FEDERAL ELECTION COMMISSION
WASHINGTON, D.C. 20463
April 15, 1996
MEMORANDUM
| TO: |
Treasurers of Separate Segregated Funds and Other
Members of the Regulated Community |
| FROM: | Information Division |
| SUBJECT: |
New Rules on Corporate and Labor Organization Activity;
Express Advocacy and Coordination with Candidates |
New regulations regarding activities that may be undertaken
by corporations and labor organizations took effect March 13,
1996. These rules implement the Supreme Court's decision in FEC
v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986)
(MCFL), by substituting an express advocacy standard for the
partisan/nonpartisan standard that had applied to corporate and
labor organization expenditures.
The enclosed Record summary of the new rules and Federal
Register reprint of the regulations and their explanation and
justification offer detailed information regarding the new
provisions.
Questions regarding these rules should be directed to the
FEC's Information Division at 202/219-3420 or 800/424-9530.
Celelbrating the Commission's 20th Anniversary
YESTERDAY, TODAY AND TOMORROW
DEDICATED TO KEEPING THE PUBLIC INFORMED
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4/96
FEDERAL ELECTION COMMISSION
WASHINGTON, D.C. 20463
MCFL Rules on Corporate/Labor Activity1
On March 13, 1996, new and revised FEC regulations
on corporate and labor communications and the use of
corporate/labor facilities and resources went into effect.2
These rules, which represented the second part of the
Commission's MCFL rulemaking, reflect recent judicial
and Commission interpretations of 2 U.S.C. §441b. This
section of the law prohibits corporate/labor organizations
from using treasury funds to make contributions or expenditures in connection
with federal elections.
The new rules modify FEC regulations in five significant ways:
- They provide a new standard for determining which
communications must be limited to the restricted class;
- They set guidelines for communications made by
corporate/labor organizations;
- They clarify that coordination between a corporation
(or labor organization) and a candidate generally results
in an illegal contribution to the candidate;
- They provide guidelines on the permissible uses of
corporate and labor facilities and resources; and
- They clarify that corporate and labor facilitation of
contributions to candidates and committees is prohibited.
New Standard for Identifying Communications
Appropriate for Restricted Class
The new rules substitute a new standard for the
partisan/nonpartisan standard previously used for deciding
which communications had to be limited to the restricted
class (i.e., members, stockholders, executives, administrative personnel and
the families of each group) and
which could be distributed to a broader audience (i.e., all
employees or the general public). The new standard is
based on "express advocacy" (i.e., a communication that
expressly advocates the election or defeat of a clearly
identified candidate for federal office or the candidates of
a clearly identified political party). See also the August
1995 Record, page 1. Under this new standard, corporate
and labor communications that contain express advocacy
may be sent only to the restricted class.
Corporate/Labor Communications
The new rules also provide guidance on the following:
- Candidate appearances and speeches at corporate/labor
events;
- Endorsements of candidates;
- Candidate appearances and speeches on college campuses;
- Candidate debates;
- Written political communications, including voter
guides, voting records and press releases;
- Voter registration and get-out-the-vote drives; and
- Voting information. (See the accompanying chart.)
Coordination with Candidate
A new provision in the revised rules addresses the
topic of coordination between a candidate and the
corporate or labor sponsor of an election-related communication. When
communicating with its restricted class, a
corporation or labor organization may coordinate with
candidates concerning their campaign plans, projects and
needs. That coordination, however, may compromise the
independence of future communications to the general
public (by the organization or its separate segregated
fund).
When communicating beyond the restricted class,
coordination with the candidate (other than the kinds of
coordination specified in the regulations -- see chart) may
result in a prohibited in-kind contribution to the candidate. Additionally, it
may compromise the independence
of future communications to the general public (by the
organization or its separate segregated fund).
Permissible Use of Corporate and Labor Facilities
The new regulations reaffirm that, if a candidate or
committee uses the facilities of a corporation or labor
organization, the organization must be reimbursed within a
commercially reasonable time for the usual and normal
rental charge. Reimbursement is not required for the use of
meeting rooms if the organization normally makes such
rooms available to civic or community groups without
charge and if it makes the room available on the same
terms to any other candidate (running for the same office)
who requests to use it.
Facilitation of Contributions
Additionally, the rules clarify that corporations and
labor organizations are prohibited from facilitating
contributions to candidates or political committees (other
than the organization's separate segregated fund). Facilitation means using
corporate or labor facilities or resources to raise funds in connection with
any federal
election. The new regulations provide several examples.
They also explain that, in a few specific cases, a
fundraising activity sponsored by a corporation or labor
organization is not facilitation if someone, such as a
candidate, individual or political committee, pays the
organization in advance for the use of the facilities or
resources. This principle applies to three situations:
- Directing staff to work on the fundraiser;
- Using the corporate or labor organization's mail list;
and
- Using the organization's food services.
1 This handout is based on an article that appeared in the April
1996 Record, page 1.
2 Announcement of Effective Date, 61 FR 10269, March 13,
1996. Final Rule, 60 FR 64260, December 14, 1995, with
corrections, 61 FR 4302, February 5, 1996. Use the FEC's
automated Flashfax system to have copies of these Federal
Register notices faxed to you; use a touch tone telephone to
dial 202/501-3413 and request document 230 at the prompt.
|
Corporate/Labor Communications
| Candidate Appearances1 |
Restricted Class |
Other Employees2 |
Campaign-Related Appearance at
Corporation or Labor Organization
11 CFR 114.3(c)(2), and 114.4(b)(1) and (2)
| Organization and candidate may
expressly advocate election or defeat of candidate.
| Candidate may advocate his/her
election, but the organization and its
may not; nor may they encourage employees to do so. |
| Organization may solicit for candidate, but may not collect
contributions.
| Candidate may solicit funds, but neither the organization nor its
SSF may solicit, direct or control contributions to candidate, in connection
with the appearance. |
| Candidate may solicit and accept
contributions before, during or after
appearance. |
Candidate may not accept contributions at event, but may leave
envelopes and campaign materials for audience. |
| Organization may bar other candidates from addressing restricted
class. |
Organization must, upon request, give opportunity to all candidates
seeking the same office. Unless impractical, organization must make
equal time and location available to
all candidates who wish to appear. |
| Organization may consult candidate on structure, format and timing of
appearance, and on campaign plans, projects or needs.3 |
Organization may consult candidate on structure, format and timing of
appearance, but not on candidate's campaign plans, projects or needs. |
| If organization allows more than one candidate to appear, and permits
news coverage, it must allow media to cover appearances by other candidate(s)
for same office. |
(Same as the adjacent restricted class rules.) |
| Organization must provide news media equal access. |
(Same as the adjacent restricted class rules.) |
| De minimis number outside restricted class may attend: employees
who facilitate the meeting, news media, guests being honored or
participating. |
In addition to restricted class, other employees, news media and
guests being honored or participating may attend. |
| Organization must file reports if communication contains express
advocacy and costs exceed $2,000 per election. |
1 These rules also apply to appearances by party representatives.
2Communications directed to employees outside the restricted class
may also go to those within the restricted class.
3That consultation, however, may compromise the independence of
future communications to the general public by the organization or its separate
segregated fund.
| Candidate Appearances |
General Public |
|---|
Noncampaign-Related Appearance
at Corporation or Labor Organization
AO 1980-22 |
Candidate may speak about issues of interest to industry or
union.
Candidate must avoid reference to campaign -- no solicitation and no
advocacy of election.
No requirement to offer other candidates equal opportunity.
Proximity to election day is not relevant. |
Public Debates
11 CFR 114.4(f) |
Any corporation or labor organization may donate funds to support
debate conducted by nonprofit organization.
Debate may be sponsored by nonprofit organization -- 501(c)(3) and
501(c)(4) -- that does not support or oppose any candidate or party, or by a
broadcaster, newspaper, magazine or other general circulation periodical
publication.
Debate must include at least two candidates, meeting face to face, and may
not promote one candidate over another.
Organization staging debate must select debate participants on the basis of
preestablished objective criteria:
- In primary election, may restrict candidates to
those seeking nomination of one party
- In general election, may not use nomination by a
particular party as sole criterion
|
Public Appearance at a College or University4
11 CFR 114.4(c)(7) |
Tax-exempt educational institution -- either incorporated or not -- may
rent facilities to candidate or political committee in normal course of
business and at usual and normal charge.
Tax-exempt educational institution -- either incorporated or not -- may make
facilities available to candidate or party for free or at discount if it:
- Makes reasonable efforts to avoid campaign event
and ensure that appearance constitutes communication in academic setting;
- Does not make express advocacy communication; and
- Does not favor one candidate or party over another.
College or university may host noncampaign appearance under above
guidelines.
College or university may host candidate debates under above guidelines. |
4 Consult IRS or applicable state rules regarding state colleges and
universities, and private tax-exempt schools.
| Publications |
Restricted Class |
General Public |
|---|
General Rule
11 CFR 114.3(a), (b) and (c)(1), and 114.4(c)(1) |
Organization may expressly advocate election or defeat
of candidate or a party's candidates. |
Organization may not expressly advocate election or defeat of
candidate or a party's candidates. |
| Organization may solicit contributions for candidate or party. |
No solicitations. |
| Organization may use brief quotations from candidate, but may not
republish candidate materials. |
| Organization must file reports if communication contains express
advocacy and costs exceed $2,000 per election. |
| Publications |
General Public |
|---|
Voting Records of Incumbent Candidates
11 CFR 114.4(c)(4) |
Organization may publish factual record of votes on legislative
matters.
Voting record may not include express advocacy.
Decision on content and distribution may not be coordinated with candidate
or party. |
Voter Guides
11 CFR 114.4(c)(5) |
Type 1: Based on prepared written questions submitted to candidates
Type 2: Not based on written questions
Characteristics Common to Both Types of Guides:
- Guide consists of at least two candidates' positions on campaign issues.
- Guide may include biographical information.
- Organization may not coordinate with candidates concerning content
(other than by receiving prepared questions) or distribution.
- Guide may not contain express advocacy.
Characteristics of Voter Guide Based on Written Questions (Type 1):
- Questions may be directed in writing to all candidates for a particular
Congressional seat and candidates may respond in writing.
- Questions may be directed in writing to Presidential candidates (all in
one party for primary or all on general election ballot in state where guide is
distributed or in enough states to win majority of electoral votes).
- No candidate may receive greater prominence than another.
- Guide may not contain an electioneering message.
- Guide may not score or rate responses in such a way as to convey an
electioneering message.
|
Press Releases/Endorsements
11 CFR 114.4(c)(6) |
Organization (except 501(c)(3) nonprofit organization) may announce at
a press conference or in a press release sent to regular press contacts that
it made a candidate endorsement to its restricted class, as long as costs are
de minimis and the announcement is not coordinated with candidate. |
| Voting Information |
Restricted Class |
General Public |
|---|
Voter Drives: Registration and
Get-Out-the-Vote
11 CFR 114.4(d) |
Organization may expressly advocate
election/defeat of candidate/party. |
Organization may not expressly advocate election/defeat of
candidate/party. |
| Organization may use phone bank to encourage registration and voting
for particular party and candidate. |
| Organization may provide transportation to registration place and to
polls, but cannot condition service on support of particular candidate or
party. |
(Same as the adjacent restricted class rules.) |
| |
Organization must give persons receiving services written notice of
the nonpartisan nature of the services. |
| |
No coordination with candidate or party is permitted. |
| |
Organization may not pay individuals conducting drive based on
number of persons (registered or transported) who support particular
candidate or party. |
| |
Organization may not target people it believes will support its favored
candidate or party. |
| Voting Information |
General Public |
|---|
Voter Advertisements
11 CFR 114.4(c)(2) |
Organization may pay for ads (possters, billboards, broadcasting, print
or direct mail) urging public to register to vote and to vote.
The advertisement may not contain express advocacy.
The advertisement may not be coordinated with candidate. |
Distribution of Official Voter Information
11 CFR 114.4(c)(3) |
Organization may distribute voter information produced by official
election administrators, including registration-by-mail forms and absentee
ballots.
Voter information may not contain express advocacy.
Voter information may not be coordinated with candidate.
Organization may give funds to state and local governments to defray costs
of voter registration, voting information and forms. |
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