The US Federal Election Commission considered five advisory opinions (AOs) at its open meeting on Thursday, September 23. The Commission approved three of the AO’s, held over discussion of another, and could not render an opinion on the remaining AO.

In A0 2010-20, the National Defense PAC (NDPAC) requested an opinion on a proposed plan to accept unlimited contributions from individuals, other political committees, corporations, and labor organizations to fund independent expenditures from a separate bank account and to allocate the cost of all the Committee’s administrative and operating expenses between accounts as it sees fit. While the draft considered by the Commission, Revised Draft A, concludes that the Act and the Commission regulations do not permit NDPAC’s proposed course of action, the Commission was unable to render an opinion on the draft. The draft AO emphasized the distinguishing characteristic between NDPAC, which makes contributions to candidates, and organizations that make only independent expenditures and which do not make contributions. The Commission’s inability to reach a decision underscores the uncertainty surrounding the recent US Supreme Court case Citizens United v. FEC, in which the Court eliminated the ban on corporations, non-profits (other than charities) and unions with respect to independent expenditures (i.e., advertising), but left untouched both disclosure statutes and the ban on director contributions to candidates.

In a highly-publicized AO involving online advertising and disclaimer notices, the Commission held over discussion of the advisory opinion and extended the public comment period through October 5, 2010. In AO 2010-19, Google requested an opinion of whether disclaimers are required on text ads generated when Internet users use the Google search engine, or whether the text ads are exempt under the “small items” exception. Google proposes to sell text ads to candidates and political committees that would not display a disclaimer indicating who authorized or paid for the ad; rather, a full disclaimer would appear on the landing page that appears when a user clicks on a text ad. Alternatively, Google has proposed a request regarding a situation where the text ad displays the URL of the committee sponsor’s website in the text ad and the landing page contains a full disclaimer meeting the full disclaimer requirements regarding who authorized or paid for the ad. The lack of a rendered opinion highlights the complex nature of online political activity, which is becoming an increasingly popular medium for campaigning and fundraising. The extension of the comment period through October 5, 2010 also indicates the Commission’s desire for further input, while still potentially allowing the Commission time to reach a decision in advance of the November mid-term elections.

An AO approved by the Commission, 2010-16, involved a wholly owned subsidiary of two not-for-profit services corporations: Health Insurance Plan of Greater New York (HIP) and Group Health Incorporated (GHI). The subsidiary, EmblemHealth Services Company LLC (EmblemHealth LLC), has elected to be treated as a partnership under the Internal Revenue Code (IRC). While LLCs treated as partnerships generally do not have the ability to serve as a connected organization to an SSF due to the ability of an LLC to make direct contributions to Federal candidates and political committees, EmblemHealth LLC is owned entirely by corporations., prohibiting EmblemHealth LLC from making contributions. Thus, the Commission determined that EmblemHealth LLC may function as the connected organization for the SSF, and may pay the administrative and solicitation costs for the separate segregated fund of HIP. Further, all three organizations may solicit the restricted classes of HIP and GHI, and the executive and administrative personnel of EmblemHealth, for contributions to the SSF. The Commission also determined that, in accordance with prior AOs allowing an SSF’s name to include only the name of the LLC treated as a partnership where the LLC functions as the connected organization, the SSF in this case may be renamed “EmblemHealth PAC.”

A0 2010-17 addresses the unique election circumstances in the race to fill Indiana’s third congressional district seat. Marlin Stutzman running to fill a vacancy created when the victor of the Republican Party primary resigned shortly after winning. The Governor of Indiana scheduled a special election to fill the vacancy, which is to take place on November 2, the same day as the general election. Stutzman is also running in the general election, and requested an AO in anticipation of receiving undesignated contributions that exceed the permissible $2,400 contribution limit for a single election. Based on the Commission’s previous finding in a similar situation that each election is subject to a separate contribution limit, the Commission concluded that undesignated contributions up to the combined $4,800 limit for both elections will not be considered excessive contributions, and the Committee does not have to seek written designations or redesignations for these contributions.

The Commission determined in AO 2010-18 that a state party committee may request, in writing, that donors to the recount fund redesignate their donations as contributions to the state party’s Federal campaign account for the 2010 election. The Commission also advised that it is permissible to use recount funds raised for the 2008 recount and election involving Senator Al Franken and then-Senator Norm Coleman for recount activities relating to future recounts. Regarding the issue of whether a transfer of funds from the recount account to the Federal campaign account is permissible, the Commission was unable to approve a response by the required four affirmative votes.

The outcome of the meeting illustrates the continued challenges facing the Commission in reaching consensus ahead of the November elections. Looking ahead, few opportunities remain before the elections for the Commission to issue clear guidance on the unresolved issues.

As a reminder, several FEC filing deadlines are approaching. Because 2010 is an election year, both monthly and quarterly filers have additional reporting requirements in the coming weeks. PACs that file monthly must do so by October 20; quarterly filers must do so by October 15. In addition, pre-general reports from monthly filers are due October 21 and post-general reports are due December 2. Deadlines for PACs that file quarterly are as follows:

PACs making contributions from October 1 through October 13

  1. You must file a pre-election report by October 21, covering contributions from October 1 through October 13; and
  2. You must file a post-election report by December 2, covering contributions from October 14 through November 22.

PACs that do NOT make contributions from October 1 through October 13

  1. You must file a post-election report by December 2, covering contributions from October 1 through November 22.

All PACs must file a year-end PAC report by January 31, 2011. This year-end report will cover the period from November 23 through December 31.