FEC Bundling Rulemaking
The Federal Election Commission (FEC) recently adopted new regulations implementing the lobbyist “bundling” provisions contained in the Honest Leadership and Open Government Act (HLOGA) of 2007. These provisions apply beginning on March 19, 2009.
Please note that if your organization is registered under the Lobbying Disclosure Act (LDA) of 1995 and administers a political action committee (PAC) registered with the FEC, the PAC must submit an amended FEC Form 1 – Statement of Organization by March 29, 2009.
What is “bundling?”
The term “bundling” is commonly used to describe the practice of an individual collecting several contributions and delivering them to a candidate or campaign. This common definition is not exactly the same as the new legal definition contained in HLOGA. Until passage of HLOGA, federal law did not define “bundling.”
What is the HLOGA definition of “bundling?”
HLOGA defines a “bundled contribution” as two or more contributions to a federal campaign committee, leadership PAC, or political party committee that have been:
- forwarded by a lobbyist (or registrant or lobbyist/registrant PAC) or
- credited to a lobbyist (or registrant or lobbyist/registrant PAC) by the recipient
“Forwarded” is defined as “delivered or transmitted, by physical or electronic means.” “Credited” is defined as assigning credit through records, designations, or other means of recognition.
Am I a “lobbyist?”
If you are listed as a lobbyist on your employer’s LDA registration, you are a lobbyist for purposes of the new FEC bundling regulations.
Note: These regulations only apply to federal lobbyists.
What is a “registrant?”
A “registrant” is an organization registered under the LDA with the Clerk of the House of Representatives and Secretary of the Senate. An organization is required to register under the LDA if it employs at least one federal “lobbyist.” If an organization retains an outside lobbyist, but does not employ any in-house lobbyists, it is not required to register.
What is a “lobbyist/registrant PAC?”
A “lobbyist/registrant PAC” is a federal PAC “established or controlled” by a lobbyist or registrant. A “federal PAC” is a PAC registered with the FEC.
Note: Under the LDA, lobbyists and registrants are already required to disclose any PACs established or controlled by them on a semiannual basis to the Clerk of the House of Representatives and the Secretary of the Senate on form LD-203.
Which bundled contributions will be disclosed?
All “bundled contributions” to a campaign committee, leadership PAC, or political party committee totaling more than $16,000 in the aggregate during a semi-annual period must be reported by the recipient. This threshold amount is indexed to inflation.
Do my personal contributions or my spouse’s contributions count?
If you are a lobbyist, your personal contributions or your spouse’s contributions do not count toward your $16,000 bundling total.
Do my organization’s PAC contributions count?
Contributions from PACs “established or controlled” by a lobbyist or registrant do not count toward the lobbyist or registrant’s $16,000 bundling total.
Can a non-lobbyist be a bundler?
It is possible, but not likely. The activities of a non-lobbyist who bundles contributions will only be disclosed if they engaged in the bundling activity “on behalf of” a lobbyist or registrant. Otherwise, the fundraising activities of non-lobbyists will not be reported to the FEC, although in some cases campaigns will voluntarily make this information public.
Do I have to report contributions I bundle?
No. There is no individual FEC reporting requirement for bundled contributions. Bundled contributions will be reported by the recipient political committee, not by the bundler.
Does my organization’s PAC have any reporting requirements under these regulations?
A PAC established or controlled by a lobbyist or registrant must now disclose this status on its Statement of Organization (Form 1) on file with the FEC. This can be accomplished either by disclosing this status on the original Form 1 when the PAC is established or by submitting an amended Form 1. This requirement applies regardless of whether the lobbyist, registrant, or PAC actually engages in bundling activity.
A PAC is not required to report bundled contributions under these new regulations, although existing regulations require PACs to report “earmarked” contributions (contributions designated for a candidate by the contributor and then forwarded to the candidate by the PAC). All PACs already disclose contributions to the FEC and PACs established or controlled by lobbyists or registrants also disclose contributions totaling $200 or more in the aggregate during the semiannual period to the Clerk of the House and Secretary of the Senate.
How are bundled contributions disclosed?
The recipient committee (campaign committees, leadership PACs, and political party committees) will disclose bundled contributions on FEC Form 3L which is due the same day as the first FEC periodic filing due after the end of the semiannual period. Senate candidates submit reports to the Secretary of the Senate. All other political committees submit reports to the FEC.
Will I know in advance if I will be disclosed as a bundler?
Not necessarily. The allocation of credit for contributions will be made by the recipient committee and not by the bundler. Recipient committees can assign credit for bundling via written records, designations, or other means of recognizing bundled contributions such as titles, access to events and mementos. For this reason, it may be prudent to discuss these issues with the recipient committee if you think you may exceed the threshold bundling amount.
I was the “co-host” of an event that raised over $16,000. Am I a bundler?
Perhaps. It will depend on how the recipient committee allocates credit for the event.
I informed a campaign I was responsible for raising over $16,000 for an event. Am I a bundler?
Again, it will depend on how the recipient committee allocates credit for the event.
I am a state or local lobbyist. Do these regulations apply to me?
No. The new FEC bundling regulations only apply to federal lobbyists (individuals listed on their employer’s LDA registration). However, an individual can be a state or local lobbyist and also a federal lobbyist.
I bundled contributions for state or local candidates. Do these regulations apply to me?
No. The new FEC bundling regulations only apply to contributions to federal campaign committees, leadership PACs and political party committees. However, an individual can be involved with state or local campaign fundraising and also federal campaign fundraising.
May corporate employees “bundle” contributions to federal candidates?
The new FEC bundling provisions regulate contributions forwarded by or credited to a lobbyist or registrant. However, there are separate FEC regulations that prohibit corporations from making or facilitating contributions in connection with a federal election. Accordingly, lobbyists employed by corporations and registrants that are corporations must exercise extreme caution when engaging in bundling activity and must ensure the bundling activity does not violate the ban on corporate facilitation.
For over 100 years it has been illegal for corporations to contribute funds out of the corporate treasury directly to a candidate for federal office. It is also illegal for corporations to reimburse employees for contributions to a federal candidate. In addition, corporations may not act as conduits for campaign contributions and may not “facilitate” the making of a contribution to a federal candidate.
Under certain circumstances, corporate employees acting as volunteers or representatives of a PAC may engage in bundling, but under no circumstances should corporate employees engage in bundling when acting as an agent or representative of the corporation.