Reports Advisory Opinions Owned by Corporations and Is Affili- (Continued from Page 2) (Continued from Page 1) Ated with at Least One of the Corpora- Tions

November 2010 Federal Election Commission Volume 36, Number 11

Table of Contents Reports Advisory Reports 1 Post-General Reporting Reminder Post-General Reporting Opinions Reminder AO 2010-16 1 Advisory Opinions The 30-Day Post-General Elec- SSF of Corporate-Owned tion report is due on December 2, LLC 800 Line 2010. The Post-General Election 8 Winding Down Your Federal EmblemHealth LLC, a limited Campaign report covers activity from October 14 (or from the close of books of the liability company that is treated as a partnership for tax purposes and 11 Nonfilers last report filed) through November 22. The following committees must is wholly owned by corporations, may pay the administrative and Outreach file this report: solicitation costs of its affiliated 12 Winding Down the Campaign • All registered PACs and party Reporting Roundtable corporation’s separate segregated 12 FEC to Host Reporting and committees—even committees fund (SSF), but it may not be named E-Filing Workshops for the 2010 with little or no activity to dis- as the SSF’s connected organiza- Year-End Report close. Monthly filers must submit tion. Nevertheless, the name of the this report in lieu of the Decem- SSF may be changed and abbrevi- 12 Index ber monthly report.1 ated to EmblemHealth PAC, and • Authorized committees of federal EmblemHealth LLC and its owner candidates running in the general corporations may solicit contribu- election, including committees of tions to the SSF from the restricted unopposed candidates. Note that class of EmblemHealth LLC and its because the reporting period for corporate owners. the Post-General Election report spans two election cycles, can- Background didate committees must use the EmblemHealth LLC is a limited Post-Election Detailed Summary liability company, treated as a part- Page (FEC Form 3, Pages 5-8 or nership under the Internal Revenue FEC Form 3P, Page 3) instead of Code,1 that is wholly owned by two the normal Detailed Summary not-for-profit health services cor- Page. porations: Health Insurance Plan of

(continued on page 3) (continued on page 2) 1An LLC that elects to be treated as a partnership by the Internal Revenue Ser- 1 Monthly filers are not required to file vice under 26 CFR 301.7701-3 is treated a December 20 monthly report in addi- as a partnership under Commission tion to the Post-General report. regulations. 11 CFR 110.1(g)(2). Federal Election Commission RECORD November 2010

Reports address, FEC identification number to the mandatory electronic filing (continued from page 1) and the updated or changed portions rules, but may file an unofficial copy of the form. of their reports with the Commis- Notification of Filing Deadlines sion in order to speed disclosure. In addition to publishing this Treasurer’s Responsibilities The Commission’s electronic filing article, the Commission notifies The Commission provides software, FECFile, is free and can be committees of filing deadlines on its reminders of upcoming filing dates downloaded from the FEC’s web- website, via its automated Faxline as a courtesy to help committees site. New FECFile Version 6.4.2.0 and through reporting reminders comply with the filing deadlines set is available for download from the called prior notices. Prior notices are forth in the Federal Election Cam- FEC website at http://www.fec.gov/ distributed exclusively by electronic paign Act (the Act) and Commission elecfil/updatelist.html. All reports mail. For that reason, it is impor- regulations. Committee treasurers filed after June 1, 2010, must be tant that every committee update must comply with all applicable filed in Format Version 6.4.2.0 (the its Statement of Organization (FEC filing deadlines established by law, new version). Reports filed in previ- Form 1) to disclose a current e-mail and the lack of prior notice does not ous formats will not be accepted. address. To amend Form 1, electron- constitute an excuse for failing to Filers may also use commercial or ic filers must submit Form 1 filled comply with any filing deadline. privately developed software as long out in its entirety. Paper filers should as the software meets the Commis- include only the committee’s name, Filing Electronically sion’s format specifications, which Under the Commission’s manda- are available on the Commission’s tory electronic filing regulations, website. Committees using com- Federal Election Commission individuals and organizations that mercial software should contact their 999 E Street, NW receive contributions or make ex- vendors for more information about Washington, DC 20463 penditures, including independent the Commission’s latest software expenditures, in excess of $50,000 in 800/424-9530 (Toll-Free) release. 202/694-1100 (Information Div.) a calendar year—or have reason to 202/501-3413 (FEC Faxline) expect to do so—must file all reports Timely Filing for Paper Filers 202/219-3336 (TDD for the and statements with the FEC elec- Registered and Certified Mail. hearing impaired) tronically.2 Reports filed electroni- Reports sent by registered or certi- cally must be received and validated Matthew S. Petersen, fied mail must be postmarked on or by the Commission by 11:59 p.m. before the mailing deadline to be Chairman Eastern Standard/Daylight Time Cynthia L. Bauerly, considered timely filed. A commit- Vice Chair on the applicable filing deadline. tee sending its reports by certified Caroline C. Hunter, Electronic filers who instead file on or registered mail should keep its Commissioner paper or submit an electronic report mailing receipt with the U.S. Postal Donald F. McGahn II, that does not pass the Commission’s Service (USPS) postmark as proof Commissioner validation program by the filing of filing because the USPS does Steven T. Walther, deadline will be considered nonfilers not keep complete records of items Commissioner and may be subject to enforcement sent by certified mail. See 2 U.S.C. Ellen L. Weintraub, actions, including administrative §434(a)(5) and 11 CFR 104.5(e). Commissioner fines. 11 CFR 104.18(e). Overnight Mail. Reports filed via Alec Palmer, Senate committees and other overnight mail3 will be considered Acting Staff Director committees that file with the Sec- timely filed if the report is received Christopher Hughey, retary of the Senate are not subject by the delivery service on or before Acting General Counsel the mailing deadline. A committee Published by the Information sending its reports by Express or Division of the Office of Priority Mail, or by an overnight de- Communications 2 The regulation covers individuals and Greg J. Scott, (continued on page 3) Assistant Staff Director organizations required to file reports of Amy L. Kort, contributions and/or expenditures with Deputy Assistant Staff Director the Commission, including any person 3 “Overnight mail” includes Priority or Myles G. Martin, making an independent expenditure. Express Mail having a delivery confir- Editor Disbursements for “electioneering mation, or an overnight service with communications” do not count toward which the report is scheduled for next http://www.fec.gov the $50,000 threshold for mandatory business day delivery and is recorded in electronic filing. 11 CFR 104.18(a). the service’s on-line tracking system.

2 November 2010 Federal Election Commission RECORD

Reports Advisory Opinions owned by corporations and is affili- (continued from page 2) (continued from page 1) ated with at least one of the corporations. AOs 2009-14 and 1992-17. livery service, should keep its proof Greater New York (HIP) and Group Health Incorporated (GHI). An- EmblemHealth LLC is wholly of mailing or other means of trans- owned by GHI and HIP, both of mittal of its reports. See 2 U.S.C. other corporation, EmblemHealth Inc., is the sole owner of both HIP which are corporations wholly §434(a)(5) and 11 CFR 104.5(e). owned by EmblemHealth, Inc. GHI Other Means of Filing. Reports and GHI. HIP and GHI established EmblemHealth LLC to integrate and HIP are therefore subsidiaries of sent by other means—including first EmblemHealth Inc., and are thus af- class mail and courier—must be re- management and administration, and to set direction for the joint opera- filiated. EmblemHealth LLC and its ceived by the FEC (or the Secretary corporate owners may all act as the of the Senate Public Records Office) tions of GHI and HIP. EmblemHealth LLC asks if an connected organization for the SSF, before close of business on the filing paying for its administrative expens- deadline. See 11 CFR 100.19 and SSF currently operated by HIP may be renamed “EmblemHealth Servic- es and solicitation costs. However, 104.5(e). because EmblemHealth LLC itself Paper forms are available for es Company LLC Federal Political Action Committee,” abbreviated as does not satisfy the definition of downloading at the FEC’s website “connected organization” as dis- (http://www.fec.gov/info/forms. “EmblemHealth PAC,” and further asks if it may act as the connected cussed above, it may not be listed as shtml) and from FEC Faxline, the the SSF’s connected organization on agency’s automated fax system organization for the SSF. Further- more, EmblemHealth LLC asks if it, FEC Form 1. Instead, the SSF must (202/501-3413). The 2010 Report- list one of EmblemHealth LLC’s ing Schedule is also available on the GHI and HIP may each use personnel and resources to pay the admin- corporate affiliates as the connected FEC’s website (http://www.fec.gov/ organization. AOs 2009-14, 2004-42 info/report_dates_2010.shtml), and istrative and solicitation expenses for the SSF, and solicit the restricted and 2003-28. from Faxline. For more informa- The SSF may be renamed “Em- tion on reporting, call the FEC at classes of EmblemHealth LLC, GHI and HIP for contributions to the SSF. blemHealth Services Company LLC 800/424-9530 or 202/694-1100. Federal Political Action Commit- tee,” abbreviated as “EmblemHealth Additional Information Analysis The Federal Election Campaign PAC.” In past advisory opinions, the For more information on 2010 Commission has permitted an SSF’s reporting dates: Act (the Act) and Commission regulations do not include partner- name to include only the name of a • See the reporting tables in the ships or LLCs in the definition of joint venture LLC that was treated January 2010 Record; “connected organization” (11 CFR as a partnership under Commis- • Call and request the reporting 100.6(a)), instead permitting them sion regulations, where the LLC tables from the FEC at 800/424- to contribute directly to candidates. was performing the functions of the 9530 or 202/694-1100; However, partnerships that are SSF’s connected organization. AOs • Fax the reporting tables to owned entirely by corporations may 2004-42 and 2003-28. Under that yourself using the FEC’s Faxline not make contributions because circumstance, the SSF may omit the (202/501-3413, document 586); of the dual attribution principle. names of the LLC’s affiliated corpo- or Contributions by partnerships are rate owners from its name “because • Visit the FEC’s web page at attributed not only to the partnership the LLC was in virtually the same http://www.fec.gov/info/report_ but also to the partners which, in position as a corporate subsidiary of dates_2010.shtml to view the this case, are corporations prohibited the owner corporation.” AO 2004-42. reporting tables online. from making contributions. 11 CFR An SSF and its connected organization may solicit contributions from —Elizabeth Kurland 110.1(e). In order to avoid prohib- iting these types of partnerships the restricted class – the executive from both making contributions and and administrative personnel and establishing and administering an stockholders, and their families – of SSF, the Commission has interpreted its subsidiaries, branches, and other the Act and Commission regulations affiliates. 2 U.S.C. §§441b(b)(2)(A) as permitting such partnerships to and (4)(A)(i); 11 CFR 114.3(a)(1) pay the administrative or solicitation and 114.5(g)(1). Once the Com- costs of an SSF established by the mission has concluded that entities partnership’s corporate owner, but only when the partnership is wholly (continued on page 4)

3 Federal Election Commission RECORD November 2010

Advisory Opinions Background Individuals may contribute up to (continued from page 3) Stutzman for Congress (the Com- $2,400 to a candidate “with respect mittee), is the principal campaign to any election for Federal office.” are affiliated, any one affiliate may committee of Marlin Stutzman, a 11 CFR 110.1(b)(1). These contribu- solicit the restricted class of any Republican candidate in Indiana’s tions limits “apply separately with other affiliated entities. AOs 2004-32 Third Congressional District. The respect to each election.” 2 U.S.C. and 2001-18. Therefore, HIP, GHI incumbent holder of that office, §441a(a)(6); 11 CFR 110.1(j)(1). and EmblemHealth LLC may solicit Representative Mark Souder, won The Act and Commission regula- the restricted class of the SSF’s con- the Republican primary election on tions define “election” to include nected organization (HIP) and the May 4. After the primary, Represen- both a general election and a special restricted class of its affiliated corpo- tative Souder resigned from office. election. ration (GHI) for contributions to the Indiana’s governor then scheduled Under the Act and Commission SSF. Although EmblemHealth LLC a special election to fill Souder’s regulations, an undesignated con- is not a corporate affiliate of HIP or office. That special election will be tribution is considered a contribu- GHI, the Commission has, in previ- held on November 2, which is the tion for the next election for that ous advisory opinions, determined same day as the general election. federal office. 11 CFR 110.1(b)(2) that the executive and administrative The winner of the special election (ii). In these circumstances, because personnel of partnerships that were will serve the remainder of Repre- the special election and the general affiliated with corporations could sentative Souder’s term of office. election for the same federal office be solicited for contributions to the The candidate elected in the general will be held on the same day, both corporation’s separate segregated election will serve the next full two- elections are considered “the next fund. AOs 1989-08 and 1983-48. year term of office. election” for purposes of treating Therefore, because EmblemHealth The Republican Party held a cau- undesignated contributions. In this LLC is affiliated with HIP, GHI and cus to nominate a candidate for the situation, although the federal office EmblemHealth Inc., and is treated special election and a new candidate sought by Mr. Stutzman is the same as a partnership under Commission for the general election. Stutzman in both elections, each election will regulations, HIP, GHI and Em- was nominated as the Republican fill a vacancy for a different term of blemHealth LLC may solicit contri- Party candidate for both of those that office. AO 1984-42 dealt with a butions from EmblemHealth LLC’s elections. Stutzman is campaigning similar situation in the State of Ken- executive and administrative person- in both elections and the Committee tucky, which held a special election nel for contributions to the SSF. anticipates it will receive undesig- for a Congressional district seat on Date Issued: September 23, 2010; nated contributions that exceed the the same day as the general election. Length: 6 pages. Federal Election Campaign Act’s The Commission concluded in that —Christopher Berg (the Act) contribution limits for opinion that each election is subject a single election. The Committee to a separate contribution limit. AO 2010-17 wishes to redesignate the excessive In AO 1986-31, the Commission portion of those contributions from addressed a nearly identical situa- Undesignated Contributions the general election to the special tion: North Carolina held a special May Be Applied to General election without seeking written election on the same day as the gen- or Special Election redesignations from the contributors. eral election for the same Senate seat A Congressional candidate who after the incumbent Senator John is running in both a special and Analysis East died in office. In that case the general election that are being held The Commission determined that Commission concluded that a can- on the same day may treat undesig- the Committee may apply undesig- didate’s authorized committee could nated contributions as contributions nated contributions to the general treat undesignated contributions as made for the general election or for election or to the special election. As made with respect to either elec- the special election. The candidate long as those contributions do not tion or divide them between the two committee may divide undesignated exceed the contributor’s combined elections as long as the contributor contributions between the two elec- limit for both elections, the Com- did not exceed the combined contri- tions as long as those contributions mittee may divide the contributions bution limits for both elections. The do not exceed the contributor’s between the two elections. The Commission also determined that combined limit for both elections. If Committee need not seek a redes- the committee did not need to seek the combined contribution limits for ignation from the contributor if the redesignations from contributors. both elections are not exceeded, no combined contribution limits for redesignation is necessary. both elections are not exceeded. (continued on page 5)

4 November 2010 Federal Election Commission RECORD

Advisory Opinions method to determine whose dona- written redesignation regulations (continued from page 4) tions remain in the recount account at 11 CFR 110.1(b)(5)(ii)(A) as a to ensure that transfer does not cause guide, and may consider a recount Therefore, in this case, the any donor to exceed its 2010 limits donation redesignated if: Committee may treat undesignated for contributions to the federal ac- • The treasurer of the political party contributions as made with respect count. Alternatively, it would like committee requests that the donor to either election or as divided be- to ask some of the donors to the provide a written redesignation of tween the two elections. This means recount fund to redesignate their do- the contribution; the Committee may accept up to nations as contributions to the DFL’s • The donor is informed that he or the contributor’s combined $4,800 federal campaign account, again she may request a refund, or if limit for both elections ($2,400 for making sure that no redesignation the donor neither redesignates the the special election and $2,400 for would cause any donor to exceed its donation nor requests a refund, the general election). Accordingly, 2010 limits for contributions to the that the donation will remain in the Committee does not have to seek federal account. It also wants to use the recount fund for future use; written designations or redesigna- any funds remaining in the recount and tions for these contributions from account to pay for recount activities • The donor provides the treasurer the contributors. However, undesig- relating to the 2010 elections. nated contributions that exceed the with a written redesignation of contributor’s combined contribution Analysis the donation as a contribution, limits for both elections are prohib- The Commission could not ap- signed by the donor. ited to the extent they exceed the prove a response by the required combined limits. four affirmative votes with regard (continued on page 6) Date Issued: September 23, 2010; to whether the DFL could transfer Length: 4 pages. funds remaining in its recount fund Legal History of the —Isaac J. Baker to its federal campaign account for Presidential use in connection with 2010 elections. Election Campaign AO 2010-18 The Commission determined Fund Act Available Use of Recount Funds from that the DFL may ask donors to the from the FEC Prior Election Cycle recount fund to redesignate their do- A state party committee may nations as contributions to the DFL’s The FEC’s Law Library is request that donors to a recount fund federal account. The Commission making available case-bound redesignate their donations as con- noted that there are no regulations copies of the Legal History of the tributions to the federal campaign that govern redesignations of recount Presidential Election Campaign account for the 2010 election. The donations, and that, unlike the regu- Fund Act in two volumes. party organization may also use any lations concerning redesignations Compiled and printed by agency remaining recount funds to pay for of excessive contributions made to staff in 1984, these editions recount activities in relation to future candidates and authorized commit- provide an exhaustive historical elections. tees, donations to recount funds are record of the bills, accompanying not required to be redesignated or re- reports and floor debates from Background funded. The Commission concluded which the present law originated. The Minnesota Democratic- that while the DFL, as a state party The material is presented in Farmer-Labor Party (the “DFL”) is a committee, is not covered by the ex- chronological fashion, starting state party committee affiliated with isting redesignation regulations and with the 1957 Gore Report, the national Democratic party. The that donations to the recount fund which examined the campaign DFL has $11,583.61 remaining in a are permissible and may remain in contributions and expenditures recount fund raised for the 2008 re- the recount fund for future elections, during the 1956 federal elections. count and election contest involving the DFL may request that donors to These volumes are available to the Senator Al Franken and then-Senator the recount fund redesignate their public free of charge. They can be Norm Coleman. donations to its federal account. obtained at the Federal Election The DFL wants to transfer some The Commission looked to the Commission’s headquarters at 999 or all of the remaining money from existing redesignation regulations E Street NW, Washington, DC, the recount fund to its federal cam- for a procedure for the DFL to 20463. To obtain a copy, please paign account for use in connection voluntarily request and to obtain contact Leta Holley at lholley@ with 2010 elections. The DFL will redesignations of recount funds. It fec.gov or (202) 694-1516. use the “first in, first out” accounting concluded that the DFL may use the

5 Federal Election Commission RECORD November 2010

Advisory Opinions DFL is not required to redesignate AO 2010-19 (continued from page 5) or refund the recount donations, it is Disclaimers on Internet Text not required to seek redesignations Ads The Commission noted that any within a 60-day timeframe under Candidates, their authorized com- donation that is redesignated in 110.1(b)(5)(ii)(A)(2). mittees and other political commit- writing as a contribution must be The Commission emphasized that tees need not display disclaimers on aggregated with any other contribu- all redesignations must be reported text ads they sponsor that are gener- tions made by the same contributor within the applicable reporting ated through Google, Inc.’s AdWords during that calendar year for the pur- period, and that committees receiv- program. The full disclaimer would pose of adhering to the contribution ing redesignated contributions must instead appear on a “landing page” limits. The Commission also noted report the redesignation in a memo that appears when a user clicks that once donations are redesignated entry on Schedule A of the campaign through a text ad. to the DFL’s federal account, they finance report covering the reporting will be considered contributions for period in which the redesignation is the purposes of the donors’ biennial Background received. The memo entry for any Google, Inc. is a corporation that limits and encouraged the DFL to redesignations of recount donations notify the donors of this fact for the creates programs and applications as contributions must include all that allow persons to search for and donors’ compliance purposes. The of the information for the recount Commission added that since the collect information on the Internet. donation as it was originally re- Google’s AdWords program gener- ported on Schedule A, as well as all ates text ads in conjunction with of the information for the contribu- keywords that are chosen by the tion as it was redesignated by the advertiser. Text ads have a head- donor, including that the donation line which can consist of up to 25 was redesignated as a contribution characters and two lines of text that Back Issues of the to the federal account and the date display a Uniform Resource Locater Record Available on on which the redesignation was (“URL”), which can consist of up to the Internet received. 70 characters. This general format Finally, the Commission permit- applies to all advertisers, regard- This issue of the Record and all ted the DFL to use the funds remain- less of whether they are political other issues of the Record starting ing in its recount fund to pay for committees. Google has partnered with January 1987 are available recount activities in relation to future with other websites to participate in on the FEC website as PDF files. elections, as the use of recount funds Google’s AdWords program. Us- Visit the FEC website at http:// is not restricted to recounts and ing chosen keywords, Google can www.fec.gov/pages/record.shtml election contests held in the calen- match an advertiser’s ads to websites to find monthly Record issues. dar year in which donations to the in Google’s partner network that The website also provides recount fund are made. are most relevant to the advertiser’s copies of the Annual Record Index Date: September 23, 2010; message. for each completed year of the Length: 5 pages. The primary purpose of a text ad Record, dating back to 1987. The —Zainab Smith is to attract customers to an advertis- Annual Record Index list Record er’s “landing page” so that custom- articles for each year by topic, ers may learn more about what the type of Commission action and, in advertiser has to offer. Advertisers the case of advisory opinions, the pay Google for a text ad based upon names of individuals requesting the number of times a user clicks on Commission action. the ad and is taken to the advertiser’s You will need Adobe® Acro- website. Google wishes to sell such bat® Reader software to view the text ads to candidates, their autho- publication. The FEC’s website rized committees and other political has a link that will take you to committees. The text ads would not Adobe’s website, where you can display a disclaimer indicating who download the latest version of the authorized or paid for the ad. A full software for free. disclaimer would instead appear on the landing page that appears when a user clicks through a text ad. (continued on page 7)

6 November 2010 Federal Election Commission RECORD

Advisory Opinions ReCellular allows each consumer that ReCellular pays each consumer. (continued from page 6) the option of donating the sale pro- Finally, ReCellular asks if recipi- ceeds from his or her phone to one ent political committees must each Analysis of several 501(c)(3) charitable or- pay ReCellular the incremental cost The Commission could not reach ganizations listed on the company’s of sending a notification email to an agreement by the required four website. If the consumer elects this the committee with the contribu- affirmative votes in response to the option, ReCellular sends a check in tor’s name, address, occupation and questions presented by Google. his or her name for the full purchase employer, and date of contribution, 2 U.S.C. §437c(c) and 11 CFR price of the phone as a donation to if that cost is not already paid by the 112.4(a). However, the Commission the selected charity. consumer. concluded that, under the circum- Now, ReCellular plans to allow stances described in the request, the consumers to choose to contrib- Analysis proposed conduct is not in violation ute their sale proceeds to federal In prior advisory opinions, the of the Federal Election Campaign candidates’ authorized committees, Commission has allowed corpora- Act or Commission regulations. national political party commit- tions to offer affinity programs and Further explanation will be provided tees, and nonconnected committees. enter into affinity-type business in the Commissioners’ concurring Committees will pay to be listed on arrangements so long as the corpora- opinions. the website, and ReCellular will post tion and political committee enter Date Issued: October 8, 2010; a statement that it does not endorse into a commercially reasonable Length: 3 pages. any of the committees. Consumers transaction in which the committee —Myles Martin choosing to contribute sale proceeds pays the usual and normal charge to political committees will be for any services provided, and the asked to confirm that their contri- amounts contributed to political AO 2010-21 bution complies with the source committees via rebates or rewards Corporate Affinity Program and amount restrictions of the Act. are from individual customers’ for Purchase of Used Mobile Finally, ReCellular plans to collect Phones the recordkeeping and reporting (continued on page 8) ReCellular, Inc., a for-profit information committees need and corporation that recycles and resells use that information to generate two used mobile phones and accesso- emails: the first to each consumer, ries, may offer an affinity program will confirm completion of the sale Campaign Guides to transmit to political committees and the amount of the contribution; Available contributions that result from its pur- the second to each recipient political For each type of committee, a chase of consumers’ used phones. committee, will list the contribution Campaign Guide explains, in clear amount and contributor information English, the complex regulations Background provided by the consumer. ReCel- regarding the activity of political ReCellular collects used cell lular will not forward any proceeds committees. It shows readers, phones in several ways, including from the sale of a phone to a politi- for example, how to fill out FEC purchasing phones directly from cal committee until it has ensured reports and illustrates how the law consumers via its website. A con- that the phone meets ReCellular’s applies to practical situations. sumer visiting the website may enter criteria. The FEC publishes four the brand and model number of his ReCellular asks if its plan to al- Campaign Guides, each for a or her phone and receive a purchase low consumers to direct the com- different type of committee, quote from ReCellular. If the con- pany to send proceeds from the and we are happy to mail your sumer accepts the offer, ReCellular sale of their used cell phones to a committee as many copies as provides them a shipping label–a political committee chosen by the you need, free of charge. We common industry practice that individual complies with the Act and encourage you to view them on improves consumer follow through. Commission regulations. ReCel- our website (www.fec.gov). Upon receipt, ReCellular assesses lular also asks if it must charge the If you would like to place an the phone to ensure that it meets recipient political committee for the order for paper copies of the certain sales criteria, and then sends company’s costs for shipping the Campaign Guides, please call the the consumer a check for the agreed phone, processing the transaction, Information Division at 800/424- purchase price. confirming the sale, and transmit- 9530. ting the payment, even though that cost is already reflected in the price

7 Federal Election Commission RECORD November 2010

Advisory Opinions that “the consumer’s phone was (continued from page 7) worth the quoted price” complies 800 Line with the Act and Commission regu- funds and not corporate funds. AOs lations. 2 U.S.C. §432(a) and (b); 11 Winding Down Your Federal 2010-06, 2008-18 and 2003-16. CFR 102.8. Campaign The Commission concluded that Date Issued: October 8, 2010; ReCellular proposal represents a This article answers common Length: 9 pages. questions from candidates and of- commercially reasonable transac- —Christopher Berg tion. ReCellular is not required to ficeholders who are registered with charge political committees for the Federal Election Commission (the Commission) but are “no longer costs that are already reflected in the Alternative Disposition of purchase price offered to the con- actively seeking” election to fed- sumer, such as the cost of shipping Advisory Opinion Request eral office. Federal candidates who phones and processing payments. withdraw from the race before the AOR 2010-20 However, committees must pay to be election takes place, lose the primary On September 23, 2010, the Com- listed on the ReCellular website and or general election or retire from mission considered, but could not must cover the cost of the notifica- office may chose to terminate their approve by the required four votes, tion emails, unless the cost is borne campaign committees. The Federal an advisory opinion request on by the consumers. The Commission Election Campaign Act (the Act) and behalf of National Defense PAC re- stated ReCellular could bill commit- Commission regulations contain cer- garding a nonconnected committe’s tees for these services monthly, so tain provisions related to the process receipt of corporate or union funds long as doing so would be “commer- of winding down and terminating a to make independent expenditures cially reasonable.” See AO 2006-34; principal campaign committee (com- and allocation of administrative and 11 CFR 114.2(f)(1) and 116.4. mittee), including the proper use operating expenses. The Commission also determined of remaining campaign funds, the Thus, the Commission was unable that the proceeds of each phone sale settlement of committee debts and to render an opinion in this matter are the property of the consumer. the process for terminating the com- and concluded its consideration of ReCellular does not disburse the mittee’s reporting obligations. the request. proceeds of a phone sale until it I collected contributions for confirms that the phone meets its the general election but will not purchase criteria. Additionally, the Advisory Opinion Requests participate in that election. Are consumer has ultimate control over refunds required? the disposition of the funds: upon Yes. A candidate may accept agreeing to sell a phone to ReCel- AOR 2010-26 Use by retiring House member of contributions for an election only if lular, the consumer decides whether he or she seeks office in that elec- the company sends the proceeds to campaign funds for storage expenses in preparation for move to home tion. Thus, a candidate who loses the consumer, a charity, or a political the primary (or otherwise does not committee. Under ReCellular’s pro- state (Representative Brian Baird, October 1, 2010) participate in the general election) posal, each consumer must confirm does not have a separate contribution that his or her contribution complies AOR 2010-27 limit for the general. If a candidate with the limitations and prohibitions Transfer from a presidential-vice accepts contributions for the general of the Act: that it is not made by a presidential general election PCC to election before the primary is held corporation, national bank, labor the presidential primary PCC of the and loses the primary (or does not organization, Federal contractor, or vice presidential nominee (Obama otherwise participate in the general a foreign national. This is consistent for America and Biden for President, election), the candidate’s principal with the conditions approved by the October 1, 2010) campaign committee must return the Commission in previous advisory general election contributions within opinions. AOs 2010-06, 2006-35 and AOR 2010-28 60 days of the primary or the date 1995-09. Refund of transfer from principal the candidate became ineligible to Finally, the Commission conclud- campaign committee to state party participate in the general election. ed that ReCellular’s plan to forward committee under 2 U.S.C. §439a(a) 11 CFR 102.9(e)(3) and 110.1(b) sale proceeds to recipient commit- (4) (Indiana Democratic Congres- (3)(i). Alternatively, the campaign tees within ten days of confirming sional Committee and Hoosiers for committee may redesignate the Hill, October 1, 2010) contributions in accordance with 11 (continued on page 9)

8 November 2010 Federal Election Commission RECORD

800 Line of a candidate (or former candidate) service to the campaign and the (continued from page 8) to fulfill a commitment, obligation payments reflect the fair market or expense of any person that would value of those services. 11 CFR CFR 110.1(b)(5) or 110.2(b)(5), or exist irrespective of the candidate’s 113.1(g)(1)(i)(A)-(J). reattribute them in accordance with campaign or duties as a federal of- Case-by-Case Determination of 11 CFR 110.1(k)(3), as appropriate. ficeholder. 11 CFR 113.1(g). Gener- Personal Use. The Commission will ally speaking, if the expense would Can my committee continue to determine, on a case-by-case basis, exist even in the absence of the pay expenses even if the campaign whether other expenses, including candidacy or even if the officeholder is over? legal expenses and travel expenses, were not in office, then the personal Yes. Under the Act, campaign would exist irrespective of the use ban applies. funds may be used for the following candidate’s campaign or duties as a Automatic Personal Use. Com- non-campaign purposes: federal officeholder and would be mission regulations list some considered personal use expenses. • Defrayal of ordinary and nec- expenses that are automatically 11 CFR 113.1(g)(1)(ii). essary expenses incurred in considered to be personal use: connection with the federal of- Can my campaign committee pay ficeholder’s duties, such as travel • Household food items and sup- plies; winding down costs? expenses for a federal officehold- Yes. Excess campaign funds may er and an accompanying spouse, • Funeral, cremation and burial expenses, except for a candidate be used to pay any ordinary and provided that the travel is under- necessary expenses incurred in con- taken to participate in a function or campaign worker whose death arises out of, or in the course of, nection with one’s duties as a federal that is directly connected to the officeholder. Such expenses include officeholder’s bona fide official the campaign; • Clothing, except for the cost of the costs of winding down the office responsibilities. 113.2(a)(1); of a former federal officeholder for • Winding down costs of a federal campaign T-shirts, hats, etc.; • Tuition payments, except those a period of six months after he or officeholder’s office for a period she leaves office. 113.2(a)(2) and of six months after leaving office. associated with training campaign staff; AO 1996-14. Winding down costs 113.2(a)(2), AOs 1996-44 and include: 1996-14; (House and Senate rules • Mortgage, rent and utility pay- may apply;); ments for the candidate’s per- • Moving Expenses. A retiring • Contributions to charitable or- sonal residence, even if a portion Member may use campaign funds ganizations defined in 26 U.S.C of the space is used for campaign to pay for the expenses of moving 170(c). 113.2(b); purposes. 60 Fed. Reg. 7862, office and personal furnishings • Unlimited transfer to any nation- 7865 (February 9, 1995); from the Congressional office in al, state or local party committee. • Investment expenses, unless all of Washington, D.C., back to the 113.2(c); the investment and its proceeds Member’s home state. While the • Donations to state and local are used for campaign purposes costs of transporting a Member’s candidates, pursuant to state law. or one of the permissible non- personal household effects and 113.2(d); and campaign uses of funds described furnishings from Washington, • Any other lawful purpose, unless above. 67 Fed. Reg. 38354 (June D.C., to the Member’s home state such use is personal use under 11 4, 2002); are not “winding down costs,” CFR 113.1(g). 113.2(e). • Entertainment expenses, such as such costs are “ordinary and nec- concert or sporting event tickets, essary expenses” incurred in con- unless the entertainment is part Can I use remaining campaign nection with ending the Member’s of a specific campaign or office- funds to cover personal expenses? duties as a federal officeholder. holder activity; Using campaign funds for per- AO 1996-14. Similarly, a retiring • Dues, fees and gratuities for sonal use is prohibited, even when Member may use campaign funds country clubs, health clubs, recre- a federal candidate or officeholder to pay the expenses of transport- ational facilities or other nonpo- is no longer seeking election to fed- ing office furnishings from the litical organizations, unless they eral office. In determining whether Member’s district office to Wash- are part of the costs of a specific expenses are for personal use or are fundraising event held on the legitimate campaign/officeholder ex- organization’s premises; and penses, the Commission uses the “Ir- • Salary payments to the candi- respective Test.” Personal use is any date’s family, unless the family use of funds in a campaign account (continued on page 10) member is providing a bona fide

9 Federal Election Commission RECORD November 2010

800 Line charitable organization before it has How does a committee terminate? (continued from page 9) expended the entire amount donated. A committee may file a termina- Note that the amount donated must tion report at any time, provided ington, D.C., where the Member have been used for purposes that do that: not personally benefit the candidate. will remain upon leaving office. • The committee no longer intends 11 CFR 113.1(g)(2). AOs 2005-6, Such costs are considered wind- to receive contributions, make 1997-1, 1996-40 and 1994-20. ing down costs. AO 1996-44. All expenditures or make any dis- such moving expenses should be May I convert my principal bursements that would otherwise reported as “other disbursements” campaign committee into a PAC? qualify it as a political committee; by the Member’s committee, with In past advisory opinions, the and the specific payee(s) and purpose Commission has explicitly permitted • Neither the committee seeking to noted. 11 CFR 104.3(b)(2)(vi) a principal campaign committee to terminate nor any other autho- and (b)(4)(vi). become a multicandidate committee rized committee of the same can- • Payments to Committee Staff. A as an alternative to the committee’s didate has any outstanding debts retiring Member may use excess termination. In meeting the require- or obligations. 11 CFR 102.3 and funds to pay staff salaries and in- ments for multicandidate status, a 116.1. cidental expenses while perform- former principal campaign com- ing duties “imposed by virtue A committee involved in an FEC mittee may avail itself of the length enforcement action, an FEC audit of having been a Member.” AOs of time of its prior registration, the 1976-90 and 1978-43. or litigation with the FEC, how- number of contributions it has made ever, must continue to file regularly • Gifts. Campaign funds may be in the past and the number of contri- used to purchase gifts or make scheduled reports until the matter is butions it has received. Note that the resolved. When filing the commit- donations of nominal value to prohibition on converting campaign persons other than the members tee’s termination report, the treasurer funds to personal use still applies should check the “Termination Re- of the candidate’s family. 11 CFR to such a committee. AOs 2004-3, 113.1(g)(4). port” box on Line 4 of the Summary 1988-41 and 1985-30. Page of FEC Form 3. The termination report must disclose: Can my campaign committee May I use remaining campaign contribute to other candidates? funds in a future federal election? • All receipts and disbursements Yes. A federal candidate commit- Yes, surplus funds may be used not previously reported, including tee may contribute up to $2,000 per in connection with a future election. an accounting of debt retirement; election to the committee of another Funds may be transferred between and federal candidate. 11 CFR 102.12(c) authorized committees of the same • The purposes for which any (2).1 Donations from federal can- candidate (for example, from a remaining committee funds or didate committees to state or local previous campaign committee to assets will be used. 11 CFR candidate committees are subject to a current campaign committee) 102.3(a). state law. without limit as long as the com- The committee’s reporting obliga- mittee making the transfer has no Can my campaign committee tion ends only when the Commission “net debts outstanding” as defined notifies the committee in writing that donate to a charitable in 11 CFR 110.1(b)(3)(ii). 11 CFR organization? the termination report has been ac- 110.3(c) and 116.2(c)(2). Alterna- cepted. Until the committee receives Yes. Gifts to charity are not tively, a candidate may redesignate considered personal use expenses this notification, it must continue to a former campaign committee as the file reports. The FEC, upon its own as long as the candidate does not principal campaign committee of his receive compensation from the initiative or at the request of a politi- or her current campaign and use the cal committee, may administratively excess funds of the previous cam- terminate a committee’s reporting paign in the current campaign. AO 1 status. For details on administrative Note: The contribution limit that ap- 1980–30. A candidate who wishes to plies to a contribution from one federal termination, consult section 102.4 of use the committee for a subsequent the regulations. candidate’s campaign to another federal federal campaign, may redesignate candidate’s campaign is $2,000 per can- The Commission will host a didate per election. This limit is different it as an authorized committee using roundtable workshop covering many from an individual contribution limit to FEC Form 2. of these issues on November 17. See a federal candidate’s campaign, which page 11 for details. is currently $2,400 per candidate per — Isaac J. Baker election and is indexed for inflation.

10 November 2010 Federal Election Commission RECORD

Pre-General Report • Committee to Elect Liz Berney Nonfilers The Commission cited 34 cam- (NY-5); paign committees for failing to file • Jeff Doctor for Congress (NC-9); Committees Fail to File the 12-Day Pre-General Election • Roberts for Ohio (OH-3); Campaign Finance Reports Report required by the Act for the • Citizens for Litt (OH-4); general election held on November • John Anderson for Congress The Commission cited campaign 2, 2010. (OH-7); committees in October for failing As of October 29, 2010, the • O’Neill for Congress 2010 (OH- to file the October Quarterly Report required disclosure reports had not 14); and the 12-Day Pre-General Report been received from: • Ben Frasier for Congress (SC-1); required by the Federal Election • Jim Pratt for Congress (SC-6); Campaign Act (the Act). • Trevor Drown for US Senate (AR); • Friends of James Whitfield (TN- October Quarterly Report • Elect Ian Gilyeat (AZ); 5); The Commission cited seven • Joslyn for Senate (AZ); • Jackie Miller for Congress (TN- campaign committees for failing to • Goodwin Exploratory Committee 5); file the October Quarterly Report (CA-19); • Elect Steve Mueller Campaign required by the Act. • Vote McNealy (CO-6); Committee (TX-9); and As of October 29, 2010, the • Bernie DeCastro Campaign Com- • Kolosso for Congress Election required disclosure reports had not mittee (FL); Committee (WI-5). been received from: • Bobbie Bean Committee for US The reports were due on October • Vote McNealy (CO-6); Senate (FL); 21, 2010, and should have included • Bernie DeCastro Campaign Com- • Snitker for Senate (FL); financial activity for the period mittee (FL); • Martin-Back for Congress (FL- October 1, 2010, through October • Banciella for US Congress (FL- 3); 13, 2010. If sent by certified or 18); • Jim Horn Election Committee registered mail, the reports should • Tim Olson for Congress Commit- (FL-16); have been postmarked by October tee (MN-8); • Banciella for US Congress (FL- 18, 2010. • Committee to Elect Juan N. Ba- 18); The FEC notified committees bauta for Congress (MP); • Kunst for Congress (FL-20); involved in the general election of • Roberts for Ohio (OH-3); and • Craig Porter for Congress (FL- their filing requirement on Septem- • Friends of James Whitfield (TN- 25); ber 27, 2010. Those committees that 5). • Committee to Elect Roderick did not file on the due date were sent Vereen for Congress (FL-17); notification on October 22, 2010 that The reports were due on October • Willoughby for Congress (HI-2); their reports had not been received 15, 2010, and should have included • Bendas for Congress (IL-3); and that their names would be pub- financial activity through September • Wilhelm for Congress (MD-3); lished if they did not respond within 30, 2010. • Committee to Elect Michael En- four business days. The FEC notified committees of gel for Congress (MA-1); —Myles Martin their filing requirements on Sep- • Gerry Dembrowski PAC (MA-7); tember 21, 2010. Those committees • Tim Olson for Congress Commit- that did not file on the due date were tee (MN-8); sent notification on October 22, • Lance Enderle for Congress (MI- 2010, that their reports had not been 8); received and that their names would • Committee to Elect Juan N. Ba- be published if they did not respond bauta for Congress (MP); within four business days.

11 Federal Election Commission RECORD November 2010

available on the FEC’s web site at 2010-08: Film production, distribu- Outreach http://www.fec.gov/info/outreach. tion costs qualify for press exemp- shtml#roundtables and from Faxline, tion, 7:6 Winding Down the the FEC’s automated fax system 2010-09: Corporate sponsored IE- Campaign Reporting (202/501-3413, request document only committee may solicit and Roundtable 590). For more information, please accept unlimited individual contri- call the Information Division at butions, 8:1 On November 17, 2010, the 800/424-9530, or locally at 202/694- 2010-10: Attribution of independent Commission will hold a roundtable 1100. expenditures, 8:3 workshop to help candidate com- —Kathy Carothers 2010-11: Contributions to an inde- mittees prepare to file their 30 Day pendent expenditure committee, Post-General (30G) Report and 8:4 wind down their campaigns. The 2010-12: Payroll deduction from workshop will include information Index directors’ compensation for volun- on raising funds to retire campaign tary SSF contributions, 9:1 debt, settling debts for less than the 2010-13: Libertarian Party of Florida full amount owed, filing the Post The first number in each cita- qualifies as state party committee, Election Detailed Summary Page tion refers to the numeric month of 9:2 and terminating a committee. Atten- the 2010 Record issue in which the dance is limited to 50 people and the article appeared. The second num- registration fee is $25. The registra- ber, following the colon, indicates (continued on page 13) tion form is available on the FEC’s the page number in that issue. For website at http://www.fec.gov/info/ example, “1:4” means that the article outreach.shtml#roundtables and is in the January issue on page four. from Faxline, the FEC’s automated Roundtable fax system (202/501-3413, request Advisory Opinions Schedule document 590). For more informa 2009-29: Membership organization tion, please call the Information may establish SSF without vote of Winding Down the Campaign Division at 800/424-9530, or locally its membership, 2:4 Reporting Roundtable at 202/694-1100. 2009-30: Trade association corporate November 17, 2010 —Kathy Carothers members may use treasury funds to FEC Headquarters assist their SSFs, 3:9 9:30 a.m. - 11:00 a.m. 2009-31: Employees may use credits FEC to Host Reporting and to make contributions to SSF, 3:10 Year-End Reporting Workshops E-Filing Workshops for the 2009-32: Proposed sale of art on be- January 12, 2011 2010 Year-End Report half of committees is not a contri- FEC Headquarters bution, 3:10 On January 12, 2011, the Com- 2010-01: State party activity on be- Reporting for PACs and Party mission will host roundtable work- half of presumptive nominee, 4:10 Committees shops on reporting and electronic 2010-02: State party committee may 9:30 a.m. - 11:00 a.m. filing for the 2010 Year-End Report. use nonfederal funds to purchase The reporting sessions will address office building, 4:11 FECFile and E-Filing for common filing problems and provide 2010-03: Members of Congress may Candidate Committees answers to questions committees solicit nonfederal funds for redis- 9:30 a.m. - 11:00 a.m. may have as they prepare to file their tricting trust, 6:1 financial reports. The electronic fil- 2010-04: Determining composition of Reporting for Candidate ing sessions will provide hands-on corporation’s restricted class, 6:3 Committees instruction for committees that use 2010-05: Sale of ad time on a for- 1:00 p.m. - 2:30 p.m. the Commission’s FECFile software eign-owned television station, 7:1 and will address questions filers may 2010-06: Political affinity accounts FECFile and E-Filing for PACs have concerning electronic filing. for revenue-generating web plat- and Party Committees Attendance is limited to 50 people form, 7:3 1:00 p.m. - 2:30 p.m. per reporting workshop and 16 2010-07: Members of Congress may people per electronic filing work- solicit funds for state ballot mea- shop; the registration fee is $25 per sure, 7:5 workshop. The registration form is

12 November 2010 Federal Election Commission RECORD

Index Lobbyist bundling threshold un- Supplemental NPRM on Coordinated (continued from page 12) changed for 2010, 3:6 Communications, 3:7 2010-14: Using recount funds to pay Outreach Reports for recount expenses before elec- Conferences in 2010, 1:14; 2:5; 3:12- FEC Form 3L Due in July, 7:9 tion day, 10:7 13; 4:14; 5:7; 6:12 Florida Special Election Reporting: 2010-15: Candidate may receive FEC to host reporting and E-Filing 19th District, 1:12 refund from his committee, 10:9 workshops for the 2010 Year-End Georgia Special Election Reporting: 2010-16: SSF of corporate-owned report, 11:12 9th District, 4:4 LLC, 11:1 June Reporting Roundtable, 6:12 Hawaii Special Election Reporting: 2010-17: Undesignated contribu- Nonconnected Committee Seminar, 1st District, 4:7 tions may be applied to general or 2:7; 3:13; 4:14-15 Illinois Special Election Reporting: special election, 11:4 October Reporting Roundtable, 8:7; Senate Vacancy, 9:5 2010-18: Use of recount funds from 9:8; 10:13 Indiana Special Election Reporting: prior election cycle, 11:5 Outreach initiatives for 2011-12, 3rd District, 9:6 2010-19: Disclaimers on Internet text 10:14 Pennsylvania Special Election Re- ads, 11:6 Roundtable on new travel rules, 1:15; porting: 12th District, 4:6 2010-21: Corporate affinity pro- 2:6 Reports Due in 2010, 1:8; 4:1; 7:1; gram for purchase of used mobile Roundtable on pre-election commu- 10:1; 11:1 phones, 11:7 nications, 8:7; 9:8 West Virginia Senate Special Election Winding down the campaign report- Reporting: 8:5 Commission ing roundtable, 10:13; 11:12 Commission statement on Citizens Year-End reporting roundtable, 1:14 Statistics United v. FEC, 3:1 House and Senate campaigns raise FEC Elects Chairman and Vice Regulations nearly $600 million in 2009, 4:12 Chair for 2010, 1:1 Effective date for amendments to PAC activity remains steady in 2009, FEC Introduces new compliance travel rules, 8:5 5:7 map, 2:2 Final Rules on campaign travel, 1:1 Party committees report slight in- Message from the Chairman, 2:1 Final Rules on coordinated communi- crease in 2009 receipts, 4:13 Policy statement establishes pilot cations, 10:1 program for requesting consider- Final Rules on debt collection, 5:1 Website ation of legal questions, 8:1 Final Rules for definition of federal Candidate Disbursements search election activity, 10:3 feature available on website, 6:10 Compliance Final Rules on funds received in Nonfilers, 3:12; 6:10; 7:12; 8:6; 9:7; response to solicitations; allocation 800 Line 10:13; 11:11 of expenses by PACs, 4:8 Disclosing independent expenditures on FEC Form 5, 10:12 Court Cases Final Rules on participation by federal candidates and officeholders at FEC rules governing public debates, ______v. FEC 10:11 - Cao, 3:1; 10:10 nonfederal fundraising events, 6:1 Hearings on coordinated communica- Redesignating and reattributing con- - Citizens United, 2:1 tributions, 8:7 - CREW, 9:1 tions rules, 6:7 Hearing on proposed federal election Winding down your federal cam- - Fieger, 4:4 paign, 11:8 - RNC, 5:3 activity (FEA) rules, 3:8 - SpeechNow.org, 5:1; 7:11 NPRM on debt collection, 4:9 - The Real Truth About Obama, NPRM on federal candidates’ and Inc., 7:10 officeholders’ participation in party - Unity08, 4:1 fundraisers, 1:5 - Utility Workers, et. al, 4:3 NPRM on funds received in response FEC v. ______to solicitations; allocation of ex- - Novacek, 5:5 penses by certain committees, 2:4 U.S. v. O’Donnell, 7:11 NPRM on standards of conduct, 6:6 Petition for rulemaking on Citizens Inflation Adjustments United, 3:7 2010 Coordinated party expenditure Public hearing rescheduled for March limits, 3:5 16, 3:7