, distribution,
display, or broadcast of the communication. An expenditure will be
presumed to be so made when it is--
(A) Based on information about the candidate's plans, projects, or
needs provided to the expending person by the candidate, or by the
candidate's agents, with a view toward having an expenditure made; or
(B) Made by or through any person who is, or has been, authorized
to raise or expend funds, who is, or has been, an officer of an
authorized committee, or who is, or has been, receiving any form of
compensation or reimbursement from the candidate, the candidate's
committee or agent;
(ii) But does not include providing to the expending person upon
request Commission guidelines on independent expenditures.
* * * * *
PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS
8. The authority citation for part 110 continues to read as
follows:
Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 437d(a)(8),
438(a)(98), 441a, 441b, 441d, 441e, 441f, 441g and 441h.
9. 11 CFR part 110 is amended by adding new section 110.12 to read
as follows:
Sec. 110.12 Candidate appearances on public educational institution
premises.
(a) Rental of facilities at usual and normal charge. Any
unincorporated public educational institution exempt from federal
taxation under 26 U.S.C. 115, such as a school, college or university,
may make its facilities available to any candidate or political
committee in the ordinary course of business and at the usual and
normal charge. In this event, the requirements of paragraph (b) of this
section are not applicable.
(b) Use of facilities at no charge or at less than the usual and
normal charge. An unincorporated public educational institution exempt
from federal taxation under 26 U.S.C. 115, such as a school, college or
university, may sponsor appearances by candidates, candidates'
representatives or representatives of political parties at which such
individuals address or meet the institution's academic community or the
general public (whichever is invited) on the educational institution's
premises at no charge or at less than the usual and normal charge, if:
(1) The educational institution makes reasonable efforts to ensure
that the appearances constitute speeches, question and answer sessions,
or similar communications in an academic setting, and makes reasonable
efforts to ensure that the appearances are not conducted as campaign
rallies or events; and
(2) The educational institution does not, in conjunction with the
appearance, expressly advocate the election or defeat of any clearly
identified candidate(s) or candidates of a clearly identified political
party, and does not favor any one candidate or political party over any
other in allowing such appearances.
10. 11 CFR part 110 is amended by revising section 110.13 to read
as follows:
Sec. 110.13 Candidate debates.
(a) Staging organizations. (1) Nonprofit organizations described in
26 U.S.C. 501 (c)(3) or (c)(4) and which do not endorse, support, or
oppose political candidates or political parties may stage candidate
debates in accordance with this section and 11 CFR 114.4(f).
(2) Broadcasters, bona fide newspapers, magazines and other
periodical publications may stage candidate debates in accordance with
this section and 11 CFR 114.4(f).
(b) Debate structure. The structure of debates staged in accordance
with this section and 11 CFR 114.4(f) is left to the discretion of the
staging organization(s), provided that:
(1) Such debates include at least two candidates; and
(2) The staging organization(s) does not structure the debates to
promote or advance one candidate over another.
(c) Criteria for candidate selection. For all debates, staging
organization(s) must use pre-established objective criteria to
determine which candidates may participate in a debate. For general
election debates, staging organization(s) shall not use nomination by a
particular political party as the sole objective criterion to determine
whether to include a candidate in a debate. For debates held prior to a
primary election, caucus or convention, staging organizations may
restrict candidate participation to candidates seeking the nomination
of one party, and need not stage a debate for candidates seeking the
nomination of any other political party or independent candidates.
PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY
11. The authority citation for part 114 continues to read as
follows:
Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 432, 437d(a)(8),
438(a)(8), and 441b.
12. 11 CFR part 114 is amended by revising paragraphs (a)(1),
(a)(2) introductory text and (a)(2)(ii), and by adding paragraph (j) to
section 114.1 as follows.
Sec. 114.1 Definitions.
(a) For purposes of part 114 and section 12(h) of the Public
Utility Holding Company Act (15 U.S.C. 791(h))--
(1) The terms contribution and expenditure shall include any direct
or indirect payment, distribution, loan, advance, deposit, or gift of
money, or any services, or anything of value (except a loan of money by
a State bank, a federally chartered depository institution (including a
national bank) or a depository institution whose deposits and accounts
are insured by the Federal Deposit Insurance Corporation or the
National Credit Union Administration, if such loan is made in
accordance with 11 CFR 100.7(b)(11)) to any candidate, political
[[Page 64274]]
party or committee, organization, or any other person in connection
with any election to any of the offices referred to in 11 CFR 114.2 (a)
or (b) as applicable.
(2) The terms contribution and expenditure shall not include--
(i) * * *
(ii) Registration and get-out-the-vote campaigns by a corporation
aimed at its stockholders and executive or administrative personnel,
and their families, or by a labor organization aimed at its members and
executive or administrative personnel, and their families, as described
in 11 CFR 114.3;
* * * * *
(j) Restricted class. A corporation's restricted class is its
stockholders and executive or administrative personnel, and their
families, and the executive and administrative personnel of its
subsidiaries, branches, divisions, and departments and their families.
A labor organization's restricted class is its members and executive or
administrative personnel, and their families. For communications under
11 CFR 114.3, the restricted class of an incorporated membership
organization, incorporated trade association, incorporated cooperative
or corporation without capital stock is its members and executive or
administrative personnel, and their families. (The solicitable class of
a membership organization, cooperative, corporation without capital
stock or trade association, as described in 11 CFR 114.7 and 114.8, may
include some persons who are not considered part of the organization's
restricted class, and may exclude some persons who are in the
restricted class.)
13. 11 CFR part 114 is amended by revising section 114.2 to read as
follows:
Sec. 114.2 Prohibitions on contributions and expenditures.
(a) National banks and corporations organized by authority of any
law of Congress are prohibited from making a contribution, as defined
in 11 CFR 114.1(a), in connection with any election to any political
office, including local, State and Federal offices, or in connection
with any primary election or political convention or caucus held to
select candidates for any political office, including any local, State
or Federal office. National banks and corporations organized by
authority of any law of Congress are prohibited form making
expenditures as defined in 11 FR 114.1(a) for communications to those
outside the restricted class expressly advocating the election or
defeat of one or more clearly identified candidate(s) or the candidates
of a clearly identified political party, with respect to an election to
any political office, including any local, State or Federal office.
(1) Such national banks and corporations may engage in the
activities permitted by 11 CFR part 114, except to the extent that such
activity is foreclosed by provisions of law other than the Act.
(2) The provisions of 11 CFR part 114 apply to the activities of a
national bank, or a corporation organized by any law of Congress, in
connection with local, State and Federal elections.
(b) Any corporation whatever or any labor organization is
prohibited from making a contribution as defined in 11 CFR 114.1(a) in
connection with any Federal election. Except as provided at 11 CFR
114.10, corporations and labor organizations are prohibited from making
expenditures with respect to a Federal election (as defined in 11 CFR
114.1(a)) for communications to those outside the restricted class
expressly advocating the election or defeat of one or more clearly
identified candidate(s) or the candidates of a clearly identified
political party.
(c) Disbursements by corporations and labor organizations for the
election-related activities described in 11 CFR 114.3 and 114.4 will
not cause those activities to be contributions or expenditures, even
when coordinated with any candidate, candidate's agent, candidate's
authorized committee(s) or any party committee to the extent permitted
in those sections. Coordination beyond that described in 11 CFR 114.3
and 114.4 shall not cause subsequent activities directed at the
restricted class to be considered contributions or expenditures.
However, such coordination may be considered evidence that could negate
the independence of subsequent communications to those outside the
restricted class by the corporation, labor organization or its separate
segregated fund, and could result in an in-kind contribution. See 11
CFR 109.1 regarding independent expenditures and coordination with
candidates.
(d) A candidate, political committee, or other person is prohibited
from knowingly accepting or receiving any contribution prohibited by
this section.
(e) No officer or director of any corporation or any national bank,
and no officer of any labor organization shall consent to any
contribution or expenditure by the corporation, national bank, or labor
organization prohibited by this section.
(f) Facilitating the making of contributions. (1) Corporations and
labor organizations (including officers, directors or other
representatives acting as agents of corporations and labor
organizations) are prohibited from facilitating the making of
contributions to candidates or political committees, other than to the
separate segregated funds of the corporations and labor organizations.
Facilitation means using corporate or labor organization resources or
facilities to engage in fundraising activities in connection with any
federal election, such as activities which go beyond the limited
exemptions set forth in 11 CFR 100.7, 100.8, 114.9(a) through (c) and
114.13. A corporation does not facilitate the making of a contribution
to a candidate or political committee if it provides goods or services
in the ordinary course of its business as a commercial vendor in
accordance with 11 CFR part 116 at the usual and normal charge.
(2) Examples of facilitating the making of contributions include
but are not limited to--
(i) Fundraising activities by corporations (except commercial
vendors) or labor organizations that involve--
(A) Officials or employees of the corporation or labor organization
ordering or directing subordinates or support staff (who therefore are
not acting as volunteers) to plan, organize or carry out the
fundraising project as a part of their work responsibilities using
corporate or labor organization resources, unless the corporation or
labor organization receives advance payment for the fair market value
of such services;
(B) Failure to reimburse a corporation or labor organization within
a commercially reasonable time for the use of corporate facilities
described in 11 CFR 114.9(d) in connection with such fundraising
activities;
(C) Using a corporate or labor organization list of customers,
clients, vendors or others who are not in the restricted class to
solicit contributions or distribute invitations to the fundraiser,
unless the corporation or labor organization receives advance payment
for the fair market value of the list;
(D) Using meeting rooms that are not customarily made available to
clubs, civic or community organizations or other groups; or
(E) Providing catering or other food services operated or obtained
by the corporation or labor organization, unless the corporation or
labor organization receives advance payment for the fair market value
of the services;
(ii) Providing materials for the purpose of transmitting or
delivering contributions, such as stamps, envelopes addressed to a
candidate or political committee other than the
[[Page 64275]]
corporation's or labor organization's separate segregated fund, or
other similar items which would assist in transmitting or delivering
contributions, but not including providing the address of the candidate
or political committee;
(iii) Soliciting contributions earmarked for a candidate that are
to be collected and forwarded by the corporation's or labor
organizations's separate segregated fund, except to the extent such
contributions also are treated as contributions to and by the separate
segregated fund; or
(iv) Using coercion, such as the threat of a detrimental job
action, the threat of any other financial reprisal, or the threat of
force, to urge any individual to make a contribution or engage in
fundraising activities on behalf of a candidate or political committee.
(3) Facilitating the making of contributions does not include the
following activities if conducted by a separate segregated fund--
(i) Any activity specifically permitted under 11 CFR 110.1, 110.2,
or 114.5 through 114.8, including soliciting contributions to a
candidate or political committee, and making in kind contributions to a
candidate or political committee; and
(ii) Collecting and forwarding contributions earmarked to a
candidate in accordance with 11 CFR 110.6.
(4) Facilitating the making of contributions also does not include
the following activities if conducted by a corporation or labor
organization--
(i) Enrolling members of a corporation's or labor organization's
restricted class in a payroll deduction plan or check-off system which
deducts contributions from dividend or payroll checks to make
contributions to the corporation's or labor organization's separate
segregated fund or an employee participation plan pursuant to 11 CFR
114.11;
(ii) Soliciting contributions to be sent directly to candidates if
the solicitation is directed to the restricted class, see 11 CFR
114.1(a)(2)(i); and
(iii) Soliciting contributions earmarked for a candidate that are
to be collected and forwarded by the corporation's or labor
organization's separate segregated fund, to the extent such
contributions also are treated as contributions to and by the separate
segregated fund.
14. 11 CFR part 114 is amended by revising section 114.3 to read as
follows:
Sec. 114.3 Disbursements for communications to the restricted class in
connection with a Federal election.
(a) General. (1) Corporations and labor organizations may make
communications on any subject, including communications containing
express advocacy, to their restricted class or any part of that class.
Corporations and labor organizations may also make the communications
permitted under 11 CFR 114.4 to their restricted class or any part of
that class. The activities permitted under this section may involve
election-related coordination with candidates and political committees.
See 11 CFR 109.1 and 114.2(c) regarding independent expenditures and
coordination with candidates.
(2) Incorporated membership organizations, incorporated trade
associations, incorporated cooperatives and corporations without
capital stock may make communications to their restricted class, or any
part of that class as permitted in paragraphs (a)(1) and (c) of this
section.
(b) Reporting communications containing express advocacy.
Disbursements for communications expressly advocating the election or
defeat of one or more clearly identified candidate(s) made by a
corporation, including a corporation described in paragraph (a)(2) of
this section, or labor organization to its restricted class shall be
reported in accordance with 11 CFR 100.8(b)(4) and 104.6.
(c) Communications containing express advocacy. Communications
containing express advocacy which may be made to the restricted class
include, but are not limited to, the examples set forth in paragraphs
(c)(1) through (c)(4) of this section.
(1) Publications. Printed material expressly advocating the
election or defeat of one or more clearly identified candidate(s) or
candidates of a clearly identified political party may be distributed
by a corporation or by a labor organization to its restricted class,
provided that:
(i) The material is produced at the expense of the corporation or
labor organization; and
(ii) The material constitutes a communications of the views of the
corporation or the labor organization, and is not the republication or
reproduction, in whole or in part, of any broadcast, transcript or tape
or any written, graphic, or other form of campaign materials prepared
by the candidate, his or her campaign committees, or their authorized
agents. A corporation or labor organization may, under this section,
use brief quotations from speeches or other materials of a candidate
that demonstrate the candidate's position as part of the corporation's
or labor organization's expression of its own views.
(2) Candidate and party appearances. (i) A corporation may allow a
candidate, candidate's representative or party representative to
address its restricted class at a meeting, convention or other function
of the corporation, but is not required to do so. A labor organization
may allow a candidate or party representative to address its restricted
class at a meeting, convention, or other function of the labor
organization, but is not required to do so. A corporation or labor
organization may bar other candidates for the same office or a
different office and their representatives, and representatives of
other parties addressing the restricted class. A corporation or labor
organization may allow the presence of employees outside the restricted
class of the corporation or labor organization who are necessary to
administer the meeting, other guests of the corporation or labor
organization who are being honored or speaking or participating in the
event, and representatives of the news media.
(ii) The candidate, candidate's representative or party
representative may ask for contributions to his or her campaign or
party, or ask that contributions to the separate segregated fund of the
corporation or labor organization be designated for his or her campaign
or party. The incidental solicitation of persons outside the
corporation's or labor organization's restricted class who may be
present at the meeting as permitted by this section will not be a
violation of 11 CFR part 114. The candidate's representative or party
representative (other than an officer, director or other representative
of a corporation or official, member or employee of a labor
organization) or the candidate, may accept contributions before, during
or after the appearance at the meeting, convention or other function of
the corporation or labor organization.
(iii) The corporation or labor organization may suggest that
members of its restricted class contribute to the candidate or party
committee, but the collection of contributions by any officer, director
or other representative of the corporation or labor organization
before, during, or after the appearance while at the meeting, is an
example of a prohibited facilitation of contributions under 11 CFR
114.2(f).
(iv) If the corporation or labor organization permits more than one
candidate for the same office, or more than one candidate's
representative or party representative, to address its restricted
class, and permits the news
[[Page 64276]]
media to cover or carry an appearance by one candidate or candidate's
representative or party representative, the corporation or labor
organization shall also permit the news media to cover or carry the
appearances by the other candidate(s) for that office, or the other
candidates' representatives or party representatives. If the
corporation or labor organization permits a representative of the news
media to cover or carry a candidate or candidate's representative or
party representative appearance, the corporation or labor organization
shall provide all other representatives of the news media with equal
access for covering or carrying that appearance. Equal access is
provided by--
(A) Providing advance information regarding the appearance to the
representatives of the news media whom the corporation or labor
organization customarily contacts and other representatives of the news
media upon request; and
(B) Allowing all representatives of the news media to cover or
carry the appearance, through the use of pooling arrangements if
necessary.
(3) Phone banks. A corporation or a labor organization may
establish and operate phone banks to communicate with its restricted
class, urging them to register and/or vote for a particular candidate
or candidates, or to register with a particular political party.
(4) Registration and get-out-the-vote drives. A corporation or a
labor organization may conduct registration and get-out-the-vote drives
aimed at its restricted class. Registration and get-out-the-vote drives
include providing transportation to the place of registration and to
the polls. Such drives may include communications containing express
advocacy, such as urging individuals to register with a particular
party or to vote for a particular candidate or candidates. Information
and other assistance regarding registering or voting, including
transportation and other services offered, shall not be withheld or
refused on the basis of support for or opposition to particular
candidates, or a particular political party.
15. 11 CFR part 114 is amended by revising section 114.4 to read as
follows:
Sec. 114.4 Disbursements for communications beyond the restricted
class in connection with a Federal election.
(a) General. A corporation or labor organization may communicate
beyond the restricted class in accordance with this section. Any
communications which a corporation or labor organization may make to
the general public under paragraph (c) of this section may also be made
to the corporation's or labor organization's restricted class and to
other employees and their families. Communications which a corporation
or labor organization may make only to its employees (including its
restricted class) and their families, but not to the general public,
are found in paragraph (b) of this section. Communications which a
corporation or labor organization may make only to its restricted class
are found at 11 CFR 114.3. The activities permitted under paragraphs
(b) and (c) of this section may involve election-related coordination
with candidates and political committees only to the extent permitted
by this section. See 11 CFR 109.1 and 114.2(c) regarding independent
expenditures and coordination with candidates. Incorporated membership
organizations, incorporated trade associations, incorporated
cooperatives and corporations without capital stock will be treated as
corporations for the purpose of making communications beyond the
restricted class under this section.
(b) Communications by a corporation or labor organization to
employees beyond its restricted class-- (1) Candidate and party
appearances on corporate premises or at a meeting, convention or other
function. Corporations may permit candidates, candidates'
representatives or representatives of political parties on corporate
premises or at a meeting, convention, or other function of the
corporation to address or meet its restricted class and other employees
of the corporation and their families, in accordance with the
conditions set forth in paragraphs (b)(1)(i) through (b)(1)(viii) of
this section. Other guests of the corporation who are being honored or
speaking or participating in the event and representatives of the news
media may be present. A corporation may bar all candidates, candidates'
representatives and representatives of political parties from
addressing or meeting its restricted class and other employees of the
corporation and their families on corporate premises or at any meeting,
convention or other function of the corporation.
(i) If a candidate for the House or Senate or a candidate's
representative is permitted to address or meet employees, all
candidates for that seat who request to appear must be given a similar
opportunity to appear;
(ii) If a Presidential or Vice Presidential candidate or
candidate's representative is permitted to address or meet employees,
all candidates for that office who are seeking the nomination or
election, and who meet pre-established objective criteria under 11 CFR
110.13(c), and who request to appear must be given a similar
opportunity to appear;
(iii) If representatives of a political party are permitted to
address or meet employees, representatives of all political parties
which had a candidate or candidates on the ballot in the last general
election or which are actively engaged in placing or will have a
candidate or candidates on the ballot in the next general election and
who request to appear must be given a similar opportunity to appear;
(iv) The candidate's representative or party representative (other
than an officer, director or other representative of a corporation) or
the candidate, may ask for contributions to his or her campaign or
party, or ask that contributions to the separate segregated fund of the
corporation be designated for his or her campaign or party. The
candidate, candidate's representative or party representative shall not
accept contributions before, during or after the appearance while at
the meeting, convention or other function of the corporation, but may
leave campaign materials or envelopes for members of the audience. A
corporation, its restricted class, or other employees of the
corporation or its separate segregated fund shall not, either orally or
in writing, solicit or direct or control contributions by members of
the audience to any candidate or party in conjunction with any
appearance by any candidate or party representative under this section,
and shall not facilitate the making of contributions to any such
candidate or party (see 11 CFR 114.2(f));
(v) A corporation or its separate segregated fund shall not, in
conjunction with any candidate, candidate representative or party
representative appearance under this section, expressly advocate the
election or defeat of any clearly identified candidate(s) or candidates
of a clearly identified political party and shall not promote or
encourage express advocacy by employees;
(vi) No candidate, candidate's representative or party
representative shall be provided with more time or a substantially
better location than other candidates, candidates' representatives or
party representatives who appear, unless the corporation is able to
demonstrate that it is clearly impractical to provide all candidates,
candidates' representatives and party representatives with similar
times or locations;
[[Page 64277]]
(vii) Coordination with each candidate, candidate's agent, and
candidate's authorized committee(s) may include discussions of the
structure, format and timing of the candidate appearance and the
candidate's positions on issues, but shall not include discussions of
the candidate's plans, projects, or needs relating to the campaign; and
(viii) Representatives of the news media may be allowed to be
present during a candidate, candidate representative or party
representative appearance under this section, in accordance with the
procedures set forth at 11 CFR 114.3(c)(2)(iv).
(2) Candidate and party appearances on labor organization premises
or at a meeting, convention or other function. A labor organization may
permit candidates, candidates' representatives or representatives of
political parties on the labor organization's premises or at a meeting,
convention, or other function of the labor organization to address or
meet its restricted class and other employees of the labor
organization, and their families, in accordance with the conditions set
forth in paragraphs (b)(1) (i) through (iii), (vi) through (viii), and
paragraphs (b)(2) (i) and (ii) of this section. Other guests of the
labor organization who are being honored or speaking or participating
in the event and representatives of the news media may be present. A
labor organization may bar all candidates, candidates' representatives
and representatives of political parties from addressing or meeting its
restricted class and other employees of the labor organization and
their families on the labor organization's premises or at any meeting,
convention or other function of the labor organization.
(i) The candidate's representative or party representative (other
than an official, member or employee of a labor organization) or the
candidate, may ask for contributions to his or her campaign or party,
or ask that contributions to the separate segregated fund of the labor
organization be designated for his or her campaign or party. The
candidate, candidate's representative or party representative shall not
accept contributions before, during or after the appearance while at
the meeting, convention or other function of the labor organization,
but may leave campaign materials or envelopes for members of the
audience. No official, member, or employee of a labor organization or
its separate segregated fund shall, either orally or in writing,
solicit or direct or control contributions by members of the audience
to any candidate or party representative under this section, and shall
not facilitate the making of contributions to any such candidate or
party. See 11 CFR 114.2(f).
(ii) A labor organization or its separate segregated fund shall
not, in conjunction with any candidate or party representative
appearance under this section, expressly advocate the election or
defeat of any clearly identified candidate(s), and shall not promote or
encourage express advocacy by its members or employees.
(c) Communications by a corporation or labor organization to the
general public.
(1) General. A corporation or labor organization may make the
communications described in paragraphs (c)(2) through (c)(5) of this
section to the general public. The general public includes anyone who
is not in the corporation's or labor organization's restricted class.
The provisions of paragraph (c) of this section shall not prevent a
qualified nonprofit corporation under 11 CFR 114.10(c) from including
express advocacy in any communication made to the general public under
paragraphs (c)(2) through (c)(5)(i) of this section.
(2) Registration and voting communications. A corporation or labor
organization may make registration and get-out-the vote communications
to the general public, provided that the communications do not
expressly advocate the election or defeat of any clearly identified
candidate(s) or candidates of a clearly identified political party. The
preparation and distribution or registration and get-out-the-vote
communications shall not be coordinated with any candidate(s) or
political party. A corporation or labor organization may make
communications permitted under this section through posters,
billboards, broadcasting media, newspapers, newsletter, brochures, or
similar means of communication with the general public.
(3) Official registration and voting information.
(i) A corporation or labor organization may distribute to the
general public, or reprint in whole and distribute to the general
public, any registration or voting information, such as instructional
materials, which has been produced by the official election
administrators.
(ii) A corporation or labor organization may distribute official
registration-by-mail forms to the general public. A corporation or
labor organization may distribute absentee ballots to the general
public if permitted by the applicable State law.
(iii) A corporation or labor organization may donate funds to State
or local government agencies responsible for the administration of
elections to help defray the costs of printing or distributing
registration or voting information and forms.
(iv) The corporation or labor organization shall not, in connection
with any such distribution, expressly advocate the election or defeat
of any clearly identified candidate(s) or candidates of a clearly
identified political party and shall not encourage registration with
any particular political party.
(v) The reproduction and distribution of registration or voting
information and forms shall not be coordinated with any candidate(s) or
political party.
(4) Voting records. A corporation or labor organization may prepare
and distribute to the general public the voting records of Members of
Congress, provided that the voting record and all communications
distributed with it do not expressly advocate the election or defeat of
any clearly identified candidate, clearly identified group of
candidates or candidates of a clearly identified political party. The
decision on content and the distribution of voting records shall not be
coordinated with any candidate, group of candidates or political party.
(5) Voter guides. A corporation or labor organization may prepare
and distribute to the general public voter guides consisting of two or
more candidates' positions on campaign issues, including voter guides
obtained from a nonprofit organization which is described in 26 U.S.C.
501 (c)(3) or (c)(4), provided that the voter guides comply with either
paragraph (c)(5)(i) or (c)(5)(ii) (A) through (E) of this section. The
sponsor may include in the voter guide biographical information on each
candidate, such as education, employment positions, offices held, and
community involvement.
(i) The corporation or labor organization shall not contact or in
any other way act in cooperation, coordination, or consultation with or
at the request or suggestion of the candidates, the candidates'
committees or agents regarding the preparation, contents and
distribution of the voter guide, and no portion of the voter guide may
expressly advocate the election or defeat of one or more clearly
identified candidate(s) or candidates of any clearly identified
political party.
(ii) (A) The corporation or labor organization shall not contact or
in any other way act in cooperation, coordination, or consultation with
or at the request or suggestion of the candidates, the candidates'
committees or agents regarding the preparation, contents and
distribution of the voter
[[Page 64278]]
guide, except that questions may be directed in writing to the
candidates included in the voter guide and the candidates may respond
in writing;
(B) All of the candidates for a particular seat or office shall be
provided an equal opportunity to respond, except that in the case of
Presidential and Vice Presidential candidates the corporation or labor
organization may choose to direct the questions only to those
candidates who--
(1) Are seeking the nomination of a particular political party in a
contested primary election; or
(2) Appear on the general election ballot in the state(s) where the
voter guide is distributed or appear on the general election ballot in
enough states to win a majority of the electoral votes;
(C) No candidate may receive greater prominence in the voter guide
than other participating candidates, or substantially more space for
responses;
(D) The voter guide and its accompanying materials shall not
contain an electioneering message; and
(E) The voter guide and its accompanying materials shall not score
or rate the candidates' responses in such a way as to convey an
electioneering message.
(6) Endorsements. A corporation or labor organization may endorse a
candidate and may communicate the endorsement to its restricted class
through the publications described in 11 CFR 114.3(c)(1) or during a
candidate appearance under 11 CFR 114.3(c)(2), provided that no more
than a de minimis number of copies of the publication which includes
the endorsement are circulated beyond the restricted class. The
corporation or labor organization may publicly announce the endorsement
and state the reasons therefor, in accordance with the conditions set
forth in paragraphs (c)(6) (i) and (ii) of this section. The Internal
Revenue Code and regulations promulgated thereunder should be consulted
regarding restrictions or prohibitions on endorsements by nonprofit
corporations described in 26 U.S.C. 501(c)(3).
(i) The public announcement of the endorsement may be made through
a press release and press conference. Disbursements for the press
release and press conference shall be de minimis. The disbursements
shall be considered de minimis if the press release and notice of the
press conference is distributed only to the representatives of the news
media that the corporation or labor organization customarily contacts
when issuing non-political press releases or holding press conferences
for other purposes.
(ii) The public announcement of the endorsement may not be
coordinated with the candidate, the candidate's agents or the
candidate's authorized committee(s).
(7) Candidate appearances on educational institution premises--(i)
Rental of facilities at usual and normal charge. Any incorporated
nonprofit educational institution exempt from federal taxation under 26
U.S.C. 501(c)(3), such as a school, college or university, may make its
facilities available to any candidate or political committee in the
ordinary course of business and at the usual and normal charge. In this
event, the requirements of paragraph (c)(7)(ii) of this section are not
applicable.
(ii) Use of facilities at no charge or at less than the usual and
normal charge. An incorporated nonprofit educational institution exempt
from federal taxation under 26 U.S.C. 501(c)(3), such as a school,
college or university, may sponsor appearances by candidates,
candidates' representatives or representatives of political parties at
which such individuals address or meet the institution's academic
community or the general public (whichever is invited) on the
educational institution's premises at no charge or at less than the
usual and normal charge, if:
(A) The educational institution makes reasonable efforts to ensure
that the appearances constitute speeches, question and answer sessions,
or similar communications in an academic setting, and makes reasonable
efforts to ensure that the appearances are not conducted as campaign
rallies or events; and
(B) The educational institution does not, in conjunction with the
appearance, expressly advocate the election or defeat of any clearly
identified candidate(s) or candidates of a clearly identified political
party, and does not favor any one candidate or political party over any
other in allowing such appearances.
(d) Registration and get-out-the-vote drives. A corporation or
labor organization may support or conduct voter registration and get-
out-the-vote drives which are aimed at employees outside its restricted
class and the general public in accordance with the conditions set
forth in paragraphs (d)(1) through (d)(6) of this section. Registration
and get-out-the-vote drives include providing transportation to the
polls or to the place of registration.
(1) The corporation or labor organization shall not make any
communication expressly advocating the election or defeat of any
clearly identified candidate(s) or candidates of a clearly identified
political party as part of the voter registration or get-out-the-vote
drive.
(2) The registration or get-out-the-vote drive shall not be
coordinated with any candidate(s) or political party.
(3) The registration drive shall not be directed primarily to
individuals previously registered with, or intending to register with,
the political party favored by the corporation or labor organization.
The get-out-the-vote drive shall not be directed primarily to
individuals currently registered with the political party favored by
the corporation or labor organization.
(4) These services shall be made available without regard to the
voter's political preference. Information and other assistance
regarding registering or voting, including transportation and other
services offered, shall not be withheld or refused on the basis of
support for or opposition to particular candidates or a particular
political party.
(5) Individuals conducting the registration or get-out-the-vote
drive shall not be paid on the basis of the number of individuals
registered or transported who support one or more particular candidates
or political party.
(6) The corporation or labor organization shall notify those
receiving information or assistance of the requirements of paragraph
(d)(4) of this section. The notification shall be made in writing at
the time of the registration or get-out-the-vote drive.
(e) Incorporated membership organizations, incorporated trade
associations, incorporated cooperatives and corporations without
capital stock. An incorporated membership organization, incorporated
trade association, incorporated cooperative or corporation without
capital stock may permit candidates, candidates' representatives or
representatives of political parties to address or meet members and
employees of the organization, and their families, on the
organization's premises or at a meeting, convention or other function
of the organization, in accordance with the conditions set forth in
paragraphs (b)(1) (i) through (viii) of this section.
(f) Candidate debates. (1) A nonprofit organization described in 11
CFR 110.13(a)(1) may use its own funds and may accept funds donated by
corporations or labor organizations under paragraph (f)(3) of this
section to defray costs incurred in staging candidate debates held in
accordance with 11 CFR 110.13.
(2) A broadcaster, bona fide newspaper, magazine or other
periodical publication may use its own
[[Page 64279]]
funds to defray costs incurred in staging public candidate debates held
in accordance with 11 CFR 110.13.
(3) A corporation or labor organization may donate funds to
nonprofit organizations qualified under 11 CFR 110.13(a)(1) to stage
candidate debates held in accordance with 11 CFR 110.13 and 114.4(f).
16. 11 CFR part 114 is amended by revising the title of section
114.12, and by removing and reserving paragraph (b) of section 114.12
to read as follows:
Sec. 114.12 Incorporation of political committees; Payment of fringe
benefits.
* * * * *
(b) [Reserved]
* * * * *
17. 11 CFR part 114 is amended by adding section 114.13 to read as
follows:
Sec. 114.13 Use of meeting rooms.
Notwithstanding any other provisions of part 114, a corporation or
labor organization which customarily makes its meeting rooms available
to clubs, civic or community organizations, or other groups may make
such facilities available to a political committee or candidate if the
meeting rooms are made available to any candidate or political
committee upon request and on the same terms given to other groups
using the meeting rooms.
Dated: December 8, 1995.
Danny L. McDonald,
Chairman, Federal Election Commission.
[FR Doc. 95-30381 Filed 12-13-95; 8:45 am]
BILLING CODE 6715-01-M