Disclosure Data Weblog

As we get ready to launch the new data files for independent expenditure and electioneering communication filings during the 2010 general election campaign, I thought it would be useful to talk a little about what we will be including in the files and some of the changes that may come during this campaign season.

(DISCLAIMER: I'm going to try to describe the general outlines of new financial activity in 2010 races and how it will be disclosed. I'm going to be as simple and clear as possible, and that means I will oversimplify things and use words in their common meaning, not necessarily their technical legal meaning.  Nothing I say here is meant to reflect Commission policy or legal judgments about possible activity - it's intended only to help you understand what you may find in the data files coming from disclosure reports submitted to us this fall.

Much attention has been given to possible changes to the campaign finance process in 2010 Congressional races stemming from a series of judicial decisions in the last year. Decisions by the U.S. Court of Appeals for the D.C. Circuit in Emily's List v. FEC and SpeechNow v. FEC and by the Supreme Court in Citizens United v. FEC mean that for-profit corporations and unions may now make independent expenditures advocating the election or defeat of federal candidates, that organizations or individuals can contribute unlimited amounts to committees that make only independent expenditures (i.e. do ont make contributions to candidates or parties) and that nonprofit organizations can use funds from any source and without limit to make election-related disbursements so long as they do not use those funds for contributions to federal candidates or parties.

So, how will this new activity be reported?

1. Some groups have created "independent expenditure-only PACs" that might report unlimited contributions received from individuals or corporations or unions along with independent expenditures the PACs make in Congressional races. These committees will not be making contributions to campaigns or to federal party committees. They will file regular disclosure reports (either monthly or quarterly) that will include all of their receipts and disbursements. In addition, they may file 24- or 48-hour reports when independent expenditures are publicly distributed if they reach certain amount thresholds. These filings will include detailed information about the expenditures. As was true previously in the case of other organizations already making independent expenditures, if these PACs file 24/48 hour reports there could be information about spending disclosed before information about the sources of receipts is available
2. Individuals, groups, corporations, unions, etc. that do not create committees may make independent expenditures using their own funds. These expenditures might be disclosed in 24- or 48-hour reports (if they meet certain amount and timing thresholds) and also in reports following a regular quarterly schedule. These Independent Expenditures reports will include detailed information about the expenditures and may include information about donations made to pay for the expenditures. (Donations made specifically to pay for an independent expenditure must be disclosed if the expenditure meets certain conditions - see "a note on 'might' or 'may' below.) Not all of this activity will really be "new" since some groups and individuals made these expenditures in past cycles.
3. In addition to making independent expenditures, groups that are not PACs may make electioneering communications and under the new court decisions for-profit corporations, unions and other organizations that were prohibited from making these disbursements before 2010 can now do so as well. Electioneering communications are broadcast ads (radio, tv, cable or satellite) sponsored by individuals or groups that are not political committees (i.e. not campaigns, PACs or parties) within 30 days of a primary election or 60 days of the general election that make reference to a federal candidate and are targeted to that candidate's electorate. (Unlike independent expenditures, electioneering communications don't advocate a candidate's election or defeat.) The payments for ads will be disclosed within one day of their public distribution. Any donations made specifically to pay for these communications will also be disclosed if they meet certain thresholds.

It's important to remember that not all of the activity we see in 2010 in these categories will really be new. People and groups have been making independent expenditures throughout the life of the Federal Election Campaign Act and some of this will simply represent a continuation of that activity, but some of these filings will come from organizations (e.g. corporations and unions using their general treasury funds) that were prohibited from making these expenditures in the past. The same goes for electioneering communications: Groups have been reporting this activity since the enactment of the Bipartisan Campaign Reform Act of 2002, but the range of organizations that may make these disbursements is now wider.

In order to give some context we've prepared tables to show the "outside" money (independent expenditures, electioneering communications and internal group communications) that was reported to the Commission in each Congressional race in 2006 and 2008. Note that the tables don't include spending by the candidates themselves, and note also that the tables don't distinguish between spending in support of a particular candidate and spending in opposition. (In fact, for example, 99% of party independent expenditures in 2008 Senate races was spent in opposition to the named candidate. The ratio was much lower (63%) for party spending in House races.)

More about the reporting process.

As I mentioned above, there are two types of activity included in these new files.  First, independent expenditures represent spending by individual people or groups or political committees or (new for 2010) corporations or unions expressly advocating the election or defeat of clearly identified federal candidates. These expenditures may not be made in concert or cooperation with or at the request or suggestion of a candidate, the candidate's campaign or a political party.

Any time up to 20 days before an election, if these independent expenditures by a person or organization aggregate more than $10,000 in a race they must be reported to the Commission before the end of the second day after the communication is publicly distributed. If the communications are distributed within the last 19 days before the election, the expenditure must be reported within one day if they aggregate more than $1,000 in any race.

Each of these "24-hour" or "48-hour" notices will include detailed information about the expenditures, including who was paid, the purpose of the disbursement, date and amount of the expenditure and the candidate for or against whom the expenditure was made. All of this information will be contained in one of the new files. In addition, these filings might contain information about donations received by the group to pay for the expenditures. Donations made specifically to finance these expenditures will be disclosed if they meet certain thresholds. If these are included in the filing the specific information about any donations will also be available in a second file.

The second type of activity to be included in these files is electioneering communications. Once spending on one of these exceeds $10,000 in the aggregate it must be reported by the end of the day after the day the ad has been publicly distributed. Additional reports are required each time additional spending for electioneering communications exceeds $10,000.

Each of these filings will include detailed information about the electioneering communication spending, including who was paid, the date, amount and purpose of the disbursement and the office, state, district and name(s) of candidates referred to in the ad.  These detailed transactions will be included in a third set of files (its a set of files because there may be several candidates mentioned in a single ad, so there will be a file with disbursement information and a linked file with candidate information).

Finally, electioneering communication filings may also include information about donations to the group that paid for these ads, and this information will also be available in a file when it is provided. Donations must be reported if they exceed $1,000 and were made either to an account used exclusively for this activity or were made specifically to pay for electioneering communications.

A note on "might" and "may"

I've been pretty equivocal in talking about the disclosure of sources of funds for these activities. That's because the law and the Commission's regulations sometimes limit the disclosure of the sources of funds. In Section 434(c)(2)(C) of the Federal Election Campaign Act of 1971, as revised, the law states that people or groups who make independent expenditures but don't register with the FEC as political committees must report "the identification of each person who made a contribution in excess of $200 to the person filing such statement which was made for the purpose of furthering an independent expenditures." Similar language appears in the Commission's regulations regarding disclosure of electioneering communications.

Some of the complexity here comes from the fact that groups that are involved in lots of different activities may be making either independent expenditures or electioneering communications, or both, in 2010. It's not clear how one would decide, for example, which union member's dues or Chamber of Commerce membership payments should be disclosed as a "source" of these funds when the Chamber and the union use dues payments for many different purposes.

Groups that create political committees and file regular monthly or quarterly reports will include disclosure of the sources of their funds.

Updating the files

We're planning to update these files in something close to real time. Reports filed electronically will be posted to the files as soon as we have received and processed them (an automated process that usually takes only a few minutes.) Transactions from reports submitted on paper will be entered into our database as soon as we can. This will hopefully mean the day we receive them for most filings. Those coming to us after normal business hours may be entered the following day, and those received on a weekend may be entered the following Monday. As soon as the entry is complete and the system has processed the data it too will be included in the files.

A note on possible duplication

The need for speed in delivering these data will mean that some of the usual review and modification that we routinely do won't be happening for these files. As we've said before, for example, if filers submit the same material more than once (e.g. by amending a previous filing, or by submitting a regular that includes information already submitted on 24- or 48-hour notices) we won't be adjusting the files to include only one version of the entries. This means that analysis of these data will require some work so that totals are not inflated. Generally this can be done by sorting the records by filer and date and targeted candidate with an examination of amendment indicator columns or report type codes with the same dates and amounts appear.

We're looking at sometime next week for the release of the files -- it should be very interesting. . .

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