Non-Political Committees Must Disclose Donors - A Complete Change to Existing Practices
by Tracy A. Olson, Lindsay Short, and Brett W. Johnson
On October 4, 2018, the Federal Election Commission (“FEC”) issued a press release to provide guidance following the District Court for the District of Columbia's recent memorandum opinion in CREW v. FEC. The press release offers guidance on interpreting and complying with the order. People and organizations that are not political committees, such as non-profit social welfare organizations (including 501(c)(4) entities), trade groups (including 501(c)(6) organizations), and donors, may want to consider these guidelines in the context of possibly reviewing policies and procedures related to donations and earmarked contributions.
First, people other than political committees (known as “non-political committees”) that make Independent Expenditures (“IE”) exceeding $250 per election are required to report on Form 5. This reporting is required to include the person’s name, mailing address, occupation and employer; the name and mailing address to which the IE was made; the amount, date and purpose of each IE; a statement indicating whether the IE was intended to support or oppose a candidate (and that candidate’s name and office sought); and a verified certification that the IE was not made in coordination with the candidate or his/her committee in any way.
Second, for reports due after September 18, 2018, those non-political committees spending over $250 on IEs are required to report on Schedule 5-A every person that contributed at least $200 to the non-political committee along with the contribution’s date and amount. In addition, non-political committees are required to note if any of the contributions were made for the purpose of furthering any IE.
Third, contrary to prior understanding, entities that make IEs exceeding $250 per election are required to disclose information about their donors who contributed for a political purpose “anytime during the full reporting quarter.” However, the FEC announced that “in the interests of fairness, since no one was on notice until the district court’s decision was handed down on Aug. 3, the Commission will exercise its prosecutorial discretion for the quarterly reports due October 15, 2018.”
Going forward, this means that there is no change for entities that made IEs only before September 18, 2018. However, for non-political committees that made IEs over $250 for a particular election on or after September 18, 2018 there is one key change:
- For contributions received between July 1, 2018 and August 3, 2018, the non-political committee is required to report the identity of the donor if:
- the donor contributed $200 or more within the calendar year to the non-political committee; and
- the contribution was made for the purpose of furthering the reported IE.
- For contributions received between August 4, 2018 and September 30, 2018, the non-political committee is required to report the identity of the donor as well as the date and amount of contributions if:
- the person’s aggregate contributions to the non-political committee exceeded $200 within the calendar year for any purpose, including the subset of donations made for the purpose of furthering the reported IE.
Importantly, this guidance may reach further than the D.C. court’s decision in CREW, which interpreted 52 U.S.C. § 30104(c)(1) to “requir[e] reporting not-political committees to identify non-trivial donors, as well as the date and amount of their contributions, when the contributions were made for political purposes to influence any election for federal office, or at the request or authorization of a candidate of the candidate’s agent.”1
Fourth, the FEC announced it would enforce the statute as interpreted by the D.C. court requiring non-political committees to report independent expenditures made on or after September 18, 2018, including to disclose all contributions received that exceed $200 annually “earmarked for political purposes,” and “intended to influence elections.” A subset of these donors is required to be further identified as donors who contribute “for the purpose of furthering an independent expenditure.” This subgroup covers express advocacy for the election or defeat of a federal candidate, whereas the broader group covers more political activity like contributing to PACs or directly to candidates.
Fifth, there is no change to the reporting requirements for 24- and 48-hour reports.
Impact on this quarter’s campaign finance reports
Practically speaking, this statement of prosecutorial discretion indicates that only contributions made after August 3, 2018 are required to comply with these more stringent reporting requirements. FEC Commissioner Ellen Weintraub cleared up any confusion that this direction might have caused in a tweet. She noted that the instruction did not mean the Commission will look the other way for this quarter’s campaign finance reports in their entirety, but rather that compliance is only required for donations made after August 3.
As such, non-political committees required to report under these rules may want to consider retaining data about their donors, updating their policies, updating standard templates and disclaimers on donor solicitations, and preparing other notifications to past and current donors to assist them in understanding reporting requirements. In addition, pursuant to the FEC’s third point, non-political committees may want to consider ensuring that donors who contributed between August 4 and September 30 for any purpose are aware that their information is required to be disclosed to the FEC on upcoming October reports.
However, under the FEC’s fourth point, the guidelines appear to infer that, going forward, if a non-political committee makes an independent expenditure on or after September 18, 2018, only contributions made for political purposes, including contributions made to further independent expenditures, are required to be reported. Further guidance from the FEC is crucial to understanding the discrepancies between points three and four. But if this understanding is correct, non-political committees making independent expenditures after September 18, 2018 may want to consider revising their donation cover letters to explain what kind of donations are not meant to be used for IEs or political work and thus, not subject to disclosure.
Hopefully, the FEC will revise this guidance to ensure that only contributions made specifically for political purposes need to be reported and other, non-political designated contributions do not need to be reported.
- Citizens for Responsibility & Ethics in Wash. v. Fed. Election Comm’n, 316 F. Supp. 3d 348, 388–89, 413, 423 (D.D.C. 2018) (emphasis added) (reasoning that 52 U.S.C. § 30104(c)(1) does not cover “all non-trivial donors to reporting not-political committees” in part because Buckley limited § 30104(c)(1) reporting requirements to contributions “earmarked for political purposes”).