[Federal Register Volume 74, Number 233 (Monday, December 7, 2009)]
[Proposed Rules]
[Pages 64016-64026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28733]


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FEDERAL ELECTION COMMISSION

11 CFR Part 300

[Notice 2009-26]


Participation by Federal Candidates and Officeholders at Non-
Federal Fundraising Events

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission seeks comments on proposed 
changes to its rules regarding participation by Federal candidates and 
officeholders at non-Federal fundraising events under the Federal 
Election Campaign Act of 1971, as amended. These proposed changes are 
in response to the decision of the U.S. Court of Appeals for the 
District of Columbia Circuit in Shays v. FEC. The Commission has made 
no final decision on the issues presented in this rulemaking.

DATES: Comments must be received on or before Monday, February 8, 2010. 
Reply comments must be limited to the issues raised in the initial 
comments and must be received on or before Monday, February 22, 2010. 
The Commission will hold a hearing on these proposed rules on 
Wednesday, March 10, 2010 at 10 a.m. Anyone wishing to testify at the 
hearing must file written comments by the due date and must include a 
request to testify in the written comments.

ADDRESSES: All comments must be in writing, addressed to Ms. Amy L. 
Rothstein, Assistant General Counsel, and submitted in either 
electronic, facsimile or hard copy form. Commenters are strongly 
encouraged to submit comments electronically to ensure timely receipt 
and consideration. Electronic comments should be sent to 
[email protected]. If the electronic comments include an 
attachment, the attachment must be in Adobe Acrobat (.pdf) or Microsoft 
Word (.doc) format. Faxed comments should be sent to (202) 219-3923, 
with hard copy follow-up. Hard copy comments and hard copy follow-up of 
faxed comments should be sent to the Federal Election Commission, 999 E 
Street, NW., Washington, DC 20463. All comments must include the full 
name and postal service address of the

[[Page 64017]]

commenter or they will not be considered. The Commission will post 
comments on its Web site after the comment period ends. The hearing 
will be held in the Commission's ninth floor meeting room, 999 E 
Street, NW., Washington, DC, 20463.

FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant 
General Counsel, or Attorneys Mr. David C. Adkins or Mr. Neven F. 
Stipanovic, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or 
(800) 424-9530.

SUPPLEMENTARY INFORMATION: The Bipartisan Campaign Reform Act of 2002 
\1\ (``BCRA'') contained extensive and detailed amendments to the 
Federal Election Campaign Act of 1971, as amended, 2 U.S.C. 431 et seq. 
(``the Act''). The Commission promulgated a number of rules to 
implement BCRA, including rules regarding Federal candidate and 
officeholder solicitations at State, district, and local party 
committee fundraising events at 11 CFR 300.64. The Court of Appeals for 
the District of Columbia Circuit found aspects of these rules invalid 
in Shays v. FEC, 528 F.3d 914 (DC Cir. 2008) (``Shays III''). The 
Commission seeks comment on proposed changes to the rules at 11 CFR 
300.64 to implement the Shays III decision.
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    \1\ Public Law 107-155, 116 Stat. 81 (2002).
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I. Background Information

A. BCRA

    In 2002, Congress amended the Act by restricting the fundraising 
activity of Federal candidates and officeholders, their agents, and 
entities directly or indirectly established, financed, maintained, 
controlled by, or acting on behalf of, any such candidates or Federal 
officeholders. See BCRA at sec. 323(e); 2 U.S.C. 441i(e). For both 
Federal and non-Federal elections, these persons may not ``solicit, 
receive, direct, transfer or spend'' funds unless the funds comply with 
the amount limitations and source prohibitions of the Act.\2\ See 2 
U.S.C. 441i(e)(1)(A) and (e)(1)(B); 11 CFR 300.61 and 300.62. 
Furthermore, Congress prohibited State, district and local party 
committees from accepting or using as Levin funds those funds that have 
been solicited, received, directed, transferred, or spent by or in the 
name of Federal candidates and officeholders. Thus, Federal candidates 
and officeholders were effectively prohibiting from raising Levin 
funds.\3\ See 2 U.S.C. 441i(b)(2)(C)(i); 11 CFR 300.31(e).
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    \2\ The amount limits on contributions depend on the type of 
contributor and the recipient. See 2 U.S.C. 441a(a)(1), (2), and 
(3). For example, individuals and non-multicandidate PACs may 
contribute up to $2,400 per election to a candidate, up to $5,000 
per calendar year to a PAC, and up to $10,000 per year (combined) to 
State, district, and local party committees. A multicandidate PAC, 
by contrast, may give up to $5,000 per election to a candidate, up 
to $5,000 per calendar year to a PAC, and up to $5,000 (combined) to 
State, district, and local party committees. Sources prohibited 
under the Act include national banks, corporations, labor 
organizations, and foreign nationals. See 2 U.S.C. 441a, 441b, and 
441e; see also 2 U.S.C. 441c (government contractors) and 441f 
(contributions made in the name of another).
    \3\ ``Levin funds'' are funds raised by State, district, or 
local party committees pursuant to the restrictions in 11 CFR 300.31 
and disbursed subject to the restrictions in 11 CFR 300.32. See 11 
CFR 300.2(i).
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    As one principal BCRA sponsor noted, ``The basic rule in the bill 
is that Federal candidates and officials cannot raise non-Federal (or 
soft) money donations--that is, funds that do not comply with Federal 
contribution limits and source prohibitions.'' 148 Cong. Rec. H407 
(daily ed. Feb. 13 2002) (statement of Rep. Shays). As that ban related 
to party committees, another of BCRA's main sponsors noted: ``The rule 
here is simple: Federal candidates and officeholders cannot solicit 
soft money funds, funds that do not comply with Federal contribution 
limits and source prohibitions, for any party committee--national, 
State, or local.'' 148 Cong. Rec. S2139 (daily ed. Mar. 20, 2002) 
(statement of Sen. McCain).
    Notwithstanding these restrictions, though, section 323(e)(3) of 
BCRA states explicitly that Federal candidates and officeholders are 
permitted to ``attend, speak, or be a featured guest at a fundraising 
event for a State, district, or local committee of a political party.'' 
See 2 U.S.C. 441i(e)(3).

B. 2002 Rulemaking

    In 2002, the Commission commenced a rulemaking to establish rules 
governing Federal candidate and officeholder participation in State, 
district, and local party committee fundraising events. The Commission 
proposed alternative interpretations of 2 U.S.C. 441i(e)(3). One 
interpretation would have allowed Federal candidates and officeholders 
only to attend, speak, or be a featured guest at State, district, and 
local party committee fundraising events, but, consistent with the 
Act's prohibition on the solicitation of funds outside the limitation 
and prohibitions of the Act by Federal candidates and officeholders, 
would have prohibited those persons from soliciting, receiving, 
directing, transferring, or spending funds or participating in any 
other fundraising aspect of a State, district, or local party committee 
fundraising event. See Notice of Proposed Rulemaking on Prohibited and 
Excessive Contributions; Non-Federal Funds or Soft Money, 67 FR 35654, 
35672, 35688 (May 20, 2002) (``2002 NPRM'').
    An alternative interpretation proposed a ``total exemption from the 
general solicitation ban.'' 2002 NPRM at 35672-73; see also 2 U.S.C. 
441i(e)(1)(B); 11 CFR 300.62. Under this interpretation, Federal 
candidates and officeholders would be permitted to ``speak freely at 
[party fundraising events] without restriction or regulation.'' 2002 
NPRM at 35672-73.
    The Commission separately explored how 2 U.S.C. 441i(e)(3)--
specifically its reference to ``featured guests''--affected the role 
that Federal candidates and officeholders could play in publicizing 
State, district, and local party committee events. See 2002 NPRM at 
35673. For example, the Commission sought comment on whether this 
provision of BCRA allowed Federal candidates and officeholders to be 
named in invitation materials and appear as members of a host 
committee. Id.
    The Commission concluded that Section 441i(e)(3) was a total 
exemption from the general solicitation ban. Under the Commission's 
regulation, Federal candidates and officeholders were permitted to 
attend, speak, and appear as featured guests at State, district, and 
local party committee fundraising events ``without restriction or 
regulation.'' See Final Rules on Prohibited and Excessive 
Contributions; Non-Federal Funds or Soft Money, 67 FR 49064, 49108 
(July 29, 2002) (``2002 Final Rule''); 11 CFR 300.64(b). The Commission 
justified its interpretation by citing to statutory structure, 
legislative intent, general First Amendment concerns, and the special 
relationships that Federal candidates and officeholders share with 
State, district, and local party committees. See 2002 Final Rule at 
49108.
    The Commission did not, however, interpret 2 U.S.C. 441i(e)(3) to 
allow unrestricted participation in pre-event publicity by Federal 
candidates and officeholders. Indeed, the Commission concluded that 
Federal candidates and officeholders were ``prohibited from serving on 
`host committees' for a party fundraising event or from personally 
signing a solicitation in connection with a State, local, or district 
party fundraising event on the basis that these pre-event activities 
are outside the permissible activities * * * flowing from a Federal 
candidate's or officeholder's appearance or attendance at the event.'' 
See 2002 Final Rule at 49108.

[[Page 64018]]

C. Shays I

    The Commission's 2002 regulation implementing 2 U.S.C. 441i(e)(3) 
was challenged in Shays v. FEC. 337 F. Supp. 2d 28 (D.D.C. 2004) 
(``Shays I''). The district court held that the meaning of 2 U.S.C. 
441i(e)(3) was ambiguous and so the Commission's regulation was not 
necessarily contrary to congressional intent. Shays I at 90 (applying 
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 
(1984)). And, while the court acknowledged that the regulation created 
``the potential for abuse,'' it did not find that the regulation unduly 
compromised BCRA's purpose such that it was not entitled to deference 
from the court. Id. at 91. The court did, however, find that the 
Commission's explanation of the rule was inadequate and, therefore, in 
violation of the Administrative Procedure Act, 5 U.S.C. 553. Id. at 92-
93. The Commission did not challenge this holding by the district 
court.

D. 2005 Rulemaking

    Upon remand, the Commission commenced a rulemaking to implement the 
Shays I district court's opinion. See Revised Explanation and 
Justification for Final Rules on Candidate Solicitation at State, 
District and Local Party Fundraising Events, 70 FR 37649 (June 30, 
2005) (``2005 Revised E&J''). This rulemaking provided additional 
explanation and justification of the 2002 Final Rule, but it did not 
change the text of that rule. The Commission, as it did in 2002, 
concluded that 2 U.S.C. 441i(e)(3) was a total exemption from the 
general solicitation ban. Thus, Federal candidates and officeholders 
were permitted, as before, to attend, speak, and appear as featured 
guests at State, district, and local party committee fundraising events 
``without restriction or regulation.'' See 2005 Revised E&J at 37650-
51.

E. Advisory Opinions

    The Commission has previously been asked for advisory opinions 
regarding the participation of Federal candidates and officeholders in 
non-Federal fundraising events for State, district, and local party 
committees, as well as for non-Federal candidates, State political 
organizations, and other non-Federal entities.
    In Advisory Opinions 2003-03 (Cantor) and 2003-36 (Republican 
Governor's Association), the Commission stated that a Federal candidate 
or officeholder may attend and speak at non-Federal fundraisers for 
non-Federal candidates and other non-Federal political organizations, 
even if non-Federal funds are being raised at the event. The Commission 
concluded that this type of participation would not violate BCRA's 
restrictions on soliciting funds outside the limits and prohibitions of 
the Act because attending such an event or giving a speech at such an 
event is not a solicitation under Commission regulations.
    In those same advisory opinions, the Commission also determined 
that Federal candidates and officeholders may solicit funds at events 
at which non-Federal funds are being raised if their solicitations are 
limited to funds that comply with the amount limitations and source 
prohibitions of the Act. To ensure that these solicitations are 
properly limited, Federal candidates and officeholders have had to 
either (1) make a specific solicitation such as ``I am soliciting $500 
from individuals only,'' or (2) condition a general solicitation with a 
disclaimer indicating that the solicitation is only for funds within 
the limitations and prohibitions of the Act. This disclaimer may be 
made orally by the Federal candidate or officeholder or, alternatively, 
in writing by posting at the event a clear and conspicuous notice 
limiting the solicitation.
    The Commission also issued several advisory opinions addressing the 
role that Federal candidates and officeholders may play in publicizing 
non-Federal fundraising events for State, district, and local party 
committees and other non-Federal entities. See Advisory Opinions 2003-
03 (Cantor), 2003-36 (Republican Governor's Association), and 2007-11 
(California State Party Committees). The Commission reasoned that if 
pre-event publicity does not contain a solicitation, then it is not 
subject to BCRA's solicitation restrictions. See id. If the pre-event 
publicity does contain a solicitation, and the Federal candidate or 
officeholder consents to be featured or appear in the publicity, then 
the publicity must contain a clear and conspicuous disclaimer limiting 
the solicitation to funds compliant with the source prohibitions and 
amount limitations of the Act. See id. The Commission made clear, 
however, that Federal candidates and officeholders may not solicit 
funds in excess of the amount limitations and source prohibitions of 
the Act and then qualify that impermissible solicitation with a 
limiting disclaimer. See Advisory Opinion 2003-36 (Republican 
Governor's Association).
    As of 2007, Commission regulations and advisory opinions created 
two sets of procedures governing activities by Federal candidates and 
officeholders at fundraising events at which funds outside the Act's 
limitations and prohibitions are raised. Commission regulations 
provided that Federal candidates and officeholders could attend 
fundraising events for State, district, and local party committee 
events, whether as a featured guest or not, and could speak at such 
events ``without restriction or regulation.'' As a result, Federal 
candidates and officeholders were permitted to solicit directly non-
Federal funds at such events. Further, through its advisory opinions 
the Commission had clarified that Federal candidates and officeholders 
could also attend, speak, or be a featured guest at non-party 
fundraising events at which funds outside the Act's limitations and 
prohibitions are raised. Solicitations at these events, however, were 
subject to the Act's fundraising restrictions; Federal candidates and 
officeholders were required to issue disclaimers--oral or written--that 
any solicitation made by them was only for funds that complied with the 
limitations and restrictions of the Act.
    The guidance relating to pre-event publicity for non-Federal 
fundraisers--both for State, district, and local party committees as 
well as other non-Federal fundraising events, did not evolve as 
clearly, however. The Commission was unable to resolve whether a 
Federal candidate or officeholder could be named as honorary 
chairperson or featured speaker in a solicitation for non-Federal funds 
that is not otherwise signed by the Federal candidate or officeholder. 
See Advisory Opinions 2003-36 (Republican Governor's Association) and 
2007-11 (California State Party Committees). In addition, the 
Commission was unable to resolve whether a Federal candidate or 
officeholder may be named as a featured speaker on pre-event publicity 
that is mailed with (e.g., in the same envelope as) a solicitation for 
non-Federal funds that does not name a Federal candidate or 
officeholder. See Advisory Opinion 2007-11 (California State Party 
Committees).

F. Shays III

    Against this backdrop, the Commission's rule implementing 2 U.S.C. 
441i(e)(3) was again challenged in court. The District Court for the 
District of Columbia upheld the Commission's regulation. Shays v. FEC, 
508 F.Supp.2d. 10 (D.D.C. 2007).
    On appeal, however, the United States Court of Appeals for the 
District of Columbia Circuit reversed the District

[[Page 64019]]

Court, concluding that the total exemption from the general 
solicitation ban ``allows what BCRA directly prohibits.'' Shays III at 
933. In addressing the Commission's regulation, the Court first 
concluded that 2 U.S.C. 441i(e)(3) did not create an ambiguity in the 
law, but should be read as ``clarif[ying] that * * * Federal candidates 
may still `attend, speak, or be a featured guest' at State party events 
where soft money is being raised, which the statute might otherwise be 
read as forbidding.'' Id. at 933. The court then held that the 
Commission had ``no basis'' to read 2 U.S.C. 441i(e)(3) as creating 
``an implied fourth exception'' to the solicitation restrictions at 
Section 441i(e)(1), given that Congress had explicitly enumerated the 
instances in which Federal candidates and officeholders could 
``solicit'' funds outside BCRA's restrictions. Id. at 933-34. The court 
found compelling the specific language in the statute--noting that 
``Congress repeatedly used the term `solicit' and `solicitation' in 
Section 441i--over a dozen times--yet chose not to do so in Section 
441i(e)(3).'' Id. at 934.

II. Proposed Revisions to 11 CFR 300.64

    To comply with the Shays III decision, the Commission proposes 
revising the exemption for attending, speaking and being a featured 
guest at non-Federal fundraising events at 11 CFR 300.64. The 
Commission seeks comment on three alternative proposals. Alternative 1 
addresses only non-Federal fundraising events for State, district, and 
local party committees, while Alternatives 2 and 3 address 
participation by Federal candidates and officeholders at all non-
Federal fundraising events, including fundraisers for State and local 
candidates.
    The Commission has not made any determination as to which of the 
alternative provisions to adopt in the final rule. The final rule may 
contain only aspects of one alternative or elements from some or all of 
the alternatives. The Commission invites comment on which, if any, of 
the three alternatives would be best and why. The Commission is 
particularly interested in whether the proposed alternatives would 
satisfy the court of appeals decision in Shays III.

A. Alternative 1

    Alternative 1 proposes an amendment to current 11 CFR 300.64 in 
order to remedy the deficiencies identified by the court of appeals in 
Shays III. It would make fewer changes to the existing rule than either 
Alternative 2 or Alternative 3. Alternative 1 would not address non-
Federal fundraising events for entities other than State, district, and 
local committees of political parties. Accordingly, Alternative 1 does 
not attempt to extend or limit the advice given in Advisory Opinions 
2003-03 (Cantor) and 2003-36 (Republican Governor's Association).
    First and foremost, Alternative 1 would delete paragraph (b) of 11 
CFR 300.64, which allows Federal candidates and officeholders to speak 
at State, district, and local party committee fundraising events 
without restriction or regulation. This change is meant to address the 
Shays III court's concerns that the provision ``allows what BCRA 
directly prohibits'': the raising of funds outside the limitations and 
prohibitions of the Act by Federal candidates and officeholders. See 
Shays III at 933. The Commission seeks comment on this proposed 
deletion. In particular, would it be sufficiently responsive to the 
Shays III court's opinion? By deleting this paragraph, would the rule 
properly interpret and give effect to the language of 2 U.S.C. 
441i(e)(3)?
    In addition, Alternative 1 would designate the introductory 
paragraph of 11 CFR 300.64 as paragraph (a) and amend it to provide 
that: (1) Federal candidates and officeholders may attend, speak, or be 
featured guests at State, district, and local party committee 
fundraising events at which funds outside the limitations and 
prohibitions of the Act or Levin funds are raised, and (2) Federal 
candidates and officeholders who solicit, receive, direct, transfer, or 
spend funds at such events must do so in accordance with Commission 
regulations. In general, Federal candidates and officeholders may not 
solicit funds in connection with any election outside the limitations 
and prohibitions of the Act. 2 U.S.C. 441i(e)(1).\4\ The exceptions to 
this general rule are set forth in subpart D of 11 CFR 300.
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    \4\ 2 U.S.C. 441i(e)(1)(A) applies to a candidate or 
officeholder soliciting funds ``in connection with an election for 
Federal office'' and 2 U.S.C. 441i(e)(1)(B) applies to a candidate 
or officeholder soliciting funds ``in connection with any election 
other than an election for Federal office.''
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    Although the statutory limitation contained in 2 U.S.C. 441i(e)(1) 
applies at any time and in any context that a Federal candidate or 
officeholder might make a solicitation in connection with any election, 
2 U.S.C. 441i(e)(3) provides that Federal candidates and officeholders 
may ``attend, speak, or be a featured guest'' at fundraising events for 
State, district and local party committees.
    Alternative 1 is intended to implement 2 U.S.C. 441i(e)(3) by 
permitting certain activities by Federal candidates and officeholders--
attending, speaking at, or being a featured guest at a State, district, 
or local party committee event at which funds outside the limits and 
prohibitions of the Act are being solicited or directed by the host 
party committee--that might otherwise be limited by the Act because 
they could be viewed as soliciting, receiving, directing, transferring, 
and spending funds outside the limitations and prohibitions of the Act 
in connection with any election.
    The Commission seeks public comment on proposed paragraph (a). Does 
the proposal provide sufficient guidance to Federal candidates and 
officeholders regarding their conduct at fundraising events for State, 
district, and local committees of political parties, including how they 
may solicit at such events?
    Proposed paragraph (a) would also effect a technical correction in 
the rule. The proposal would delete the reference to 11 CFR 100.24 in 
the current rule and replace it with a reference to 11 CFR 
300.31(e)(2). This change would track more closely with cross-
references in the Act. See 2 U.S.C. 441i(e)(3). Section 441i(e)(3) of 
the Act includes a cross reference to Section 441i(b)(2)(C), which in 
effect prohibits Federal candidates and officeholders from soliciting, 
receiving, directing, transferring or spending Levin funds. See 2 
U.S.C. 441i(b)(2)(C). However, 11 CFR 300.64, the rule implementing 
Section 441i(e)(3) of the Act, does not include a parallel cross-
reference to 11 CFR 300.31(e), the rule implementing Section 
441i(b)(2)(C). Instead, 11 CFR 300.64 cross-references 11 CFR 100.24, 
which defines Federal election activity and thus is not directly 
related to the issue of attending, speaking, or being a featured guest 
at a State, district or local party committee fundraising event.
    Alternative 1 would also redesignate paragraph (a) of the current 
rule, which addresses advertising, announcing, or otherwise publicizing 
a Federal candidate or officeholder's appearance at a State, district, 
or local party committee fundraising event, as paragraph (b). Because 
publicity for a fundraising event for a State, district, or local 
committee of a political party was not at issue in the Shays 
litigation, Alternative 1 does not propose any substantive changes to 
the current rule regarding publicity. As the Commission has stated 
previously, the purpose of this paragraph is to clarify that State 
parties are free to advertise, announce or

[[Page 64020]]

otherwise publicize, including in pre-event invitations, a Federal 
candidate or officeholder's attendance, speaking, being a featured 
guest at a State, district, or local party committee fundraising event 
as long as that publicity does not constitute a solicitation of funds 
outside the limits and prohibitions of the Act by the Federal candidate 
or officeholder. See 2002 Final Rules at 49108; 2005 Revised E&J at 
37651. In light of the Shays III court's ruling that Federal candidates 
and officeholders may not solicit funds outside the prohibitions and 
limitations of the Act at such events, should the rule explicitly state 
that they also may not solicit such funds in pre-event publicity 
materials? Alternatively, should paragraph (b) be deleted altogether?
    The proposed rule text in Alternative 1 addresses only Federal 
officeholders' and candidates' attendance, speaking, or being a 
featured guest at State, local, and district party fundraising events. 
Alternative 1 also provides that State, district, and local party 
committees may publicize Federal candidates' and officeholders' 
participation at such events, but does not specifically address the 
parameters of such publicity, such as whether the publicity may include 
solicitations of funds outside the limits and prohibitions of the Act 
by the event sponsor if the Federal candidate or officeholder appears 
on the publicity, and what would constitute a solicitation by the 
Federal candidate or officeholder in this context. Alternative 1 also 
would continue to leave unaddressed whether, and under what conditions, 
Federal officeholders and candidates may participate at non-party 
fundraising events that are in connection with any election at which 
funds outside the limits and prohibitions of the Act are raised.
    Although the text of the rule would not address whether Federal 
candidates and officeholders may serve on ``host committees'' for a 
party fundraising event at which funds outside the prohibitions and 
limitations of the Act are raised or may sign or otherwise make a 
solicitation in connection with a party fundraising event at which such 
funds are raised, such activities would continue to be prohibited. See 
2002 Final Rules at 49108; 2005 Revised E&J at 37651.

B. Scope of Alternatives 2 and 3

    Under proposed Alternatives 2 and 3, 11 CFR 300.64 would be more 
extensively revised to comply with the court of appeals' decision, as 
well as to provide additional guidance on participation by Federal 
candidates and officeholders in all fundraising events at which funds 
outside the limits and prohibitions of the Act are raised (``non-
Federal fundraising events''). The scope of activities covered by 
Alternatives 2 and 3 is the same, although the two proposals diverge in 
how they would regulate those activities.
    Paragraph (a), which is the same in both of these alternatives, 
establishes that the scope of the proposed rule is more comprehensive 
than current 11 CFR 300.64. In addition, paragraph (a) provides that 
the proposed rule would address a fuller spectrum of Federal candidate 
and officeholder activity--specifically, Federal candidate and 
officeholder participation at non-Federal fundraising events, as well 
as Federal candidates and officeholder participation in the pre-event 
publicity for such events.
    However, proposed paragraph (a) limits the scope of Alternatives 2 
and 3 in three important respects. First, it provides that the rule 
would cover only participation by Federal candidates and officeholders 
in non-Federal fundraising events--those fundraising events at which 
funds outside the limits and prohibitions of the Act, or Levin funds, 
are raised, even if Federal funds are also raised at the event. The 
proposed rule would not cover fundraising events at which only Federal 
funds are raised, nor would it apply to fundraising events in 
connection with any non-Federal election at which only funds within the 
limitations and prohibitions of the Act are raised (e.g., a small-
dollar, non-corporate, non-union fundraiser for a State candidate).
    Second, proposed paragraph (a) provides that Alternatives 2 and 3 
would cover only those non-Federal fundraising events that are ``in 
connection with any election for Federal office or any non-Federal 
election.'' In other words, the Commission does not intend these 
alternatives to affect Federal candidate and officeholder participation 
in fundraising events that are in no way election related. The purpose 
of this provision is two-fold: first, it applies the Act's prohibition 
on Federal candidates and officeholders soliciting, receiving, 
directing, transferring, spending, or disbursing funds in connection 
with any election for Federal office or any non-Federal elections, see 
2 U.S.C. 441i(e)(1)(B); second, it ensures that the proposed rule does 
not reach activity that is outside the Commission's jurisdiction.
    Third, proposed paragraph (a) states explicitly that nothing in 
proposed 11 CFR 300.64 shall alter the fundraising exception for 
Federal candidates and officeholders who are also State candidates, 
found at 11 CFR 300.63, or the fundraising exceptions for certain tax-
exempt organizations, found at 11 CFR 300.65. See also 2 U.S.C. 
441i(e)(2) and (e)(4). To the extent that Alternative 2 or 3 could be 
read to limit in any way these pre-existing statutory exceptions, the 
Commission wishes to make clear that they do not.
    The Commission seeks comment on the scope of Alternatives 2 and 3 
as set forth in proposed paragraph (a) of each. Does it correctly 
establish the scope of the proposed rule? Is it appropriate for the 
rule to address the full range of Federal candidate and officeholder 
participation in non-Federal fundraising events? Do Alternatives 2 and 
3 set forth proposed rules that clearly state the manner in which 
Federal candidates and officeholders may participate in such events? 
Are there other forms of participation in these types of events which 
the rules neglect to cover? The Commission intends for the scope to 
cover activities at all fundraising events at which funds outside the 
limitations and prohibitions of the Act are raised, including dual 
purpose fundraisers (i.e., fundraising events at which Federal funds 
and non-Federal funds are raised). The Commission seeks comment on 
whether it is necessary to include an explicit statement in the rule 
indicating that such dual-purpose events are covered.
    Does proposed paragraph (a) appropriately limit the scope of 
Alternatives 2 and 3? By covering participation by Federal candidates 
and officeholders only in fundraising events that are in connection 
with any election for Federal office or any non-Federal election and at 
which funds outside the limits and prohibitions of the Act are raised, 
has the rule been crafted too narrowly? Are there other types of 
fundraising events that should be addressed by the proposed rule that 
are not under the current construction? Is the scope of Alternatives 2 
and 3 correctly limited to only participation in those events at which 
funds outside the limitations and prohibitions of the Act and Levin 
funds are raised, regardless of whether Federal funds are also raised 
at the event?
    Importantly, the Commission seeks comment on whether proposed 
paragraph (a)--and its use of the ``in connection with any election for 
Federal office or any non-Federal election'' standard--establishes a 
clear and administrable standard. Does this standard provide clear 
guidance to Federal candidates and officeholders as to which types of 
events will--and will not--be affected under the proposed rule? Do 
prior Commission advisory opinions already provide sufficient

[[Page 64021]]

guidance for the meaning of this term? See, e.g., Advisory Opinions 
2005-10 (Berman/Doolittle) (solicitation of donations by Federal 
officeholders to a State ballot measure committee was not in connection 
with any election), 2004-14 (Davis) (solicitation of donations by a 
Federal officeholder to a charity was not in connection with any 
election), and 2003-20 (Hispanic College Fund) (solicitation of 
donations by a Federal officeholder to a scholarship fund was not in 
connection with any election). Cf. Advisory Opinion 2003-12 (Flake) 
(solicitation of donations by Federal officeholders for a political 
organization supporting a State referendum was in connection with an 
election if the measure had qualified for the ballot). Alternatively, 
should the Commission define what constitutes ``in connection with any 
election for Federal office or any non-Federal election'' for purposes 
of Alternatives 2 and 3? If so, how should the Commission define this 
standard?
    As proposed, Alternatives 2 and 3 cover participation in 
fundraising events that are ``in connection with any election for 
Federal office or any non-Federal election.'' Does this establish the 
correct standard? Should the rule instead look to the organization or 
entity that is the beneficiary of the fundraiser for purposes of 
determining whether the ``in connection with any election for Federal 
office or any non-Federal election'' standard is met? See, e.g., 
Advisory Opinion 2003-36 (Republican Governor's Association).
    Finally, the Commission seeks comment on whether proposed paragraph 
(a) sufficiently preserves the statutory exclusions at 2 U.S.C. 
441i(e)(2) and (3). Are the cross-references to 11 CFR 300.63 and 
300.65 clear and helpful? Are they necessary?

C. Alternative 2

    Under Alternative 2, Federal candidates and officeholders would be 
permitted to: (1) Attend, speak, and be featured guests at non-Federal 
fundraising events; (2) solicit funds in compliance with the 
limitations and prohibitions of the Act at such events; and (3) be 
featured, with certain limitations, in pre-event publicity for such 
events. Alternative 2 is based on the statement in the Shays III 
decision that 2 U.S.C. 441i(e)(3) ``merely clarifies'' that Federal 
candidates may attend, speak, or appear as featured guests at State, 
district, or local party committee events without such activities 
constituting an unlawful ``solicitation.'' Shays III at 933. The court 
explained that if Congress had intended for 2 U.S.C. 441i(e)(3) to 
create an exception to the general solicitation ban, it would have done 
so explicitly, as it did in other provisions of Section 441i(e). Id. at 
933-34.
    To that end, Alternative 2 does not distinguish between State, 
district, and local party events and other non-Federal fundraising 
events. Under proposed paragraph (b)(1) of Alternative 2, Federal 
candidates and officeholders may attend, speak, and be featured guests 
at all non-Federal fundraising events. This provision reflects that, 
under Alternative 2, attending, speaking at, or being a featured guest 
at non-Federal fundraising events does not constitute a solicitation 
and, therefore, these activities are not subject to the Act's 
restrictions on Federal candidates and officeholders.
    The proposed rule in Alternative 2 is in part informed by, and 
adopts, some of the Commission's conclusions reached in Advisory 
Opinions 2003-03 (Cantor) and 2003-36 (Republican Governors 
Association). Although Alternative 2 is consistent with certain 
conclusions contained in previous Commission advisory opinions, 
Alternative 2 is based entirely on the reasoning set forth in this 
notice.
    The Commission seeks comment on this approach. Does it correctly 
interpret and implement the court's decision in Shays III? Is it 
appropriate to allow Federal candidates and officeholders to attend, 
speak at, and be featured guests at all non-Federal fundraising 
events--whether for State, district, or local party committees or for 
other entities? Does such an approach give appropriate meaning to 2 
U.S.C. 441i(e)? If it is correct to interpret the Shays III decision to 
mean that merely being a featured guest at a State, district, or local 
party committee fundraiser is not in and of itself an unlawful 
solicitation according to the Act (2 U.S.C. 441i(e)(3)), how could 
being a featured guest at a non-party, non-Federal fundraiser transform 
such activity into an unlawful solicitation? So long as a Federal 
candidate or officeholder does not solicit funds outside the 
limitations and prohibitions of the Act, what statutory authority does 
the Commission have to limit Federal candidates and officeholders from 
attending, speaking at, or appearing as featured guests at non-party, 
non-Federal fundraising events? And if such statutory authority exists, 
how can it be harmonized with the court's reasoning in Shays III?
    Proposed paragraph (b)(2) allows Federal candidates and 
officeholders to solicit funds at non-Federal fundraising events so 
long as the solicitations are in amounts and from sources that are 
consistent with State law and do not violate the Act's contribution 
limits or source prohibitions. Proposed paragraphs (b)(2)(i) and (ii) 
clarify the manner in which Federal candidates and officeholders may so 
limit their solicitations at non-Federal fundraising events. 
Specifically, proposed paragraph (b)(2)(i) states that a Federal 
candidate or officeholder may properly limit such a solicitation either 
by displaying a written notice or by making an oral statement that the 
solicitation is limited to funds permitted under the Act. Paragraph 
(b)(2)(ii) provides that, whether done orally or in writing, the notice 
would have to be clear and conspicuous.
    The Commission seeks comment on proposed paragraph (b)(2). Does it 
faithfully implement the restrictions imposed by the Act on Federal 
candidates and officeholders in their solicitation of funds in 
connection with non-Federal elections? See 2 U.S.C. 441i(e)(1)(B); see 
also 11 CFR 300.62. Should the Commission be more explicit regarding 
notices limiting solicitations at non-Federal fundraising events? For 
example, should the final rule include examples of notices that satisfy 
the rule? Further, should the Commission articulate more clearly how a 
notice will be considered clear and conspicuous? What factors should 
the Commission consider in making this determination? Are such notices 
effective?
    Finally, paragraph (c) of Alternative 2 addresses publicity 
associated with non-Federal fundraising events, including 
advertisements, announcements, and pre-event invitations, regardless of 
form (e.g., phone calls, mail, e-mail, facsimile), and the extent to 
which Federal candidates and officeholders may participate in such 
publicity. The proposal distinguishes between publicity that solicits 
funds outside the limitations and prohibitions of the Act and publicity 
that does not. Proposed paragraph (c) is intended to be consistent with 
the conclusions that were reached in Advisory Opinions 2003-36 
(Republican Governor's Association) and 2007-11 (California State Party 
Committees) and also answer the questions raised in those advisory 
opinions that the Commission was unable to resolve.
    Proposed paragraph (c)(1) provides that Federal candidates and 
officeholders may without limitation approve, authorize, agree, or 
consent to the use of their names or likenesses in publicity for non-
Federal fundraising events, if the publicity does not contain a 
solicitation. Such publicity may use the name or likeness of a Federal 
candidate or officeholder to indicate

[[Page 64022]]

that such person will attend, speak, or be a featured guest at the 
event.
    If pre-event publicity solicits funds outside the limitations or 
prohibitions of the Act or Levin funds, though, proposed paragraph 
(c)(2) establishes two different standards for participation by Federal 
candidates and officeholders that are contingent upon whether the 
solicitation is made by the Federal candidate or officeholder or by 
another person or entity associated with the event.
    Specifically, under proposed paragraph (c)(2)(i), Federal 
candidates and officeholders would be prohibited from authorizing the 
use of their names or likenesses in publicity that would constitute a 
solicitation by them of funds outside the limitations and prohibitions 
of the Act. Proposed paragraph (c)(2)(i)(A) states that this 
prohibition covers publicity in which a Federal candidate or 
officeholder solicits funds outside the limitations and prohibitions of 
the Act, such as by signing a solicitation letter. Publicity that 
identifies a Federal candidate or officeholder as serving in a role 
tied to fundraising, such as serving on the event's ``host committee,'' 
is a solicitation of funds outside the limitations and prohibitions of 
the Act by that individual and also would be prohibited. By contrast, 
proposed paragraph (c)(2)(i)(B) provides that being identified on pre-
event publicity as merely serving as a ``featured speaker'' or 
``honorary chairperson'' would not be in and of itself a solicitation 
because this Alternative presumes that those are not roles tied to 
fundraising and therefore would be permitted.
    Proposed paragraph (c)(2)(ii) permits a Federal candidate or 
officeholder to approve, authorize, agree, or consent to the use of his 
or her name or likeness on publicity that contains a solicitation of 
funds outside the limitations and prohibitions of the Act if the 
solicitation is made by--and clearly attributable to--a person or 
entity other than the Federal candidate or officeholder. Such publicity 
must include a clear and conspicuous statement noting that the 
solicitation of funds outside the limitations and prohibitions of the 
Act is not being made by the Federal candidate or officeholder whose 
name or likeness is featured. Such a statement would be required to 
meet the requirements of 11 CFR 110.11(c)(2) in order to be considered 
``clear and conspicuous.''
    The Commission seeks comments on how pre-event publicity for non-
Federal fundraising events is treated in proposed paragraph (c). Given 
the court's statement in Shays III that 2 U.S.C. 441i(e)(3) provides 
that ``Federal candidates may * * * be a featured guest at a State 
party event where soft money is raised,'' Shays III at 933, is there 
any reason why pre-event publicity regarding that activity should not 
be allowed? Should such publicity be limited in any way, or do such 
limitations infringe upon a Federal candidate's or officeholder's 
ability to be a featured guest?
    As above, the Commission also requests comments on whether the 
discussion in Shays III regarding this issue was limited to State party 
events, or whether the court's reasoning applies more broadly to all 
non-Federal fundraising events. If the latter, does its reasoning apply 
also to how Federal candidates and officeholders may be ``featured'' in 
pre-event publicity? Is proposed paragraph (c) of Alternative 2 
consistent with the Shays III decision on this issue? Is it consistent 
with 2 U.S.C. 441i(e)?
    Additionally, does proposed Alternative 2 establish a generally 
workable standard that provides clear guidance to Federal candidates 
and officeholders? Does the proposal adequately address all types of 
publicity associated with these events? Does the proposal correctly 
implement the prohibition in the Act and in Commission regulations 
regarding the solicitation, receipt, direction, transfer, spending, and 
disbursement of funds outside the limitations and prohibitions of the 
Act by Federal candidates and officeholders? Is the identification of a 
Federal candidate or officeholder as member of a ``host committee'' 
appropriately treated under the proposal as being a solicitation by the 
Federal candidate or officeholder, or is it common for such an 
individual to be identified as a ``host'' in a capacity not related to 
solicitation or fundraising? Is it appropriate for the proposal to 
exclude titles on pre-event publicity such as featured guest, featured 
speaker, or honorary chairperson, or should such titles similarly be 
considered to be a solicitation by the individual?
    Is the distinction between publicity that includes a solicitation 
by Federal candidates and officeholders and publicity that includes a 
solicitation by another person associated with the non-Federal 
fundraising event a reasonable one? Could a Federal candidate or 
officeholder be featured in publicity that solicits funds outside the 
limitations and prohibitions of the Act without having that 
solicitation attributed, at least in part, to that candidate or 
officeholder? Is proposed paragraph (c) of Alternative 2 consistent 
with proposed paragraph (b), governing participation by Federal 
candidates and officeholders at non-Federal fundraising events?
    In conclusion, the Commission seeks comment on proposed Alternative 
2 in all respects. Does it appropriately resolve the Shays III court's 
criticisms of the Commission's previous implementation of 2 U.S.C. 
441i(e)(3) and does it appropriately implement that Section, as well as 
Section 441i(e) generally?

D. Alternative 3

    As noted above, the proposed scope of Alternative 3 is the same as 
that proposed in Alternative 2. As with Alternative 2, Alternative 3 
does not cover participation by Federal candidates or officeholders in 
fundraising events at which only Federal funds are raised, nor would it 
apply to fundraising events in connection with any non-Federal election 
at which only funds subject to the limitations and prohibitions of the 
Act are raised (e.g., a small-dollar, non-corporate, non-union 
fundraiser for a State candidate). Though Alternatives 2 and 3 would 
cover the same universe of activity, they diverge in the manner in 
which that activity would be addressed. Specifically, Alternative 3 
would treat participation by Federal candidates and officeholders at 
non-Federal fundraising events for State, district, and local party 
committees differently from participation by Federal candidates and 
officeholders at all other non-Federal fundraising events (e.g., for a 
local candidate, a State PAC, or an organization making independent 
expenditures). This approach is informed both by the court's decision 
that found invalid the Commission's previous rule allowing Federal 
candidates and officeholders to speak at certain non-Federal 
fundraising events without ``restriction or regulation,'' and by the 
plain language of the Act, specifically, by the focus in 2 U.S.C. 
441i(e)(3) on State, district, and local party committee fundraisers 
only.
    As the court noted in Shays III, 2 U.S.C. 441i(e)(3) permits 
Federal candidates to attend, speak or be a featured guest at State, 
district, and local party committee fundraisers--activities which the 
Act and, specifically, its fundraising restrictions, ``might otherwise 
be read as forbidding.'' Shays III at 933. This language could be read 
as an acknowledgement by the court that Section 441i(e)(1) may 
permissibly and plausibly be construed to limit attending, speaking, 
and being a featured guest as fundraising activities.

[[Page 64023]]

If such a construction of Section 441i(e)(1) had not been possible, 
Section 441(i)(e)(3) would not have been necessary.
    Whether the statute would affect such activities is largely a 
function of the Commission's definition of ``solicit,'' which was 
promulgated subsequent to the passage of BCRA and 2 U.S.C. 441i(e)(3). 
The Commission initially defined ``to solicit'' as ``to ask that 
another person make a contribution, donation, transfer of funds, or 
otherwise provide anything of value.'' 11 CFR 300.2(m) (2003). The 
Court of Appeals stuck down this definition for failing to enact a 
restriction equal in breadth to that intended by Congress. Shays v. 
FEC, 414 F.3d 76, 103-05 (DC Cir. 2005). Specifically, the Court held 
that the Commission's prior definition failed to cover indirect 
requests. Id. In order to comply with the court's ruling, the 
Commission revised its definition of ``to solicit'' to mean ``to ask, 
request or recommend, explicitly or implicitly, that another person 
make a contribution, donation, transfer of funds, or otherwise provide 
anything of value.'' 11 CFR 300.2(m).
    Federal candidates and officeholders are often included at 
fundraising events for the specific purpose of drawing more donors (and 
more donations) to the events. The fundraiser's motivation to include 
Federal candidates and officeholders at the event is, as one commenter 
in the 2005 rulemaking explained, ``to increase attendance and the 
[fundraiser]'s yield from that event.'' 2005 Revised E&J at 37654. When 
a Federal candidate or officeholder allows his or her name to be used 
to increase the number of donors and amount of donations, that helps to 
raise funds--potentially funds outside the limitations and prohibitions 
of the Act. Participating in non-Federal fundraisers in this way would 
constitute an implicit ask, request, or recommendation that individuals 
attend and donate funds as part of the fundraising event, and thus 
would be prohibited for Federal candidates and officeholders to the 
extent the event seeks to raise funds outside the limitations and 
prohibitions of the Act.
    Under this reading, 2 U.S.C. 441i(e)(3) does, indeed, provide a 
limited exception to the Act's fundraising restrictions--specifically, 
for Federal candidates and officeholders who appear as featured guests 
at non-Federal fundraising events for State, district, or local party 
committees. Importantly, given 2 U.S.C. 441i(e)(3)'s specific focus on 
only State, district, and local party committee events, this exception 
would not extend to other election-related non-Federal fundraising 
events. As such, proposed paragraph (b)(1)(i) of Alternative 3 provides 
that a Federal candidate or officeholder may attend, speak, or be a 
featured guest at a State, district or local party fundraiser. By 
contrast, proposed paragraph (c) provides that a Federal candidate or 
officeholder may attend a non-party, non-Federal fundraising event and 
speak at such an event (so long as the speech does not itself 
constitute a solicitation), but may not consent to the use of his or 
her name or likeness in publicity for non-party, non-Federal events. 
This aspect of the proposal is intended to prohibit activities by 
Federal candidates and officeholders in connection with non-Federal 
fundraising events that constitute the solicitation of funds outside 
the limits and prohibitions of the Act, which would violate the Act.
    The Commission seeks comment on this approach. As a threshold 
matter, does the proposed bifurcated structure of the rule 
appropriately recognize the Act's unique treatment of participation by 
Federal candidates and officeholders at State, district, and local 
party committee fundraisers? If the Commission were to adopt a rule 
that treats Federal candidate and officeholder participation at all 
non-Federal fundraising events the same, would it, in effect, render 
Section 441i(e)(3) of the Act meaningless? Would it be responsive to 
the Shays III court's concern that the Commission's initial regulation 
was too permissive? Is the approach proposed in Alternative 3 
consistent with the court's opinion in Shays III? Does the court's 
opinion provide guidance on whether the rule should treat State, 
district, and local party committee fundraisers differently from other 
election-related non-Federal fundraising events, given that these other 
events were not at issue in the prior regulation?
    The Commission invites comments on whether the Commission should 
provide additional guidance by promulgating a regulatory definition of 
``featured guest,'' and if so, what should that definition be? Are 
there different ways in which a guest might be featured and would some 
of those ways constitute a solicitation while others would not? What 
does it mean to be a featured guest? Is being featured as a guest 
limited to appearing on written materials or can a guest be featured in 
some other manner? Is there a difference between simply appearing on a 
list of attendees and being featured on such a list? If pre-event 
publicity for a fundraising event indicates that a Federal candidate or 
officeholder will be attending, or will be speaking, is that alone 
enough to make the Federal candidate or officeholder a featured guest?
    What factors should the Commission consider in determining when a 
person should be considered to be a featured guest? If a person is 
listed in pre-event publicity as ``invited'' (but for which there is no 
confirmation the person will attend), should the person still be 
considered a featured guest? Should a person be considered a featured 
guest even though the word ``featured'' is not used? Can a person be a 
``guest'' if the person is a usual attendee or a member of the group 
hosting the event?
    Similarly, because the exemption for participating as a featured 
guest only applies when a Federal candidate does so at a State, 
district, or local party committee's fundraising event, should the 
Commission promulgate a regulatory definition of what qualifies as a 
``fundraising event''? For instance, is there a minimum number of 
attendees required to constitute a fundraising event? Or is the term 
``fundraising event'' generally understood by those who participate in 
them, such that no definition is required?
    Regarding the specifics of Alternative 3, proposed paragraph 
(b)(1)(i) of Alternative 3 provides that a Federal candidate or 
officeholder may attend, speak, or be a featured guest at a State, 
district or local party fundraiser. Proposed paragraph (b)(1)(ii) 
provides that Federal candidates and officeholders may solicit funds at 
such non-Federal fundraising events if the solicitation is not for 
Levin funds and is limited to funds that do not exceed the Act's 
contribution limits or come from prohibited sources under the Act. Each 
proposed paragraph implements, almost verbatim, a provision of the Act. 
Proposed paragraph (b)(1)(i) addresses 2 U.S.C. 441i(e)(3) of the Act, 
which provides that a Federal candidate or officeholder may attend, 
speak, or be a featured guest at a State, district or local party 
fundraiser. Proposed paragraph (b)(1)(ii) states that Federal 
candidates and officeholders may solicit funds for State, district and 
local party committees so long as the solicitation is consistent with 2 
U.S.C. 441i(e)(1)(B). Proposed paragraph (b)(1)(ii) is intended to 
require all solicitations made by Federal candidates and officeholders 
at such events to be limited to funds that comply with the Act's amount 
limitations and source prohibitions. This proposal would neither 
preserve nor extend the disclaimer regime of Advisory Opinions 2003-36 
(Republican Governor's Association) and 2003-03 (Cantor).

[[Page 64024]]

    The Commission seeks comment on the proposed distinctions between 
party committee non-Federal events and other non-Federal fundraising 
events. Does the proposal faithfully implement the Act? Does it 
appropriately recognize Congress's different statutory treatment of 
Federal candidates' and officeholders' participation in non-Federal 
party committee events and other non-Federal fundraising events? Or, 
consistent with Alternative 2, does the statute merely clarify that 
Federal candidates and officeholders may participate in non-Federal 
party committee events, without necessarily differentiating between 
party versus non-party events? Does proposed paragraph (b)(1)(ii) 
establish clear guidance for Federal candidates and officeholders who 
wish to solicit funds at fundraising events for a State, district, or 
local committee of a political party?
    Proposed paragraph (b)(2) of Alternative 3 would address publicity 
associated with non-Federal fundraising events for State, district, and 
local committees of political parties. It would provide that a Federal 
candidate or officeholder may approve, authorize, agree, or consent to 
the use of his or her name or likeness in publicity for a non-Federal 
fundraising event for a State, district, or local party committee for 
the purpose of indicating that he or she will be attending, speaking, 
or will be a featured guest at the event only if the publicity does not 
solicit funds outside the limitations and prohibitions of the Act or 
Levin funds. Publicity covered by proposed paragraph (b)(2) would 
include, but not be limited to, pre-event invitation materials. Like 
proposed paragraph (b)(1)(ii), proposed paragraph (b)(2) is intended to 
ensure that Federal candidate and officeholder participation in 
publicity for State, district and local party committee fundraisers is 
consistent with the Act's prohibition on raising funds outside the 
limitations and prohibitions of the Act. See 2 U.S.C. 441i(e)(1)(B).
    The Commission seeks comments on paragraph (b)(2)'s treatment of 
publicity in connection with non-Federal fundraising events for State, 
district, and local party committees. Does the proposal properly 
implement 2 U.S.C. 441i(e)(3)? Does it preserve the Act's restrictions 
on the raising of Levin funds and funds outside the limitations and 
prohibitions of the Act? Does proposed paragraph (b)(2) establish clear 
guidance as to how Federal candidates and officeholders may and may not 
be featured in such publicity? Would it clearly establish the types of 
publicity that would solicit Levin funds or funds outside the 
limitations and prohibitions of the Act?
    Proposed paragraph (c) of Alternative 3 in turn would establish 
rules governing participation by Federal candidates and officeholders 
at all other non-Federal fundraising events. Given the absence of a 
statutory provision addressing specifically non-party, non-Federal 
fundraisers, it follows that no special exceptions exist for Federal 
candidates and officeholders at such events. Accordingly, rules 
governing participation by Federal candidates and officeholders at such 
events would be guided only by to the Act's general fundraising 
restrictions. See 2 U.S.C. 441i(e)(1)(B); 11 CFR 300.62. Accordingly, a 
Federal candidate or officeholder could participate in non-party, non-
Federal fundraisers only if his or her participation did not constitute 
a solicitation otherwise prohibited by the Act.
    To that end, proposed paragraph (c)(2) provides that a Federal 
candidate or officeholder may attend a non-party, non-Federal 
fundraising event and speak at such an event so long as the speech does 
not, itself, constitute a solicitation. Although this type of 
participation at non-party, non-Federal fundraisers is not explicitly 
exempted by the Act, it is also not specifically prohibited by the Act 
or Commission regulations. See, e.g., 11 CFR 300.2(m). So long as a 
Federal candidate or officeholder can attend or speak at a non-party, 
non-Federal fundraising event without soliciting funds outside the 
limitations and prohibitions of the Act, the Commission is not 
proposing to prohibit such attendance and speech.
    Proposed paragraph (c)(1) of Alternative 3, however, prohibits 
Federal candidates and officeholders from consenting to the use of 
their names or likenesses in publicity for non-party, non-Federal 
fundraisers. This aspect of Alternative 3 is based upon the premise 
that Federal candidates and officeholders lend their names to publicity 
for fundraising events for one reason: to help raise funds. Therefore, 
it follows that appearing in publicity as a featured guest at an event 
where funds outside the limitations and prohibitions of the Act will be 
raised amounts to an implicit request that someone make a contribution 
beyond the limits of the Act and Commission regulations. See 2 U.S.C. 
441i(e)(1)(B); 11 CFR 300.62, 11 CFR 300.2(m) (stating that a 
solicitation may be made ``explicitly or implicitly'' and is any 
activity that ``in context'' contains a clear message asking for a 
contribution or donation). To the extent that the purpose of a Federal 
candidate or officeholder's participation is to attract contributors 
and contributions to an event that solicits funds outside the 
limitations and prohibitions of the Act, such participation is 
prohibited under proposed paragraph (c)(1). A Federal candidate or 
officeholder may not participate in those efforts.
    The Commission seeks comment on this approach. Would allowing 
Federal candidates and officeholders to attend or speak at such non-
Federal fundraisers undermine the Act's restrictions on soliciting 
Levin funds and funds outside the limitations and prohibitions of the 
Act? Does the Commission have statutory authority to restrict Federal 
candidates and officeholders from attending or speaking at non-party, 
non-Federal fundraisers, if they do not ask for funds outside the 
limitations and prohibitions of the Act?
    In conclusion, the Commission seeks comment on proposed Alternative 
3 in all respects. Does it appropriately resolve the Shays III court's 
criticisms of the Commission's previous implementation of 2 U.S.C. 
441i(e)(3) and does it appropriately implement that section? Does 
Alternative 3 provide a generally workable standard that provides clear 
guidance to Federal candidates and officeholders?

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

Regulatory Flexibility Act

    The Commission certifies that the attached proposed rule, if 
promulgated, would not have a significant economic impact on a 
substantial number of small entities. The basis for this certification 
is that the entities affected by this proposed rulemaking do not meet 
the definition of ``small entity'' under 5 U.S.C. 601. That definition 
requires that the enterprise be independently owned and operated and 
not dominate in its field. 5 U.S.C. 601(4).
    This proposed rulemaking would affect State, district, and local 
party committees, as well as Federal candidates and their campaign 
committees. Federal candidates, as individuals, do not fall within the 
definition at 5 U.S.C. 601, and campaign committees are not 
independently owned and operated because they are not financed and 
controlled by a small identifiable group of individuals.
    State, district, and local party committees also fall outside the 
definition of ``small entity.'' These 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

[[Page 64025]]

addition, the State political party committees representing the 
Democratic and Republican parties have a major controlling influence 
within the political arenas of their States and are thus dominant in 
their fields. 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 might be considered ``small 
organizations,'' the number affected by this proposal is not 
substantial.

List of Subjects in 11 CFR Part 300

    Campaign funds, Nonprofit organizations, Political committees and 
parties, Political candidates, Reporting and recordkeeping 
requirements.

    For the reasons set out in the preamble, Subchapter C of Chapter 1 
of title 11 of the Code of Federal Regulations would be amended to read 
as follows:

PART 300--NON-FEDERAL FUNDS

    1. The authority citation for part 300 would continue to read as 
follows:

    Authority: 2 U.S.C. 434(e), 438(a)(8), 441a(a), 441i, 453.

    2. Section 300.64 would be revised to read as follows:

Alternative 1


Sec.  300.64  Attending, speaking, or appearing as a featured guest at 
State, district, or local party committee fundraising events (2 U.S.C. 
441i(e)(3)).

    (a) A Federal candidate or individual holding Federal office may 
attend, speak, or be a featured guest at a fundraising event for a 
State, district, or local committee of a political party, including, 
but not limited to, a fundraising event at which funds outside the 
limits and prohibitions of the Act or Levin funds are raised. Federal 
candidates and individuals holding Federal office who solicit, receive, 
direct, transfer, or spend funds at any such fundraising event shall 
only do so in accordance with 11 CFR 300.31(e)(2), 300.61, and 300.62.
    (b) State, district, or local committees of a political party may 
advertise, announce or otherwise publicize that a Federal candidate or 
individual holding Federal office will attend, speak, or be a featured 
guest at a fundraising event, including, but not limited to, 
publicizing such appearance in pre-event invitation materials and in 
other party committee communications.

Alternative 2


Sec.  300.64  Participation By Federal Candidates and Officeholders at 
Non-Federal Fundraising Events (2 U.S.C. 441i(e)(1) and (3)).

    (a) Scope. This section covers participation by Federal candidates 
and officeholders at fundraising events in connection with any election 
for Federal office or any non-Federal election at which funds outside 
the limitations and prohibitions of the Act or Levin funds are raised, 
and in publicity related to such non-Federal fundraising events. This 
section applies even if funds that comply with the limitations and 
prohibitions of the Act are also raised at the event. Nothing in this 
section shall be construed to alter the fundraising exception for State 
candidates at 11 CFR 300.63 or the fundraising exceptions for certain 
tax-exempt organizations at 11 CFR 300.65.
    (b) Participation at non-Federal fundraising events. A Federal 
candidate or officeholder may:
    (1) Attend, speak, or be a featured guest at a non-Federal 
fundraising event.
    (2) Solicit funds at a non-Federal fundraising event, provided that 
the solicitation is limited to funds that comply with the limitations 
and prohibitions of the Act and is consistent with State law.
    (i) A Federal candidate or officeholder may limit such a 
solicitation by displaying at the fundraising event a clear and 
conspicuous written notice, or making a clear and conspicuous oral 
statement, that the solicitation is not for Levin funds, does not seek 
funds that exceed the Act's contribution limits, and does not seek 
funds from prohibited sources under the Act.
    (ii) A written notice or oral statement is not clear and 
conspicuous if it is difficult to read or hear or if its placement is 
easily overlooked.
    (c) Publicity for non-Federal fundraising events. For the purposes 
of this paragraph, publicity for a non-Federal fundraising event 
includes, but is not limited to, advertisements, announcements, or pre-
event invitation materials, regardless of format or medium of 
communication.
    (1) Publicity not containing a solicitation. A Federal candidate or 
officeholder may approve, authorize, agree, or consent to the use of 
his or her name or likeness in publicity for a non-Federal fundraising 
event that does not contain a solicitation.
    (2) Publicity containing a solicitation.
    (i) Solicitation by the Federal candidate or officeholder. A 
Federal candidate or officeholder may not solicit funds outside the 
limitations or prohibitions of the Act or Levin funds in any publicity 
for a non-Federal fundraising event.
    (A) A solicitation by the Federal candidate or officeholder occurs 
if the Federal candidate or officeholder approves, authorizes, agrees, 
or consents to being identified as serving in a position specifically 
related to fundraising, such as on a host committee, or signs the 
communication, even if the communication contains a written statement 
as described in paragraph (c)(2)(ii) of this section.
    (B) Titles such as featured guest, featured speaker, or honorary 
chairperson are not positions specifically related to fundraising for 
purposes of this paragraph.
    (ii) Solicitations by someone other than the Federal candidate or 
officeholder. A Federal candidate or officeholder may approve, 
authorize, agree, or consent to the use of his or her name or likeness 
in publicity for a non-Federal fundraising event that contains a 
solicitation of funds outside the limitations and prohibitions of the 
Act or Levin funds only if the solicitation is made by someone other 
than the Federal candidate or officeholder. Any such publicity must 
include a clear and conspicuous written statement that the solicitation 
is not being made by the Federal candidate or officeholder. The written 
statement must meet the requirements in 11 CFR 110.11(c)(2).

Alternative 3


Sec.  300.64  Participation By Federal Candidates and Officeholders at 
Non-Federal Fundraising Events (2 U.S.C. 441i(e)(1) and (3)).

    (a) Scope. This section covers participation by Federal candidates 
and officeholders at fundraising events in connection with any election 
for Federal office or any non-Federal election at which funds outside 
the limitations and prohibitions of the Act or Levin funds are raised, 
and in publicity related to such non-Federal fundraising events. This 
section applies even if funds that comply with the limitations and 
prohibitions of the Act are also raised at the event. Nothing in this 
section shall be construed to alter the fundraising exception for State 
candidates at 11 CFR 300.63 or the fundraising exceptions for certain 
tax-exempt organizations at 11 CFR 300.65.
    (b) Non-Federal fundraising event for a State, district, or local 
committee of a political party.
    (1) Participation by a Federal candidate or officeholder. A Federal 
candidate or officeholder may:

[[Page 64026]]

    (i) Attend, speak, or be a featured guest at a non-Federal 
fundraising event for a State, district, or local committee of a 
political party; and
    (ii) Solicit funds at such non-Federal fundraising events, provided 
that the solicitation is limited to funds in amounts that do not exceed 
the Act's contribution limits and do not come from prohibited sources 
under the Act.
    (2) Publicity for a non-Federal fundraising event for a State, 
district, or local committee of a political party. A Federal candidate 
or officeholder may approve, authorize, agree, or consent to the use of 
his or her name or likeness in an advertisement, announcement, or other 
publicity for a fundraising event for a State, district, or local 
committee of a political party for the purpose of indicating that the 
Federal candidate or officeholder will attend, speak, or be a featured 
guest at the fundraising event, provided that the advertisement, 
announcement, or other publicity does not solicit funds outside the 
limitations and prohibitions of the Act or Levin funds. Such 
advertisements, announcements, or other publicity may include but are 
not limited to pre-event invitation materials.
    (c) Other non-Federal fundraising events.
    (1) For non-Federal fundraising events that are not described in 
paragraph (b) of this section, a Federal candidate or officeholder may 
not approve, authorize, agree, or consent to the use of his or her name 
or likeness in an advertisement, announcement or other publicity for 
the event, including but not limited to pre-event invitation materials.
    (2) Nothing in paragraph (c)(1) would prohibit a Federal candidate 
or officeholder from attending or speaking at such a non-Federal 
fundraising event as long as he or she does not solicit funds outside 
the limitations and prohibitions of the Act.

    Dated: November 24, 2009.

    On behalf of the Commission.
Steven T. Walther,
Chairman, Federal Election Commission.
[FR Doc. E9-28733 Filed 12-4-09; 8:45 am]
BILLING CODE 6715-01-P