December 2, 2013

Last Week at the FEC: Refunds and Mobile Advertising

Holland & Knight Eyes on Washington Blog
Andy Emerson

Last week the Federal Election Commission announced the release of a final Advisory Opinion (AO) regarding solicitation of political donors to request refunds from candidates, a closeout letter after failing to adopt an opinion regarding a reporting exemption request, and two sets of draft AOs regarding disclaimer requirements for mobile advertisements and a separate segregated fund's (SSF) solicitation of potentially affiliated companies' executives.

The Commission issued an Advisory Opinion 2013-16 to, a web-based non-profit which intends to solicit campaign donors to seek refunds from candidates who have changed their positions on major issues or are at the center of a scandal.

In this AO, the Commission found that may use data published online by the Commission to contact campaign donors a single time to solicit them to seek refunds from candidate's because the contributor information would not be used to solicit a contribution or for commercial purposes. In addition, the Commission found that may follow-up with candidates at a contributor's request, may display the aggregate number of contributors seeking such refunds on its website, and may sell advertising and other sponsorship opportunities to support its activities.

Tea Party Leadership Fund

The Commission issued a Closeout Letter to the Tea Party Leadership Fund (TPLF), a hybrid PAC registered with the FEC, which had sought an exemption from reporting requirements, alleging that disclosure of its contributors' personal information would result in threats, harassment, or reprisals against them. The Commission previously  issued two draft AOs for public comment regarding this request and deliberated on both prior to issuing its closeout letter.

The Commission voted 3-2 against adopting proposed AO Draft A, which would have granted the TPLF an exemption based on its ability to show that as a "minor party" there is a "reasonable probability" that its members may will face threats, harassment, or reprisals if their identities were revealed.  The Commission voted 3-2 in favor of adopting proposed Draft B, which would have concluded that TLPF Tea Party is not a minor party and therefore not eligible for an exemption to FECA's reporting requirements. However, because an affirmative vote of four members of the Commission is required for the FEC to render an advisory opinion, neither draft was adopted and the Commission closed its file without issuing an opinion.

Revolution Messaging, LLC

The Commission issued two draft advisory opinions in response to a request submitted by Revolution Messaging, LLC's regarding whether mobile phone banner advertisements for political committees are exempt from disclaimer requirements based on the small item or impracticability exceptions.

Draft A of the AO would find that proposed mobile phone advertisements do not qualify for either exception, but could meet the disclaimer requirements by alternative means, such as on a "landing page" as suggested (but not adopted by the requisite four votes) in AO 2010-19 (Google). Alternatively, Draft B of the AO would find that the "small item" exception applied to because such mobile phone banners are limited in size and length by external technological restrictions.

The public may submit written comments for consideration during the Commission's deliberations until 12:00 p.m. December 4, 2013. 

Yamaha Motor Corporation, U.S.A.

The Commission FEC issued two draft advisory opinions in response to a request from Yamaha Motor Corporation, U.S.A (Yamaha) for clarification regarding whether its Separate Segregated Fund (SSF) can solicit contributions from the executives of its dealers and/or its service centers. Since an SSF may only solicit contributions from a corporation, or affiliated corporations, executives, administrative personnel, stockholders, or their families, the Commission's decision will turn on whether the relationship between Yamaha, its dealers, and service centers is sufficient to merit affiliation for the purposes of the Federal Election Campaign Act (FECA).

Draft A of the AO would find that Yamaha's SSF may not solicit such contributions because Yamaha does not exercise sufficient control over its dealers or service centers to create an affiliate relationship for the purposes of FECA and Commission Regulations because, amongst other reasons, there is no requirement for exclusivity in the agreement between Yamaha and these parties. Alternatively, Draft B would find that, though the Commission has previously found that a lack of exclusivity in a contract can be "further evidence" that entities are not affiliated, exclusivity is not, in of itself, a dispositive factor. Instead, the Commission would find that Yamaha's practical exercise of authority over dealerships' ownership, management, and business operations is sufficient to form an affiliation for the purposes of FECA and Commission regulations.

The public may submit written comments for consideration during the Commission's deliberations until 12:00 p.m. December 4, 2013. 

This Week at the FEC

Later this week, the Commission is expected to consider an interpretive rule regarding the date of political party nominations in New York special primary elections and recommendations from the Audit Division that it find that the Caesars Entertainment Corporation Political Action Committee misstated its financial activity for calendar years 2011-2012.  In addition, it will deliberate on its response to Yamaha's AO request.

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