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~Ior 2003-/5- I McKenria Long RECEIVED Adante *r Alrlrirlcw* FEC MAIL SanDie9° & euJ ^™§ OPERATIONS CENTER SanFrandsco Los Angeles 303 Peachtree Street, NE • Suite 5300 • Atlanta,$8>#8 \\y A IP 09 Washington. D.C. Tel: 404.527.4000 • Fax: 404.527.4198 Philadelphia www.mckennalong.com Brussel$ 6. SCOTT RAFSHOON EMAIL ADDRESS (404) 527-4952 [email protected] April 14,2003 ^ 3 g cr aH5rp? Federal Election Commission J ^ ^^ ^"> ^ /v °"9 / ^ m r^B{5n Office of General Counsel /l/lD J {jlVS** I *\ ^ g*=*° 999EStreetNW ~iO^# ftR^ 2003-/5^^tV-> / ^ - -I * © Washington, DC 20463 Re: Advisory Opinion Request Dear Commissioners: On behalf of Denise Majette, a Member of the United States House of Representatives, and the Committee to Re-Elect Congresswoman Denise Majette (the "Committee"), we respectfully request an advisory opinion from the Federal Election Commission pursuant to 2 U.S.C. § 437f of the Federal Election Campaign Act of 1971, as amended (the "Act"). A civil lawsuit was brought against Representative Majette by supporters of her opponent in Georgia's 2002 primary election. As a direct result of that lawsuit, Representative Majette has incurred significant legal expenses. To defray those legal expenses, Representative Majette wishes to establish a Legal Expense Fund, as more specifically detailed below. We respectfully ask that you confirm that funds raised and spent by Representative Majette under the circumstances described in this letter, for the purpose of defraying the costs associated with defending against the described litigation, are not "contributions" or "expenditures" as defined in the Act, and are thus not subject to the provisions of the Act. Background In the 2002 Democratic Primary in Georgia's 4th United States Congressional District, then-Judge Majette challenged then-incumbent Representative Cynthia McKinney. After an active campaign and a record primary turnout, Judge Majette won the Democratic Primary with fifty-eight percent (58%) of the vote on August 20, 2002. Shortly thereafter, five supporters of the defeated incumbent filed suit in United States District Court for the Northern District of Georgia challenging Georgia's "open primary" election system and asking the Court to block Judge Majette from taking office (the "Litigation"). Although the plaintiffs eventually amended their complaint to exclude Representative Majette as a defendant, she has incurred legal expenses in excess of $90,000.00 and continues to incur modest legal fees related to monitoring the on­ going litigation. It is also possible that the plaintiffs could amend the suit again because the ATLANTA:4540735.1 Mr. Lawrence Norton, Esq. April 14, 2003 Page 2 statute of limitations has not run. Therefore, it may be necessary to retain money in the Fund for: that contingency. Representative Majette intends to establish a Legal Expense Fund (the "Fund") to raise: money to defray these legal expenses. The Fund will be established in accordance with the Legal Expense Funds Regulations promulgated by the Committee on Standards of Official; Conduct of the U.S. House of Representatives. Among other requirements, the Fund will be! established as a Georgia trust (the "Trust"), administered by an independent trustee who will; oversee fundraising. Trust funds will be used only for legal expenses, including expenses: incurred in soliciting for and administering the Trust. Contributions will be limited to $5,000 per year from any individual or organization. The Trust will solicit funds from individuals, labor organizations and corporations, and all solicitations will be made in person or by mail and will be accompanied by a letter stating the. purpose of the Fund. The Statement of Purpose made during any solicitation will: be substantially as follows: "The purpose of this solicitation is to obtain personal funds to defray the cost of certain litigation against Representative Majette. Funds obtained by this solicitation will not be used for the purpose of influencing any election, and will not be used in any way to promote or maintain the official activities of any officeholder." In addition, contributors will be requested to sign a card to be returned with the donation affirming the purpose the gift. The card will state substantially as follows: "I, the undersigned, hereby confirm the donation! of $ to the Trust for purpose of funding certain litigation defense-related activity. This donation is not given for the purpose of influencing any election or as a campaign contribution or for the purpose of promoting or maintaining the official activities of any officeholder!'' Solicitations to the Fund will be conducted completely separate from any solicitations for or on behalf of the Committee. Analysis The Act, as amended by the Bipartisan Campaign Reform Act of 2002, provides that a "contribution" includes any gift, subscription, loan, advance, or deposit of money, or anything of value made by any person for the purpose of influencing the nomination or election of any person to federal office. 2 U.S.C. § 431(8). Similarly, the term "expenditure" is defined in an identical fashion as relating to payments made for the purpose of influencing a person's nomination or election to federal office. 2 U.S.C. § 431(9). The Commission has on several occasions considered the applicability of the Act to fundraising for purposes such as those anticipated here, including through establishment of Legal Expense Funds. See, e.g., Advisory Opinion Nos. 1996-39, 1983-37, 1983-30, 1983-21, 1982-37A, 1982-35, 1981-13, 1980-4: hi those opinions and others, the Commission concluded that the money being raised and spent wa$ not being raised and spent for the purpose of influencing a federal election. Because donations to, and disbursements from, the Trust will be exclusively connected with, and strictly for the purpose of, paying the cost of Representative Majette's legal defense, such donations and disbursements would not be "contributions" or "expenditures" as those terms are defined in the Act. Accordingly, donations to and disbursements from the Fund would not be ATLANTA:4540735.il Mr. Lawrence Norton, Esq. April 14, 2003 Page 3 subject to the restrictions and regulations of the Act, and nothing in the Act or Commission; regulations would limit or prohibit the Trust from receiving donations from sources, such' as corporations, that would be prohibited from contributing to the Committee. In addition, the; Trust would not be required to file disclosure reports under the Act or Commission regulations.; See Advisory Opinion No. 1979-37. In Advisory Opinion No. 1996-39, the Commission approved a similar request brought by a Republican Congressional Candidate, Susan Heintz, to establish a separate account to pay certain legal expenses. Opponents of Ms. Heintz had challenged the sufficiency of her nominating petitions to qualify for the Republican Primary election ballot. The state agency reviewing the challenge could not resolve the issue, forcing Ms. Heintz to seek a writ: of mandamus from the Michigan Court of Appeals. The Court of Appeals directed that Ms, Heintz's name be placed on the primary election ballot, and the Commission concluded that "funds received and spent to pay for the expenses of the litigation described in your request would not be treated as contributions or expenditures for purposes of the Act, provided that they are raised and spent by an entity other than a political committee." Advisory Opinion No. 1996^ 39. i In rendering its opinion in Advisory Opinion No. 1996-39, the Commission relied, in part, on Advisory Opinion No. 1982-35B, in which the Commission approved the request of a potential candidate for federal office who was forced to initiate a legal challenge to a party rule that required a party convention endorsement vote before the candidate could qualify for the party's primary election ballot. The Commission observed that filing the.lawsuit to challenge;the party rule was "a condition precedent to the candidate's participation in the primary election') and concluded that raising funds to defray the cost of such litigation was outside the purview Of the Act. Advisory Opinion No. 1982-35B. In a related request, the Commission ruled that funds, raised by the state party to defend against the same lawsuit were not covered by the Act] Advisory Opinion No. 1983-37. \ Unlike Representative Gonzales whose legal expense fund was not approved in Advisory Opinion No. 1980-57, Representative Majette is not engaged in an "attempt to force an election opponent off the ballot." Instead, Representative Majette was forced to defend herself against a spurious legal challenge by supporters of her defeated primary opponent; therefore, her situation is more analogous to Ms. Heintz' request in Advisory Opinion No. 1996-39 than Representative Gonzales' situation. The Commission has previously distinguished between legal expenses incurred for defensive purposes and those incurred to initiate election challenges. In the former situation, a "Committee has no choice but to defend itself or admit the violations alleged by the plaintiff." Advisory Opinion No. 1980-4. See also Advisory Opinion No. 1982-35A. Although the specific issue addressed in Advisory Opinion No. 1980-4 involved donated legal services and not a legal expense fund, the rationale employed by the Commission in that situation should apply to Representative Majette's situation. The Commission reasoned, "to characterize the donated legal services as contributions in this case ... could, in turn, lead to the situation where any committee similarly situated would have to use up its expenditure limit (and perhaps its funds as well...) in defending lawsuits." Advisory Opinion No. 1980-4. ATLANTA:454Q735.) Mr. Lawrence Norton, Esq. April 14, 2003 Page 4 In conclusion, we respectfully submit that donations to the Fund (and expenditures from, the Fund) defraying legal expenses in relation to the Litigation do not constitute "contributions" or "expenditures" as defined by the Act, and that such fundraising is therefore not subject to the; prohibitions and restrictions contained in the Act.
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