[Federal Register Volume 71, Number 110 (Thursday, June 8, 2006)]
[Rules and Regulations]
[Pages 33190-33211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5195]


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FEDERAL ELECTION COMMISSION

11 CFR Part 109

[Notice 2006-10]


Coordinated Communications

AGENCY: Federal Election Commission.

ACTION: Final rules and transmittal of rules to Congress.

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SUMMARY: The Federal Election Commission is revising its regulations 
regarding communications that are coordinated with Federal candidates 
and political party committees. The Commission's rules set out a three-
prong test for determining whether a communication is ``coordinated'' 
with, and therefore an in-kind contribution to, a Federal candidate or 
a political party committee. These final rules implement the recent 
decision of the Court of Appeals in Shays v. Federal Election 
Commission, in which the court determined that the Commission needs to 
provide a more complete explanation and justification for its rules 
pursuant to the Administrative Procedure Act. To comply with the 
court's decision, and to address other issues involving the coordinated 
communication rules, the Commission is issuing these Final Rules and 
Explanation and Justification. Further information is provided in the 
supplementary information that follows.

DATES: Effective July 10, 2006.

FOR FURTHER INFORMATION CONTACT: Mr. Brad C. Deutsch, Assistant General 
Counsel, Mr. Ron B. Katwan, Ms. Margaret G. Perl, or Ms. Esa L. Sferra, 
Attorneys, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or 
(800) 424-9530.

SUPPLEMENTARY INFORMATION: 

Scope of Regulatory Changes

    The Commission is revising its regulations regarding communications 
that are coordinated with Federal candidates and political party 
committees. The Commission is: (1) Revising the fourth content standard 
at 11 CFR 109.21(c)(4) to establish separate time frames for 
communications referring to political parties, Congressional and 
Presidential candidates; (2) creating a safe harbor for certain 
endorsements and solicitations by Federal candidates; (3) revising the 
temporal limit of the common vendor and former employee conduct 
standards; (4) creating a safe harbor for the use of publicly available 
information; (5) creating a safe harbor for the establishment and use 
of a firewall; (6) clarifying that the payment prong of the coordinated 
communication test is satisfied if an outside person pays for only part 
of the costs of a communication; and (7) revising 11 CFR 109.37 to 
include the applicable time frame and safe harbor revisions in 11 CFR 
109.21.

Transmission of Final Rules to Congress

    Under the Administrative Procedure Act, 5 U.S.C. 553(d), and the 
Congressional Review of Agency Rulemaking Act, 5 U.S.C. 801(a)(1), 
agencies must submit final rules to the Speaker of the House of 
Representatives and the President of the Senate and publish them in the 
Federal Register at least 30 calendar days before they take effect. The 
final rules that follow were transmitted to Congress on June 2, 2006.

Explanation and Justification

I. Background

A. Bipartisan Campaign Reform Act and 2002 Coordination Rulemaking

    The Bipartisan Campaign Reform Act of 2002,\1\ (``BCRA''), repealed 
the Commission's pre-BCRA regulations regarding ``coordinated general 
public political communications'' and directed the Commission to 
promulgate new regulations on ``coordinated communications'' in their 
place.\2\ Congress specified in BCRA that the Commission's new 
regulations ``shall not require agreement or formal collaboration to 
establish coordination.''

[[Page 33191]]

BCRA, sec. 214(c), 116 Stat. 81 at 95. ``Apart from this negative 
command--`shall not require'--BCRA merely listed several topics the 
rules `shall address,' providing no guidance as to how the FEC should 
address them.'' Shays v. FEC, 414 F.3d 76, 97-98 (D.C. Cir. 2005). On 
December 17, 2002, the Commission promulgated regulations as required 
by BCRA. See 11 CFR 109.21; see also, Final Rules and Explanation and 
Justification on Coordinated and Independent Expenditures, 68 FR 421 
(Jan. 3, 2003) (``2002 Coordination Final Rules'').
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    \1\ Pub. L. 107-155, 116 Stat. 81 (2002); amending the Federal 
Election Campaign Act of 1971, as amended, 2 U.S.C. 431 et seq. (the 
``Act'' or ``FECA'').
    \2\ Pub. L. 107-155, sec. 214(b), (c) (2002).
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    The Commission's 2002 coordinated communication regulations set 
forth a three-prong test for determining whether a communication is a 
coordinated communication, and therefore an in-kind contribution to, 
and an expenditure by, a candidate, a candidate's authorized committee, 
or a political party committee. See 11 CFR 109.21(a). First, the 
communication must be paid for by someone other than a candidate, a 
candidate's authorized committee, a political party committee, or their 
agents (the ``payment prong''). See 11 CFR 109.21(a)(1). Second, the 
communication must satisfy one of four content standards (the ``content 
prong''). See 11 CFR 109.21(a)(2) and (c). Third, the communication 
must satisfy one of five conduct standards (the ``conduct prong''). See 
11 CFR 109.21(a)(3) and (d). A communication must satisfy all three 
prongs to be a ``coordinated communication.''

B. Content Prong Challenged in Shays v. FEC

    In 2003, Representatives Shays and Meehan brought suit in Federal 
District Court challenging, among other Commission regulations, the 
content prong of the Commission's coordination regulations. See Shays 
v. FEC, 337 F. Supp. 2d 28 (D.D.C. 2004) (``Shays District''), aff'd, 
Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) (``Shays Appeal'') (pet. for 
reh'g en banc denied Oct. 21, 2005) (No. 04-5352). The content prong is 
comprised of four sub-categories of communications. A communication 
that falls in any of the four categories satisfies the prong. The 
purpose of the content prong is to ``ensure that the coordination 
regulations do not inadvertently encompass communications that are not 
made for the purpose of influencing a Federal election,'' and therefore 
are not ``expenditures'' subject to regulation under the Act. See 2002 
Coordination Final Rules at 426. Accordingly, each of the four content 
standards that comprise the ``content prong'' identifies a category of 
communications whose ``subject matter is reasonably related to an 
election.'' Id. at 427.
    The first content standard is satisfied if the communication is an 
electioneering communication. See 11 CFR 109.21(c)(1).\3\ This content 
standard implements the statutory directive that disbursements for 
coordinated electioneering communications be treated as in-kind 
contributions to, and expenditures by, the candidate or political party 
supported by the communication.
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    \3\ The Act and Commission regulations define an 
``electioneering communication'' as any broadcast, cable, or 
satellite communication that (1) refers to a clearly identified 
candidate for Federal office; (2) is publicly distributed within 60 
days before a general election or 30 days before a primary election 
for the office sought by the candidate referenced in the 
communication; and (3) can be received by 50,000 or more persons 
within the geographic area that the candidate referenced in the 
communication seeks to represent. See 2 U.S.C. 434(f)(3); 11 CFR 
100.29.
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    The second content standard is satisfied by a public communication 
\4\ made at any time that disseminates, distributes, or republishes 
campaign materials prepared by a candidate, a candidate's authorized 
committee, or agents thereof. See 11 CFR 109.21(c)(2). This content 
standard implements Congress's mandate that the Commission's rules on 
coordinated communications address the ``republication of campaign 
materials.'' See Pub. L. 107-155, sec. 214(c)(1) (2002). The Commission 
concluded that communications that disseminate, distribute, or 
republish campaign materials, no matter when such communications are 
made, can be reasonably construed only as for the purpose of 
influencing an election.
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    \4\ 11 CFR 100.26 defines a ``public communication'' as ``a 
communication by means of any broadcast, cable or satellite 
communication, newspaper, magazine, outdoor advertising facility, 
mass mailing or telephone bank to the general public, or any other 
form of general public political advertising. The term general 
public political advertising shall not include communications over 
the Internet, except for communications placed for a fee on another 
person's Web site.'' See Final Rules and Explanation and 
Justification: Internet Communications, 71 FR 18589 (published April 
12, 2006; effective May 12, 2006); see also 2 U.S.C. 431(22).
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    The third content standard is satisfied if a public communication 
made at any time expressly advocates \5\ the election or defeat of a 
clearly identified candidate for Federal office. See 11 CFR 
109.21(c)(3). The Commission concluded that express advocacy 
communications, no matter when such communications are made, can be 
reasonably construed only as for the purpose of influencing an 
election.
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    \5\ The term ``expressly advocating'' is defined in the 
Commission's regulations at 11 CFR 100.22.
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    The fourth content standard in the 2002 rule is satisfied if a 
public communication (1) refers to a political party or a clearly 
identified Federal candidate; (2) is publicly distributed or publicly 
disseminated 120 days or fewer before an election; \6\ and (3) is 
directed to voters in the jurisdiction of the clearly identified 
Federal candidate or to voters in a jurisdiction in which one or more 
candidates of the political party appear on the ballot. See 11 CFR 
109.21(c)(4) (2002).
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    \6\ The term ``election'' includes general elections, primary 
elections, runoff elections, caucuses or conventions, and special 
elections. See 11 CFR 100.2.
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    In incorporating the 120-day time frame into the fourth content 
standard, the Commission sought to create a bright-line rule that 
provided clear guidance for those seeking to produce and distribute 
public communications that do not republish campaign materials and do 
not contain express advocacy, communications that are already covered 
by the second and third content standards, respectively. The 120-day 
time frame ``focuses the regulation on activity reasonably close to an 
election, but not so distant from the election as to implicate 
political discussion at other times.'' 2002 Coordination Final Rules at 
430. The Commission noted that its intent was ``to require as little 
characterization of the meaning or the content of the communication, or 
inquiry into the subjective effect of the communication on the reader, 
viewer, or listener as possible.'' Id. (citing Buckley v. Valeo, 424 
U.S. 1, 42-44 (1976)). The Commission emphasized that the regulation 
``is applied by asking if certain things are true or false about the 
face of the public communication or with limited reference to external 
facts on the public record.'' Id.
    In adopting this time frame, the Commission relied in part on the 
fact that, in BCRA, Congress defined ``Federal election activity'' 
(``FEA'') as, inter alia, voter registration activity ``during the 
period that begins on the date that is 120 days'' before a Federal 
election. The Commission concluded that, in doing so, Congress 
``deem[ed] that period of time before an election to be reasonably 
related to that election.'' Id. (citing 2 U.S.C. 431(20)(A)(i)).
1. Shays District Court Decision
    The District Court held that the ``content prong'' of the 
Commission's coordinated communication regulations satisfied the first 
step of Chevron analysis, but did not satisfy the second

[[Page 33192]]

step of Chevron review.\7\ Shays District at 62-65. The District Court 
concluded that limiting the coordinated communication definition to 
communications that satisfy the content standards at 11 CFR 
109.21(c)(1) through (4), ``undercuts FECA's statutory purposes and 
therefore these aspects of the regulations are entitled to no 
deference.'' Shays District at 65. The District Court reasoned that 
communications that have been coordinated with a candidate, a 
candidate's authorized committee, or a political party committee have 
value for, and therefore are in-kind contributions to, that candidate 
or committee, regardless of the content, timing, or geographic reach of 
the communications. Id. at 63-64. Therefore, the Commission's exclusion 
of communications under the 120-day test failed the second step of 
Chevron review. Id. at 64-65.
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    \7\ The District Court described the first step of the Chevron 
analysis, which courts use to review an agency's regulations: ``a 
court first asks `whether Congress has directly spoken to the 
precise question at issue. If the intent of Congress is clear, that 
is the end of the matter; for the court, as well as the agency, must 
give effect to the unambiguously expressed intent of Congress.' '' 
See Shays District at 51 (quoting Chevron, U.S.A., Inc. v. Natural 
Res. Def. Council, 467 U.S. 837, 842-43 (1984)). According to the 
District Court, in the second step of the Chevron analysis, the 
court determines if the agency's interpretation is a permissible 
construction of the statute that does not ``unduly compromise'' the 
Act's purposes by ``creat[ing] the potential for gross abuse.'' See 
Shays District at 91 (citing Orloski v. FEC, 795 F.2d 156, 164-65) 
(D.C. Cir. 1986) (internal citations omitted).
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2. Shays Court of Appeals Decision
    The Commission appealed the District Court's decision. In 2005, a 
three-judge panel of the Court of Appeals for the D.C. Circuit 
considered the Commission's appeal. See Shays Appeal at 97-102. The 
Court of Appeals found that the Commission's regulations satisfied 
Chevron step one, and, contrary to the District Court's opinion, 
satisfied Chevron step two as well. Shays Appeal at 99-100. The Court 
of Appeals concluded: ``Accordingly, we reject Shays's and Meehan's 
argument that FECA precludes content-based standards under Chevron step 
one. And for the same reasons, we disagree with the district court's 
suggestion that any standard looking beyond collaboration to content 
would necessarily `create an immense loophole,' thus exceeding the 
range of permissible readings under Chevron step two.'' Shays Appeal at 
99-100.
    In reaching its holding, the Court of Appeals found that Congress 
provided the Commission with an ``open-ended directive'' under which to 
promulgate coordination regulations. Shays Appeal at 97-98. ``[I]n the 
BCRA provision most clearly on point--the directive calling for new 
regulations--Congress studiously avoided prescribing any specific 
standard, save abrogation of the `collaboration or agreement' test. 
Given this `lack of guidance in the statute,' we cannot say that BCRA 
clearly forecloses the FEC's approach. Nor do we see clearly contrary 
intent, as do Shays and Meehan, in FECA's preexisting `expenditure' and 
`contribution' definitions.'' Id. at 99 (internal citation omitted).
    The Court of Appeals noted that under the statute, a communication 
that is a coordinated expenditure ``shall be considered to be a 
contribution,'' and the Commission ``lacks discretion to exclude that 
communication from its coordinated communication rule.'' Id. at 99. 
``Yet to qualify as [an] `expenditure' in the first place, spending 
must be undertaken `for the purpose of influencing' a federal election 
(or else involve `financing' for redistribution of campaign 
materials).'' Id. (emphasis added). The Court of Appeals emphasized 
that ``time, place, and content may be critical indicia of 
communicative purpose.'' Shays Appeal at 99. The Court of Appeals 
recognized, ``Insofar as such statements may relate to political or 
legislative goals independent from any electoral race--goals like 
influencing legislators' votes or increasing public awareness--we 
cannot conclude that Congress unambiguously intended to count them as 
`expenditures' (and thus as `contributions' when coordinated). To the 
contrary, giving appropriate Chevron deference, we think the FEC could 
construe the expenditure definition's purposive language as leaving 
space for collaboration between politicians and outsiders on 
legislative and political issues involving only a weak nexus to any 
electoral campaign. Moreover, we can hardly fault the FEC's efforts to 
develop an `objective, bright-line test [that] does not unduly 
compromise the Act's purposes,' considering that we approved just such 
a test for `contribution' in Orloski. 795 F.2d at 165.'' Id. 
Accordingly, the Court of Appeals concluded that the Commission's 
regulation satisfied Chevron steps one and two. Id. at 99-100.
    While finding the content prong was a permissible construction of 
Congressional intent, the Court of Appeals held that the content prong 
was inadequately explained under the Administrative Procedure Act. Id. 
at 100. The Court of Appeals stated, ``while we accept the FEC's 
premise that time, place, and content may illuminate communicative 
purpose and thus distinguish FECA `expenditures' from other 
communications, we detect no support in the record for the specific 
content-based standard the Commission has promulgated.'' Id. at 102. In 
response to this finding by the Court of Appeals, the Commission opened 
the present rulemaking.

C. Notice of Proposed Rulemaking and Supplemental Notice of Proposed 
Rulemaking

    The Commission published a Notice of Proposed Rulemaking (``NPRM'') 
on December 14, 2005, in which it sought comment on a number of 
alternatives for retaining or revising the content standard of the 
coordinated communication regulations and on several other issues 
involving the coordinated communication rules. See 70 FR 73946 
(December 14, 2005). The comment period closed on January 13, 2006. The 
Commission received written comments from 28 commenters. The Commission 
held a public hearing on January 25 and 26, 2006, at which 18 witnesses 
testified. The comments and a transcript of the public hearing are 
available at http://www.fec.gov/law/law_rulemakings.shtml#coordinated.\8\
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    \8\ For purposes of this document, the terms ``comment'' and 
``commenter'' apply to both written comments and oral testimony at 
the public hearing.
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    In the NPRM, the Commission specifically requested that commenters 
submit empirical data showing the time period before an election during 
which campaign communications generally occur. NPRM at 73949. None of 
the commenters provided empirical data in response to the Commission's 
request, either in written comments or at the public hearing. One joint 
comment did provide a compilation of selected advertisements run during 
recent election cycles.
    Because no commenters provided empirical data in response to the 
Commission's request, the Commission licensed data from TNS Media 
Intelligence/CMAG (``CMAG'') regarding television advertising spots run 
by Presidential, Senate, and House of Representatives candidates during 
the 2004 election cycle. CMAG is a leading provider of political 
advertising tracking and provides media analysis services to a wide 
variety of clients, including national media organizations, 
foundations, academics, and Fortune 100 companies. See www.tnsmi-cmag.com. CMAG also provided data to the Brennan Center in conjunction 
with its 2000 study ``Buying Time,'' which was cited by BCRA's 
principal sponsors

[[Page 33193]]

in support of BCRA's provisions. See, e.g., 148 Cong. Rec. S2141 (daily 
ed. March 20, 2002) (statement of Sen. McCain) (``According to the 
Brennan Center's `Buying Time 2000' study, less than one percent of the 
group-sponsored soft-money ads covered by this provision of the bill 
were genuine issue discussion, more than 99 percent of these ads were 
campaign ads. This degree of accuracy is more than sufficient to 
overcome any claim of substantial overbreadth.'').
    The Commission produced graphical representations derived from the 
CMAG data and made these graphs and the underlying data available on 
its Web site. The Commission then published a Supplemental Notice of 
Proposed Rulemaking (``SNPRM'') in the Federal Register on March 15, 
2006, that re-opened the comment period for this rulemaking. 71 FR 
13306 (March 15, 2006). The graphs and data are available at the 
Commission's Web site at http://www.fec.gov/pdf/nprm/coord_commun/suppNPRMmaterials.shtml.\9\ In the SNPRM, the Commission sought 
additional comment, in light of the information presented by the data, 
on the issues and questions raised in the NPRM regarding the content 
prong time frame.
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    \9\ Available at http://www.fec.gov/pdf/nprm/coord_commun/suppNPRMmaterials.shtml are ten graphs covering Presidential 
election data, four graphs covering Senate election data, and four 
graphs covering House election data, as well as an explanation of 
the methodology used for each graph. These graphs are titled, and 
referenced herein, as P1-P10, S1-S4, and H1-H4, respectively. An 
additional chart regarding Presidential spending in individual 
``battleground'' States, see note 21, below, is available at http://www.fec.gov/pdf/nprm/coord_commun/chart_20060407.pdf. This chart 
is referenced herein as Chart P11.
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    The reopened comment period for the SNPRM closed on March 22, 2006. 
The Commission received written comments on the SNPRM from 12 
commenters, which are also available at http://www.fec.gov/law/law_rulemakings.shtml#coordinated.

II. Revised Time Frames for Coordinated Communications (11 CFR 
109.21(c)(4))

A. The Commission Has Determined To Retain the Content Prong With 
Revised Time Frames

    The Shays Court of Appeals emphasized that retaining a time frame 
as part of the fourth content standard requires the Commission to 
undertake a factual inquiry to determine whether the temporal line it 
draws ``reasonably defines the period before an election when non-
express advocacy likely relates to purposes other than `influencing' a 
federal election.'' Shays Appeal at 101-02. The Court presented three 
questions to guide the Commission's inquiry: (1) ``Do candidates in 
fact limit campaign-related advocacy to the four months surrounding 
elections, or does substantial election-related communication occur 
outside that window?''; (2) ``Do congressional, senatorial, and 
presidential races--all covered by this rule--occur on the same cycle, 
or should different rules apply to each?''; and (3) ``[T]o the extent 
election-related advocacy now occurs primarily within 120 days, would 
candidates and collaborators aiming to influence elections simply shift 
coordinated spending outside that period to avoid the challenged rules' 
restrictions?'' Id. at 102.
    Based on its inquiry into the Court of Appeals' questions, the 
Commission has decided to retain the existing content prong, but revise 
the applicable time frames in the fourth content standard at 11 CFR 
109.21(c)(4). The revision creates separate time frames for 
communications based on whether they refer to (1) Congressional 
candidates, (2) Presidential candidates, or (3) political parties. For 
those communications that refer to Senate and House of Representatives 
candidates in Congressional primary \10\ and general elections, the 
revised time frame begins 90 days before each candidate's election and 
ends on the date of that candidate's election. For communications that 
refer to Presidential candidates, the revised time frame covers, on a 
State-by-State basis, the period of time from 120 days before the date 
of a Presidential primary up to and including the date of the general 
election.\11\
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    \10\ The method of choosing nominees for election to Federal 
office, either by a primary or a preference election, a caucus, or a 
convention, differs from State to State. This document uses the term 
``primary election'' to refer to any election that chooses a nominee 
for the general election. See also note 6, above.
    \11\ Thus, if State A conducts its Presidential primary on 
February 1st of the Presidential election year, the time frame in 
State A for Presidential candidates would begin on approximately 
October 1st of the year preceding the Presidential election and 
would end on the date of the Presidential general election. 
Similarly, if State B held its Presidential primary on June 1st of 
the Presidential election year, the time frame in State B for 
Presidential candidates would begin on approximately February 1st of 
the Presidential election year and end on the date of the 
Presidential general election.
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    For those communications that reference political parties and do 
not reference a clearly identified Federal candidate, when such 
communications occur in a non-Presidential election cycle, the revised 
time frame period begins 90 days before each election and ends on the 
date of that election; when such communications occur in a Presidential 
election cycle, the revised time period covers, on a State-by-State 
basis, the period of time from 120 days before the date of a primary 
through the general election. For communications that reference a 
political party and a clearly identified Federal candidate, the 
applicable time frame is either the Congressional or Presidential 
candidate time period, depending upon (1) whether the communication is 
coordinated with the political party committee or the candidate, (2) 
whether the upcoming general election is a Presidential or non-
Presidential election, and (3) whether the communication is aired in 
the referenced candidate's jurisdiction.
1. Senate and House Candidates Conduct Nearly All Campaign-Related 
Advocacy Within 60 Days of an Election
    The data obtained by the Commission respond directly to the first 
question posed by the Court of Appeals: ``Do candidates in fact limit 
campaign-related advocacy to the four months surrounding elections, or 
does substantial election-related communication occur outside that 
window?'' Shays Appeal at 102. This question is relevant to the 
Commission's inquiry because the purpose of the content standard is to 
provide a bright-line delineation between those coordinated 
advertisements that are for the purpose of influencing an election--and 
therefore are ``expenditures'' regulated by the Act--and those that are 
not. As the Shays Court of Appeals stated, ``Insofar as such statements 
may relate to political or legislative goals independent from any 
electoral race--goals like influencing legislators' votes or increasing 
public awareness--we cannot conclude that Congress unambiguously 
intended to count them as ``expenditures'' (and thus as `contributions' 
when coordinated).'' Shays Appeal at 99 (``[T]o qualify as [an] 
`expenditure' in the first place, spending must be undertaken `for the 
purpose of influencing' a federal election.'').
    Any time a candidate uses campaign funds to pay for an 
advertisement, it can be presumed that this advertisement is aired for 
the purpose of influencing the candidate's election. Additionally, 
candidates and their campaign staff are experienced and knowledgeable 
in matters of advertising strategy and are highly motivated to run 
advertisements at a time when they are likely to influence voters. 
Thus, data showing when candidates spend their own campaign funds on 
advertisements

[[Page 33194]]

provide an empirical basis for predicting when advertising that has the 
purpose of influencing a Federal election occurs. Moreover, in the 
context of coordination, a candidate has an incentive to ask an outside 
group to pay for advertisements to be aired precisely during the time 
period when the candidate believes these advertisements would be 
effective. Advertisements run outside of the effective time frame are 
of little value to the candidate, and therefore do not present the 
potential for corruption or the appearance of corruption that BCRA and 
the Act intend to prevent.
    Commenters agreed that a time frame is helpful in identifying 
communications that are made for the purpose of influencing an 
election. As one commenter noted: ``The Commission is reasonable in its 
belief that election-influencing communications are generally 
susceptible of temporal definition and limitation. The Commission 
should continue to determine where that temporal limitation is.'' 
Moreover, commenters generally agreed that proximity to an election 
factors into the value of the communication.
    The data analyzed by the Commission show that nearly all Senate and 
House candidate advertising takes place within 60 days of an election. 
Senate candidates aired 91.60 percent and 94.73 percent of their 
advertisements within 60 days of the primary and general election, 
respectively.\12\ This represented 93.32 percent and 97.20 percent of 
the estimated costs of advertisements the Senate candidates ran before 
the primary and general elections, respectively.\13\ House candidates 
aired 88.16 percent and 98.09 percent of their advertisements within 60 
days of the primary and general elections, respectively.\14\ This 
represented 92.68 percent and 98.75 percent of the estimated costs of 
the advertisements House candidates ran before the primary and general 
elections, respectively.\15\
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    \12\ See Graphs S1 and S3.
    \13\ See Graphs S2 and S4.
    \14\ See Graphs H1 and H3.
    \15\ See Graphs H2 and H4.
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    The data show that a minimal amount of activity occurs between 60 
and 90 days before an election, and that beyond 90 days, the amount of 
candidate advertising approaches zero. Senate candidates aired only 
0.87 percent and 0.39 percent of their advertisements more than 90 days 
before their primary and general elections, respectively,\16\ which 
represented 0.66 percent and 0.15 percent of the total estimated costs 
of advertisements run by Senate candidates before the primary and 
general elections, respectively.\17\ Similarly, House candidates aired 
only 8.56 percent and 0.28 percent of their advertisements more than 90 
days before their primary and general elections, respectively.\18\ This 
represented 3.79 percent and 0.13 percent of the total estimated costs 
of advertisements run by House candidates before the primary and 
general elections, respectively.\19\
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    \16\ See Graphs S1 and S3.
    \17\ See Graphs S2 and S4.
    \18\ See Graphs H1 and H3.
    \19\ See Graphs H2 and H4.
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    The data are consistent with the comments received by the 
Commission. Commenters stated that a 60-day time frame comports with 
the practical reality of when candidates run advertisements. Comments 
submitted by the Democratic National Committee, the Democratic 
Senatorial Campaign Committee, the Democratic Congressional Campaign 
Committee, the National Republican Senatorial Committee, and the 
National Republican Congressional Committee (``NRCC'') all stated that 
in their experience, coordinated activities occurred within 60 days of 
the 2004 elections. The NRCC further stated that both its coordinated 
and independent expenditures for the 2004 general election were all 
made within 60 days of that election.
    A 60-day time frame is also consistent with past Congressional, 
Supreme Court, and Commission findings. As one commenter stated, ``this 
time period [60 days] would be consistent with Congressional line-
drawing in the context of electoral and political speech in the BCRA 
itself.'' Comments submitted by the BCRA Congressional sponsors in 2002 
stated, ``Title II of BCRA reflects congressional judgment that 
communications concerning federal elected officials during the 60 day 
period prior to a general election and the 30 day period prior to a 
primary is usually campaign related.'' In McConnell v. FEC, the Supreme 
Court upheld the 30- and 60-day time frames for electioneering 
communications, concluding that Congress had adequately explained its 
decision to regulate the ``virtual torrent of televised election-
related ads during the periods immediately preceding federal elections' 
and that ``[t]he record amply justifies Congress' line drawing.'' 
McConnell v. FEC, 540 U.S. 93, 207-08 (2003). As the FEC successfully 
argued in McConnell:

The timing requirement is also directly tied to Congress's objective 
of capturing advertisements that are likely to influence the outcome 
of federal elections. The record `overwhelmingly demonstrate[s] the 
appropriateness of BCRA's sixty and thirty day benchmarks,' and 
confirms with remarkable clarity the common-sense conclusion `that 
issue advertisements aimed at influencing federal elections are 
aired in the period right before an election. Supp. App. 725sa-
728sa, 847sa-848sa (Kollar-Kotelly) (discussing evidence); see id. 
at 851sa (`The sixty and thirty day figures are not arbitrary 
numbers selected by Congress, but appropriate time periods tied to 
empirically verifiable data.')

    Brief for the Federal Election Commission et al. at 94, McConnell 
v. FEC, 540 U.S. 93 (2003) (discussing the timing requirement under the 
definition of electioneering communication).
    The record before Congress when passing BCRA and before the Supreme 
Court in McConnell included the Brennan Center's ``Buying Time'' study, 
which further supports the conclusion that the vast majority of 
election related advocacy occurs immediately before an election. The 
Brennan Center found that, ``[i]n the 2000 election, genuine issue ads 
are rather evenly distributed throughout the year, while group-
sponsored electioneering ads make a sudden and overwhelming appearance 
immediately before elections.'' Craig B. Holman and Luke P. McLoughlin, 
``Buying Time 2000: Television Advertising in the 2000 Federal 
Elections,'' 56 (2002). Another study supported the 60-day time frame 
and was entered into the Congressional Record by Senator Snowe. 
Jonathan Krasno and Kenneth Goldstein, ``The Facts About Television 
Advertising and the McCain-Feingold Bill,'' 35(2) PS: Political Science 
and Politics 207 (2002); see also 147 Cong. Rec. S3070-01, S3074. This 
study found that in 1998 and 2000 ``the greatest deluge of issue ads 
began appearing after Labor Day.'' Id. at S3075.
    The 60-day time frame is also consistent with existing Commission 
regulations. As a commenter stated, ``Setting the time period at 60 
days is also supported by the FEC's regulatory time periods for the 
depreciation of polling data in 11 CFR 106.4(g), under which the FEC 
has determined that on the 61st day after the polling event, the data 
is worth only 5% of its original value.''
    Therefore, in response to the Court of Appeals' first question, the 
data analyzed and comments reviewed by the Commission establish that 
Senate and House candidates focus their campaign advocacy not during 
the last 120 days before an election, but during

[[Page 33195]]

the last 60 days before an election. Moreover, beyond 90 days from an 
election, Senate and House candidate advertising nearly ceases. As 
suggested by the Court of Appeals' second question, however, the data 
on Presidential candidates show a different advertising pattern, and 
are discussed below.
2. Campaign Advertising in Presidential Races Occurs on a Different 
Cycle Than in Senate and House Races
    The data and comments examined by the Commission respond directly 
to the second question posed by the Court of Appeals: ``Do 
congressional, senatorial, and presidential races--all covered by this 
rule--occur on the same cycle, or should different rules apply to 
each?'' Shays Appeal at 102. The data show that advertising in the 
Presidential race does in fact occur on a different cycle than 
advertising in Senate and House races. Appreciable spending occurred 
outside of the 120-day time frame with regard to the Presidential 
general election.\20\ Specifically, in the media markets contained 
within individual ``battleground'' States,\21\ the 120-day time frame 
before the general election covered less than 75 percent of the 
estimated spending.\22\
---------------------------------------------------------------------------

    \20\ See Graphs P2 and P4.
    \21\ The Commission decided to limit the data appearing in these 
graphical representations to those States in which the 2004 
Presidential race was the most highly contested. The States 
determined to be the 2004 ``battleground'' States are: Arizona, 
Arkansas, Colorado, Florida, Iowa, Louisiana, Maine, Michigan, 
Minnesota, Missouri, Nevada, New Hampshire, New Mexico, North 
Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Washington, West 
Virginia, and Wisconsin. A list of ``battleground'' States was 
determined from the following sources: Cook Political Report (http://www.cookpolitical.com/column/2004/021704.php); ABC News/Washington 
Post (http://www/abcnews.go.com/sections/us/WorldNewsTonight/battlegrounds_poll_040422.html); National Journal (http://nationaljournal.com/members/campaign/2004/swingstates/); Wall Street 
Journal/Zogby International (http://online.wsj.com/public/resources/documents/info-battleground04-print.html).
    \22\ See Graph P10.
---------------------------------------------------------------------------

    Under the Commission's 2002 regulations, the general election 
coordinated communication window effectively extended further back than 
120 days before the general election because the Presidential 
nominating conventions of the political parties are also elections for 
purposes of determining whether a communication satisfies the fourth 
content standard in former 11 CFR 109.21(c)(4). See 11 CFR 100.2(e). 
Accordingly, in 2004, the general election coordinated communication 
window overlapped with the coordinated communication windows before the 
Presidential nominating conventions and therefore the coordination 
regulations applied for the entire 184 days before the general election 
for Republican Presidential candidates and for 219 days before the 
general election for Democratic Presidential candidates.\23\ Even with 
this extended general election window, however, in several States there 
was still a time period between the primary elections and the start of 
the extended window during which public communications were not covered 
by the 120-day time frame in the 2002 rules (``gap period''). Moreover, 
the length of the gap period was solely a function of the parties' 
selection of convention dates. To the extent advertising was continuous 
during the time period between the primary and general elections, the 
amount that was subject to the existing 120-day rule depended on the 
dates the parties set for their conventions, rather than on the 
purposeful application of the rule.
---------------------------------------------------------------------------

    \23\ The general election coordinated communication window began 
on July 5, 2004, for all candidates. The Republican National 
Convention was held on August 30-September 2, 2004, and the 
coordinated communication window for that convention began on May 2, 
2004, which was 184 days before the general election. The Democratic 
National Convention was held on July 27-29, 2004, and the 
coordinated communication window for that convention began on March 
28, 2004, which was 219 days before the general election.
---------------------------------------------------------------------------

    The Commission received several comments addressing the issue of 
communications made during the Presidential gap periods. Some 
commenters were in favor of regulating communications run during this 
gap period, noting that post-primary communications are 
``overwhelmingly likely to be for the purpose of influencing the 
candidate's election.'' One joint commenter submitted voluminous 
appendices and argued that a significant amount of campaign advertising 
occurs during this gap period.\24\ As another commenter argued, ``a 
period starting 120 days prior to a primary and running all the way to 
the general election would be appropriate to capture ads that are most 
likely to influence an election.'' In contrast, other commenters argued 
against extending the regulation into this gap period, asserting that 
campaigns do not advertise significantly during this time, and 
therefore, according to some, regulation would unnecessarily infringe 
on constitutionally protected speech. A commenter representing a 
political party committee argued that political party committees would 
already be covered by Federal reporting and spending limitations and 
that covering this gap period is therefore unnecessary.
---------------------------------------------------------------------------

    \24\ Some of the advertisements presented by the commenter were 
run during the pre-convention window, and therefore, were covered by 
the Commission's existing coordination regulations.
---------------------------------------------------------------------------

    The CMAG data show that, in 2004, Presidential candidates spent 
appreciable amounts on advertisements run during the gap period between 
the State primaries and the beginning of the 184-day Republican and the 
219-day Democratic extended general election windows, respectively. 
Specifically, in media markets contained fully within individual 
``battleground'' States, the Republican Presidential candidate spent a 
total of $9,475,679 on television advertisements run during the gap 
period, which amounted to 14 percent of the total costs of media spots 
aired by the Republican Presidential candidate in those media markets 
after the State primaries.\25\ In some of these media markets, the 
percentage was significantly higher.\26\ For example, in the Seattle, 
WA, media market, 38 percent of the post-primary Republican spending 
occurred during the gap period, and, in the Madison and Milwaukee, WI, 
media markets, 20 percent of the post-primary Republican spending 
occurred during the gap period.\27\ Democratic Presidential candidates 
spent $1,221,045 on post-primary television advertisements that 
occurred during the gap period.\28\ Thus, nearly $10.7 million was 
spent by Presidential candidates on television advertisements during 
the gap periods.\29\
---------------------------------------------------------------------------

    \25\ See Chart P11.
    \26\ See Chart P11.
    \27\ See Chart P11.
    \28\ See CMAG Data.
    \29\ See Chart P11 and CMAG Data.
---------------------------------------------------------------------------

    In response to the Court of Appeals' second question, the data and 
comments confirm that campaign advertising in Presidential races does 
in fact take place on a different cycle than Senate and House races. 
Rather than the 60-day cycle in Senate and House races, the data and 
comments confirm that nearly all Presidential advertisement spending 
took place during the time period from 120 days before the primary 
elections up through the date of the general election. According to the 
data, in the 2004 election cycle, over 99 percent of the estimated 
media spot spending by Presidential candidates in media markets fully 
contained within individual ``battleground'' States occurred during 
this time period.\30\ This time period is now fully covered by the 
Commission's revised content standard at 11 CFR 109.21(c)(4).
---------------------------------------------------------------------------

    \30\ See Graphs P8 and P10.

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

[[Page 33196]]

3. The Minimal Value of Advertising Outside of the Revised Time Frames 
Limits the Risk of Corruption From Candidates and Collaborators 
Shifting Coordinated Spending to Outside the Time Frames
    The data and comments reviewed by the Commission also respond to 
the third question posed by the Court of Appeals: ``[T]o the extent 
election-related advocacy now occurs primarily within 120 days, would 
candidates and collaborators aiming to influence elections simply shift 
coordinated spending outside that period to avoid the challenged rules' 
restrictions?'' Shays Appeal at 102. As discussed above, candidates 
have little incentive to ask outside groups to pay for advertisements 
aired outside of periods where the candidates' own spending indicates 
they would be effective. Therefore, outside of those time periods where 
candidate advertising occurs, there is little risk that coordinated 
activity presents the risk or appearance of corruption.
    As discussed above, the data and comments analyzed in response to 
the Court of Appeals' first question overwhelmingly support a 60-day 
time frame for Congressional candidate communications. However, in 
order to foreclose the possibility that candidates and groups will 
shift spending outside the applicable time frame, the Commission has 
determined to set the Congressional time frame at 90 days. 
Congressional candidates aired a minimal percentage of their 
advertisements more than 60 days before an election, and beyond 90 days 
aired virtually no advertisements.\31\ Candidates have little or no 
incentive to shift spending beyond 90 days. The limited value of 
advertising beyond 90 days is reflected in the data, with Senate 
candidates spending less than a quarter of one percent of their 
television advertising budgets on spots that aired between 90 and 120 
days before either a primary or a general election.\32\ Similarly, 
House candidates spent less than three percent of their television 
advertising budgets on spots that aired between 90 and 120 days before 
a primary election \33\ and less than a quarter of one percent of their 
television advertising budgets on spots that aired between 90 and 120 
days before a general election.\34\
---------------------------------------------------------------------------

    \31\ See Graphs S1, S3 and H1, H3.
    \32\ See Graphs S2 and S4.
    \33\ See Graph H2.
    \34\ See Graph H4.
---------------------------------------------------------------------------

    For Presidential candidates, while the data show that the existing 
120-day time frames captured a majority of Presidential spending, some 
appreciable spending occurred in the gap period not covered by the 
current 120-day rule.\35\ Accordingly, the Commission has determined to 
close the gap period and extend the applicable time frame from 120 days 
before the primary election in a State continuously through the day of 
the general election in that State. This revised time frame would have 
covered more than 99 percent of Presidential advertising spending in 
2004.\36\
---------------------------------------------------------------------------

    \35\ See Chart P11.
    \36\ This figure represents Presidential spending in media 
markets fully contained within individual ``battleground'' States. 
See Graphs P8 and P10.
---------------------------------------------------------------------------

    One group of commenters, including plaintiffs in the Shays 
litigation, argued that the 120-day time frame was under-inclusive and 
should be supplemented with a complex, multi-factored approach that 
would use a different test, based not on time but instead on the 
identity of the entity paying for any communication made outside of the 
120-day time period. The commenters proposed the Commission adopt the 
following regulation:

    (4) A public communication, as defined in 11 CFR 100.26, made by 
a political committee, which is an expenditure directed to voters in 
the jurisdiction of the candidate with whom the communication is 
coordinated, or if coordinated with a political party, is an 
expenditure directed to voters in a jurisdiction in which one or 
more candidates of the political party appear on the ballot.
    (5) A public communication, as defined in 11 CFR 100.26, made by 
an organization described in section 527 of the Internal Revenue 
Code and not registered as a political committee, which:
    (i)(A) Is distributed or disseminated during the period 
beginning 30 days prior to the primary election or 60 days prior to 
the general election of the federal candidate with whom the 
communication is coordinated, or, if coordinated with a political 
party, during the period beginning 30 days prior to the primary 
election or 60 days prior to the general election in which one or 
more candidates of the political party appear on the ballot, and (B) 
is directed to voters in the jurisdiction of that candidate or to 
voters in a jurisdiction in which one or more candidates of the 
political party appear on the ballot, regardless of whether the 
communication refers to a clearly identified candidate for federal 
office, or party; or
    (ii)(A) Is distributed or disseminated during the period 
beginning 120 days prior to the primary election and ending on the 
day of the general election, (B) refers to a clearly identified 
candidate for federal office or to a political party, and (C) is 
directed to voters in the jurisdiction of the clearly identified 
candidate, or to voters in a jurisdiction in which one or more 
candidates of the political party appear on the ballot; or
    (iii)(A) Is distributed or disseminated more than 120 days prior 
to the primary election, (B) promotes, attacks, supports or opposes 
a clearly identified candidate for federal office, or if the ad is 
coordinated with a political party, promotes, attacks, supports or 
opposes the party or its candidates, and (C) is directed to voters 
in the jurisdiction of the clearly identified candidate, or to 
voters in a jurisdiction in which one or more candidates of the 
political party appear on the ballot.
    (6) A public communication, as defined in 11 CFR 100.26, made by 
any person other than a political committee or other organization 
described in section 527 of the Internal Revenue Code which:
    (i)(A) Is distributed or disseminated during the period 
beginning 30 days prior to the primary election or 60 days prior to 
the general election of the federal candidate with whom the 
communication is coordinated, or, if coordinated with a political 
party, during the period beginning 30 days prior to the primary 
election or 60 days prior to the general election in which one or 
more candidates of the political party appear on the ballot, and (B) 
is directed to voters in that candidate's jurisdiction, regardless 
of whether the communication refers to a clearly identified 
candidate for federal office, or party; or
    (ii)(A) Is distributed or disseminated during the period 
beginning 120 days prior to the primary election and ending on the 
day of the general election, (B) refers to a clearly identified 
candidate for federal office or to a political party, and (C) is 
directed to voters in the jurisdiction of the clearly identified 
candidate, or to voters in a jurisdiction in which one or more 
candidates of the political party appear on the ballot; or
    (iii)(A) Is distributed or disseminated more than 120 days prior 
to the primary election, (B) refers to the character or the 
qualifications or fitness for office of a clearly identified 
candidate for federal office, or if the ad is coordinated with a 
political party, refers to the character or the qualifications or 
fitness for office of the party generically or of candidates of that 
party, and (C) is directed to voters in the jurisdiction of the 
clearly identified candidate, or to voters in a jurisdiction in 
which one or more candidates of the political party appear on the 
ballot.

    The Commission believes the record does not support the time frames 
in the commenters' proposed regulation, nor the disparate regulatory 
schemes for various entities. Moreover, the Commission agrees with 
other witnesses at the hearing that if the Commission were to adopt the 
proposed regulation, its complexity would likely place an extreme 
burden upon the regulated community. The commenters also submitted 
summaries of advertisements from recent election cycles that, according 
to the commenters, were run more than 120 days before the primary or 
general election they were intended to influence. However, at the 
hearing, these commenters acknowledged that there was no evidence that 
any of these advertisements had been coordinated with a candidate or a 
political party

[[Page 33197]]

committee. The lack of evidence that these advertisements were 
coordinated with candidates comports with the conclusion drawn from the 
CMAG data and comments; specifically, that candidates perceive little 
value in airing advertisements beyond 90 days from an election, and 
have little incentive to seek such advertising in exchange for 
political favoritism.
4. Communications That Refer to Political Parties
    As set forth in new 11 CFR 109.21(c)(4)(iii) and (iv), 
communications that refer to political parties are now subject to 
different time periods depending upon: (1) Whether the communication is 
coordinated with a candidate or political party committee; (2) whether 
the upcoming general election is a midterm or Presidential election; 
and (3) if the communication also refers to a clearly identified 
Federal candidate, whether it is run in the clearly identified 
candidate's jurisdiction.
    When communications are paid for by outside groups, refer to a 
political party, are coordinated with a candidate, and are publicly 
distributed or otherwise disseminated in that candidate's jurisdiction, 
they can generally be presumed to be for the purpose of influencing 
that candidate's election whether or not they also refer to the 
candidate with whom they are coordinated. Accordingly, it is 
appropriate to use the time frame established for communications that 
refer to a House or Senate candidate (90 days before a primary, 
special, or general election) where the communications refer only to a 
political party and not to a clearly identified Federal candidate, but 
are coordinated with a House or Senate candidate and distributed in 
that candidate's jurisdiction, even if such communications are 
distributed during a Presidential election cycle. See 11 CFR 
109.21(c)(4)(iii)(A). Similarly, if a communication were coordinated 
with a Presidential candidate, it would be appropriate to use the same 
120-day time period established for communications referring to 
Presidential candidates. See 11 CFR 109.21(c)(4)(iii)(A).
    A communication that refers to a political party without referring 
to a clearly identified Federal candidate, otherwise satisfies the 
content prong, is paid for by an outside group, and is coordinated with 
a political party, can generally be presumed to be for the purpose of 
influencing the elections of all of the party's candidates within that 
jurisdiction during the relevant time period before an election. During 
a midterm election cycle (in which only House and Senate candidates are 
on the ballot), new 11 CFR 109.21(c)(4)(iii)(B) provides that 
communications referring to political parties are subject to the same 
90-day time period as communications referring to House and Senate 
candidates. Likewise, the new rules provide that during a Presidential 
election cycle, communications referring to political parties are 
presumed to be for the purpose of influencing the elections of all of 
the party's candidates, including the party's Presidential candidate. 
Accordingly, such communications are subject to the same 120-day time 
period as communications referring to Presidential candidates. See new 
11 CFR 109.21(c)(4)(iii)(C).
    If the communication refers to both a political party and a clearly 
identified Federal candidate, the communication is subject to the time 
frame applicable to that clearly identified candidate under 11 CFR 
109.21(c)(4)(i) or (ii) when the communication is coordinated with 
either a candidate or a political party and is distributed or 
disseminated within the clearly identified candidate's jurisdiction. 
See 11 CFR 109.21(c)(4)(iv)(A) and (B). Such communication is subject 
to the applicable time frames for party references when coordinated 
with a political party and distributed and disseminated outside the 
candidate's jurisdiction. See 11 CFR 109.21(c)(4)(iv)(C). Any such 
communication coordinated with a candidate, but distributed outside 
that candidate's jurisdiction, would not constitute a coordinated 
communication.
5. Other Considerations
    In the Commission's judgment, the foregoing time frames encompass 
the periods in which effective political party, Congressional, and 
Presidential election-related advertising occurs, and therefore 
political parties, candidates, and collaborators will have little 
incentive to shift spending outside of these time frames. None of the 
commenters submitted any evidence that, during the recent election 
cycles during which the Commission's 2002 coordination rules were in 
effect, House or Senate candidates asked outside groups to run 
advertisements more than 90 days before House or Senate primary or 
general elections. Since the 2002 rule took effect, the Commission has 
received very few complaints alleging that House or Senate candidates 
or their agents coordinated with outside groups to produce or 
distribute communications that ran between 90 and 120 days before a 
House or Senate primary or general election. Moreover, commenters did 
not submit any evidence that during the recent election cycles in which 
the Commission's 2002 coordination rules were in effect, Presidential 
candidates or their agents asked outside groups to run advertisements 
more than 120 days before Presidential primaries or the general 
election.
    Retaining a longer time frame that is not supported by the record 
could potentially subject political speech protected under the First 
Amendment to Commission investigation. Subjecting activity to 
investigation that the evidence shows is unlikely to be for the purpose 
of influencing Federal elections could chill legitimate lobbying and 
legislative activity. As the Supreme Court has emphasized, where First 
Amendment rights are affected, ``[p]recision of regulation must be the 
touchstone,'' Edenfield v. Fane, 507 U.S. 761, 777 (1993).
    The Court of Appeals emphasized that it ``can hardly fault the 
[Commission's] effort to develop an objective, bright-line test.'' 
Shays Appeal at 99. As the D.C. Circuit noted in an analogous context, 
``a subjective test based on a totality of the circumstances * * * 
would inevitably curtail permissible conduct.'' Orloski v. FEC, 795 
F.2d 156 (D.C. Cir. 1986). In Orloski, the D.C. Circuit further warned 
that:

[A] subjective test would also unduly burden the FEC with requests 
for advisory opinions * * * and with complaints by disgruntled 
opponents who could take advantage of a totality of the 
circumstances test to harass the sponsoring candidate and his 
supporters. It would further burden the agency by forcing it to 
direct its limited resources toward conducting a full-scale, 
detailed inquiry into almost every complaint, even those involving 
the most mundane allegations.

Id. at 165.

    Considering the political, expressive, and associational rights at 
stake, the Commission has determined not to extend the time frame 
beyond that period supported by the record.

B. Revised 11 CFR 109.21(c)(4)

    The Commission continues to believe that an objective, bright-line 
coordination test provides the clearest guidance to candidates, 
political party committees, and outside organizations. Moreover, as 
discussed above, the CMAG data show that in the 2004 election cycle, 
nearly all television advertisements paid for by candidates were aired 
within certain time frames before an election. These data, therefore, 
provide empirical support for the

[[Page 33198]]

Commission's decision to use time frames as part of a bright-line test 
for determining whether a communication is made for the purpose of 
influencing Federal elections.
    Accordingly, as set forth in new 11 CFR 109.21(c)(4)(i), public 
communications that refer to a Senate or House of Representatives 
candidate are subject to two 90-day time periods. One time period runs 
from 90 days before any primary in which the Congressional candidate is 
on the ballot through the date of the primary. Then, another time 
period starts 90 days before any general election in which the 
candidate is on the ballot and runs through the date of the general 
election. In some States, these periods will overlap if a primary 
election is held fewer than 90 days before a general election.
    Under new 11 CFR 109.21(c)(4)(ii), communications that refer to a 
candidate for President or Vice President are subject to a single time 
period that begins 120 days before a State's primary election up to and 
including the date of the general election.
    Under new 11 CFR 109.21(c)(4)(iii), communications that refer to a 
political party but not to a clearly identified Federal candidate are 
subject to different time periods under different circumstances. For 
those communications that are coordinated with a candidate and 
reference a political party, but do not reference a clearly identified 
Federal candidate, the time frame that would be applicable if that 
candidate were clearly identified in the communication under 11 CFR 
109.21(c)(4)(i) or (ii) applies when the communication is distributed 
or disseminated within that candidate's jurisdiction. See 11 CFR 
109.21(c)(4)(iii)(A). For communications coordinated with a political 
party committee and distributed during the two-year election cycle 
ending in a non-Presidential general election, one time period runs 
from 90 days before any primary in which a candidate of that party is 
on the ballot through the date of the primary. See 11 CFR 
109.21(c)(4)(iii)(B). Then, another time period begins 90 days before 
any general election in which a candidate of that party is on the 
ballot and runs through the date of the general election. In some 
States, these periods will overlap if a primary election is held fewer 
than 90 days before a general election. For communications coordinated 
with a political party committee and distributed during the two-year 
election cycle ending in a Presidential general election, a single time 
period begins 120 days before a candidate of that party's primary 
election in a State up to and including the date of the general 
election. See 11 CFR 109.21(c)(4)(iii)(C).
    Under new 11 CFR 109.21(c)(4)(iv), communications that refer to 
both a political party and a clearly identified candidate are subject 
to the time frame applicable to that clearly identified candidate under 
11 CFR 109.21(c)(4)(i) or (ii) when the communication is distributed or 
disseminated within the clearly identified candidate's jurisdiction. 
See 11 CFR 109.21(c)(4)(iv)(A) and (B). However, communications that 
refer to both a political party and a clearly identified candidate, are 
coordinated with a political party committee, and are distributed 
outside the clearly identified candidate's jurisdiction are subject to 
the time period that would apply to communications that refer only to a 
political party. See 11 CFR 109.21(c)(4)(iv)(C).

C. Clarification of Time Frame Requirement

    The Commission is also taking this opportunity to clarify that a 
public communication satisfies the content standards in 11 CFR 
109.21(c)(4)(i) and (ii) with respect to a candidate for Federal office 
only if the public communication is publicly distributed or otherwise 
publicly disseminated during the relevant time periods before an 
election in which that candidate or another candidate seeking election 
to the same office is on the ballot.
    This clarification addresses the situation presented in Advisory 
Opinion 2004-01 (Bush-Cheney/Kerr). This advisory opinion concerned 
President Bush's appearance in a television advertisement paid for by a 
Congressional candidate in which President Bush endorsed that 
Congressional candidate. The Commission determined that any airing of 
the advertisement that occurred more than 120 days before the 
Presidential primary in a State in which the advertisement aired was 
not an in-kind contribution to President Bush because it did not 
satisfy the fourth content standard (i.e., 11 CFR 109.21(c)(4)). Thus, 
in determining whether the Congressional candidate's payment for the 
communication would be an in-kind contribution to President Bush, the 
Commission looked at whether the communication was aired within 120 
days before President Bush's election rather than whether it was aired 
within the time period applicable to the paying Congressional 
candidate.
    In the NPRM, the Commission sought comment on whether it should 
clarify its coordinated communication rules to incorporate the approach 
taken in Advisory Opinion 2004-01 and to make clear that a public 
communication satisfies the content prong with respect to a Federal 
candidate only if it is distributed within the applicable time period 
before that candidate's election. For example, a Senator whose 
reelection is not until 2008 appears in an advertisement with a 2006 
candidate for the House of Representatives. The advertisement is aired 
within 90 days of the House candidate's election, is paid for by the 
House candidate's campaign committee, and is disseminated in the State 
where the Senator will seek reelection in 2008. The proposed 
clarification of the rule would explain that the advertisement would 
not be an in-kind contribution to the Senator because the advertisement 
was not aired within 90 days of the Senator's 2008 election. Two 
commenters supported the proposed clarification and no commenters 
opposed it. Accordingly, the Commission is revising 11 CFR 
109.21(c)(4)(i) and (ii) to make clear that the public communication at 
issue must be publicly distributed or otherwise publicly disseminated 
in the clearly identified candidate's jurisdiction before the clearly 
identified candidate's election in that jurisdiction. Read in 
conjunction with the ``payment prong'' at 11 CFR 109.21(a), which 
requires that the communication be paid for by someone other than the 
candidate at issue, this revision codifies the Commission's decision in 
Advisory Opinion 2004-01. See also Advisory Opinion 2005-18 (Reyes) 
(Concurring opinion of Commissioners Thomas, Toner, Mason, McDonald, 
and Weintraub).
    The Commission notes that 11 CFR 109.21(c)(4)(i) and (ii) also 
cover advertisements coordinated with a candidate and disseminated 
within the applicable time period before an election of that 
candidate's opponent or potential opponent.\37\ For example, Candidate 
Smith has already won the Democratic nomination for the U.S. Senate in 
State A, but the Republican Party has not yet held its primary in that 
State. At the request or suggestion of Candidate Smith, Organization X 
pays to run advertisements a week before the Republican primary 
attacking Candidate Jones, who is the frontrunner in the Republican 
primary race for U.S. Senate in State A and hopes to compete in the 
subsequent general election against Smith. Although Candidate Smith is 
not on the ballot in the Republican primary

[[Page 33199]]

in State A and his general election is more than 90 days away, the 
advertisement attacking Candidate Jones is an in-kind contribution to 
Candidate Smith because its purpose is to oppose Candidate Smith's 
potential opponent in the general election and thus influence Smith's 
election.
---------------------------------------------------------------------------

    \37\ See note 44, below (defining ``potential opponent'' and 
identifying criteria that must be met for a person to be a 
``candidate'' under the Act.).
---------------------------------------------------------------------------

III. Alternative Proposals for Revising the Content Prong Not Adopted

    The NPRM presented seven alternatives for retaining or revising the 
``content prong'' of the 2002 coordination rules at 11 CFR 109.21(c). 
The Commission sought comment on each of these alternatives, as well as 
on whether a combination of components from different alternatives 
would be appropriate. Alternative 1 was to retain the 120-day time 
frame and Alternative 2 was to replace it with another time frame. In 
light of the Court of Appeals' rejection of the District Court's 
conclusion that ``FECA precludes content-based standards,'' (Shays 
Appeal, 414 F.3d at 99), and in light of the Court of Appeals' ruling 
that ``time, place, and content may be critical indicia of 
communicative purpose,'' (Id. at 99) the Commission has decided to 
adopt a combination of Alternative 1 and Alternative 2 based on a 
careful review of the comments and the CMAG data on candidate 
advertising during the 2004 election cycle. The Commission has 
therefore decided not to adopt any of the remaining five alternatives, 
each of which is discussed briefly below.

Alternative 3

    Alternative 3 was to eliminate the time frame from the fourth 
content standard altogether. Commenters generally opposed this approach 
because they believed it would be unconstitutionally overbroad and 
would unnecessarily sweep into the area of ``grassroots lobbying'' 
efforts. One group of commenters argued that such an approach was 
adequate for political committees, but was overbroad with regard to 
speakers other than political committees.
    The Commission agrees with the majority of the commenters who 
believe that eliminating the time frame from the fourth content 
standard in 11 CFR 109.21(c)(4) would unnecessarily capture a 
substantial amount of speech that is unrelated to elections, thereby 
raising substantial First Amendment issues. This alternative would 
apply to any public communication that refers to a Federal candidate 
and is publicly disseminated in the jurisdiction of the Federal 
candidate, even if the communication is made years before any election 
in which the candidate participates and is made without any purpose of 
influencing a Federal election. Such an approach is inconsistent with 
the Court of Appeals' recognition that ``to qualify as [an] 
`expenditure' in the first place, spending must be undertaken `for the 
purpose of influencing' a federal election.'' Shays Appeal at 99. Such 
an approach also runs counter to the Court of Appeals' conclusion that 
the Commission may appropriately apply a content standard to determine 
which communications are made for the purpose of influencing a Federal 
election and that the timing of a communication may be a critical 
indicium of an election-influencing purpose. Shays Appeal at 99. Such 
an approach is not justified by the need to prevent circumvention of 
the Act's contribution limits because, as discussed above, the CMAG 
data show that public communications made by candidates for the purpose 
of influencing a Federal election overwhelmingly take place within 
certain limited time frames before elections (i.e., 90 days before 
House and Senate elections and 120 days before Presidential primaries 
through the day of the general election).

Alternative 4

    Alternative 4 proposed to replace the time frame in the fourth 
content standard with a test based on whether a communication promotes, 
supports, attacks, or opposes (``PASOs'') \38\ a political party or 
clearly identified Federal candidate. No commenter fully supported 
Alternative 4. One group of commenters argued that a PASO standard 
should not be applied to political committees but should be applied to 
entities described in section 527 of the Internal Revenue Code that are 
not registered with the Commission as political committees. Other 
commenters proposed combining the PASO standard with a time 
restriction, namely, the 30/60-day time frame used in the 
``electioneering communication'' regulations.\39\ Other commenters 
opposed adoption of a PASO standard, arguing that a PASO standard in 
place of a time frame is unworkable, inadequate, and overly broad. One 
joint commenter asserted that the legislative history in BCRA's 
coordination provisions implies that the Commission lacks the authority 
to use a PASO standard as part of the coordinated communication test. 
In rejecting a PASO standard, most commenters agreed that the 
Commission should continue to use a bright-line rule to determine 
whether a communication satisfies the content prong of the coordinated 
communication test. As one commenter stressed, ``We agree with the 
Court of Appeals when it said it could `hardly fault the [Commission's] 
effort to develop an objective, bright-line test [that] does not unduly 
compromise the Act's purpose.' Thus, we urge the Commission to maintain 
a bright-line test in the area of coordination.''
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    \38\ The PASO standard is found in BCRA and applies to 
candidates and political party committees with respect to Federal 
Election Activity (``FEA''). See 2 U.S.C. 431(20)(A)(iii). Congress 
also applied the PASO standard to the activity of certain tax-exempt 
organizations. For example, BCRA prohibits party committees from 
soliciting funds for, or making or directing donations to, certain 
tax-exempt organizations that make expenditures or disbursements for 
FEA, which includes public communications that PASO a Federal 
candidate. See 2 U.S.C. 431(20)(A)(iii) and 441i(d)(1). In addition, 
BCRA directed the Commission not to exempt any communications that 
PASO a clearly identified Federal candidate from the electioneering 
communication provisions. See 2 U.S.C. 434(f)(3)(B)(iv). The Supreme 
Court, in rejecting a constitutional vagueness challenge to the PASO 
standard, held that ``the words `promote,' `oppose,' `attack,' and 
`support' * * * provide explicit standards for those who apply them 
and `give the person of ordinary intelligence a reasonable 
opportunity to know what is prohibited.' '' McConnell v. FEC, 540 
U.S. 93, 170 n.64 (2003) (quoting Grayned v. City of Rockford, 408 
U.S. 104, 108-109 (1972)).
    \39\ See note 3, above.
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    The Commission agrees with the commenters that an objective, 
bright-line test, based on a sound evidentiary record, provides the 
clearest guidance to those seeking to comply with the coordination 
regulations. The Commission also invited comment on whether under 
Alternative 4, instead of using a PASO standard, the Commission should 
create a safe harbor exemption from the coordinated communication rules 
for certain types of communications that are not made for the purpose 
of influencing Federal elections. Several commenters supported the 
creation of such a safe harbor. One joint commenter argued that 
adopting a more focused safe harbor is both ``the most supportive 
[approach] of political speech and the most consistent with the 
legislative history of BCRA's coordination provisions.'' In this vein, 
as discussed below, the Commission is adding a safe harbor for public 
communications in which a Federal candidate endorses another candidate, 
or solicits contributions for certain tax-exempt organizations, 
candidates, and political committees. See Section V, below, and new 11 
CFR 109.21(g). The Commission, however, has determined that a temporal 
standard, rather than a PASO standard, best effectuates the purposes of 
the Act, while providing clear guidance to the regulated community.

[[Page 33200]]

Alternative 5

    Alternative 5 proposed to eliminate the time frame from the fourth 
content standard for political committees only. Many of the commenters 
opposed this approach. Several commenters argued that by eliminating a 
time frame only for political committees, the Commission would be 
presuming that communications paid for by political committees are made 
solely for the purpose of influencing Federal elections, when they 
believed that many of a political committee's communications are made 
for other purposes, such as issue advocacy. Another commenter objected 
that such an approach would retain the existing time frame for 
organizations that are not subject to the prohibitions and limitations 
of the Act while tightening regulation for organizations that are 
already subject to numerous regulations because of their status as 
political committees. As that commenter pointed out, political 
committees are subject to the Act's contribution limits and 
prohibitions, are required to disclose their activities to the 
Commission, and receive relatively small contributions, mostly from 
individuals. In addition, several commenters opposed this alternative 
because it is not supported by empirical evidence. One joint commenter, 
however, supported Alternative 5 based on the assertion that groups 
whose `major purpose' is to influence elections should be subject to 
broader regulatory standards. Accordingly, the joint commenter 
concluded that under Alternative 5, ``an `expenditure' by a political 
committee should satisfy the `content' test without regard to a time 
frame.'' For the same reason, the commenter also urged the Commission 
to abolish the time frame for public communications made by entities 
described in section 527 of the Internal Revenue Code.
    The Commission has decided not to adopt Alternative 5 because, as 
discussed above, the Court of Appeals rejected the argument that ``FECA 
precludes content-based standards'' and concluded that ``time, place, 
and content may be critical indicia of communicative purpose.'' Shays 
Appeal at 99. As discussed above, the CMAG data provide overwhelming 
empirical support for the Commission's decision to use time frames as 
part of a bright-line test for determining whether a communication is 
made for the purpose of influencing Federal elections. In contrast, 
there is no evidence that political committees are more likely than 
other groups to coordinate communications outside of these time frames.

Alternative 6

    In Alternative 6, the Commission proposed to replace the fourth 
content standard with a test that simply relies on the statutory 
language ``made for the purpose of influencing a Federal election.'' 
The majority of commenters were opposed to this standard because they 
believe it would require the Commission to determine whether a public 
communication is a coordinated communication based on a totality of the 
circumstances test and would fail to give those subject to the 
Commission's regulations adequate notice of what behavior will come 
within the coordination regulations. One joint commenter believed that 
adoption of this alternative would deter individuals and organizations 
from making public communications regarding policy matters because 
``they would have no idea whether their subsequent public communication 
would be covered by the prohibition on coordinated expenditures.''
    On the other hand, some commenters argued that modified versions of 
Alternative 6 might be acceptable. For example, one commenter suggested 
that the alternative should include the 30/60-day temporal limit used 
in the electioneering communication regulations.\40\ Another joint 
commenter supported the use of a ``for the purpose of influencing a 
Federal election'' test as part of a complex, tiered approach that 
would apply different content standards depending on the identity of 
the entity paying for the communication.
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    \40\ See note 3, above.
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    The Commission has decided not to adopt Alternative 6 because a 
bright-line test based on proximity to an election provides the 
clearest guidance to those seeking to comply with the regulations and 
provides a more manageable standard for enforcement than the more 
general ``for the purpose of influencing a Federal election'' standard.

Alternative 7

    Alternative 7 proposed to eliminate the entire content prong in 11 
CFR 109.21(c) and replace it with the requirement that the 
communication be a public communication as defined in 11 CFR 100.26. 
This approach was universally rejected by commenters. Some commenters 
disapproved of this alternative on the grounds that it would be 
overbroad, was not supported by any evidence in the record or 
indication of Congressional intent, would have unintended consequences, 
and would unnecessarily chill constitutionally protected speech. 
Another commenter asserted that this proposal was in direct 
contradiction with the legislative history of BCRA, which demonstrated 
that Congress ``affirmatively intended that any coordination regulation 
issued by the Commission should protect against interference with 
lobbying and similar activities.''
    When the Commission promulgated the 2002 Coordination Final Rules, 
it stated ``the Commission believes that a content standard provides a 
clear and useful component of a coordination definition in that it 
helps ensure that the coordination regulations do not inadvertently 
encompass communications that are not made for the purpose of 
influencing a federal election.'' 2002 Coordination Final Rules, 68 FR 
at 426. In order to ensure that the coordination regulations do not 
inadvertently encompass communications not made for the purpose of 
influencing a Federal election, the Commission is rejecting Alternative 
7.

IV. The ``Directed to Voters'' Requirement in 11 CFR 109.21(c)(4)

    The 2002 rules provided that to satisfy the fourth content 
standard, a public communication must be directed to voters in the 
jurisdiction where the clearly identified Federal candidate is on the 
ballot or where one or more candidates of the political party are on 
the ballot. See former 11 CFR 109.21(c)(4)(iii). The Commission is 
removing the phrase ``directed to voters in the jurisdiction.'' In the 
revised rule, to satisfy the content standard in 11 CFR 109.21(c)(4), a 
public communication must be ``publicly distributed or otherwise 
publicly disseminated in the clearly identified candidate's 
jurisdiction'' or, if the public communication refers to a political 
party, but not to a clearly identified Federal candidate, in a 
jurisdiction in which one or more candidates of a political party 
appear on the ballot. These revisions clarify that a communication is 
potentially for the purpose of influencing a Federal election where the 
persons receiving the communication that is coordinated can vote for or 
against the referenced candidate or candidate's opponent in that 
election, or in the case of a general party reference, a candidate of 
the referenced party in that election. The revisions also clarify that 
for communications that refer solely to a political party and are 
coordinated with a candidate, the analysis turns on whether the 
communication is publicly distributed or otherwise publicly

[[Page 33201]]

disseminated in the jurisdiction of the candidate with whom it is 
coordinated.\41\
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    \41\ For communications coordinated between a candidate and a 
political party and paid for by a political party, see 11 CFR 
109.37.
---------------------------------------------------------------------------

    The NPRM also sought comment on whether the fourth content standard 
at former 11 CFR 109.21(c)(4)(iii) should be changed to specify a 
minimum number of persons that must be able to receive a communication 
and, if so, what the required minimum number of persons should be. The 
Act and Commission regulations defining ``electioneering 
communication'' require that 50,000 or more persons be able to receive 
an ``electioneering communication'' in the jurisdiction where the 
clearly identified Federal candidate is on the ballot.\42\ Similarly, 
the definitions of ``mass mailing'' and ``telephone bank'' contained in 
the Act and Commission regulations as part of the definition of 
``public communication'' contain a minimum threshold of 500. See 2 
U.S.C. 431(23) and (24); 11 CFR 100.27, 100.28, and 100.29 (defining 
``mass mailing'' as a mailing of more than 500 pieces of mail of an 
identical or substantially similar nature sent within a 30-day period 
and ``telephone bank'' as more than 500 telephone calls of an identical 
or substantially similar nature made within a 30-day period). In 
contrast, the fourth content standard does not specify how many persons 
must be able to receive a communication for it to be classified as a 
coordinated communication. See 2 U.S.C. 434(f)(3)(C); 11 CFR 
100.29(b)(3)(ii)(A) and (b)(5).
---------------------------------------------------------------------------

    \42\ See note 3, above.
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    The Commission has decided not to specify a minimum number of 
persons that must be able to receive a communication for the fourth 
content standard to apply. While the 50,000 threshold for 
``electioneering communication'' and the 500 threshold for mass 
mailings and telephone banks are contained in BCRA, there is no 
analogous statutory provision to suggest that Congress intended either 
of these thresholds, or any other threshold, for coordinated 
communications. Moreover, because the coordinated communication rules 
apply to different types of communications, no single minimum threshold 
is appropriate for all communications. For example, unlike the 
``electioneering communication'' provisions, which cover only 
broadcast, cable, and satellite communications (i.e., television and 
radio advertisements), the coordinated communication rules apply to 
print media and telephone banks as well. Adopting, for instance, a 
50,000 or even 30,000-person threshold could have the effect of 
creating a blanket exemption for print advertisements placed in small 
town newspapers with a relatively low circulation.
    In the NPRM, the Commission also invited comment on whether a 
``directed to voters in the candidate's jurisdiction'' requirement 
should be added to the second and third content standards, which cover 
the republication of campaign materials and express advocacy. Three 
commenters supported adding the requirement to the second and third 
content standards because, in the words of one of these commenters, a 
communication ``cannot be said to influence the outcome of an election 
if the people cannot vote in that particular election.'' In contrast, a 
different commenter argued that BCRA does not permit the Commission to 
add a ``directed to voters'' requirement for the republication of 
campaign materials content standard.
    The Commission has decided not to add a ``directed to voters in the 
candidate's jurisdiction'' requirement to the second and third content 
standards. The purpose of the content prong of the coordinated 
communication test is to determine whether a communication has the 
purpose of influencing a Federal election. Communications that 
expressly advocate the election or defeat of a Federal candidate or 
republish campaign materials are by their very nature for the purpose 
of influencing a Federal election and therefore are in-kind 
contributions if their creation or distribution is coordinated with a 
candidate or political party committee.

V. Safe Harbor for Endorsements and Solicitations by Federal Candidates 
(New 11 CFR 109.21(g))

A. Endorsements of, and Solicitations for, Federal or Non-Federal 
Candidates, Political Committees, and Certain Tax-Exempt Organizations

    The Commission is creating a new safe harbor in 11 CFR 109.21(g) 
for endorsements by Federal candidates of other Federal and non-Federal 
candidates, and for solicitations by Federal candidates for other 
Federal and non-Federal candidates, political committees, and certain 
tax-exempt organizations described in section 501(c) of the Internal 
Revenue Code as permitted by 11 CFR 300.65.\43\ Specifically, the new 
regulation provides that a public communication in which a candidate 
for Federal office endorses another candidate for Federal or non-
Federal office, or solicits funds for another candidate, or for a 
political committee or section 501(c) organization as permitted by 11 
CFR 300.65, is not a coordinated communication with respect to the 
endorsing or soliciting Federal candidate unless the public 
communication PASOs the endorsing or soliciting candidate, or another 
candidate who seeks election to the same office as the endorsing or 
soliciting candidate.\44\ This safe harbor applies regardless of the 
timing and proximity to an election of the endorsement or solicitation.
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    \43\ 11 CFR 300.65 permits a Federal candidate or officeholder 
to make certain solicitations of funds on behalf of any organization 
described in 26 U.S.C. 501(c) and exempt from taxation under 26 
U.S.C. 501(a). See also 2 U.S.C. 441i(e)(4). The Commission notes 
that those organizations not covered by this safe harbor are not 
subject to a coordination finding, unless their activities 
separately meet the conduct, content, and payment prongs.
    \44\ The phrase ``another candidate who seeks election to the 
same office as the endorsing or soliciting candidate'' covers not 
only a candidate's actual opponent but also a candidate's potential 
opponent, i.e., a candidate who seeks election to the same office as 
the endorsing or soliciting candidate but who has not yet secured 
his or her party's nomination and therefore is not yet the endorsing 
or soliciting candidate's actual opponent. See 11 CFR 100.3(a) and 2 
U.S.C. 431(2) (setting forth the criteria that must be met for a 
person to be a ``candidate'' under the Act). Thus, for example, an 
advertisement in which a Presidential candidate endorses a candidate 
for Senate but that also attacks one of the opposing party's 
candidates for nomination for President would satisfy the fourth 
content standard at 11 CFR 109.21(c)(4) because it attacks a 
candidate seeking election to the same office as the endorsing 
Presidential candidate. In Subpart C of 11 CFR Part 109 the term 
``opponent'' includes a candidate's potential opponent. The term 
``candidate's opponent'' turns on whether the opponent will be an 
opponent of the soliciting or endorsing candidate during the two-
year election cycle and whether the opponent qualifies as a 
candidate for the same office.
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    Most commenters who addressed this issue supported the creation of 
a safe harbor on the grounds that such communications are not intended 
to benefit the endorsing or soliciting candidate's election and are not 
made for the purpose of influencing the endorsing or soliciting 
candidate's election. See Shays Appeal at 99 (``[T]o qualify as [an] 
expenditure in the first place, spending must be undertaken ``for the 
purpose of influencing'' a federal election.''). One commenter stated 
``solicitations are regularly directed to individuals who are not even 
eligible to vote for the soliciting candidate.'' Another commenter 
observed that ``often the solicitation is directed to an audience whose 
members include few, if any, of the candidate's own electorate.'' In 
the context of endorsements, one commenter argued that ``[a] 
coordinated expenditure,

[[Page 33202]]

treated as a contribution subject to the limits and source 
restrictions, must meet the test of benefiting a candidate. This is not 
true of an endorsement, which is a speech act performed for the benefit 
of another.'' Similarly, another commenter noted that the ``purpose of 
a federal candidate's endorsement message is to aid the endorsed 
candidate * * * not to aid the endorsing candidate's own election,'' 
(emphasis in original) while another commenter observed that 
``endorsements are seldom, if ever, of electoral value to the endorsing 
candidate.''
    The NPRM invited comment on whether any safe harbor for 
endorsements and solicitations by Federal candidates should be limited 
to communications that do not PASO or, alternatively, do not expressly 
advocate, the endorsing or soliciting candidate or the candidate's 
opponent or potential opponent. Most commenters, including two who had 
opposed the proposed safe harbors in their written comments, agreed 
that it would be appropriate for the Commission to create the proposed 
safe harbors so long as they do not extend to communications intended 
to influence the election of the endorsing or soliciting candidate. 
Moreover, at the hearing, most commenters agreed that the PASO standard 
would be an appropriate and workable standard for determining whether 
communications containing endorsements or solicitations have the 
purpose of influencing the endorsing or soliciting candidates' 
elections. Congress has already determined that a State candidate who 
wishes to sponsor an advertisement featuring a Federal candidate is 
prohibited by 2 U.S.C. 441i(f) from promoting or supporting the Federal 
candidate with non-Federal funds. See 2 U.S.C. 441i(f) and 11 CFR 
300.71. A witness from a reform organization stated that ``if the 
endorsement doesn't promote the candidate doing the endorsement, then 
it should be okay * * * [T]here should be a standard, whether it's a 
PASO standard or for the purpose of influencing.''
    The coordinated communication regulation identifies communications 
that are for the purpose of influencing a Federal election. See 2 
U.S.C. 431(9) and 11 CFR 109.21. Because the Commission agrees that 
endorsements and solicitations are not made for the purpose of 
influencing the endorsing or soliciting candidate's own election, the 
Commission is adopting a safe harbor for endorsements of Federal and 
non-Federal candidates and solicitations made by a Federal candidate 
for Federal or non-Federal candidates, certain tax-exempt organizations 
as permitted by 11 CFR 300.65, and for political committees. There is 
no evidence that Congress intended to restrict the established practice 
of candidate endorsements and solicitations when the endorsements and 
solicitations do not PASO the endorsing or soliciting candidate. To the 
contrary, in floor statements regarding BCRA, Senator Feingold 
explained that the relevant BCRA provisions would not prohibit 
``spending non-Federal money to run advertisements that mention that 
[State candidates] have been endorsed by a Federal candidate * * * so 
long as those advertisements do not support, attack, promote, or oppose 
the Federal candidate.'' 148 Cong. Rec. S2143 (daily ed. Mar. 20, 
2002). The Commission's safe harbor for candidate endorsements is 
fashioned consistent with this legislative history.
    The new rule at 11 CFR 109.21(g) provides that a communication is 
eligible for the safe harbor only if it does not PASO the endorsing or 
soliciting candidate or another candidate seeking election to the same 
Federal office as the endorsing or soliciting candidate.\45\ When the 
safe harbor is applicable, the endorsing or soliciting candidate (and 
the candidate's agents) may be involved in the development of the 
communication, in determining the content of the communication, as well 
as determining the means or mode and timing or frequency of the 
communication.
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    \45\ The Act, as amended by BCRA, generally prohibits Federal 
candidates and officeholders from soliciting funds on behalf of 
other Federal or non-Federal candidates, unless the funds are 
subject to the limitations and prohibitions of the Act. 2 U.S.C. 
441i(e)(1)(A) and (B). See also 11 CFR 300.61 and 300.62.
---------------------------------------------------------------------------

    The new regulation addresses issues presented in Advisory Opinions 
2004-01 (Bush-Cheney/Kerr) and 2003-25 (Weinzapfel). As discussed 
above, in Advisory Opinion 2004-01, the Commission considered a 
television advertisement that featured President Bush endorsing a 
Congressional candidate. The Commission determined that, for any 
advertisement distributed within 120 days of the Presidential primary 
in the State in which the advertisement aired, the advertisement's 
production and distribution costs paid for by the Congressional 
candidate's committee but attributable to the President's authorized 
committee were contributions to the President's authorized committee 
from the Congressional candidate's committee. Similarly, in Advisory 
Opinion 2003-25, the Commission considered an advertisement featuring a 
U.S. Senator endorsing a mayoral candidate and concluded that the 
communication did not satisfy the fourth content standard because it 
was not distributed within 120 days of a Federal election.\46\
    These advisory opinions are superseded to the extent they concluded 
that communications containing endorsements by Federal candidates are 
in-kind contributions to the endorsing Federal candidate if they 
otherwise satisfy the coordinated communication test, irrespective of 
whether the communication PASOs the endorsing candidate.
---------------------------------------------------------------------------

    \46\ The Commission also determined in Advisory Opinion 2003-25 
that the proposed advertisement did not PASO the endorsing Federal 
candidate.
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B. Endorsements of, and Solicitations for, State Ballot Initiatives

    In the NPRM, the Commission also sought comment on whether a 
similar safe harbor should apply to a Federal candidate's appearance in 
communications that endorse, or solicit funds for, State ballot 
initiatives. Only two commenters addressed the safe harbor proposal and 
both supported such a safe harbor, arguing that, like endorsements of 
other candidates, endorsements of State ballot initiatives are not made 
for the purpose of influencing the election of the endorsing candidate, 
but rather to influence the outcome of the State ballot initiative. No 
other commenters addressed the proposal. In light of the limited record 
produced by the commenters regarding a safe harbor for ballot 
initiatives, the Commission has decided not to extend a safe harbor for 
endorsements and solicitations for State ballot initiatives at this 
time.

VI. Amendments to the Conduct Prong (11 CFR 109.21(d) and (h))

    The conduct prong of the Commission's coordinated communication 
regulations was not challenged in Shays v. FEC. Nonetheless, in the 
NPRM, the Commission took the opportunity to seek comment on how 
certain aspects of the conduct prong have worked in practice since the 
coordination regulations were promulgated in 2002. Several issues 
regarding the conduct prong are addressed below.

A. The ``Request or Suggest'' Conduct Standard (11 CFR 109.21(d)(1))

    In the NPRM, the Commission invited comment on whether a 
communication that is paid for by a person other than a candidate, 
authorized committee, political party committee, or their agents and 
that satisfies the first

[[Page 33203]]

conduct standard (i.e., it is made at the request or suggestion of a 
candidate or a political party) should automatically qualify as a 
coordinated communication without also having to satisfy one of the 
content standards. Specifically, the Commission asked whether a public 
communication paid for by another person that is made at the request or 
suggestion of a candidate or a political party committee presumptively 
has value to that candidate, or political party, regardless of its 
timing or content.
    One commenter supported this proposal generally, while all other 
commenters addressing this issue opposed it. This latter group of 
commenters asserted that the proposal could turn ``grassroots 
lobbying,'' or issue advocacy communications, into in-kind 
contributions solely because the communication was created at the 
request or suggestion of a candidate or political party committee. One 
commenter stated that ``[a]n officeholder that suggests that his 
constituents engage in grassroots lobbying is not suggesting that the 
constituents engage in communications that are for the purpose of 
influencing an election.'' Another commenter asserted that a request or 
suggestion by a candidate should not be enough to show that a 
communication is a coordinated communication under the Commission's 
regulations because ``[a]bsent some other indicia of an electoral 
nexus, the fact that a communication is made at the request or 
suggestion of a candidate is not sufficient to demonstrate that it is 
the functional equivalent of a campaign contribution.'' Additionally, 
another commenter stated that ``interactions between members of 
Congress or staff with citizens and citizens groups on legislative 
issues, strategies, and policies do NOT automatically taint subsequent 
public communications regarding that issue, legislation or matter by 
the citizens or citizens group.'' (emphasis in original).
    The Commission agrees with these commenters that the ``request or 
suggestion'' conduct prong should not be amended. In BCRA floor debate, 
Senator McCain clarified that:

[N]othing in the section 214 should or can be read to suggest * * * 
that lobbying meetings between a group and a candidate concerning 
legislative issues could alone lead to a conclusion that ads that 
the group runs subsequently concerning the legislation that was the 
subject of the meeting are coordinated with the candidate * * *. We 
do not intend for the FEC to promulgate rules, however, that would 
lead to a finding of coordination solely because the organization 
that runs such ads has previously had lobbying contacts with a 
candidate.

148 Cong. Rec. S2145 (daily ed. Mar. 20, 2002) (statement of Sen. 
McCain).

    When the Commission promulgated the 2002 Coordination Final Rules, 
it stated that ``the Commission believes that a content standard 
provides a clear and useful component of a coordination definition in 
that it helps ensure that the coordination regulations do not 
inadvertently encompass communications that are not made for the 
purpose of influencing a federal election.'' 2002 Coordination Final 
Rules, 68 FR 421, 426. The Court of Appeals recognized that 
``statements may relate to political or legislative goals independent 
from any electoral race--goals like influencing legislators'' votes or 
increasing public awareness'' and that ``the FEC could construe the 
expenditure definition's purposive language as leaving space for 
collaboration between politicians and outsiders on legislative and 
political issues involving only a weak nexus to any electoral 
campaign.'' Shays Appeal at 99. Therefore, consistent with the Court of 
Appeals' observations and the comments received in this proceeding, and 
in order to ensure that the coordination regulations are tailored to 
reach only communications made for the purpose of influencing a Federal 
election, the Commission is not amending the ``request or suggest'' 
conduct standard.

B. ``Common Vendor'' and ``Former Employee'' Conduct Standards (11 CFR 
109.21(d)(4) and (5))

    The fourth and fifth conduct standards involve common vendors and 
former employees, respectively. See 11 CFR 109.21(d)(4) and (5). These 
two conduct standards implement the requirement of BCRA that the 
Commission address ``the use of a common vendor'' and ``persons who 
previously served as an employee of a candidate or a political party'' 
in the context of coordination. See BCRA, Pub. L. 107-155, sec. 
214(c)(2) and (3) (2002).
    The ``common vendor'' conduct standard in the 2002 coordination 
rules is satisfied if (1) the person paying for a communication 
contracts with, or employs, a ``commercial vendor'' to create, produce, 
or distribute the communication; (2) the commercial vendor has provided 
one or more specified types of services, within the ``current election 
cycle,'' \47\ to the clearly identified candidate, or the candidate's 
authorized committee, the candidate's opponent, the opponent's 
authorized committee or political party committee; and (3) the 
commercial vendor uses or conveys information about the campaign plans, 
projects, activities, or needs of the candidate or political party 
committee that is material to the creation, production, or distribution 
of the communication obtained from the work done for the candidate or 
political party committee when working for the person paying for the 
communication. See former 11 CFR 109.21(d)(4).
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    \47\ The term ``election cycle'' is defined in 11 CFR 100.3(b) 
(``An election cycle shall begin on the first day following the date 
of the previous general election for the office or seat which the 
candidate seeks * * * The election cycle shall end on the date on 
which the general election for the office or seat that the 
individual seeks is held.'').
---------------------------------------------------------------------------

    Similarly, the ``former employee'' conduct standard in the 2002 
coordination rules is satisfied if (1) the person paying for a 
communication was, or is, employing a person who was a former employee 
or independent contractor, within the ``current election cycle,'' of 
the clearly identified candidate or the political party committee 
referred to in the communication; and (2) the former employee uses or 
conveys material information about the plans, projects, activities, or 
needs of the candidate or political party committee obtained from work 
done for the candidate or political party committee when working for 
the person paying for the communication. See former 11 CFR 
109.21(d)(5).
    The NPRM sought comment on whether these two conduct standards 
should be limited to cover only common vendors and former employees who 
are agents of a candidate or political party, and whether the 
Commission should change the temporal limit of the ``current election 
cycle'' in the standards. The Commission has decided not to limit these 
conduct standards to agents, but to revise the temporal limit in the 
common vendor and former employee conduct standards to encompass 120 
days rather than the entire ``current election cycle.''
1. Agents
    First, the Commission sought comment on whether it should change 
the coordinated communication regulations to cover common vendors and 
former employees only if they are agents of the candidate or political 
party committee under the Commission's definition of ``agent'' in 11 
CFR 109.3. The NPRM also asked if the Commission should instead 
eliminate the common vendor and former employee conduct standards since 
restricting these standards to agents would render these standards 
superfluous because, if limited to agents, the conduct of former 
employees and common vendors would already be covered by the first 
three

[[Page 33204]]

conduct standards at 11 CFR 109.21(d)(1) through (d)(3).
    The commenters were divided as to whether restricting these conduct 
standards to agents, or eliminating the standards completely, was 
within the Commission's statutory authority. Some commenters argued 
that BCRA sections 214(c)(2) and (3) did not mandate that the 
Commission restrict common vendors and former employees, but only that 
the Commission consider these issues when deciding what coordination 
rules to adopt. These commenters argued that the Commission is 
authorized to restrict or eliminate these standards after proper 
consideration of the issue. In contrast, other commenters argued that 
limiting the common vendor and former employee conduct standards would 
``fundamentally compromise'' the purpose and intent of BCRA's 
requirement.
    After consideration of the comments and the BCRA provisions 
regarding common vendors and former employees, the Commission has 
decided not to change the conduct standards in this manner at this 
time. The Commission recognizes that these conduct standards focus on 
the conduct of third party vendors and former employees who might no 
longer be the candidate's or political party committee's agents, and 
therefore apply to some persons not covered by the other conduct 
standards. However, under 11 CFR 109.21(b)(2), a candidate or a 
political party committee with whom a communication is coordinated does 
not receive or accept an in-kind contribution if the coordination only 
results from conduct under the common vendor and former employee 
standards. See 11 CFR 109.21(b)(2). Coupled with this pre-existing 
safeguard, these conduct standards continue to apply regardless of 
whether the common vendor or former employee would be considered an 
agent under 11 CFR 109.3.
2. Election Cycle Temporal Limit
    The NPRM also sought comment regarding whether the Commission 
should revise the current ``election cycle'' temporal limit in the 
common vendor and former employee conduct standards. Many commenters 
suggested that including the entire election cycle in the conduct 
standard was over-inclusive, especially with regard to six-year Senate 
election cycles. One commenter noted that the ``revolving door'' ethics 
rules for Congress limit subsequent employment for only one year, and 
argued that no other ethics rule included as long a period as the 
current rule in these conduct standards. One commenter observed that a 
``temporal limit of an entire election cycle creates significant and 
unnecessary legal risks for individuals who are not in a position to 
violate the coordination rules.'' Many commenters observed that 
information relevant to the common vendor and former employee conduct 
standards, such as campaign strategy, tends to have a ``very short 
shelf life,'' that is, it becomes irrelevant quickly during an election 
year. Some commenters suggested revising the temporal limit to a 60-day 
period based upon the Commission's long-standing rule at 11 CFR 
106.4(g) regarding the valuation of polling information, which treats 
poll results that are between 61 to 180 days old as ``worth'' only 5 
percent of their initial value. Poll results more than 180 days old 
need not be reported as having any value. See 11 CFR 106.4(g).
    In contrast, other commenters opposed any shortening of the 
temporal limit for these conduct standards. These commenters argued 
that the 2002 rule properly addresses the danger of coordination 
presented by candidates' campaign committees and political party 
committees using common vendors and by individual employees moving back 
and forth between different candidates and political party committees 
during the same election cycle. These commenters stated that the 
``election cycle'' temporal limit was a bright-line rule appropriately 
drawn by the Commission to avoid the dangers of coordination.
    The Commission explained in the 2002 Coordination Final Rules that 
the temporal limit in the common vendor and former employee standards 
was not intended to serve as a ``cooling off'' period where employment 
was forbidden. 2002 Coordination Final Rules at 438. Nevertheless, many 
commenters noted that the ``election cycle'' temporal limit operated in 
practice as a ``period of disqualification'' in which a vendor or 
former employee may not work on any particular matter for particular 
clients merely because that vendor or employee once worked with a 
candidate or political party at some point during the election cycle. 
These commenters stated that the rule had a ``chilling effect'' on the 
retention of consultants and employees because organizations want to 
avoid the speculative allegations of improper coordination. One 
commenter asserted that the ``election cycle'' temporal limit ``caused 
substantial harm to individuals who lacked any material information 
that could be used for coordination purposes, and yet who were targeted 
in FEC complaints.'' These commenters described the difficult process 
that political committees use to interview and investigate commercial 
vendors, many of whom are in short supply, to determine if the 
commercial vendor is ``tainted'' under these standards before 
contracting with these vendors for political work. The record also 
indicates that some commercial vendors feel compelled under this rule 
to refuse work from political committees near the beginning of an 
election cycle in order to preserve the ability to work for a political 
party or a candidate as the election approaches.
    After considering the comments, which reflect experience in the 
recent election cycles under these rules, the Commission concludes that 
an ``election cycle'' limit is overly broad and unnecessary to the 
effective implementation of the coordination provisions. The more 
appropriate temporal limit for the common vendor and former employee 
conduct standards is 120 days. This temporal limit begins on the last 
day of the most recent employment or provision of services, not on the 
dates when the communication is publicly distributed or is paid for. 
Therefore, the 120-day period starts on the last day of an individual's 
employment with a candidate or political party committee, or on the 
last day when a commercial vendor performed any of the services listed 
in 11 CFR 109.21(d)(4)(ii) for a candidate or political party 
committee. If the former employee or commercial vendor performs any 
work for the candidate or political party committee after the official 
termination of employment or contract, including any projects or plans 
formulated during the employment or contractual relationship to be 
performed after official termination, the calculation of the 120-day 
period will restart from that date. Thus, under the Commission's 
revised rule, the 120-day period begins on the last day that goods or 
services are provided.
    Reducing the temporal limit to 120 days will not undermine the 
effectiveness of the conduct standards and will not lead to 
circumvention of the Act. The record in this rulemaking indicates that 
material information regarding candidate and political party committee 
``campaigns, strategy, plans, needs, and activities''--the information 
that is central to the common vendor and former employee conduct 
standards--does not remain ``material'' for long periods of time during 
an election cycle. Indeed, both national and local events tend to 
render campaign plans and strategy obsolete on

[[Page 33205]]

a very rapid basis. Moreover, as some commenters noted, much of the 
information gained working for candidates during primary races becomes 
largely irrelevant for general elections. As one commenter noted:

If you're involved in a primary race and you've got a competitive 
primary, you are totally focused on how to win the nomination. And 
all your polling and all the information that you're getting; all 
the strategy that you're working out is basically focused on how do 
you win that election. It is an entirely different process when you 
get into the general election * * * The information you had about a 
primary is [largely] irrelevant * * * [W]hat is happening in the 
world in June could be very different by the time you get to October 
or September * * * [Y]ou're not going to have a lot of relevant 
information that's going to make a difference anyway.

    Thus, the Commission agrees that it is unlikely that participation 
in early strategy decisions for a Senate candidate in the beginning of 
a six-year election cycle provides material information that is 
relevant and useful to a communication created five years later in the 
final stages of the general election campaign, or even six months 
later. This approach is consistent with the Commission's polling 
regulations, which recognize that polling information quickly loses its 
value with the passage of time. See 11 CFR 106.4(g).
    Based on all the evidence and comments received by the Commission 
and the Commission's experience in enforcing the common vendor 
regulations in prior enforcement actions, the Commission concludes that 
a limit of 120 days is more than sufficient to reduce the risk of 
circumvention of the Act.

C. Safe Harbor for the Use of Publicly Available Information (11 CFR 
109.21(d)(2)-(5))

    In the NPRM, the Commission sought comment on whether to create a 
safe harbor for the use of publicly available information. 
Specifically, the safe harbor was proposed to ensure that the use or 
conveyance of publicly available information in creating, producing, or 
distributing a communication would not, in and of itself, satisfy any 
of the conduct standards in 11 CFR 109.21(d).
    All commenters addressing this issue supported a safe harbor to 
some extent. The Commission agrees and is adding a safe harbor for the 
use of publicly available information. Although the safe harbor 
proposed in the NPRM would have applied to all five conduct standards 
and would have been set forth in a new paragraph, the Commission has 
decided that the new safe harbor more appropriately applies to only 
four of the five conduct standards, and is being added to the 
paragraphs currently containing those four conduct standards.
    Some commenters expressed concern that the safe harbor proposed in 
the NPRM would preclude certain communications from satisfying the 
coordinated communications test simply because a portion of a given 
communication was based on publicly available information, even if a 
candidate privately conveyed a request that a communication be made. To 
address this concern, the new safe harbor does not apply to the 
``request or suggestion'' conduct standard in 11 CFR 109.21(d)(1). 
Moreover, the four conduct standards that are being revised to include 
a safe harbor for the use of publicly available information all concern 
conduct that conveys material information that is subsequently used to 
create a communication, whereas the ``request or suggestion'' conduct 
standard concerns only a candidate's or political party's request or 
suggestion that a communication be created, produced or distributed, 
and is not dependent upon the nature of information conveyed. See 11 
CFR 109.21(d)(2) (requiring material involvement regarding the 
communication's content, intended audience, means or mode, specific 
media outlet, timing or frequency, and size, prominence, or duration); 
109.21(d)(3) (requiring a substantial discussion about campaign plans, 
projects, activities, or needs); and 109.21(d)(4) and (5) (requiring 
use or conveyance by a common vendor or former employee of information 
about campaign plans, projects, activities, or needs). Thus, new 
language in paragraphs 109.21(d)(2), (d)(3), (d)(4)(iii), and 
(d)(5)(ii) explains that the conduct standards contained in 11 CFR 
109.21(d)(2) through (d)(5) are not satisfied if the information 
material to the creation, production, or distribution of the 
communication was obtained from a publicly available source.
    Under the new safe harbor, a communication created with information 
found, for instance, on a candidate's or political party's Web site, or 
learned from a public campaign speech, is not a coordinated 
communication if that information is subsequently used in connection 
with a communication. The Commission emphasizes that this treatment of 
the use of publicly available information is consistent with the 
Commission's historical treatment of the use of such information. See 
2002 Coordination Final Rules, 68 FR at 432-434 (noting that the 
conduct standards would not apply to ``a speech at a campaign rally'' 
and could not be satisfied by ``a speech to the general public''); see 
also FEC v. Public Citizen, 64 F. Supp. 2d 1327 (N.D. Ga. 1999) 
(finding that an organization's expenditures for communications 
supporting a candidate did not qualify as coordinated expenditures 
because the organization used information disseminated to the public by 
the candidate's campaign). This treatment is also consistent with 
legislative history indicating that certain conduct does not amount to 
coordination. See H.R. Conf. Rep. No. 94-1057, at 38 (April 28, 1976) 
(``[A] general request for assistance in a speech to a group of persons 
by itself should not be considered to be a ``suggestion'' that such 
persons make an expenditure to further such election or defeat.'').
    To qualify for the safe harbor, the person paying for the 
communication bears the burden of showing that the information used in 
creating, producing, or distributing the communication was obtained 
from a publicly available source. The person paying for the 
communication may meet this burden in a wide variety of ways. For 
example, the person paying for a communication may demonstrate that 
media buying strategies regarding a communication were based on 
information obtained from a television station's public inspection 
file, and not on private communications with a candidate or political 
party committee.\48\ Other sources of public information for the 
purposes of the safe harbor include, but are not limited to: Newspaper 
or magazine articles; candidate speeches or interviews; materials on a 
candidate's Web site or other publicly available Web site; transcripts 
from television shows; and press releases.
---------------------------------------------------------------------------

    \48\ See, e.g., Matter Under Review (``MUR'') 5506 (EMILY's 
List), First General Counsel's Report at 7 (the Committee ``states 
that it made its decisions about placing and pulling ads based on 
information that television stations are required to make public.'')
---------------------------------------------------------------------------

    The Commission emphasizes that a communication that does not fall 
within this safe harbor will not automatically be presumed to satisfy 
the conduct prong of the coordinated communication test. For a 
coordinated communication to be established, the use of such non-public 
information must satisfy the conduct prongs, and the communication must 
also satisfy the content and payment prongs.

[[Page 33206]]

D. Safe Harbor for Establishment and Use of a Firewall (New 11 CFR 
109.21(h))

    The NPRM sought comment on whether to create a rebuttable 
presumption that a common vendor or former employee has not engaged in 
coordinated conduct under 11 CFR 109.21(d)(4) or (5), if the vendor or 
employee has taken certain specified actions, such as the use of 
``firewalls,'' to ensure that no information about the campaign plans, 
projects, activities, or needs of a candidate or political party 
committee that is material to the creation, production or distribution 
of the communication is used or conveyed to a third party. The NPRM did 
not include any proposed regulatory text. The NPRM also discussed the 
Commission's finding in a recent enforcement matter that the facts 
produced by a respondent indicating that a firewall had been 
established within a political committee were sufficient to refute 
allegations of coordination under the first three conduct standards in 
11 CFR 109.21(d)(1)-(3). See MUR 5506 (EMILY's List), First General 
Counsel's Report at 5-8.
    Many commenters supported the idea of a safe harbor and argued that 
a candidate, political party committee, or other organization should be 
able to rely upon assurances from a commercial vendor that it maintains 
a firewall to prevent any coordination with one of the vendor's other 
clients. Some commenters urged the Commission to codify its analysis in 
MUR 5506 and implement a safe harbor with respect to all of the conduct 
standards. These commenters argued that a safe harbor applicable to all 
conduct standards would reduce the ``chilling effect'' of the 
coordination rules with regard to organizations conducting lobbying-
related meetings with officeholders who are also candidates and would 
encourage and enhance compliance with the coordination regulations. 
Many commenters also supported a firewall safe harbor as a way for 
organizations to respond to speculative complaints alleging 
coordination when organizations are faced with trying to ``prove a 
negative'' by showing that coordination did not occur.
    Some commenters described various approaches that political party 
committees and other committees have used in the past to avoid the 
possibility of coordination when some employees of a committee work on 
independent expenditures at the same time that other employees of the 
committee work with candidates or political party committees on 
lobbying or other issues. The commenters described how specific 
employees are placed on separate teams (or ``silos'') within the 
organization, so that information does not pass between the employees 
who work on independent expenditures and the employees who work with 
candidates and their agents.
    As these commenters noted, the Supreme Court has recognized that 
political party committees have the right to make unlimited independent 
expenditures \49\ and that establishing firewalls and similar screening 
policies is an effective way to simultaneously protect that right and 
avoid improper coordination. Other commenters opposed the creation of a 
firewall safe harbor, arguing that such a safe harbor could compromise 
BCRA.
---------------------------------------------------------------------------

    \49\ See Colorado Republican Federal Campaign Committee v. 
Federal Election Commission, 518 U.S. 604, 614, 618 (1996).
---------------------------------------------------------------------------

    The Commission has decided to add a safe harbor provision at new 11 
CFR 109.21(h) regarding the establishment and use of a firewall. This 
safe harbor codifies the Commission's conclusions in MUR 5506 (EMILY's 
List). The Commission concludes that it is possible for a commercial 
vendor or other employer to create an effective firewall between 
different employees or between different units within its organization 
that prevents information obtained from one client from being used on 
behalf of another, and thereby prevents its staff from conveying 
information from one client to another. Similarly, a political 
committee with an effective firewall can prevent involvement by, and 
discussions between, a candidate or political party committee and the 
individuals creating the communication. In the context of a political 
party committee, use of a firewall can ensure that staff responsible 
for the party's coordinated party expenditures do not share or convey 
information to staff who are simultaneously exercising the party's 
constitutional right to make unlimited independent expenditures.\50\
---------------------------------------------------------------------------

    \50\ In McConnell v. FEC, 540 U.S. 93, 213-214 (2003), the 
Supreme Court struck down a provision of BCRA (sec. 213) that 
required political parties to choose between making coordinated and 
independent expenditures after nominating a candidate.
---------------------------------------------------------------------------

    Accordingly, the new regulation provides that the conduct standards 
in 11 CFR 109.21(d) are not met if a commercial vendor, former 
employee, or political committee has designed and implemented an 
effective firewall that meets the requirements of this new provision. 
In order to be eligible for the safe harbor, the firewall must be 
designed and implemented to prohibit the flow of information about the 
candidate's or political party committee's campaign plans, projects, 
activities, or needs between those employees or consultants providing 
services for the person paying for the communication and those 
employees or consultants who currently provide, or previously provided, 
services for the candidate who is clearly identified in the 
communication, or the candidate's authorized committee, the candidate's 
opponent, the opponent's authorized committee, or a political party 
committee. See new 11 CFR 109.21(h)(1).
    The safe harbor provision does not dictate specific procedures 
required to prevent the flow of information referenced in new 109.21(h) 
because a firewall is more effective if established and implemented by 
each organization in light of its specific organization, clients, and 
personnel. One example of procedures that, if implemented, would 
satisfy this first requirement is the firewall described by EMILY's 
List in MUR 5506. That organization's firewall procedures stated that 
employees, volunteers, and consultants who handle advertising buys were 
``barred, as a matter of policy, from interacting with Federal 
candidates, political party committees, or the agents of the foregoing. 
These employees, volunteers, and consultants [were] also barred from 
interacting with others within EMILY's List regarding specified 
candidates or officeholders.'' See MUR 5506 (EMILY's List), First 
General Counsel's Report at 6-7. The EMILY's List firewall prohibited 
personnel who worked directly with the candidate committees from 
discussing and conveying material information to the staff who handled 
the advertising buys.
    Any firewall must also be described in a written policy that is 
distributed to all relevant employees, consultants and clients affected 
by the policy. See new 11 CFR 109.21(h)(2). ``All relevant employees'' 
includes all employees or consultants actually providing services to 
the person paying for the communication or the candidate or political 
party committee. To ensure that the firewall is in place before any 
information is shared between the relevant employees, the written 
firewall policy should be distributed to all relevant employees before 
those employees begin work on the communication referencing the 
candidate or political party. In an enforcement context, the Commission 
will weigh the credibility and specificity of any allegation of 
coordination against the credibility and

[[Page 33207]]

specificity of the facts presented in the response showing that the 
elements of the safe harbor are satisfied. A person paying for a 
communication seeking to use the firewall safe harbor should be 
prepared to provide reliable information (e.g., affidavits) about an 
organization's firewall, and how and when the firewall policy was 
distributed and implemented.
    The Commission notes that common leadership or overlapping 
administrative personnel does not defeat the use of a firewall. 
Moreover, mere contact or communications between persons on either side 
of a firewall does not compromise the firewall, as long as the firewall 
prevents information about the candidate's or political party 
committee's campaign plans, projects, activities or needs from passing 
between persons on either side of the firewall.
    Once a firewall has been established, for the firewall to be 
vitiated and the safe harbor to be inapplicable, material information 
about the candidate's or political party committee's campaign plans, 
projects, activities or needs must pass between persons on either side 
of the firewall. The safe harbor does not apply if there is specific 
information indicating that, despite the firewall, either (1) 
information about the candidate's or political party committee's 
campaign plans, projects, activities or needs that is material to the 
creation, production, or distribution of the communication was used by 
the commercial vendor, former employee, or political committee; or (2) 
the common vendor, former employee, or political committee conveyed 
this information to the person paying for the communication. See new 11 
CFR 109.21(h). The Commission emphasizes that the addition of this 
firewall safe harbor provision to the coordinated communication rules 
does not require commercial vendors, former employees and political 
committees to use a firewall. The Commission will not draw a negative 
inference from the lack of such a screening policy.

VII. Amendment to the Payment Prong (11 CFR 109.21(a)(1))

    The Commission is amending the payment prong (11 CFR 109.21(a)(1)) 
of the Commission's coordinated communication test to read, ``Is paid 
for, in whole or in part, by a person other than that candidate, 
authorized committee, or political party committee.'' The addition of 
``in whole or in part'' clarifies that the payment prong is satisfied 
not only when a person other than the candidate, the candidate's 
authorized committee, or political party committee, pays for the entire 
cost of a communication, but also if that person pays for only part of 
the costs. This clarification is consistent with the approach the 
Commission has taken in previous advisory opinions. See Advisory 
Opinions 2004-29 (Akin) and 2004-01 (Bush-Cheney/Kerr). The Commission 
notes that where a candidate or political party committee pays its 
allocable share of a joint communication, the payment prong has not 
been triggered and the communication is not a coordinated communication 
with respect to that candidate or political party.

VIII. Political Party Coordinated Communication Provisions (11 CFR 
109.37)

    In the NPRM, the Commission noted that the party coordinated 
communication regulations at 11 CFR 109.37 also contain a three-prong 
test for determining whether a communication is coordinated between a 
candidate and a political party committee. This ``party coordinated 
communication'' test in 11 CFR 109.37, which governs coordinated 
communications paid for by political party committees, has a content 
prong that is substantially the same as the one for ``coordinated 
communications'' in 11 CFR 109.21(c).\51\ See 11 CFR 109.37(a)(2). 
Although the party coordinated communication regulations were not 
addressed in the Shays litigation, the Commission sought comment on 
whether it should make any changes to the 120-day time frame in 11 CFR 
109.37 consistent with any changes made to the coordinated 
communication rules in 11 CFR 109.21. One commenter focused solely on 
this issue and encouraged the Commission to retain the 120-day time 
frame while adding a PASO standard. Other commenters noted only that 
their comments on this issue are the same as their comments on the 
coordinated communication rules in 11 CFR 109.21 regarding the 120-day 
time frame.
---------------------------------------------------------------------------

    \51\ 11 CFR 109.37(a)(2) differs from 11 CFR 109.21(c) in two 
ways: first, it does not contain a separate content standard for 
electioneering communications and, second, the content standard in 
section 109.37(a)(2)(iii), the equivalent of the fourth content 
standard in section 109.21(c)(4), can be satisfied only by reference 
to a clearly identified Federal candidate and not, as in section 
109.21(c)(4), also by reference to a political party.
---------------------------------------------------------------------------

    The Commission is revising its rules regarding party coordinated 
communications to ensure consistency with the revisions to the fourth 
content standard at 11 CFR 109.21(c)(4). Thus, revised section 
109.37(a)(2)(iii), like revised section 109.21(c)(4), establishes 
separate time frames for communications referring to Congressional and 
Presidential candidates. For communications referring to Congressional 
candidates in primary and general elections, the revised time frame 
begins 90 days before each election and ends on the date of that 
election. For communications referring to Presidential candidates, the 
revised time frame covers, on a State-by-State basis, the entire period 
of time beginning 120 days before the date of a primary up to and 
including the date of the general election. Because the content 
standard in 11 CFR 109.37(a)(2) is not satisfied by a communication 
that refers only to a political party, revised 11 CFR 109.37, unlike 
revised 11 CFR 109.21(c)(4), does not contain a separate time frame for 
communications that refer to political parties.
    The justification for the revised time frame in 11 CFR 
109.37(a)(2)(iii) is the same as the justification for the revision of 
11 CFR 109.21(c)(4). The CMAG data show that in the 2004 election 
cycle, nearly all television advertisements paid for by House and 
Senate candidates were aired within 90 days before primary or general 
elections and that nearly all advertisements paid for by Presidential 
candidates were aired during the time period that begins 120 days 
before a State's primary election up to and including the date of the 
general election. As discussed above, data showing when candidates 
spend their own campaign funds on advertisements provide an empirical 
basis for determining when advertising that has the purpose of 
influencing a Federal election occurs. Moreover, a candidate has an 
incentive to ask a political party committee to pay for advertisements 
to be aired precisely during the time period when the candidate 
believes these advertisements would be effective, which, as shown 
above, are the time periods when the candidate herself pays for such 
advertisements to be aired. The CMAG data, therefore, provide empirical 
support for using the revised time frames as part of a bright-line test 
for determining whether a communication that is paid for by a political 
party committee and is coordinated with a candidate is made for the 
purpose of influencing Federal elections. Finally, the Commission has 
been presented with no evidence that the revised time frame in 11 CFR 
109.37(a)(2)(iii) would permit circumvention of the Act.
    For the reasons discussed above, the Commission also incorporates 
into 11 CFR 109.37 the safe harbor provisions at new 11 CFR 
109.21(d)(2)-(5) for use of publicly available information, as well

[[Page 33208]]

as the safe harbors at new 11 CFR 109.21(g) and (h) for endorsements 
and solicitations by Federal candidates, and for the establishment and 
use of a firewall.

IX. Technical Changes Including Amendments to References to ``Agents'' 
(11 CFR 109.20, 109.21, and 109.23)

    The Commission is also making certain technical, non-substantive 
changes to its coordinated communication rules to simplify them and 
enhance readability. One technical change of note is that the 
Commission is adding a sentence to 11 CFR 109.20(a) that explains that 
any reference in the coordinated communication rules to a candidate, a 
candidate's authorized committee, or a political party committee, also 
refers to any agent of the candidate, the candidate's authorized 
committee, or the political party committee. The Commission is adding 
this sentence to make explicit that an agent is included whenever a 
candidate, an authorized committee, or a political party committee is 
referenced, in order to remove the duplicative references to agents in 
11 CFR 109.21 and 109.23.

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

    The Commission certifies that the attached rules do not have a 
significant economic impact on a substantial number of small entities. 
The basis for this certification is that any individuals and not-for-
profit entities that are affected by these rules are not ``small 
entities'' under 5 U.S.C. 601. The definition of ``small entity'' does 
not include individuals, but classifies a not-for-profit enterprise as 
a ``small organization'' if it is independently owned and operated and 
not dominant in its field. 5 U.S.C. 601(4).
    Moreover, any State, district, and local party committees that are 
affected by these proposed rules are not-for-profit committees that do 
not meet the definition of ``small organization.'' State political 
party committees are not independently owned and operated because they 
are not financed and controlled by a small identifiable group of 
individuals, and they are affiliated with the larger national political 
party organizations. In addition, the State political party committees 
representing the Democratic and Republican parties have a major 
controlling influence within the political arena of their State and are 
thus dominant in their field. District and local party committees are 
generally considered affiliated with the State committees and need not 
be considered separately. To the extent that any State party committees 
representing minor political parties or any other political committees 
might be considered ``small organizations,'' the number that are 
affected by this proposed rule is not substantial, particularly the 
number that coordinate communications with candidates or other 
political committees in connection with a Federal election.
    Furthermore, any separate segregated funds that are affected by 
these proposed rules are not-for-profit political committees that do 
not meet the definition of ``small organization'' because they are 
financed by a combination of individual contributions and financial 
support for certain expenses from corporations, labor organizations, 
membership organizations, or trade associations, and therefore are not 
independently owned and operated.
    Most of the other political committees that are affected by these 
proposed rules are not-for-profit committees that do not meet the 
definition of ``small organization.'' Most political committees are not 
independently owned and operated because they are not financed by a 
small identifiable group of individuals. In addition, most political 
committees rely on contributions from a large number of individuals to 
fund the committees' operations and activities. To the extent that any 
other entities fall within the definition of ``small entities,'' any 
economic impact of complying with these rules is not significant.
    With respect to commercial vendors whose clients include 
candidates, political party committees or other political committees, 
the final rules provide cost-effective methods for complying with the 
Act that are not required and that will reduce certain regulatory 
restrictions. Thus, rather than adding an economic burden, the rules 
potentially have a beneficial economic impact on such commercial 
vendors.

List of Subjects in 11 CFR Part 109

    Elections, Reporting and recordkeeping requirements.

0
For the reasons set out in the preamble, the Federal Election 
Commission is amending Subchapter A of Chapter I of Title 11 of the 
Code of Federal Regulations as follows:

PART 109--COORDINATED AND INDEPENDENT EXPENDITURES (2 U.S.C. 
431(17), 441a(a) AND (d), AND PUB. L. 107-155 SEC. 214(c))

0
1. The authority citation for part 109 continues to read as follows:

    Authority: 2 U.S.C. 431(17), 434(c), 438(a)(8), 441a, 441d; Sec. 
214(c) of Pub. L. 107-155, 116 Stat. 81.


0
2. In Sec.  109.20, paragraph (a) is revised to read as follows:


Sec.  109.20  What does ``coordinated'' mean?

    (a) Coordinated means made in cooperation, consultation or concert 
with, or at the request or suggestion of, a candidate, a candidate's 
authorized committee, or a political party committee. For purposes of 
this subpart C, any reference to a candidate, or a candidate's 
authorized committee, or a political party committee includes an agent 
thereof.
* * * * *

0
3. Section 109.21 is revised as follows:
0
a. Revise paragraph (a)(1);
0
b. Revise paragraph (b)(2);
0
c. Revise paragraphs (c)(2), (3), and (4);
0
d. Revise paragraphs (d)(1), (2), (3), (4), and (5);
0
e. Revise paragraph (e);
0
f. Add paragraph (g);
0
g. Add paragraph (h);
    The additions and revisions read as follows:


Sec.  109.21  What is a ``coordinated communication''?

    (a) * * *
    (1) Is paid for, in whole or in part, by a person other than that 
candidate, authorized committee, or political party committee;
* * * * *
    (b) * * *
    (2) In-kind contributions resulting from conduct described in 
paragraphs (d)(4) or (d)(5) of this section. Notwithstanding paragraph 
(b)(1) of this section, the candidate, authorized committee, or 
political party committee with whom or which a communication is 
coordinated does not receive or accept an in-kind contribution, and is 
not required to report an expenditure, that results from conduct 
described in paragraphs (d)(4) or (d)(5) of this section, unless the 
candidate, authorized committee, or political party committee engages 
in conduct described in paragraphs (d)(1) through (d)(3) of this 
section.
* * * * *
    (c) * * *
    (2) A public communication, as defined in 11 CFR 100.26, that 
disseminates, distributes, or republishes, in whole or in part, 
campaign materials prepared by a candidate or the candidate's 
authorized committee, unless the dissemination, distribution, or 
republication is excepted under 11 CFR 109.23(b). For a

[[Page 33209]]

communication that satisfies this content standard, see paragraph 
(d)(6) of this section.
    (3) A public communication, as defined in 11 CFR 100.26, that 
expressly advocates the election or defeat of a clearly identified 
candidate for Federal office.
    (4) A public communication, as defined in 11 CFR 100.26, that 
satisfies paragraph (c)(4)(i), (ii), (iii), or (iv) of this section:
    (i) References to House and Senate candidates. The public 
communication refers to a clearly identified House or Senate candidate 
and is publicly distributed or otherwise publicly disseminated in the 
clearly identified candidate's jurisdiction 90 days or fewer before the 
clearly identified candidate's general, special, or runoff election, or 
primary or preference election, or nominating convention or caucus.
    (ii) References to Presidential and Vice Presidential candidates. 
The public communication refers to a clearly identified Presidential or 
Vice Presidential candidate and is publicly distributed or otherwise 
publicly disseminated in a jurisdiction during the period of time 
beginning 120 days before the clearly identified candidate's primary or 
preference election in that jurisdiction, or nominating convention or 
caucus in that jurisdiction, up to and including the day of the general 
election.
    (iii) References to political parties. The public communication 
refers to a political party, does not refer to a clearly identified 
Federal candidate, and is publicly distributed or otherwise publicly 
disseminated in a jurisdiction in which one or more candidates of that 
political party will appear on the ballot.
    (A) When the public communication is coordinated with a candidate 
and it is publicly distributed or otherwise publicly disseminated in 
that candidate's jurisdiction, the time period in paragraph (c)(4)(i) 
or (ii) of this section that would apply to a communication containing 
a reference to that candidate applies;
    (B) When the public communication is coordinated with a political 
party committee and it is publicly distributed or otherwise publicly 
disseminated during the two-year election cycle ending on the date of a 
regularly scheduled non-Presidential general election, the time period 
in paragraph (c)(4)(i) of this section applies;
    (C) When the public communication is coordinated with a political 
party committee and it is publicly distributed or otherwise publicly 
disseminated during the two-year election cycle ending on the date of a 
Presidential general election, the time period in paragraph (c)(4)(ii) 
of this section applies.
    (iv) References to both political parties and clearly identified 
Federal candidates. The public communication refers to a political 
party and a clearly identified Federal candidate, and is publicly 
distributed or otherwise publicly disseminated in a jurisdiction in 
which one or more candidates of that political party will appear on the 
ballot.
    (A) When the public communication is coordinated with a candidate 
and it is publicly distributed or otherwise publicly disseminated in 
that candidate's jurisdiction, the time period in paragraph (c)(4)(i) 
or (ii) of this section that would apply to a communication containing 
a reference to that candidate applies;
    (B) When the public communication is coordinated with a political 
party committee and it is publicly distributed or otherwise publicly 
disseminated in the clearly identified candidate's jurisdiction, the 
time period in paragraph (c)(4)(i) or (ii) of this section that would 
apply to a communication containing only a reference to that candidate 
applies;
    (C) When the public communication is coordinated with a political 
party committee and it is publicly distributed or otherwise publicly 
disseminated outside the clearly identified candidate's jurisdiction, 
the time period in paragraph (c)(4)(iii)(B) or (C) of this section that 
would apply to a communication containing only a reference to a 
political party applies.
    (d) * * *
    (1) Request or suggestion. (i) The communication is created, 
produced, or distributed at the request or suggestion of a candidate, 
authorized committee, or political party committee; or
    (ii) The communication is created, produced, or distributed at the 
suggestion of a person paying for the communication and the candidate, 
authorized committee, or political party committee assents to the 
suggestion.
    (2) Material involvement. This paragraph, (d)(2), is not satisfied 
if the information material to the creation, production, or 
distribution of the communication was obtained from a publicly 
available source. A candidate, authorized committee, or political party 
committee is materially involved in decisions regarding:
    (i) The content of the communication;
    (ii) The intended audience for the communication;
    (iii) The means or mode of the communication;
    (iv) The specific media outlet used for the communication;
    (v) The timing or frequency of the communication; or
    (vi) The size or prominence of a printed communication, or duration 
of a communication by means of broadcast, cable, or satellite.
    (3) Substantial discussion. This paragraph, (d)(3), is not 
satisfied if the information material to the creation, production, or 
distribution of the communication was obtained from a publicly 
available source. The communication is created, produced, or 
distributed after one or more substantial discussions about the 
communication between the person paying for the communication, or the 
employees or agents of the person paying for the communication, and the 
candidate who is clearly identified in the communication, or the 
candidate's authorized committee, the candidate's opponent, the 
opponent's authorized committee, or a political party committee. A 
discussion is substantial within the meaning of this paragraph if 
information about the candidate's or political party committee's 
campaign plans, projects, activities, or needs is conveyed to a person 
paying for the communication, and that information is material to the 
creation, production, or distribution of the communication.
    (4) Common vendor. All of the following statements in paragraphs 
(d)(4)(i) through (d)(4)(iii) of this section are true:
    (i) The person paying for the communication, or an agent of such 
person, contracts with or employs a commercial vendor, as defined in 11 
CFR 116.1(c), to create, produce, or distribute the communication;
    (ii) That commercial vendor, including any owner, officer, or 
employee of the commercial vendor, has provided any of the following 
services to the candidate who is clearly identified in the 
communication, or the candidate's authorized committee, the candidate's 
opponent, the opponent's authorized committee, or a political party 
committee, during the previous 120 days:
    (A) Development of media strategy, including the selection or 
purchasing of advertising slots;
    (B) Selection of audiences;
    (C) Polling;
    (D) Fundraising;
    (E) Developing the content of a public communication;
    (F) Producing a public communication;
    (G) Identifying voters or developing voter lists, mailing lists, or 
donor lists;
    (H) Selecting personnel, contractors, or subcontractors; or

[[Page 33210]]

    (I) Consulting or otherwise providing political or media advice; 
and
    (iii) This paragraph, (d)(4)(iii), is not satisfied if the 
information material to the creation, production, or distribution of 
the communication used or conveyed by the commercial vendor was 
obtained from a publicly available source. That commercial vendor uses 
or conveys to the person paying for the communication:
    (A) Information about the campaign plans, projects, activities, or 
needs of the clearly identified candidate, the candidate's opponent, or 
a political party committee, and that information is material to the 
creation, production, or distribution of the communication; or
    (B) Information used previously by the commercial vendor in 
providing services to the candidate who is clearly identified in the 
communication, or the candidate's authorized committee, the candidate's 
opponent, the opponent's authorized committee, or a political party 
committee, and that information is material to the creation, 
production, or distribution of the communication.
    (5) Former employee or independent contractor. Both of the 
following statements in paragraphs (d)(5)(i) and (d)(5)(ii) of this 
section are true:
    (i) The communication is paid for by a person, or by the employer 
of a person, who was an employee or independent contractor of the 
candidate who is clearly identified in the communication, or the 
candidate's authorized committee, the candidate's opponent, the 
opponent's authorized committee, or a political party committee, during 
the previous 120 days; and
    (ii) This paragraph, (d)(5)(ii), is not satisfied if the 
information material to the creation, production, or distribution of 
the communication used or conveyed by the former employee or 
independent contractor was obtained from a publicly available source. 
That former employee or independent contractor uses or conveys to the 
person paying for the communication:
    (A) Information about the campaign plans, projects, activities, or 
needs of the clearly identified candidate, the candidate's opponent, or 
a political party committee, and that information is material to the 
creation, production, or distribution of the communication; or
    (B) Information used by the former employee or independent 
contractor in providing services to the candidate who is clearly 
identified in the communication, or the candidate's authorized 
committee, the candidate's opponent, the opponent's authorized 
committee, or a political party committee, and that information is 
material to the creation, production, or distribution of the 
communication.
* * * * *
    (e) Agreement or formal collaboration. Agreement or formal 
collaboration between the person paying for the communication and the 
candidate clearly identified in the communication, or the candidate's 
authorized committee, the candidate's opponent, the opponent's 
authorized committee, or a political party committee, is not required 
for a communication to be a coordinated communication. Agreement means 
a mutual understanding or meeting of the minds on all or any part of 
the material aspects of the communication or its dissemination. Formal 
collaboration means planned, or systematically organized, work on the 
communication.
* * * * *
    (g) Safe harbor for endorsements and solicitations by Federal 
candidates. (1) A public communication in which a candidate for Federal 
office endorses another candidate for Federal or non-Federal office is 
not a coordinated communication with respect to the endorsing Federal 
candidate unless the public communication promotes, supports, attacks, 
or opposes the endorsing candidate or another candidate who seeks 
election to the same office as the endorsing candidate.
    (2) A public communication in which a candidate for Federal office 
solicits funds for another candidate for Federal or non-Federal office, 
a political committee, or organizations as permitted by 11 CFR 300.65, 
is not a coordinated communication with respect to the soliciting 
Federal candidate unless the public communication promotes, supports, 
attacks, or opposes the soliciting candidate or another candidate who 
seeks election to the same office as the soliciting candidate.
    (h) Safe harbor for establishment and use of a firewall. The 
conduct standards in paragraph (d) of this section are not met if the 
commercial vendor, former employee, or political committee has 
established and implemented a firewall that meets the requirements of 
paragraphs (h)(1) and (h)(2) of this section. This safe harbor 
provision does not apply if specific information indicates that, 
despite the firewall, information about the candidate's or political 
party committee's campaign plans, projects, activities, or needs that 
is material to the creation, production, or distribution of the 
communication was used or conveyed to the person paying for the 
communication.
    (1) The firewall must be designed and implemented to prohibit the 
flow of information between employees or consultants providing services 
for the person paying for the communication and those employees or 
consultants currently or previously providing services to the candidate 
who is clearly identified in the communication, or the candidate's 
authorized committee, the candidate's opponent, the opponent's 
authorized committee, or a political party committee; and
    (2) The firewall must be described in a written policy that is 
distributed to all relevant employees, consultants, and clients 
affected by the policy.

0
4. In Sec.  109.23, paragraph (b)(1) is revised to read as follows:


Sec.  109.23  Dissemination, distribution, or republication of 
candidate campaign materials.

* * * * *
    (b) * * *
    (1) The campaign material is disseminated, distributed, or 
republished by the candidate or the candidate's authorized committee 
who prepared that material;
* * * * *

0
5. In Sec.  109.37, paragraphs (a)(2) and (3) are revised to read as 
follows:


Sec.  109.37  What is a ``party coordinated communication''?

    (a) * * *
    (2) The communication satisfies at least one of the content 
standards described in paragraphs (a)(2)(i) through (a)(2)(iii) of this 
section.
    (i) A public communication that disseminates, distributes, or 
republishes, in whole or in part, campaign materials prepared by a 
candidate, the candidate's authorized committee, or an agent of any of 
the foregoing, unless the dissemination, distribution, or republication 
is excepted under 11 CFR 109.23(b). For a communication that satisfies 
this content standard, see 11 CFR 109.21(d)(6).
    (ii) A public communication that expressly advocates the election 
or defeat of a clearly identified candidate for Federal office.
    (iii) A public communication, as defined in 11 CFR 100.26, that 
satisfies paragraphs (a)(2)(iii)(A) or (B) of this section:
    (A) References to House and Senate candidates. The public 
communication refers to a clearly identified House or Senate candidate 
and is publicly distributed or otherwise publicly disseminated in the 
clearly identified candidate's jurisdiction 90 days or fewer before the 
clearly identified candidate's

[[Page 33211]]

general, special, or runoff election, or primary or preference 
election, or nominating convention or caucus.
    (B) References to Presidential and Vice Presidential candidates. 
The public communication refers to a clearly identified Presidential or 
Vice Presidential candidate and is publicly distributed or otherwise 
publicly disseminated in a jurisdiction during the period of time 
beginning 120 days before the clearly identified candidate's primary or 
preference election in that jurisdiction, or nominating convention or 
caucus in that jurisdiction, up to and including the day of the general 
election.
    (3) The communication satisfies at least one of the conduct 
standards in 11 CFR 109.21(d)(1) through (d)(6), subject to the 
provisions of 11 CFR 109.21(e), (g), and (h). A candidate's response to 
an inquiry about that candidate's positions on legislative or policy 
issues, but not including a discussion of campaign plans, projects, 
activities, or needs, does not satisfy any of the conduct standards in 
11 CFR 109.21(d)(1) through (d)(6). Notwithstanding paragraph (b)(1) of 
this section, the candidate with whom a party coordinated communication 
is coordinated does not receive or accept an in-kind contribution, and 
is not required to report an expenditure that results from conduct 
described in 11 CFR 109.21(d)(4) or (d)(5), unless the candidate, 
authorized committee, or an agent of any of the foregoing, engages in 
conduct described in 11 CFR 109.21(d)(1) through (d)(3).
* * * * *

    Dated: June 2, 2006.
Michael E. Toner,
Chairman, Federal Election Commission.
[FR Doc. 06-5195 Filed 6-7-06; 8:45 am]
BILLING CODE 6715-01-P