New Rule Subjects “Bundlers” to Greater Scrutiny

The FEC adopted rules implementing the last of the changes brought on by the Honest Leadership and Open Government Act (“HLOGA”). The rules will require candidates, leadership PACs, and political parties to disclose lobbyists who bundle more than $15,000 during a reporting period.

Unlike the other HLOGA rules, which imposed new disclosure requirements on lobbyists, the FEC’s rule imposes disclosure obligations on candidates, with one important exception: the new rules require connected PACs to disclose on their Form 1M whether or not their connected organization is a registrant. This is so candidates will know whether bundled contributions from a PAC are subject to the new reporting requirements.

Although the reporting burdens on lobbyists will be light, it is likely that the media will use the new disclosures to find stories about money buying influence and access.

The new rule requires candidates, leadership PACs, and parties to check the House and Senate web sites to determine whether those who bundle contributions are registered lobbyists. If they are, the candidate, leadership PAC, or party will be required to file FEC From 3L (not yet available), which will disclose:

  • The name of each registered lobbyist credited with a bundled contribution;
  • The employer of each such lobbyist;
  • The name of any political action committee controlled by a registered lobbyist that is credited with a bundled contribution; and,
  • The aggregated amount of bundled contributions received from each lobbyist and lobbyist-controlled PAC.

The rules define “bundled contributions” as multiple contributions that have either been forwarded to the reporting committee by a registrant, or received by a reporting committee directly from individual contributors but credited to a registrant by the campaign. The rules go into great detail explaining what it means for a contribution to be credited to the lobbyist, and include such things as receiving special access (e.g. VIP reception) or mementoes (e.g., signed pictures), based on the contributions bundled, or maintaining records showing who has bundled the contributions.

The FEC has not yet announced an effective date for the rules and has not yet issued the “explanation and justification” that provides the FEC’s interpretation of the rules. It is not clear when that document will be issued, when the rules will be published in the Federal Register, or when the rules will become effective, although the Commissioners have indicated a desire to have the rules up and running for the new election cycle.