[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Proposed Rules]
[Pages 31116-31117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08695]


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FEDERAL ELECTION COMMISSION

11 CFR Parts 102, 104, 110

[NOTICE 2024-11]


Contributions From Corporations and Other Organizations to 
Political Committees

AGENCY: Federal Election Commission.

ACTION: Notification of disposition of petition for rulemaking.

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SUMMARY: The Commission announces its disposition of a Petition for 
Rulemaking filed on May 14, 2015. The Petition asks the Commission to 
revise existing rules concerning the reporting of contributions to 
political committees from corporations and other organizations. For the 
reasons described below, the Commission is not initiating a rulemaking 
at this time.

DATES: April 24, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General 
Counsel, or Mr. Luis M. Lipchak, Attorney, 1050 First Street NE, 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Federal Election Campaign Act, 52 U.S.C. 
30101-45 (the ``Act''), and Commission regulations require all 
political committees to abide by certain organizational, record-
keeping, and reporting requirements.\1\ This includes maintaining 
records of contribution receipts and disbursements, reporting 
independent expenditures, and filing periodic disclosure reports that 
identify the source of each contribution exceeding $200.\2\ Commission 
regulations also require every person who makes electioneering 
communications aggregating in excess of $10,000 in a calendar year and 
every person (other than a political committee) that makes independent 
expenditures in excess of $250 with respect to a given election in a 
calendar year to report certain information to the Commission.\3\
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    \1\ See 52 U.S.C. 30102, 30103, 30104; 11 CFR 102.1, 102.2, 
102.7, 104.3.
    \2\ See 11 CFR 104.3(a)(4)(i), 104.4, 104.5(c).
    \3\ 11 CFR 104.20(b) and (c), 109.10(b), (e); 52 U.S.C. 
30104(c)(1) and (2), (f).
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    On May 14, 2015, the Federal Election Commission received a 
Petition for Rulemaking from Make Your Laws PAC, Inc. and Make Your 
Laws Advocacy, Inc. (``Petition''). The Petition asked the Commission 
to modify its regulations requiring disclosure of contributions from 
corporations and other organizations to political committees. The 
Petition requested that the Commission establish a new rule requiring 
that ``any person, other than a natural person, contributing an 
aggregate of more than $1,000 in any calendar year to any political 
committee, whether directly or indirectly'' (emphasis omitted), must do 
so from an account subject to certain reporting requirements. 
Specifically, the Petition asked the Commission to require that these 
accounts disclose ``the original source of all election-related 
contributions and expenditures, traceable through all intermediary 
entities to a natural person, regardless of the amounts or entities 
involved'' (emphasis omitted). The Petition also asked the Commission 
to apply to these accounts the identification requirements of 11 CFR 
100.12; the Act's prohibition on foreign national contributions, 52 
U.S.C. 30121; allocation rules for administrative expenses; and, in 
some circumstances, the Act's limitations on contributions to political 
committees.
    The Petition argued that for disclosure requirements to be 
effective, disclosure must be required for ``the original source of all 
election-related contributions and expenditures, traceable through all 
intermediary entities to a natural person, regardless of the amounts or 
entities involved'' (footnote omitted).\4\ The Petition asserted that 
under existing regulations independent expenditure only political 
committees can hide the ``original source'' of contributions because 
they are permitted to receive contributions from corporations, 
including 501(c)(4) corporations, that are not subject to reporting 
obligations under the Act.\5\ The Petition argued that these sources 
can make political contributions while hiding the ``true source'' of 
contributions because ``the FEC only requires political committees to 
report the identity of the proximate source of a contribution, rather 
than the original source.'' \6\ Furthermore, the Petition asserted that 
foreign nationals could circumvent the prohibition on indirect 
political contributions by foreign nationals by making contributions to 
501(c)(4) corporations knowing that their funds will be used to make 
contributions to political committees.\7\
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    \4\ Petition at 4.
    \5\ Petition at 2.
    \6\ Id.
    \7\ See id.
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    The Commission published a Notice of Availability (``NOA'') on July 
29, 2015, asking for public comment on the Petition.\8\ The Commission 
received 13 substantive comments on the Petition and one non-
substantive comment (from an individual commenting on a tangential 
matter). Of the 13 substantive comments, three were from individuals 
supporting the Petition and 10 were from commenters who opposed the 
Petition. The three comments supporting the Petition included a broad 
statement of support for the Petition, and two of those individual 
commenters expressed general concern about the influence of corporate 
contributions on the political process.
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    \8\ See Notice of Availability, 80 FR 45115 (July 29, 2015).
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    The 10 comments opposed to initiating a rulemaking were received 
from four individuals and six organizations/professionals. Of the four 
comments from individuals opposing the Petition, one was from an 
individual who broadly opposed the proposed rulemaking, two were from 
individuals who contended that the proposed rules were beyond the 
Commission's statutory authority, and one was from an individual who 
believed the proposed rules did not address the issue raised by the 
Petition of identifying the original source of funds contributed to 
independent expenditure-only political committees. The primary and 
common

[[Page 31117]]

themes of the organizational/professional comments were that the 
Petition sought to address a problem that does not exist, that 
promulgating new regulations would lead to confusion and burdens that 
would unnecessarily implicate the First Amendment, and that the 
Commission lacked the statutory authority to promulgate the proposed 
regulations.
    In deciding whether to initiate a rulemaking in response to a 
petition, the Commission generally considers five factors: (1) the 
Commission's statutory authority; (2) policy considerations; (3) the 
desirability of proceeding on a case-by-case basis; (4) the necessity 
or desirability of statutory revision; and (5) available agency 
resources.\9\ After considering these factors and reviewing the 
comments received on the petition, the Commission has decided not to 
initiate a rulemaking at this time.
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    \9\ 11 CFR 200.5.
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    First, and most significantly, the Commission lacks the statutory 
authority to promulgate a rule sought by the Petition. The Act empowers 
the Commission to ``make, amend, or repeal such rules . . . as are 
necessary to carry out the provisions of [the] Act.'' \10\ And as the 
Petition acknowledges, the Act does not require corporations and other 
organizations (except for political committees) to make contributions 
from a separate account subject to the prohibitions and reporting 
requirements of the Act.\11\ Nor does the Act require such entities to 
disclose, as the Petition proposes, ``the original source of all 
election-related contributions and expenditures, traceable through all 
intermediary entities to a natural person.'' The Commission may not 
impose such requirements without a statutory mandate to do so.
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    \10\ 52 U.S.C. 30107(a)(8).
    \11\ Corporations and labor organizations are prohibited from 
making contributions to candidates and party committees. 52 U.S.C. 
30118(a), (b)(2); 11 CFR 114.2(b). Corporations may, however, make 
contributions to nonconnected political committees that make only 
independent expenditures and to non-contribution accounts of hybrid 
political committees. See, e.g., Citizens United v. FEC, 558 U.S. 
310 (2010); SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010) (en 
banc); Advisory Opinion 2011-11 (Colbert).
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    Second, the vast majority of the commenters, across the political 
spectrum, opposed the Petition. Given the public opposition to the 
Petition, and the fact that the Commission lacks statutory authority to 
implement the Petition's proposal, there is no policy interest in 
pursuing a rulemaking, nor would it be a good use of Commission 
resources.
    Furthermore, declining to pursue the proposed rulemaking will not 
require the Commission to proceed on a case-by-case-basis because the 
information sought by the petition is not required to be disclosed 
under the Act and Commission regulations.\12\
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    \12\ 52 U.S.C. 30104, 30116, 30118, 30119, 30121, 30122; see 
also 11 CFR part 104, 11 CFR 110.1, 110.4, 110.20, 114.2, 115.2.
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    Lastly, the ``necessity or desirability of statutory revision'' 
weighs against pursuing the proposed rulemaking because the changes 
sought by Petitioners would require a statutory revision given that the 
Commission lacks the statutory authority to promulgate the rules 
proposed by Petitioners.\13\ Accordingly, after considering the 
comments received regarding the Petition and in consideration of each 
of the factors discussed, the Commission declines to initiate a 
rulemaking in response to the Petition.
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    \13\ 11 CFR 200.5.
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    Copies of the comments and the Petition for Rulemaking are 
available on the Commission's website, https://www.fec.gov/fosers/ (REG 
2015-03 Contributions from Corporations and Other Organizations to 
Political Committees (2015)) and at the Commission's Public Records 
Office, 1050 First Street NE, Washington, DC 20463, Monday through 
Friday between the hours of 9 a.m. and 5 p.m.

    Dated: April 18, 2024.

    On behalf of the Commission.
Sean J. Cooksey,
Chairman, Federal Election Commission.
[FR Doc. 2024-08695 Filed 4-23-24; 8:45 am]
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