[Federal Register: August 31, 2007 (Volume 72, Number 169)]
[Proposed Rules]
[Page 50261-50274]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31au07-15]
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FEDERAL ELECTION COMMISSION
11 CFR Part 100, 104, and 114
[Notice 2007-16]
Electioneering Communications
AGENCY: Federal Election Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Election Commission requests comments on proposed
revisions to its rules governing electioneering communications. These
proposed rules would implement the Supreme Court's decision in FEC v.
Wisconsin Right to Life, Inc., which held that the prohibition on the
use of corporate and labor organization funds for electioneering
communications is unconstitutional as applied to certain types of
electioneering communications. The Commission has made no final
decision on the issues presented in this rulemaking. Further
information is provided in the supplementary information that follows.
DATES: Comments must be received on or before October 1, 2007. The
Commission will hold a hearing on the proposed rules on October 17,
2007 at 10 a.m. Anyone seeking to testify at the hearing must file
written comments by the due date and must include a request to testify
in the written comments.
ADDRESSES: All comments must be in writing, must be addressed to Mr.
Ron B. Katwan, Assistant General Counsel, and must be submitted in e-
mail, facsimile, or paper copy form. Commenters are strongly encouraged
to submit comments by e-mail or fax to ensure timely receipt and
consideration. E-mail comments must be sent to wrtl.ads@fec.gov. If e-
mail comments include an attachment, the attachment must be in Adobe
Acrobat (.pdf) or Microsoft Word (.doc) format. Faxed comments must be
sent to (202) 219-3923, with paper copy follow-up. Paper comments and
paper copy follow-up of faxed comments must be sent to the Federal
Election Commission, 999 E Street, NW., Washington, DC 20463. All
comments must include the full name and postal service address of the
commenter or they will not be considered. The Commission will post
comments on its Web site after the comment period ends.
FOR FURTHER INFORMATION CONTACT: Mr. Ron B. Katwan, Assistant General
Counsel, Mr. Anthony T. Buckley, Attorney, or Ms. Margaret G. Perl,
Attorney, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or
(800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is seeking public comment on
proposed revisions to 11 CFR parts 100, 104 and 114 that would
implement the recent U.S. Supreme Court decision in FEC v. Wisconsin
Right to Life, Inc., 127 S. Ct. 2652 (June 25, 2007), available at
http://www.fec.gov/law/litigation/wrtl--sct--decision.pdf.
I. Background
A. Statutory and Regulatory Provisions Governing Electioneering
Communications
The Bipartisan Campaign Reform Act of 2002 (``BCRA'') \1\ amended
the Federal Election Campaign Act of 1971, as amended \2\ (the ``Act''
or ``FECA''), by adding a new category of political communications,
``electioneering communications,'' to those already governed by the
Act. See 2 U.S.C. 434(f)(3). Electioneering communications are
broadcast, cable or satellite communications that refer to a clearly
identified candidate for Federal office, are publicly distributed
within sixty days before a general election or thirty days before a
primary election, and are targeted to the relevant electorate. See 2
U.S.C. 434(f)(3)(A)(i). Those who make electioneering communications
are subject to certain reporting obligations. See 2 U.S.C. 434(f)(1)
and (2). Corporations and labor organizations are prohibited from using
general treasury funds to finance electioneering communications,
directly or indirectly. 2 U.S.C. 441b(b)(2).
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\1\ Pub. L. 107-155, 116 Stat. 81 (2002).
\2\ 2 U.S.C. 431 et seq.
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The Act exempts certain communications from the definition of
``electioneering communication'' found in 2 U.S.C. 434(f)(3)(B)(i) to
(iii), and specifically authorizes the Commission to promulgate
regulations exempting other communications as long as the exempted
communications do not promote, support, attack or oppose (``PASO'') a
candidate. See 2 U.S.C. 434(f)(3)(B)(iv), citing 2 U.S.C.
431(20)(A)(iii).
The Commission promulgated regulations to implement BCRA's
electioneering communications provisions. Final Rules and Explanation
and Justification for Regulations on Electioneering Communications, 67
FR 65190 (Oct. 23, 2002) (``EC E&J'').\3\ See also 11 CFR 100.29
(defining ``electioneering communication''); 104.20 (implementing
electioneering communications reporting requirements); 110.11(a)
(requiring disclaimers in all electioneering communications); 114.2
(prohibiting corporations and labor organizations from making
electioneering communications); 114.10 (allowing qualified non-profit
corporations (``QNCs'') to make electioneering communications); 114.14
(restricting indirect corporate and labor organization funding of
electioneering communications). Commission regulations exempt five
types of communications from the definition of ``electioneering
communication.'' See 11 CFR 100.29(c).\4\
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\3\ The Commission revised its electioneering communications
regulations in 2005, in response to Shays v. FEC, 337 F. Supp. 2d 28
(D.D.C. 2004), aff'd, 414 F.3d 76 (D.C. Cir. 2005), reh'g en banc
denied, No. 04-5352 (D.C. Cir. Oct. 21, 2005). See Final Rules and
Explanation and Justification for Regulations on Electioneering
Communications, 70 FR 75713 (Dec. 21, 2005).
\4\ The exemptions in 11 CFR 100.29(c)(1) (non-broadcast
communications), 100.29(c)(2) (news stories, commentaries or
editorials), 100.29(c)(3) (expenditures and independent
expenditures) and 100.29(c)(4) (candidate debates or forums) are
based on the express language of the Act. See 2 U.S.C.
434(f)(3)(B)(i) to (iii). Section 100.29(c)(5) exempts
communications paid for by State or local candidates that do not
PASO any Federal candidate.
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B. U.S. Supreme Court Precedent Regarding Electioneering Communications
In McConnell v. FEC, 540 U.S. 93 (2003) (``McConnell''), the U.S.
Supreme Court upheld BCRA's electioneering communication provisions
against various constitutional challenges. Id. at 194, 201-02, 207-08.
Specifically, the Supreme Court held that the prohibition on the use of
general treasury funds by corporations and labor organizations to pay
for electioneering communications in 2 U.S.C. 441b(b)(2) was not
facially overbroad. Id. at 204-06. In Wisconsin Right to Life, Inc. v.
FEC, 546 U.S. 410 (2006) (``WRTL I''), the U.S. Supreme Court explained
that McConnell's upholding of section 441b(b)(2) against a facial
constitutional challenge did not preclude further as-applied challenges
to the corporate and labor organization funding prohibitions. See WRTL
I, 546 U.S. at 411-12. Subsequently, in FEC v.
[[Page 50262]]
Wisconsin Right to Life, Inc., 127 S. Ct. 2652 (2007) (``WRTL II''),
the Supreme Court reviewed an as-applied challenge brought by a non-
profit corporation seeking to use its own general treasury funds, which
included donations it had received from other corporations, to pay for
broadcast advertisements referring to Senator Feingold and Senator Kohl
during the electioneering communications period before the 2004 general
election, in which Senator Feingold, but not Senator Kohl, was on the
ballot. The plaintiff argued that these communications were genuine
issue ads run as part of a grassroots lobbying campaign on the issue of
Senate filibusters on judicial nominations. WRTL II, 127 S. Ct. at
2660-61. The Supreme Court held that section 441b(b)(2) was
unconstitutional as applied to the plaintiff's advertisements because
the advertisements were not the ``functional equivalent of express
advocacy.'' Id. at 2670, 2673. A communication is the ``functional
equivalent of express advocacy'' only if it ``is susceptible of no
reasonable interpretation other than as an appeal to vote for or
against a specific candidate.'' Id. at 2667.
The Commission is initiating this rulemaking to implement the
Supreme Court's decision in WRTL II. The Commission seeks public
comment generally regarding the effect of the WRTL II decision on the
Commission's rules governing corporate and labor organization funding
of electioneering communications, the definition of ``electioneering
communication,'' and the rules governing reporting of electioneering
communications.
II. Proposed Rules on Electioneering Communications
A. Scope of the Rulemaking
1. Scope of the Proposed Electioneering Communications Exemption
The Commission is seeking public comment on two proposed
alternative ways to implement the WRTL II decision in the rules
governing electioneering communications. The first alternative would
incorporate the new exemption into the rules prohibiting the use of
corporate and labor organization funds for electioneering
communications in 11 CFR part 114. The second alternative would
incorporate the new exemption into the definition of ``electioneering
communication'' in 11 CFR 100.29.
Alternative 1--Proposed revisions to the corporate and labor
organization prohibition.
Under the Act, electioneering communications are subject to both
funding restrictions and reporting requirements. Specifically, entities
that spend a total of more than $10,000 on electioneering
communications in a calendar year must file disclosure reports with the
FEC. See 2 U.S.C. 434(f)(1). Corporations and labor organizations are
prohibited from using general treasury funds to pay for any
electioneering communication. See 2 U.S.C. 441b(b)(2). The plaintiff in
WRTL II challenged only BCRA's corporate and labor organization funding
restrictions and did not contest either the definition of
``electioneering communication'' in section 434(f)(3), or the reporting
requirement in section 434(f)(1). See WRTL II, 127 S. Ct. at 2658-59;
see also Verified Complaint for Declaratory and Injunctive Relief, ] 36
(July 28, 2004) in Wisconsin Right to Life, Inc. v. FEC (No. 04-1260),
available at http://fecds005.fec.gov/law/litigation--
related.shtml#wrtl--dc (``WRTL does not challenge the reporting and
disclaimer requirements for electioneering communications, only the
prohibition on using its corporate funds for its grass-roots lobbying
advertisements.'') Accordingly, the Commission could construe the
Supreme Court's holding that the Act's electioneering communication
funding restrictions are unconstitutional as applied to certain
advertisements as not extending to the reporting requirements for
electioneering communications.
BCRA added the electioneering communications reporting requirements
to the Act through a different provision (section 201) than the BCRA
provision containing the corporate prohibition on making electioneering
communications (section 203). The Commission seeks comment as to
whether the scope of the WRTL II decision is limited to an as-applied
challenge to the section 203 prohibitions and whether the Commission
has the authority to change its electioneering communications rules
beyond what is required by the Supreme Court's decision. Does the
holding in WRTL II depend on a finding that the prohibition on using
corporate and labor organization funds for electioneering
communications in section 203 is a direct limitation on speech? Do the
reporting requirements in section 201 implicate the same concerns about
direct restrictions on First Amendment rights, given that McConnell
specifically upheld the electioneering communications reporting
provisions as constitutional because they ``d[o] not prevent anyone
from speaking?'' McConnell, 540 U.S. at 201 (quoting McConnell v. FEC,
251 F. Supp. 2d 176, 241 (D.D.C. 2003)) (internal quotations omitted).
See also Alaska Right To Life Comm. v. Miles, 441 F.3d 773, 788 (9th
Cir. 2006) (``The [McConnell] Court was not * * * explicit about the
appropriate standard of scrutiny with respect to disclosure
requirements. However, in addressing extensive reporting requirements
applicable to * * * `electioneering communications' * * *, the Court
did not apply `strict scrutiny' or require a `compelling state
interest.' Rather, the Court upheld the disclosure requirements as
supported merely by `important state interests.' '') (internal
quotation omitted); Buckley v. Valeo, 424 U.S. 1, 60-84 (1976)
(upholding FECA's reporting requirements); cf. Brown v. Socialist
Workers '74 Campaign Comm. (Ohio), 459 U.S. 87, 98-99 (1982) (reporting
requirements found unconstitutional when there was a ``reasonable
probability'' that disclosure of information would lead to economic
reprisals or physical threats).
Therefore, under Alternative 1, the Commission proposes to
implement the WRTL II decision by creating an exemption solely from the
prohibition on the use of corporate and labor organization funds to
finance electioneering communications. The proposed revisions to 11 CFR
114.2 and proposed new section 114.15 would not create an exemption
from either the overall definition of ``electioneering communication''
in section 100.29 or from the reporting requirements in section 104.20.
Thus, corporations and labor organizations would be permitted to use
general treasury funds for electioneering communications that qualify
for the proposed exemption, but would be required to file
electioneering communications disclosure reports once they spend more
than $10,000 in a calendar year on such communications. See proposed
revision to 11 CFR 104.20. The Commission seeks comment on this
approach.
Alternative 2--Proposed revisions to the definition of
``electioneering communication.''
Under Alternative 2, the Commission proposes to place the new
exemption in 11 CFR 100.29(c) as an additional exemption from the
definition of ``electioneering communication.'' This alternative would
construe the Supreme Court's decision in WRTL II to hold that
communications that qualify for the WRTL II exemption may not be
constitutionally regulated as electioneering communications (i.e., if a
communication satisfies the Court's test, it is not an ``electioneering
communication,'' as that term is used in the Act), meaning that the
associated reporting requirements are no longer applicable.
[[Page 50263]]
Placing the exemption within section 100.29(c) in the definition of
``electioneering communication'' would have at least two practical
implications. First, if a communication satisfies the WRTL II
exemption, and is therefore exempted from the definition of
``electioneering communication,'' the electioneering communications
reporting requirements would not apply to the exempted communication.
Second, an exemption from the definition of ``electioneering
communication'' would extend beyond corporations and labor
organizations to all ``persons'' paying for communications that satisfy
the exemption articulated in WRTL II. See 11 CFR 104.20. The Commission
understands this distinction would extend the Supreme Court's exemption
to individuals, unincorporated entities, and QNCs, in addition to
corporations and labor organizations. Would any other ``persons'' be
affected? \5\ The Commission seeks comment on all aspects of the impact
of these proposed regulations on ``persons'' under the Act.
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\5\ Political committees are not currently subject to the Act's
electioneering communications provisions because communications that
constitute either expenditures or independent expenditures, provided
that the expenditures or independent expenditures are required to be
reported under the Act or Commission regulations, are exempt from
the definition of ``electioneering communication.'' See 11 CFR
100.29(c)(3); EC E&J, 67 FR at 65197-98.
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Does WRTL II either permit or necessitate an exemption from the
definition of ``electioneering communication,'' or give the Commission
authority to create such an exemption? Would the Commission's statutory
authority to create exemptions under 2 U.S.C. 434(f)(3)(B)(iv) be
sufficient to create an exemption that satisfies the requirements of
WRTL II? If the Commission were to use its statutory authority set
forth at 2 U.S.C. 434(f)(3)(B)(iv) to create exemptions, would the
statutory provision's PASO requirement be applicable, or does WRTL II
supersede that requirement with respect to a communication that
qualifies for the WRTL II exemption? Would WRTL II's functional
equivalent test be a reasonable statutory construction of PASO? The
Commission seeks comment on all aspects of the appropriate scope of,
and authority for, a new exemption.
The choice between Alternative 1 and Alternative 2 would also have
implications for the coordinated communications rules, which rely in
part on the definition of ``electioneering communication'' in section
100.29. See 2 U.S.C. 441a(a)(7)(C); 11 CFR 109.21(c). The Commission's
coordinated communications rule includes four different content
standards: (1) Electioneering communications; (2) public communications
that republish campaign materials; (3) public communications that
include express advocacy; and (4) public communications that refer to a
Federal candidate during certain time periods before an election. See
11 CFR 109.21(c)(1)-(4). The proposed rules in Alternative 1 do not
affect the coordinated communications rules because communications that
qualify for the proposed exemption in section 114.15 would still be
considered ``electioneering communications'' and thus meet the
``electioneering communication'' content standard in 11 CFR
109.21(c)(1). By contrast, because Alternative 2 creates an exemption
from the definition of ``electioneering communication,'' any
communication that qualifies for the exemption in proposed section
100.29(c)(6) could no longer meet the ``electioneering communication''
content standard in section 109.21(c)(1). However, under both
alternatives, a communication that qualifies for the proposed new
exemption may still be a ``coordinated communication'' under one of the
other three content standards in sections 109.21(c)(2)-(4). Thus, under
both alternatives, exempt communications made by corporations or labor
organizations may still be prohibited in-kind contributions as
``coordinated communications.'' The Commission seeks comment on the
effects of each alternative on the coordinated communication rule.
2. Impact on the Definition of Express Advocacy
WRTL II demarcated the constitutional reach of the Act's
electioneering communications funding restrictions. Does WRTL II also
provide guidance regarding the constitutional reach of other provisions
in the Act? WRTL II's ``functional equivalent of express advocacy''
test limiting the electioneering communication prohibition draws upon
the Supreme Court's express advocacy construction of ``independent
expenditure,'' first appearing in Buckley v. Valeo, 424 U.S. 1 (1976),
and later applied in the context of section 441b's corporate
expenditure ban in FEC v. Massachusetts Citizens for Life, Inc., 479
U.S. 238 (1986). The Court's equating of the ``functional equivalent of
express advocacy'' with communications that are ``susceptible of no
reasonable interpretation other than as an appeal to vote for or
against a specific candidate'' bears considerable resemblance to
components of the Commission's definition of express advocacy at 11 CFR
100.22. Section 100.22(a) deems communications that ``in context can
have no other reasonable meaning than to urge the election or defeat of
one or more clearly identified candidate(s)'' to be express advocacy.
Express advocacy may also be found under section 100.22(b) when, in
context, a communication ``could only be interpreted by a reasonable
person as containing advocacy of the election or defeat of one or more
clearly identified candidate(s).'' Does WRTL II require the Commission
to revise or repeal any portion of its definition of express advocacy
at section 100.22? Does the ``functional equivalent of express
advocacy'' test from WRTL II also demarcate the constitutional reaches
of Commission regulation of independent expenditures?
Section 434(f)(3)(B)(ii) excludes ``an expenditure or an
independent expenditure'' from the definition of ``electioneering
communication.'' Would a definition of ``express advocacy'' (which, in
turn, defines ``independent expenditure'') that subsumes all
electioneering communications effectively nullify section 434(f) by
deeming all ``functional equivalent'' communications to be
``expenditures'' and thus by definition not electioneering
communications? Would these coextensive definitions leave any
independent meaning to the electioneering communications reporting
requirements, because there would be no remaining class of
electioneering communications to be reported? Would this combination of
definitions likewise rob the electioneering communication prohibition
in section 441b(b)(2) (and proposed new 11 CFR 114.15) of independent
significance by construing the corporate expenditure prohibition as
coextensive with the corporate electioneering communications
prohibition? What are the implications of having different regulatory
language defining the scope of the prohibitions?
B. General Prohibition on Corporations and Labor Organizations Making
Electioneering Communications
Alternative 1--Proposed Revisions to 11 CFR 114.2
Section 114.2(b)(2)(iii) implements the funding restrictions of 2
U.S.C. 441b(b)(2) by prohibiting corporations and labor organizations
from ``[m]aking payments for an electioneering communication to those
outside the restricted class.'' After the WRTL II
[[Page 50264]]
decision, that section must be amended to reflect that corporations and
labor organizations cannot constitutionally be prohibited from funding
certain types of communications that fall within the statutory
definition of electioneering communications. However, placing a
detailed exemption based on the WRTL II decision within section
114.2(b) could be confusing and difficult for the reader to find. Thus,
the Commission proposes to set out the WRTL II exemption in a new
proposed section 114.15, and to amend section 114.2(b) by cross-
referencing the exemption in section 114.15. See proposed 11 CFR
114.2(b)(3) (``Except as provided at 11 CFR 114.10 and 114.15 * * *
'').\6\
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\6\ To increase clarity and readability, the proposed rule would
also revise the title of section 114.2 to include electioneering
communications explicitly, and renumber paragraph (b)(2)(iii) as
paragraph (b)(3) with conforming changes as necessary in the text of
that paragraph.
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Alternative 2--No Proposed Changes
Under Alternative 2, no revisions to section 114.2(b) are proposed.
If a communication is exempted from the definition of ``electioneering
communication'' at 11 CFR 100.29, it would not be subject to the
prohibition set forth at current section 114.2(b).
C. The WRTL II Exemption
Alternative 1--Proposed 11 CFR 114.15--Permissible Use of Corporate and
Labor Organization Funds for Certain Electioneering Communications
The new exemption in proposed section 114.15 would only apply to
certain types of communications that meet the current definition of
``electioneering communication'' in 11 CFR 100.29. Proposed paragraph
(a) would set forth the general standard for determining whether the
use of corporate and labor organization funds for an electioneering
communication is permissible under WRTL II. Proposed paragraph (b)
would include safe harbor provisions for two common types of
communications: grassroots lobbying communications, and commercial or
business advertisements. Proposed paragraph (c) would address reporting
obligations for corporations and labor organizations that choose to use
general treasury funds to pay for permissible electioneering
communications.
Alternative 2--Proposed 11 CFR 100.29(c)(6)--Exemption From the
Definition of ``Electioneering Communication''
The new exemption in proposed section 100.29(c)(6) would apply to
certain types of communications that otherwise meet the current
definition of ``electioneering communication'' in 11 CFR 100.29(a).
Proposed paragraph (c)(6) would set forth the general standard for
determining whether a communication is exempt from the definition of
``electioneering communication'' pursuant to WRTL II. Proposed
paragraphs (c)(6)(i) and (ii) are identical to proposed section
114.15(b), and would include the same safe harbor provisions for two
common types of communications: grassroots lobbying communications, and
commercial or business advertisements. Alternative 2 does not include a
paragraph that is equivalent to proposed section 114.15(c), because
there would be no reporting requirements for communications that
satisfy the proposed exemption.
Because the substantive requirements of the proposed WRTL II
exemption and the included safe harbors would be the same under either
Alternative 1 or 2, the following discussion applies equally to both
alternatives.
1. Proposed 11 CFR 114.15(a) or 11 CFR 100.29(c)(6)--Articulation of
the WRTL II Exemption
The Supreme Court in WRTL II held that the Act's prohibition on the
use of corporate and labor organization funds to pay for electioneering
communications is unconstitutional as applied to communications that
are not the ``functional equivalent'' of express advocacy. WRTL II, 127
S. Ct. at 2659. Under WRTL II, ``an ad is the functional equivalent of
express advocacy only if the ad is susceptible of no reasonable
interpretation other than as an appeal to vote for or against a
specific candidate.'' WRTL II, 127 S. Ct. at 2667.
Under Alternative 1, proposed section 114.15(a) would provide that
corporations and labor organizations may make an electioneering
communication (as defined in 11 CFR 100.29) without violating the
prohibition in section 114.2(b)(3), ``if the communication is
susceptible of a reasonable interpretation other than as an appeal to
vote for or against a clearly identified Federal candidate.'' Under
Alternative 2, proposed section 100.29(c)(6) would provide that if the
communication ``is susceptible of a reasonable interpretation other
than as an appeal to vote for or against a clearly identified Federal
candidate,'' it is exempted from the definition of ``electioneering
communication'' set forth at 11 CFR 100.29(a).
The proposed exemptions in the two alternatives would be objective,
``focusing on the substance of the communication rather than amorphous
considerations of intent and effect.'' WRTL II, 127 S. Ct. at 2666. In
determining whether a particular communication is susceptible of a
reasonable interpretation other than as an appeal to vote for or
against a clearly identified Federal candidate, the Commission may
consider ``basic background information that may be necessary to put an
ad in context.'' Id. at 2669. According to the WRTL II opinion, this
information could include whether a communication ``describes a
legislative issue that is either currently the subject of legislative
scrutiny or likely to be the subject of such scrutiny in the near
future.'' Id. (internal citation omitted). The Commission seeks comment
on this approach. Should the Commission include in the Explanation and
Justification or the rule itself a list of examples of information that
would be included as ``basic background information''? What information
beyond the ``four corners'' of the communication may the Commission
consider as ``basic background information''? What examples should the
Commission use?
The Commission proposes, under both alternatives, to supplement the
general exemption with two safe harbors. The safe harbors are identical
under both alternatives. The two safe harbors would focus on the
content of the communication rather than its intent and effect.
Satisfying one of the safe harbor provisions would demonstrate that the
communication is susceptible of a reasonable interpretation other than
as an appeal to vote for or against a Federal candidate. A
communication that qualifies for one of the safe harbors would be
deemed to satisfy the general exemption set forth in proposed section
114.15(a) or section 100.29(c)(6). However, a communication that does
not qualify for either of the safe harbors may still come within the
general exemption in proposed section 114.15(a) or section
100.29(c)(6).
The Commission seeks comment on the proposed approach of creating
safe harbors in addition to a general exemption. Do safe harbor
provisions based on categorical content-based requirements provide
useful additional guidance to entities applying the general exemption,
or is the general exemption sufficiently clear so that further guidance
is unnecessary? Should the Commission, instead of, or in addition to,
creating safe harbors, provide an exhaustive or non-exhaustive list of
factors to be considered when determining whether a communication is
susceptible of a reasonable interpretation other than as an appeal to
vote for or against a clearly identified Federal candidate? If the
Commission
[[Page 50265]]
provides a list of factors, should it include factors in addition to
those listed in the proposed safe harbors and WRTL II? Are there any
factors that could support a conclusion that a communication is per se
the functional equivalent of express advocacy?
2. Proposed 11 CFR 114.15(b)(1) or 11 CFR 100.29(c)(6)(i)--Safe Harbor
for Grassroots Lobbying Communications
Under both alternatives, proposed sections 114.15(b)(1) or
100.29(c)(6)(i) would establish identical safe harbors for grassroots
lobbying communications based on WRTL II's analysis of the specific
advertisements at issue in the case. The Supreme Court determined that
WRTL's advertisements were not the ``functional equivalent of express
advocacy'' because the communications' content was ``consistent with
that of a genuine issue ad'' and the communications lacked ``indicia of
express advocacy.'' WRTL II, 127 S. Ct. at 2667. The Supreme Court
concluded that the content of the communications was ``consistent with
that of a genuine issue ad'' because they focused on a legislative
issue, took a position on the issue, exhorted the public to adopt the
position, and urged the public to contact public officials with respect
to the issue. Id. The Court found that the communications lacked
``indicia of express advocacy'' because they did not mention any
election, candidacy, political party, or challenger, and the
communications did not take positions on a candidate's character,
qualifications, or fitness for office. Id.
Accordingly, the first two prongs of the proposed safe harbor for
grassroots lobbying communications (proposed 11 CFR 114.15(b)(1)(i) and
(ii) or 11 CFR 100.29(c)(6)(i)(A) and (B)) would incorporate the
factors the Court used to determine whether a communication's content
is ``consistent with that of a genuine issue ad.'' The third and fourth
prongs (proposed 11 CFR 114.15(b)(1)(iii) and (iv) or 11 CFR
100.29(c)(6)(i)(C) and (D)) would incorporate the factors the Court
used to determine whether a communication lacks ``indicia of express
advocacy.'' A communication would qualify for the proposed safe harbor
for grassroots lobbying communications only if it satisfies all four
prongs. The Commission invites comment on whether a showing that the
communication meets all four prongs (and all elements of each prong)
should be required to come within the safe harbor. If not all elements
or prongs are essential, how should the safe harbor be constructed?
What is the relationship between the first two positive content prongs
(discussing a pending legislative matter and urging a position on an
officeholder or the public) and the last two negative or exclusionary
prongs (not mentioning certain topics and not taking a position on
certain issues)? Should the safe harbors be described only by the
``positive content prongs'' and the exclusionary factors be used as
tests for the ``no other reasonable meaning'' portion of the general
exemption in proposed section 114.15(a)? Should the grassroots lobbying
communications safe harbor contain different requirements depending
upon whether the Commission decides to implement the exemption in
proposed section 114.15(a) or proposed section 100.29(c)(6)?
a. Proposed 11 CFR 114.15(b)(1)(i) or 11 CFR 100.29(c)(6)(i)(A)
The first prong of the safe harbor in proposed 11 CFR
114.15(b)(1)(i) or 11 CFR 100.29(c)(6)(i)(A) would be that the
communication ``exclusively discusses a pending legislative or
executive matter or issue.'' A ``pending legislative or executive
matter or issue'' includes: a legislative proposal introduced in
Congress as a bill or resolution, or a pending proposal that has not
yet been formally introduced as a bill; the confirmation of a nominee;
or the use of legislative procedures such as filibustering, cloture
votes, or earmarking. The proposed safe harbor would also include
communications discussing pending ``executive'' matters because Federal
candidates who are officeholders in the executive branch of Federal,
State or local government also may be lobbied to take action on matters
involving public policy. In addition, this prong would include current
and pending matters of public debate that engage Congress or the
Executive Branch. In describing the legislative focus of the
advertisement, the WRTL II opinion does not use the term ``exclusive.''
If an advertisement is ``exclusively'' about a legislative issue (as
proposed in the rule), are the exclusionary factors (limiting other
content) necessary?
The Commission is considering whether to include the following as
examples of what would constitute a ``legislative or executive matter
or issue'' under this proposed prong:
A bill designated ``H.R.1'' or ``S.1'';
An initiative or undertaking proposed by the President of
the United States;
An issue that rises to prominence through events occurring
in the States, such as border control;
An issue that is given prominence by a Supreme Court
decision, such as eminent domain.
Should these examples appear in the Explanation and Justification that
would accompany the final rule or should they be incorporated into the
rule itself? Should this prong of the safe harbor be limited to pending
State or local matters if the named Federal candidate is a State or
local officeholder? Should further examples be added to the list or
should some examples be removed from it? The safe harbor currently
requires that a matter or issue be ``pending.'' How should the
Commission determine whether a given matter or issue is ``pending?''
Should this requirement be removed, so that the safe harbor protects
discussion of matters or issues, even if they are not ``pending?''
b. Proposed 11 CFR 114.15(b)(1)(ii) or 11 CFR 100.29(c)(6)(i)(B)
The second prong of the proposed safe harbor in proposed 11 CFR
114.15(b)(1)(ii) or 11 CFR 100.29(c)(6)(i)(B) would be that the
communication ``urges an officeholder to take a particular position or
action with respect to the matter or issue, or urges the public to
adopt a particular position and to contact the officeholder with
respect to the matter or issue.'' In addition to communications that
urge the public to contact a public official (such as those in WRTL
II), this requirement would also be met if the communication directly
urges the officeholder to take a particular position or action
regarding the legislative or executive matter or issue.
Communications discussing a Federal candidate who is not a Federal,
State or local officeholder would not come within the proposed safe
harbor. The Commission seeks comment on this approach. Should the safe
harbor be so limited, or should communications discussing Federal
candidates who are not officeholders also be eligible for the safe
harbor? For example, could a communication that asks a Federal
candidate who is not an officeholder to sign a pledge to support a
particular issue if elected be reasonably construed as other than an
appeal to vote for or against that candidate? Are there instances in
which an entity has ``lobbied'' a Federal candidate to take a
particular position or action once elected?
The Commission is also considering whether to include the following
as examples of what would constitute exhortations to the officeholder
under the proposed prong:
``Congressman Smith, vote yes on H.R.1.''
[[Page 50266]]
``The Association of Local Merchants calls on Governor
Smith to Sign the Tax Reduction Act of 2006.''
``We urge President Smith to stand with America's workers
and support expanded health care coverage.''
``Congressman Smith, vote for the President's health care
initiative.'' Similarly, some examples of urging the general public to
act under the proposed safe harbor would include the following:
``Call Congressman Smith at (202) 555-1234 and tell him to
vote yes on H.R.1.''
``Write to Governor Smith at the address on the screen and
ask him to sign the Tax Reduction Act of 2006.''
Send President Smith an e-mail to tell him that you hope
he will stand with America's workers and support expanded health care
coverage. His e-mail address is Mr.Smith@whitehouse.gov.''
``Contact Congressman Smith and ask him to vote for the
President's health care initiative [contact information on screen].''
Should these examples appear in the Explanation and Justification
that would accompany the final rule or should they be incorporated into
the rule itself? Should further examples be added to the list or should
some examples be removed from it? Should an advertisement that urges
the public to ``Call Congressman Smith and thank him for voting for
H.R. 1'' satisfy this prong of the safe harbor?
The Commission seeks comment on whether the criteria for the safe
harbor in proposed section 114.15(b)(1)(i) and (ii) or section
100.29(c)(6)(i)(A) and (B) accurately reflect the content of a
``genuine issue ad'' as noted by WRTL II. Should the Commission add
further prongs to ensure that the content of the communication would be
fully consistent with that of a grassroots lobbying communication?
c. Proposed 11 CFR 114.15(b)(1)(iii) or 11 CFR 100.29(c)(6)(i)(C)
The third prong of the proposed safe harbor in proposed 11 CFR
114.15(b)(1)(iii) or 11 CFR 100.29(c)(6)(i)(C) would be that the
communication ``does not mention any election, candidacy, political
party, opposing candidate, or voting by the general public.'' The
proposed prong would include ``voting by the general public'' in
addition to the terms listed in the WRTL II decision as further indicia
of express advocacy. For example, a communication would not meet this
prong if it discussed a Federal candidate's position on certain pending
legislative issues, but concluded with the tag line ``Vote. It's
important to your future.'' Should references to voting by the general
public in an election be included as additional indicia of express
advocacy? Could communications that provide the address of campaign
headquarters as an officeholder's contact information satisfy this
prong of the proposed safe harbor under either alternative, or would
such communications be considered to be referring to the officeholder's
candidacy? Should only communications that provide contact information
at the incumbent officeholder's Federal or State government office or a
district office qualify for the proposed safe harbors?
The Commission invites comment on whether the following examples
``mention'' elections, candidacy, political parties or opposing
candidates sufficient to transform a communication into the functional
equivalent of express advocacy (if these factors are used to assess
permissible electioneering communications) or to remove them from the
proposed new safe harbors.
Elections
Specific reference to a named election date, such as
``Support gun rights this November 5'' or ``Perform your civic duty
November 5 to protect the environment.''
Specific reference to elections in general, such as
``Remember to vote to preserve private property come election time.''
Reference to election-related themes, such as pictures or
text references to: (1) a ballot, (2) ballot box, (3) polls, (4)
franchise, (5) suffrage.
Candidacy
Specific description of named candidate and the election,
such as ``Bob Jones is running for Senate;'' or ``Before Bob Jones ran
for the House he never paid property taxes.''
Specific description of named candidate, such as ``Tim
Wirth has a right to run for Senate, but he doesn't have a right to * *
*.'' \7\
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\7\ See FEC v. Colorado Republican Federal Campaign Committee,
59 F.3d 1015, 1018 n.1 (10th Cir. 1995), rev'd, 518 U.S. 604 (1996).
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Specific reference to office or candidacy, such as ``Vote
for liberty when picking your Senator!'' or ``There's an important
choice for Senator this year.''
Reference to candidacy by unique events or actions related
to office, such as ``Remember the House Bank scandal? This November,
let's do better.''
Implied references to candidacy, such as: (1) Photo shots
of candidate near Capitol; (2) candidate appears in mock-setting of
government office; (3) other images reasonably suggesting candidacy.
Political party
Specific reference to a recognized party, such as
``Democrats,'' ``Republicans,'' ``Libertarians,'' or ``Greens.''
Reference to political parties by nickname or proxy
description, ``Remember to support the GOP!'' or ``liberals in
Congress;'' or ``the War party in Washington;'' or ``Support the party
of Lincoln and Reagan;'' or graphics reasonably understood to reference
the party (e.g. elephants or donkeys).
Opposing Candidate
Reference to incumbent and opposing candidate, such as
``Bob Barry supports our troops; Bill Jones cut veterans' benefits by
20%.''
Reference to incumbent, implying opposing candidate, such
as ``It's time to take out the trash, select real change with Bob
Barry.''
Generic references to opposing candidate, such as an
advertisement in which the opposing candidate appears as ``Rocky'' the
prizefighter.
d. Proposed 11 CFR 114.15(b)(1)(iv) or 11 CFR 100.29(c)(6)(i)(D).
The final prong of the proposed safe harbor would state that the
communication ``does not take a position on any candidate's or
officeholder's character, qualifications, or fitness for office.'' See
proposed 11 CFR 114.15(b)(1)(iv) or 11 CFR 100.29(c)(6)(i)(D). It may
be argued, however, that effective lobbying may require reference to an
officeholder's position or record on a particular issue. For example,
an organization may find it difficult to convey its support for, or
opposition to, an officeholder's prior position on a public policy
issue unless that position is identified. Thus, a discussion of an
officeholder's position on a public policy issue or legislative record
may be consistent with the content of a genuine issue advertisement and
may, therefore, not automatically render a communication ineligible for
the proposed safe harbor. However, if a communication discusses an
officeholder's past position on an issue in a way that implicates the
officeholder's character, qualifications, or fitness for office, then
the communication would not meet this prong of the proposed safe
harbor. The Commission seeks comment on this approach. How should the
Commission determine if an officeholder's past position on an issue is
discussed in a way that implicates the officeholder's
[[Page 50267]]
character, qualifications, or fitness for office?
In McConnell, the Supreme Court used a hypothetical ``Jane Doe''
advertisement as an example of the type of advertisements that would be
subject to the electioneering communications rules. This hypothetical
advertisement ``condemned Jane Doe's record on a particular issue
before exhorting viewers to `call Jane Doe and tell her what you
think.'' ' McConnell, 540 U.S. at 127. The Justices in WRTL II
disagreed as to whether this Jane Doe hypothetical would be considered
``susceptible of no reasonable interpretation other than as an appeal
to vote for or against a specific candidate.'' See 127 S. Ct. at 2667
n.6 (Roberts, C.J.) (distinguishing the Jane Doe hypothetical from the
WRTL advertisements); 127 S. Ct. at 2683 n.7 (Scalia, J.) (contending
that the new exemption covers the Jane Doe hypothetical); 127 S. Ct. at
2698-99 (Souter, J.) (arguing that the WRTL advertisements are
indistinguishable from the Jane Doe hypothetical). The Commission seeks
comment on how an advertisement similar to the Jane Doe hypothetical
should be treated under the proposed rule. If an advertisement merely
condemns a candidate's record on an issue would it fail to satisfy the
fourth prong of the safe harbor? Would such an advertisement also fail
to meet the general exemption in proposed section 114.15(a) or
100.29(c)(6)? Would the outcome be different if the advertisement
condemned a candidate's record but also included a discussion of the
legislative issue itself? Does eligibility for the WRTL II exemption
depend on the strength of the condemnation or on whether the
condemnation is the sole or main content of the advertisement? Are
there advertisements that describe issues in such inflammatory terms
that merely to recite the candidate or officeholder's position is to
comment on the individual's character, qualifications, or fitness for
office? (E.g., ``H.R. 6000 would legalize infanticide. Congressman
Jones supports this bill. Call Congressman Jones and tell him to stop
supporting baby killing and oppose H.R. 6000.'') Are there criteria the
Commission could use to define such advertisements, or would any
attempt by the Commission to devise such criteria risk impairing the
speaker's ``autonomy to choose the content of his own message?'' See
WRTL II, 127 S. Ct. at 2671 n.9.
The Commission invites comment on whether the following examples of
statements about a candidate take a position on a candidate's
``character, qualifications, or fitness for office'' sufficient to
transform a communication into the functional equivalent of express
advocacy.
The candidate is acting from an improper motive: favoring
special interests, or specific interests for improper or insufficient
reasons.
Defamatory statements about the candidate.
The candidate is failing to adhere to standards of a
profession, trade or office.
The candidate is failing to abide by religious
convictions.
The candidate is failing to fulfill family, personal,
civil or legal obligations or duties (e.g. divorce proceedings, family
law matters, fidelity, bankruptcy, medical or professional malpractice
proceedings, sexual harassment or employment-related litigation).
Allegations that the candidate has violated a law or
ordinance.
The candidate has poor performance in job or school (based
on official work/academic record or based on peer judgment of
candidate's school and work record).
Allegations that the candidate misrepresented his own
record or accomplishments.
Negative characterizations of a candidate's vote, voting
record or position on an issue, such as ``Congressman Rogers has the
worst environmental voting record in the Calizona Congressional
delegation.''
Peer's recollection of candidate's reputation (e.g.
``hardworking,'' ``scandalous,'' ``faithful public servant,''
``philanderer,'' ``tenacious'').
The candidate's untruthfulness or untrustworthiness,
truthfulness or reliability.
The candidate's patriotism or lack thereof.
The candidate's sound judgment or lack thereof.
The candidate's effectiveness in politics or professional
endeavors (receipt of awards or recognition).
The candidate's history or absence of public, military, or
community service.
The candidate's loyalty to political party.
The candidate's service to constituents.
Demonstration of the candidate's knowledge of requisite
topics.
Medical, psychological or mental fitness of the candidate:
Is the candidate in good medical standing for public service?
e. Examples.
The Commission is considering whether to include in the rule or the
Explanation and Justification for the final rule examples of
communications that would, and would not, satisfy the four prongs of
the safe harbor for grassroots lobbying communications. These examples
are drawn from actual communications evaluated by the courts in
electioneering communications cases. The Commission is also considering
whether to provide, in the rule or the Explanation and Justification
for the final rule, examples of communications that would be the
functional equivalent of express advocacy under the general exemption
in proposed section 114.15(a) or section 100.29(c)(6). The Commission
seeks comment on whether such examples should be provided, and what
types of communications would be appropriate examples.
The following examples are illustrative only and are not intended
to create a requirement for any particular words or phrases that must
be included for a communication to qualify for the safe harbor. The
Commission seeks comment on the application of the proposed safe harbor
to these examples, and asks whether further examples would be helpful.
Example 1
LOAN OFFICER: Welcome Mr. and Mrs. Shulman. We've reviewed your
loan application, along with your credit report, the appraisal on
the house, the inspections, and well * * *
COUPLE: Yes, yes * * * we're listening.
OFFICER: Well, it all reminds me of a time I went fishing with
my father. We were on the Wolf River Waupaca * * *
VOICE-OVER: Sometimes it's just not fair to delay an important
decision.
But in Washington, it's happening. A group of Senators is using
the filibuster delay tactic to block federal judicial nominees from
a simple ``yes'' or ``no'' vote. So qualified candidates aren't
getting a chance to serve.
It's politics at work, causing gridlock and backing up some of
our courts to a state of emergency.
Contact Senators Feingold and Kohl and tell them to oppose the
filibuster.
Visit: BeFair.org
Paid for by Wisconsin Right to Life (befair.org), which is
responsible for the content of this advertising and not authorized
by any candidate or candidate's committee.\8\
\8\ ``Loan,'' Wisconsin Right to Life, Inc. v. FEC, 466 F. Supp.
2d 195, 198 n.4 (D.D.C. 2006). The Supreme Court held that this
advertisement was not the ``functional equivalent of express
advocacy. WRTL II, .127 S. Ct at 2670.
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This communication would come within the proposed safe harbor in
either of the two alternatives. Its content is consistent with that of
a genuine issue advertisement because it focuses exclusively on the
pending legislative matter of Senate filibuster votes on judicial
nominees (proposed section 114.15(b)(1)(i) or section
100.29(c)(6)(i)(A)), and urges viewers to
[[Page 50268]]
contact Senators Feingold and Kohl to take a position with respect to
the filibuster issue (proposed section 114.15(b)(1)(ii) or section
100.29(c)(6)(i)(B)). Further, the communication does not contain
indicia of express advocacy: it does not mention any election,
candidacy, political party, opposing candidate, or voting by the
general public (proposed section 114.15(b)(1)(iii) or section
100.29(c)(6)(i)(C)), and it does not take a position on the character,
qualifications, or fitness for office of Senators Feingold or Kohl
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(proposed section 114.15(b)(1)(iv) or section 100.29(c)(6)(i)(D)).
?>Example 2
Who is Bill Yellowtail? He preaches family values but took a
swing at his wife. And Yellowtail's response? He only slapped her.
But ``her nose was not broken.'' He talks law and order * * * but is
himself a convicted felon. And though he talks about protecting
children, Yellowtail failed to make his own child support payments--
then voted against child support enforcement. Call Bill Yellowtail.
Tell him to support family values.\9\
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\9\ ``Bill Yellowtail,'' McConnell v. FEC, 540 U.S. 93, 193 n.78
(2003). The Court noted that this advertisement was ``clearly
intended to influence the election.'' Id.
This communication fails to satisfy the proposed safe harbor in
either of the two alternatives in several ways. Although the
advertisement mentions a past vote against child support enforcement,
the communication does not exclusively discuss a pending legislative
matter or issue. Instead, it discusses the candidate's own personal and
legal history. Similarly, the exhortation, ``Tell him to support family
values,'' does not urge the public to tell Yellowtail to take a
specific position or action with respect to a pending legislative
matter or issue. Therefore, the communication's content is not
consistent with that of a genuine issue advertisement. Further, the
communication attacks Bill Yellowtail's character by referring to
alleged actions he took against his spouse, his delinquent child-
support payments, and his past felony conviction (proposed
114.15(b)(1)(iv) or section 100.29(c)(6)(i)(D)). Thus, the
communication also contains indicia of express advocacy.
If the Commission decides to provide examples of communications
that would be the functional equivalent of express advocacy under the
general exemption in proposed section 114.15(a) or section
100.29(c)(6), would the Yellowtail advertisement be an appropriate
example? What considerations would support a conclusion that this
communication is susceptible of no reasonable interpretation other than
as an appeal to vote against Bill Yellowtail? If this communication is
not the functional equivalent of express advocacy, of what reasonable
interpretation other than as an appeal to vote against Bill Yellowtail
is the communication susceptible?
Example 3
Our country stands at the crossroads--at the intersection of how
marriage will be defined for future generations. Marriage between a
man and a woman has been challenged across this country and could be
declared unconstitutional at any time by rogue judges. We must
safeguard the traditional definition of marriage by putting it
beyond the reach of all judges--by writing it into the U.S.
Constitution. Unfortunately, your senators voted against the
Marriage Protection Amendment two years ago. Please call Sens. Snowe
and Collins immediately and urge them to support the Marriage
Protection Amendment when it comes to a vote in early June. Call the
Capitol switchboard at 202-224-3121 and ask for your senators.
Again, that's 202-224-3121. Thank you for making your voice heard.
Paid for by the Christian Civic League of Maine, which is
responsible for the content of this advertising and not authorized
by any candidate or candidate's committee.\10\
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\10\ ``Crossroads,'' Verified Complaint for Declaratory and
Injunctive Relief, Exhibit A (Apr. 3, 2006), Civic Christian League
of Maine v. FEC, 443 F. Supp. 2d 81 (D.D.C. 2006) (No. 06-0614),
available at http://www.fec.gov/law/litigation/christian--civic--
league--complaint.pdf. The Commission filed a joint motion asking
the Court to hold this advertisement meets the WRTL II exemption.
See ``Joint Motion'' (July 13, 2007), Civic Christian League of
Maine v. FEC, (No. 06-0614).
This communication would come within the proposed safe harbor in
either of the two alternatives. Its content exclusively focuses on the
pending legislative matter of the Marriage Protection Amendment
(proposed 114.15(b)(1)(i) or section 100.29(c)(6)(i)(A)), and urges
viewers to contact Senators Snowe and Collins to urge them to support
this pending legislation (proposed 114.15(b)(1)(ii) or section
100.29(c)(6)(i)(B)). This communication does not mention any election,
candidacy, political party, opposing candidate, or voting by the
general public (proposed 114.15(b)(1)(iii) or section
100.29(c)(6)(i)(C)). In contrast to Example 2 above, this communication
criticizes the Senators' past voting records only as part of a broader
discussion of particular legislation, and it does not include or
function as an attack on their personal character, qualifications, or
fitness for office (proposed 114.15(b)(1)(iv) or section
100.29(c)(6)(i)(D)). Therefore, this communication does not include
---------------------------------------------------------------------------
indicia of express advocacy.
Example 4
It's our land; our water. America's environment must be
protected. But in just 18 months, Congressman Ganske has voted 12
out of 12 times to weaken environmental protections. Congressman
Ganske even voted to let corporations continue releasing cancer-
causing pollutants into our air. Congressman Ganske voted for the
big corporations who lobbied these bills and gave him thousands of
dollars in contributions. Call Congressman Ganske. Tell him to
protect America's environment. For our families. For our future.\11\
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\11\ See McConnell v. FEC, 251 F. Supp. 2d 176, 876 (D.D.C.
2003) (Leon, J.), available at http://www.fec.gov/pages/bcra/mem--
opinion--leon.pdf.
The Commission seeks comment on whether this communication should
come within the proposed safe harbor in either of the two alternatives.
Does its content exclusively discuss a pending legislative or executive
matter or issue (proposed 114.15(b)(1)(i) or section
100.29(c)(6)(i)(A))? Does the sentence ``Tell him to protect America's
environment'' urge Congressman Ganske to take a particular position or
action with respect to the matter or issue? Does the sentence
``Congressman Ganske even voted to let corporations continue releasing
cancer-causing pollutants into our air'' discuss a past voting record
as part of a broader discussion of a particular matter or issue, or
does it serve to function as an attack on Congressman Ganske's
character, qualifications, or fitness for office? If the sentence
serves both purposes, should the advertisement come within the safe
harbor? Does the sentence, ``Congressman Ganske voted for the big
corporations who lobbied these bills and gave him thousands of dollars
in contributions,'' function as an attack on Congressman Ganske's
character, qualifications, or fitness for office (proposed
114.15(b)(1)(iv) or section 100.29(c)(6)(i)(D))? If this sentence is
removed, does that change the analysis? If the communication does not
fall within the safe harbor, does the communication fall within the
general exemption in proposed section 114.15(a) or section
100.29(c)(6)? If the sentence regarding corporate contributions is
---------------------------------------------------------------------------
removed, does the communication fall within the general exemption?
Example 5
What's important to America's families? [middle-aged man,
interview style]: ``My pension is very important because it will
provide a significant amount of my income when I retire.'' And where
do the candidates
[[Page 50269]]
stand? Congressman Charlie Bass voted to make it easier for
corporations to convert employee pension funds to other uses. Arnie
Arnesen supports the ``Golden Trust Fund'' legislation that would
preserve pension funds for retirees. When it comes to your pension,
there is a difference. Call or visit our website to find out
more.\12\
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\12\ Adapted from McConnell v. FEC, 251 F. Supp. 2d 176, 918
(D.D.C. 2003) ( Leon, J.), available at http://www.fec.gov/pages/
bcra/mem--opinion--leon.pdf.
The Commission seeks comment on whether this communication should
come within the proposed safe harbor in either of the two alternatives.
Does its content exclusively discuss a pending legislative or executive
matter or issue (proposed 114.15(b)(1)(i) or section
100.29(c)(6)(i)(A))? Does it contain an adequate call to action
(proposed 114.15(b)(1)(ii) or section 100.29(c)(6)(i)(B))? If the
phrase ``Call or visit our website to find out more'' is replaced with
``Contact Congressman Bass and tell him to support the Golden Trust
Fund legislation,'' does that change the analysis? Does the reference
to two candidates competing for the same office constitute a reference
to an ``opposing candidate'' (proposed section 114.15(b)(1)(iii) or
100.29(c)(6)(i)(C))? If the communication does not come within the safe
harbor, does the communication fall within the general exemption in
proposed section 114.15(a) or section 100.29(c)(6)?
Example 6
TOM KEAN, JR.
No experience. Hasn't lived in New Jersey for 10 years. It takes
more than a name to get things done.
NEVER. Never worked in New Jersey. Never ran for office. Never
held a job in the private sector. Never paid New Jersey property
taxes. Tom Kean, Jr. may be a nice young man and you may have liked
his dad a lot--but he needs more experience dealing with local
issues and concerns. For the last 5 years he has lived in Boston
while attending college. Before that, he lived in Washington. New
Jersey faces some tough issues. We can't afford on-the-job training.
Tell Tom Kean, Jr. * * * New Jersey needs New Jersey leaders.
Example 7
[Superimposed over a photograph of Mr. Kean wearing a campaign
button]
For the last 5 years Tom Kean, Jr. has lived in Massachusetts.
Before that, he lived in Washington, D.C. And all the time Tom Kean
lived in Massachusetts and Washington, he never held a job in the
private sector. And until he decided to run for Congress--Tom never
paid property taxes. No experience. TOM KEAN MOVED TO NEW JERSEY TO
RUN FOR CONGRESS. New Jersey faces some difficult problems.
Improving schools, keeping taxes down, fighting overdevelopment and
congestion. Pat Morrisey has experience dealing with important
issues. It takes more than a name to get things done. Tell Tom Kean,
Jr. * * * NEW JERSEY NEEDS NEW JERSEY LEADERS.\13\
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\13\ MUR 5024R, Factual and Legal Analysis for Council for
Responsible Government, Inc. and its Accountability Project; Gary
Glenn; William ``Bill'' Wilson, at 8-9 (approved by the Commission
on April 11, 2005), available at http://eqs.nictusa.com/eqsdocs/
00004C5E.pdf. The Commission did not analyze the advertisements in
Examples 6 and 7 with regard to the electioneering communications
provisions because the advertisements appeared in printed flyers in
an election held before BCRA was enacted. The application of the
proposed exemption and safe harbor assumes that the examples are
distributed as a broadcast advertisement.
The Commission seeks comment on whether these two advertisements
constitute the functional equivalent of express advocacy under either
alternative. The Commission previously found reason to believe that
both advertisements constituted express advocacy based on McConnell.
Does the WRTL II decision change or strengthen that finding, given that
both these advertisements comment on a candidate's qualifications or
fitness for office?
3. Proposed 11 CFR 114.15(b)(2) and 11 CFR 100.29(c)(6)(ii)--Safe
Harbor for Commercial and Business Advertisements
Under WRTL II, corporations and labor organizations may not be
prohibited from funding an electioneering communication unless that
communication is the functional equivalent of express advocacy, meaning
that it is susceptible of no reasonable interpretation other than as an
appeal to vote for or against a clearly identified candidate. The Court
found that the advertisements at issue in WRTL II were not the
functional equivalent of express advocacy because they could be
reasonably viewed as issue advocacy. However, issue advocacy is not the
only conceivable non-electoral ``reasonable interpretation'' to which a
communication might be susceptible. For example, the Commission has in
several instances applied the Act and Commission regulations to
communications that advertise a business or a product.\14\ Because some
communications that meet the definition of ``electioneering
communication'' could reasonably be interpreted as having a non-
electoral, business or commercial purpose, the Commission is proposing
a safe harbor for business and commercial advertisements.
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\14\ See, e.g., Advisory Opinions (``AOs'') 2004-31 (Darrow),
2004-30 (Citizens United), and 2004-15 (Hardy); Matters under Review
(``MURs'') 5467 (Michael Moore) and 5410 (Oberweis Dairy, et al.).
See also Notice of Availability of Rulemaking Petition: Exception
for the Promotion of Political Documentary Films from
''Electioneering Communications,'' 69 FR 52461 (Aug. 26, 2004).
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The Commission seeks comment on this approach. Is the holding in
WRTL II limited in application to communications that contain issue
advocacy or grassroots lobbying, or does the holding extend to other
types of communications such as business and commercial advertisements?
See Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York,
447 U.S. 557 (1980) (refusing to apply strict scrutiny First Amendment
analysis to commercial advertisements, instead using four-part
intermediate scrutiny test); 44 Liquormart, Inc. v. Rhode Island, 517
U.S. 484 (1996); Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001)
(same). The Supreme Court in Buckley stated: ``The First Amendment
affords the broadest protection to such political expression in order
`to assure (the) unfettered interchange of ideas for the bringing about
of political and social changes desired by the people.' '' Buckley, 424
U.S. at 14 (quoting Roth v. United States, 354 U.S. 476, 484 (1957)).
Does WRTL II modify the long-standing jurisprudence that commercial
speech is entitled to less Constitutional protection than political
speech? The WRTL II decision addressed commercial speech, stating:
At the outset, we reject the contention that issue advocacy may
be regulated because express election advocacy may be, and ``the
speech involved in so-called issue advocacy is [not] any more core
political speech than are words of express advocacy.'' McConnell,
supra, at 205. This greater-includes-the-lesser approach is not how
strict scrutiny works. A corporate ad expressing support for the
local football team could not be regulated on the ground that such
speech is less ``core'' than corporate speech about an election,
which we have held may be restricted. A court applying strict
scrutiny must ensure that a compelling interest supports each
application of a statute restricting speech. That a compelling
interest justifies restrictions on express advocacy tells us little
about whether a compelling interest justifies restrictions on issue
advocacy; the McConnell Court itself made just that point. See 540
U. S., at 206, n. 88. Such a greater-includes-the-lesser argument
would dictate that virtually all corporate speech can be suppressed,
since few kinds of speech can lay claim to being as central to the
First Amendment as campaign speech. That conclusion is clearly
foreclosed by our precedent. See, e.g., Bellotti, supra, at 776-777.
WRTL II, 127 S. Ct. at 2671-72.
The safe harbor in both alternatives would employ the same two-step
approach that the Court used in WRTL II to determine whether a
communication is a ``genuine issue ad.'' The first two prongs of the
safe harbor
[[Page 50270]]
would ensure that the content of the communication is fully consistent
with that of a genuine commercial advertisement, based on the
Commission's experience applying the electioneering communications rule
to commercial advertising in the past two election cycles. See proposed
11 CFR 114.15(b)(2)(i) and (ii) or proposed 11 CFR 100.29(c)(6)(ii)(A)
and (B). The third and fourth prongs would incorporate the factors the
WRTL II Court used to determine whether a communication lacks ``indicia
of express advocacy.'' See proposed 11 CFR 114.15(b)(2)(iii) and (iv)
and proposed section 100.29(c)(6)(ii)(C) and (D). A communication would
qualify for the proposed safe harbor for genuine business
advertisements only if it satisfies all four prongs. The Commission
seeks comment on whether it is appropriate to include a proposed safe
harbor for commercial advertisements. If so, are the proposed prongs
appropriate? Should the commercial advertisements safe harbors contain
different requirements depending upon whether the Commission decides to
implement the exemption in proposed section 114.15(a) or proposed
section 100.29(c)(6)?
As discussed above, a communication that qualifies for the proposed
new safe harbor may still be a ``coordinated communication'' if it
satisfies the content and conduct prongs in section 109.21. Thus,
exempt communications made by corporations or labor organizations may
still be prohibited in-kind contributions as ``coordinated
communications.'' The Commission seeks comment on the effects of the
commercial safe harbor on the coordinated communication rule.
a. Proposed 11 CFR 114.15(b)(2)(i) or 100.29(c)(6)(ii)(A)
The first prong of this proposed safe harbor in proposed 11 CFR
114.15(b)(2)(i) or 100.29(c)(6)(ii)(A) would be that the communication
``exclusively advertises a Federal candidate's or officeholder's
business or professional practice or any other product or service.''
This prong would be satisfied both by advertisements in which a Federal
candidate or officeholder appears to promote a business, product for
sale, or other commercial service, and by advertisements in which a
Federal candidate or officeholder is referred to as the subject of a
book or movie. This prong would apply to businesses owned or operated
by, or employing, the candidate or officeholder, and publishers,
distributors or promoters of books, films or plays that refer to the
candidate or officeholder.
b. Proposed 11 CFR 114.15(b)(2)(ii) or 100.29(c)(6)(ii)(B)
The second prong of the proposed safe harbor in proposed 11 CFR
114.15(b)(2)(ii) or 100.29(c)(6)(ii)(B) would be that the communication
``is made in the ordinary course of business of the entity paying for
the communication.'' For example, a restaurant owned by a Federal
candidate could use its corporate general treasury funds to pay for
advertisements featuring the owner/candidate. Similarly, an
incorporated publisher or distributor of a book about a Federal
candidate would be able to pay for an advertisement for that book. How
should the Commission determine what constitutes an entity's ``ordinary
course of business''? Should the Commission review the advertising
history or advertising patterns of the entity paying for the
communication in order to evaluate this prong of the safe harbor? If
the entity in question is a newly established business, should the fact
that it has never before distributed broadcast advertisements indicate
that it is not operating in the ``ordinary course of business''?
c. Proposed 11 CFR 114.15(b)(2)(iii) and (iv) or
100.29(c)(6)(ii)(C) and (D)
The third and fourth prongs of the proposed safe harbor for
commercial and business advertisements (proposed sections
114.15(b)(2)(iii) and (iv) or sections 100.29(c)(6)(ii)(C) and (D))
would be identical to prongs three and four of the proposed safe harbor
for grassroots lobbying communications in both alternatives.
Accordingly, a commercial or business advertisement would qualify for
the safe harbor only if it ``does not mention any election, candidacy,
political party, opposing candidate, or voting by the general public''
and ``does not take a position on any candidate's or officeholder's
character, qualifications, or fitness for office.'' See proposed 11 CFR
114.15(b)(2)(iii) and (iv) or 11 CFR 100.29(c)(6)(ii)(C) and (D).
d. Example
The Commission is considering whether to include in the Explanation
and Justification examples of communications that would satisfy all
four prongs of the safe harbor for commercial and business
advertisements. The following example is based on an actual
communication in a past advisory opinion request. It is illustrative
only and is not intended to create a requirement for any particular
words or phrases that must be included for a communication to qualify
for the safe harbor. The Commission seeks comment on this example and
asks whether further examples would be helpful.
[VOICE OVER SPEAKING WHILE SHOWING VARIOUS FOOTAGE OF
DEALERSHIP]: Cadillac. Style. luxury. Visit Joe Smith Cadillac in
Waukesha. Where we uphold the Cadillac legacy of style, luxury and
performance everyday. At Joe Smith Cadillac, you'll find a huge
selection of Cadillacs and receive award-winning service every time
you bring your Cadillac in. Whether you're in the market for a
classic sedan or SUV, you can be sure Joe Smith Cadillac has it. And
while shopping for your Cadillac, a single detail won't be missed.
We know the importance of taking care of our customers. That's why
you'll always find incredible service specials to help to maintain
your Cadillac. When it comes to care for your Cadillac, you
shouldn't settle for anything less than the best. We're Wisconsin's
all-time sales leader and we want to be your Cadillac dealership.
[VOICE OVER SPEAKING WHILE VIDEO OF INSIDE DEALERSHIP ZOOMS IN
ON FRAMED PICTURE ON WALL OF JOE SMITH]: Stop into Joe Smith
Cadillac, on Highway 18 in Waukesha, and see what Cadillac style
really is all about.\15\
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\15\ This example is drawn from one of the advertisements in AO
2004-31 (Darrow), Attachment A at 3 (Sept. 10, 2004), in which the
Commission found that under the particular facts of this advisory
opinion, the advertisements did not meet the definition of
``electioneering communication'' because the use of the name ``Russ
Darrow'' referred to a business or another individual (in this case,
the candidate's son) who was not a Federal candidate.
This communication could satisfy the proposed safe harbor in either
alternative.\16\ The communication advertises a business owned by
candidate Joe Smith (proposed section 114.15(b)(2)(i) or section
100.29(c)(6)(ii)(A)). Assuming the communication was paid for in the
ordinary course of business by a car dealership to advertise its
business, it would satisfy proposed section 114.15(b)(2)(ii) or section
100.29(c)(6)(ii)(B). Finally, the communication does not mention any
election, candidacy, political party, opposing candidate, or voting by
the general public (proposed section 114.15(b)(2)(iii) or section
100.29(c)(6)(ii)(C)), and it does not take a position on the
candidate's character, qualifications, or fitness for office (proposed
section 114.15(b)(2)(iv) or section 100.29(c)(6)(ii)(D)).
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\16\ As discussed above, even if the advertisement qualifies for
the safe harbor for commercial advertisements, the advertisement
could still implicate the coordinated communication rules.
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4. Other Types of Communications
Are there other common categories of broadcast communication that
often involve Federal candidates, yet would
[[Page 50271]]
be reasonably interpreted as something other than as an appeal to vote,
such as public service announcements or promotions of charities or
charitable events? \17\ Do other categories of communication warrant
safe harbors similar to those proposed for lobbying and commercial
communications? What elements would such a safe harbor contain?
---------------------------------------------------------------------------
\17\ See, for example, the communications at issue in AO 2006-10
(EchoStar) and AO 2004-14 (Davis).
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D. Reporting Requirements for Electioneering Communications Under
Alternative 1
Any person that has made electioneering communications aggregating
in excess of $10,000 in a calendar year must file a statement that
discloses, inter alia, the names and addresses of each donor who
donated an amount aggregating $1,000 or more during the period
beginning on the first day of the preceding calendar year and ending on
the disclosure date. See 2 U.S.C. 434(f)(1)-(2); 11 CFR 104.20(b)-(c).
However, the Act and Commission regulations provide the option that
persons making electioneering communications may create a segregated
bank account for funding electioneering communications in order to
limit reporting to the donors for that account. See 2 U.S.C.
434(f)(2)(E); 11 CFR 104.20(c)(7). The segregated bank account may only
include funds contributed by individuals who are U.S. citizens or
nationals, or permanent residents. Id. If a person does not create a
segregated bank account and funds electioneering communications from
its general account, that person must disclose all donors of over
$1,000 to the entity during the current and preceding calendar year.
See 2 U.S.C. 434(f)(2)(F); 11 CFR 104.20(c)(8). Moreover, persons that
do not use a segregated bank account must be able to demonstrate
through a reasonable accounting method that no corporate or labor
organization's funds were used to pay any portion of an electioneering
communication. See 11 CFR 114.14(d)(1).
The Commission is proposing to revise its rules on reporting and
establishing segregated bank accounts for electioneering communications
to accommodate reporting by corporations and labor organizations that
choose to make electioneering communications that are permissible under
proposed section 114.15.
1. Proposed 11 CFR 114.15(c)--Corporate and Labor Organization
Reporting Requirement
Proposed section 114.15(c) would provide that corporations and
labor organizations that make electioneering communications permissible
under the WRTL II exemption in proposed section 114.15(a) totaling over
$10,000 in a calendar year must file reports like other entities that
make electioneering communications. This proposed section would include
a cross reference to the electioneering communications reporting
requirements in 11 CFR 104.20.
2. Proposed Revisions to 11 CFR 104.20 and 114.14--Using Segregated
Bank Accounts For Electioneering Communications
Current section 104.20(c)(7) only addresses segregated bank
accounts containing funds solely from individuals who are ``United
States citizens, United States nationals, or who are lawfully admitted
for permanent residence under 8 U.S.C. 1101(a)(20).'' These provisions
would continue to be applicable to a segregated bank account used to
pay for any electioneering communications that do not come within the
new WRTL II exemption under proposed 11 CFR 114.15. However, a new
provision may be needed regarding reporting the receipt of corporate or
labor organization funds to pay for electioneering communications
coming under the new WRTL II exemption in proposed section 114.15.
Accordingly, the Commission proposes to divide paragraph
104.20(c)(7) into paragraphs (c)(7)(i) and (c)(7)(ii). Paragraph
(c)(7)(i) would address the segregated bank account used to pay for
electioneering communications that would not come under new 11 CFR
114.15. It would follow current paragraph (c)(7) by barring
corporations and labor organizations from donating to such an account.
In contrast, paragraph (c)(7)(ii) would permit a segregated bank
account to be used to pay for electioneering communications that are
permissible under the new WRTL II exemption in 11 CFR 114.15. This
second type of account could contain corporate and labor organization
funds. The Commission is not proposing revisions to paragraph (c)(8),
which provides for the reporting of ``donors'' when electioneering
communications are not made using a segregated bank account.
Under the proposed regulations, how would a corporation or labor
organization report an electioneering communication funded with general
treasury funds? If the corporation or labor organization does not pay
for the electioneering communication from an account described in
proposed sections 104.20(c)(7)(ii) and 114.14(d)(2)(i), would the
corporation or labor organization be required to report ``the name and
address of each donor who donated an amount aggregating $1,000 or
more'' to the corporation or labor organization during the relevant
reporting period, as required by 2 U.S.C. 434(f)(2)(F) and 11 CFR
104.20(c)(8)? If so, how would a corporation or labor organization
determine which receipts qualify as ``donations''? Should the
Commission limit the ``donation'' reporting requirement to funds that
are donated for the express purpose of making electioneering
communications?
Additionally, the Commission proposes to make conforming changes to
11 CFR 114.14(d)(2), which applies to the use of segregated bank
accounts by persons that receive funds from corporations or labor
organizations. Section 114.14(d)(2) would be divided into two
paragraphs consistent with the proposed changes to section
104.20(c)(7). Paragraph (d)(2)(i) would allow any person (including
corporations and labor organizations) wishing to make electioneering
communications permissible under 11 CFR 114.15 to establish a
segregated bank account for that exclusive purpose, and to limit
reporting to donations to that account. In this circumstance, a
corporation or labor organization that established such an account
would report only donations made to the account for the purpose of
electioneering communications, pursuant to 11 CFR 104.20(c)(7)(ii).
Paragraph (d)(2)(ii) would continue to allow persons (other than
corporations and labor organizations) to establish a segregated bank
account to be used to exclusively pay for electioneering communications
that do not come under the new exception in proposed 11 CFR 114.15. New
paragraph (d)(2)(i) contains the same allowances and restrictions as
old paragraph (d)(2), but clarifies that this option is not available
to corporations and labor organizations.
The Commission believes that if organizations intend to make some
electioneering communications that comply with the new WRTL II
exemption and other electioneering communications that do not, or might
not, come within the exemption, they would be well-advised to establish
two separate bank accounts to ensure that corporate and labor
organization funds are only accepted and used to fund exempt
electioneering communications.
[[Page 50272]]
Please note, however, that separate bank accounts would not be
mandatory because organizations need only show that they used a
reasonable accounting method to separate corporate and labor
organization funds under 11 CFR 114.14(d)(1).\18\ The Commission seeks
comment on this approach.
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\18\ Upon issuance of final rules, the Commission intends to
review FEC Form 9 to ensure that it conforms to whatever changes are
contained in the final rules.
---------------------------------------------------------------------------
E. Reporting Requirements for Electioneering Communications Under
Alternative 2
Under Alternative 2, a communication that qualifies for the WRTL II
exemption in proposed section 100.29(c)(6) would be exempted from the
definition of ``electioneering communication.'' Provisions of the
Commission's regulations imposing reporting requirements on persons
making ``electioneering communications'' are inapplicable where the
communication is exempted from the definition of ``electioneering
communication.'' Under Alternative 2, the reporting requirements
applicable to all communications that continue to meet the definition
of ``electioneering communication'' would remain unchanged.
F. Revisions to Other Provisions Under Alternative 1
1. Proposed Revisions to 11 CFR 114.4--Communications Beyond the
Restricted Class
Section 114.4(c) sets out the types of communications that
corporations and labor organizations may make either to the general
public or to all employees and members. Such communications include
registration and voting communications, official registration and
voting information, voting records, and voting guides. Alternative 1
proposes adding new paragraph (c)(8) to state that any corporation or
labor organization may make electioneering communications to the
general public that fall within the new exemption in proposed section
11 CFR 114.15. Proposed paragraph (c)(8) would also make clear that
QNCs may make electioneering communications regardless of whether they
are permissible under 11 CFR 114.15. The Commission is not proposing
any changes to its regulations concerning QNCs at section 114.10.\19\
---------------------------------------------------------------------------
\19\ The Commission is also proposing a conforming change to
paragraph 114.4(c)(1). The statement listing the paragraphs that
describe communications that corporations and labor organizations
may make to the general public would be amended to include paragraph
114.4(c)(8).
---------------------------------------------------------------------------
2. Proposed Revisions to 11 CFR 114.14--Further Restrictions on the Use
of Corporate and Labor Organization Funds for Electioneering
Communications
Current section 114.14 prohibits corporations and labor
organizations from providing general treasury funds to pay for any
electioneering communications whatsoever. The Commission's proposed
revisions to this section under Alternative 1 would limit this
prohibition to electioneering communications that do not come within
the new WRTL II exemption in proposed section 114.15, consistent with
the proposed changes to the general prohibition on the use of corporate
and labor organizations funds in section 114.2.
Current paragraph (a)(1) of this section contains a general ban on
corporations and labor organizations providing funds to any other
person for the purpose of financing an electioneering communication.
Likewise, current paragraphs (b)(1) and (2) of this section prohibit
persons that accept funds from corporations and labor organizations
from using those funds to pay for electioneering communications, or
from providing those same funds to any other person for the purpose of
paying for an electioneering communication. Current paragraph (d)(1) of
this section requires any person that receives funds from corporations
and labor organizations, and that makes electioneering communications,
to demonstrate by a reasonable accounting method that no corporate or
labor organization funds were used to pay for the electioneering
communication.
The proposed rule would modify paragraphs (a)(1), (b)(1) and (2),
and (d)(1) by adding the phrase ``that is not permissible under 11 CFR
114.15'' after the word ``communication'' in each paragraph. These
proposed changes would implement WRTL II by limiting the prohibition on
the use of corporate and labor organization funds to those
electioneering communications that are the functional equivalent of
express advocacy, and therefore would not be permissible under proposed
new 11 CFR 114.15. Paragraph (d)(1) would be further revised by adding
the phrase ``other than corporations and labor organizations'' after
the word ``Persons.'' The Commission is proposing this change to avoid
any suggestion that corporations and labor organizations may make
electioneering communications that do not come within the new exception
articulated in WRTL II. The Commission seeks comment on this approach.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the attached proposed rules, if
adopted, would not have a significant economic impact on a substantial
number of small entities. The basis for this certification is that any
small entities affected would not feel a significant economic impact
from the proposed rule. Overall, the proposed rules would relieve a
funding restriction that the current rules place on corporations and
labor organizations and would therefore have a positive economic impact
for any affected small entities. The proposed rules would allow small
entities to engage in activity they were previously prohibited from
funding with corporation or labor organization funding. Moreover, this
activity (making and funding electioneering communications) is entirely
voluntary, and any reporting obligations would only be triggered based
on entities choosing to engage in this activity above a threshold of
$10,000 per calendar year.
In addition, there are few ``small entities'' that would be
affected by these proposed rules. The Commission's proposed revisions
could affect for-profit corporations, labor organizations, individuals
and some non-profit organizations. Individuals and labor organizations
are not ``small entities'' under 5 U.S.C. 601(6), and most, if not all,
for-profit corporations that would be affected by the proposed rule are
not ``small businesses'' under 5 U.S.C. 601(3). Large national and
state-wide non-profit organizations that might produce electioneering
communications are not ``small organizations'' under 5 U.S.C. 601(4)
because they are not independently owned and operated and they are
dominant in their field. In addition, the factual record developed by
the Commission in past electioneering proceedings indicates that few,
if any, section 501(c)(3) non-profit organizations make broadcast,
cable or satellite communications that refer to Federal candidates
during the electioneering communication time frames to the targeted
audience.
List of Subjects
11 CFR Part 100
Elections.
[[Page 50273]]
11 CFR Part 104
Campaign funds, political committees and parties, reporting and
recordkeeping requirements.
11 CFR Part 114
Business and industry, Elections, Labor.
For the reasons set out in the preamble, the Federal Election
Commission proposes to amend Subchapter A of Chapter 1 of Title 11 of
the Code of Federal Regulations as follows:
Alternative 1
PART 104--REPORTS BY POLITICAL COMMITTEES AND OTHER PERSONS (2
U.S.C. 434)
1. The authority citation for part 104 would continue to read as
follows:
Authority: 2 U.S.C. 431(1), 431(8), 431(9), 432(i), 434,
438(a)(8) and (b), 439a, 441a, and 36 U.S.C. 510.
2. In Sec. 104.20, paragraph (c)(7) would be revised to read as
follows:
Sec. 104.20 Reporting electioneering communications (2 U.S.C.
434(f)).
* * * * *
(c) * * *
(7) (i) If the disbursements were paid exclusively from a
segregated bank account established to pay for electioneering
communications not permissible under 11 CFR 114.15, consisting of funds
provided solely by individuals who are United States citizens, United
States nationals, or who are lawfully admitted for permanent residence
under 8 U.S.C. 1101(a)(20), the name and address of each donor who
donated an amount aggregating $1,000 or more to the segregated bank
account, aggregating since the first day of the preceding calendar
year; or
(ii) If the disbursements were paid exclusively from a segregated
bank account established to pay for electioneering communications
permissible under 11 CFR 114.15, the name and address of each donor who
donated an amount aggregating $1,000 or more to the segregated bank
account, aggregating since the first day of the preceding calendar
year.
* * * * *
PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY
3. The authority citation for part 114 would continue to read as
follows:
Authority: 2 U.S.C. 431(8), 431(9), 432, 434, 437d(a)(8),
438(a)(8), 441b.
4. In Sec. 114.2, the section heading and paragraph (b)(2) would
be revised and paragraph (b)(3) would be added to read as follows:
Sec. 114.2 Prohibitions on contributions, expenditures and
electioneering communications.
* * * * *
(b) * * *
(2) Except as provided at 11 CFR 114.10, corporations and labor
organizations are prohibited from:
(i) Making expenditures as defined in 11 CFR part 100, subpart D;
or
(ii) Making expenditures with respect to a Federal election (as
defined in 11 CFR 114.1(a)), for communications to those outside the
restricted class that expressly advocate the election or defeat of one
or more clearly identified candidate(s) or the candidates of a clearly
identified political party.
(3) Except as provided at 11 CFR 114.10 and 114.15, corporations
and labor organizations are prohibited from making payments for an
electioneering communication to those outside the restricted class.
However, this paragraph (b)(3) shall not apply to State party
committees and State candidate committees that incorporate under 26
U.S.C. 527(e)(1), provided that:
(i) The committee is not a political committee as defined in 11 CFR
100.5;
(ii) The committee incorporated for liability purposes only;
(iii) The committee does not use any funds donated by corporations
or labor organizations to make electioneering communications; and
(iv) The committee complies with the reporting requirements for
electioneering communications at 11 CFR part 104.
* * * * *
5. In Sec. 114.4, paragraph (c)(1) would be amended by adding the
phrase ``and (c)(8)'' after ``(c)(5),'' and paragraph (c)(8) would be
added as follows:
Sec. 114.4 Disbursements for communications beyond the restricted
class in connection with a Federal election.
* * * * *
(c) * * *
(8) Electioneering communications. Any corporation or labor
organization may make electioneering communications to the general
public that are permissible under 11 CFR 114.15. Qualified nonprofit
corporations, as defined in 11 CFR 114.10(c), may make electioneering
communications in accordance with 11 CFR 114.10(d), regardless of
whether they are permissible under 11 CFR 114.15.
* * * * *
6. In Sec. 114.14, paragraphs (a), (b) and (d) would be revised to
read as follows:
Sec. 114.14 Further restrictions on the use of corporate and labor
organization funds for electioneering communications.
(a)(1) Corporations and labor organizations shall not give,
disburse, donate or otherwise provide funds, the purpose of which is to
pay for an electioneering communication that is not permissible under
11 CFR 114.15, to any other person.
(2) A corporation or labor organization shall be deemed to have
given, disbursed, donated, or otherwise provided funds under paragraph
(a)(1) of this section if the corporation or labor organization knows,
has reason to know, or willfully blinds itself to the fact, that the
person to whom the funds are given, disbursed, donated, or otherwise
provided, intended to use them to pay for such an electioneering
communication.
(b) Persons who accept funds given, disbursed, donated or otherwise
provided by a corporation or labor organization shall not:
(1) Use those funds to pay for any electioneering communication
that is not permissible under 11 CFR 114.15; or
(2) Provide any portion of those funds to any person, for the
purpose of defraying any of the costs of an electioneering
communication that is not permissible under 11 CFR 114.15.
* * * * *
(d)(1) Persons other than corporations and labor organizations who
receive funds from a corporation or a labor organization that do not
meet the exceptions of paragraph (c) of this section, must be able to
demonstrate through a reasonable accounting method that no such funds
were used to pay any portion of any electioneering communication that
is not permissible under 11 CFR 114.15.
(2)(i) Any person who wishes to pay for electioneering
communications permissible under 11 CFR 114.15 may, but is not required
to, establish a segregated bank account into which it deposits only
funds donated or otherwise provided for the purpose of paying for such
electioneering communications as described in 11 CFR part 104. Persons
who use funds exclusively from such a segregated bank account to pay
for any electioneering communication permissible under 11 CFR 114.15
shall be required to only report the names and addresses of those
persons who donated or otherwise provided an amount aggregating $1,000
or more to the segregated bank account, aggregating since the first day
of the preceding calendar year.
(ii) Any person, other than corporations and labor organizations,
who wishes to pay for electioneering
[[Page 50274]]
communications not permissible under 11 CFR 114.15 may, but is not
required to, establish a segregated bank account into which it deposits
only funds donated or otherwise provided by individuals as described in
11 CFR part 104. Persons who use funds exclusively from such a
segregated bank account to pay for any electioneering communication
shall satisfy paragraph (d)(1) of this section. Persons who use funds
exclusively from such a segregated bank account to pay for any
electioneering communication shall be required to only report the names
and addresses of those persons who donated or otherwise provided an
amount aggregating $1,000 or more to the segregated bank account,
aggregating since the first day of the preceding calendar year.
7. Section 114.15 would be added to read as follows:
Sec. 114.15 Permissible use of corporate and labor organization funds
for certain electioneering communications.
(a) Permissible electioneering communications. Corporations and
labor organizations may make an electioneering communication, as
defined in 11 CFR 100.29, to those outside the restricted class without
violating the prohibition contained in 11 CFR 114.2(b)(3) if the
communication is susceptible of a reasonable interpretation other than
as an appeal to vote for or against a clearly identified Federal
candidate.
(b) Safe Harbors for certain types of electioneering
communications. An electioneering communication shall satisfy paragraph
(a) of this section if it meets the requirements of either paragraph
(b)(1) or (b)(2) of this section:
(1) Grassroots lobbying communications. Any communication that:
(i) Exclusively discusses a pending legislative or executive matter
or issue;
(ii) Urges an officeholder to take a particular position or action
with respect to the matter or issue, or urges the public to adopt a
particular position and to contact the officeholder with respect to the
matter or issue;
(iii) Does not mention any election, candidacy, political party,
opposing candidate, or voting by the general public; and
(iv) Does not take a position on any candidate's or officeholder's
character, qualifications, or fitness for office.
(2) Commercial and business advertisements. Any communication that:
(i) Exclusively advertises a Federal candidate's or officeholder's
business or professional practice or any other product or service;
(ii) Is made in the ordinary course of business of the entity
paying for the communication;
(iii) Does not mention any election, candidacy, political party,
opposing candidate, or voting by the general public; and
(iv) Does not take a position on any candidate's or officeholder's
character, qualifications, or fitness for office.
(c) Reporting requirement. Corporations and labor organizations
that make electioneering communications under paragraph (a) aggregating
in excess of $10,000 in a calendar year shall file statements as
required by 11 CFR 104.20.
End of Alternative 1
Alternative 2
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
8. The authority citation for part 100 would continue to read as
follows:
Authority: 2 U.S.C. 431, 434 and 438(a)(8).
9. Section 100.29 would be amended by adding new paragraph (c)(6)
to read as follows:
Sec. 100.29 Electioneering communication (2 U.S.C. 434(f)(3)).
* * * * *
(c) * * *
(6) Is susceptible of a reasonable interpretation other than as an
appeal to vote for or against a clearly identified Federal candidate. A
communication shall satisfy this section if it meets the requirements
of either paragraph (c)(6)(i) or (ii) of this section:
(i) Grassroots lobbying communications. Any communication that:
(A) Exclusively discusses a pending legislative or executive matter
or issue;
(B) Urges an officeholder to take a particular position or action
with respect to the matter or issue, or urges the public to adopt a
particular position and to contact the officeholder with respect to the
matter or issue;
(C) Does not mention any election, candidacy, political party,
opposing candidate, or voting by the general public; and
(D) Does not take a position on any candidate's or officeholder's
character, qualifications, or fitness for office.
(ii) Commercial and business advertisements. Any communication
that:
(A) Exclusively advertises a Federal candidate's or officeholder's
business or professional practice or any other product or service;
(B) Is made in the ordinary course of business of the entity paying
for the communication;
(C) Does not mention any election, candidacy, political party,
opposing candidate, or voting by the general public; and
(D) Does not take a position on any candidate's or officeholder's
character, qualifications, or fitness for office.
End of Alternative 2
Dated: August 24, 2007.
Ellen L. Weintraub,
Commissioner, Federal Election Commission.
[FR Doc. E7-17184 Filed 8-30-07; 8:45 am]
BILLING CODE 6715-01-P