Portfolio 16-5th: Regulation of Corporate Political Activity

I. Overview of Corporate Political Activity
A. Introduction
B. Early Regulation Under the Tillman Act
C. The Federal Corrupt Practices Act of 1925
D. Increased Regulation in the 1940s
E. The Influence of Judicial Decisions
F. The Federal Election Campaign Act of 1971
G. ‘Buckley v. Valeo' and the 1974 FECA Amendments
H. The FECA Amendments of 1976
I. The FECA Amendments of 1979
J. The Presidential Election Campaign Fund Act
K. The Bipartisan Campaign Reform Act of 2002
L. The Honest Leadership and Open Government Act of 2007
M. The Federal Election Commission

II. Political Action Committees
A. Introduction
1. Political action committees
2. PACs of partnerships and joint ventures
3. National banks and federally chartered corporations
4. Subsidiaries of foreign corporations and control by foreign nationals
5. Limited liability companies
6. Alternatives to connected PACs
B. Formation of the PAC
1. Identifying the group or officer(s) at the corporation who can authorize the establishment of a PAC
2. Authorizing resolution
3. Legal form of the PAC
4. Multiple PACs and affiliation issues
5. Membership
6. Articles of organization and bylaws—checklist
7. Becoming operational—multi-candidate political committee status
8. Expenses of establishing and administering a PAC and soliciting contributions
9. Petty cash
10. Federal employer identification number
11. Federal and state tax status
a. Section 527 tax exemption
b. Notifying the IRS of section 527 status (Registration requirement)
c. Section 527 disclosure requirements (Reporting requirements)
d. Section 527 annual report and return requirements
C. Organization
1. Office of the treasurer
2. Duties of the treasurer
3. Campaign depositories
4. Federal committees and accounts
5. Investment of contributions
D. Registration
E. Introduction of the PAC
F. Solicitations
1. Persons who may be solicited
a. Stockholders and executives
b. Other employees
c. Other contributors
d. Foreign nationals—no solicitation or contributions permitted
2. Procedures relating to all solicitations
a. Coercion
b. Guidelines for contributions
c. Disclaimers
d. Payroll deduction systems
e. The Internet and PAC fundraising
3. Procedures relating to the twice-yearly written solicitations of employees who are not stockholders or executive or administrative personnel
a. Who may be solicited
b. Manner of solicitation
c. Custodial arrangement—office and duties
d. Confidentiality
4. Labor union access to corporate fund solicitation methods
a. Solicitation of stockholders and executives
b. ‘Twice-yearly’ solicitations
G. Contributions and Expenditures
1. General rule
2. Contribution limitations
3. Earmarked/designated contributions
4. Undesignated contributions
5. Making expenditures
6. Independent expenditures
7. Electioneering communications
8. The EMILY'S List Advisory Opinion, Allocation of Hard and Soft Money, and the 527 Rule
9. Disclaimers for certain communications
10. Other disbursements
H. Trade Association PACs
I. Maintaining Records
1. Records of contributions
2. Illegal contributions
3. Records of disbursements
J. Reporting Requirements
1. Disclosure categories
a. Cash on hand
b. Contributions from persons other than committees
c. Contributions and transfers from committees
d. Loans made or repaid to the committee
e. Offsets to operating expenditures
f. Other receipts
g. Total receipts
h. Operating expenditures
i. Transfers to affiliated committees
j. Loans made or repaid by the committee
k. Contribution refunds and offsets
l. Contributions made
m. Independent expenditures
n. Other disbursements
o. Total disbursements
p. Debts and obligations
2. Reporting earmarked/designated contributions
3. Reporting ‘in-kind’ contributions
4. Reporting independent expenditures
5. Reporting expenditures on behalf of more than one candidate
6. Reporting debts
7. Limited safe harbor
8. Reporting contributions ‘bundled' by federal lobbyists, lobbyist employers, lobbying firms, and their PACs
K. Filing Dates
1. Election year and nonelection year reports
2. Monthly reporting
3. Filing by mail
4. Electronic filing
L. State Filing Requirements
M. Termination
N. Effect on State Law

III. Other Corporate Political Activity
A. General Principles
1. Contributions and expenditures
2. To a ‘candidate’
3. ‘In connection with a Federal election’
a. Express advocacy versus issue advocacy
b. Electioneering communications
c. The ‘PSAO' test, allocation of hard and soft money, and the 527s rule
d. Coordination and issue advocacy
e. Contributions/expenditures unrelated to federal elections
4. Shays v. FEC—Post-BCRA regulations in question
B. Commercial and Noncommercial Transactions
C. Corporate Communications
1. Communications to the restricted class
2. Reporting communications to the restricted class
D. Communications Outside the Restricted Class
1. Candidate and party appearances
2. Voter registration and get-out-the-vote drives
3. Voting records of congressmen and voter guides
a. Voting records
b. Voter guides
4. Nonpartisan registration and get-out-the-vote drives
5. Sponsorship of candidate debates
6. Disclaimers
7. Internet communications
E. Additional Corporate ‘Political Activity’
1. Volunteer services and related use of corporate facilities
2. Political activity by corporate personnel
a. Bundling contributions
b. Facilitating contributions
3. Use of corporate jets or other corporate transportation
4. Rental of meeting rooms
5. Donation of accountant and attorney time
6. Legal defense funds/redistricting funds
7. Employees on leave to participate in political activities or campaigns; fringe benefits and service credit
8. Loans, guarantees, and settlements of debts
F. Party Contributions and Presidential Nominating Conventions
1. Party contributions
2. Presidential nominating conventions
a. Commercial vendors
b. Host committees
c. Hospitality suites
G. Employee Participation Plans
H. Honoraria and Other Payments
1. Honoraria
2. Other payments
I. The Ethics in Government Act

IV. State Laws Regulating Corporate Political Activity
A. Types of State Statutes
1. States that prohibit corporate political contributions and expenditures
2. State restrictions on the establishment and use of a PAC
3. States that prohibit certain types of corporations from making political contributions or that have ‘pay-to-play' laws affecting state contractors
4. States that permit corporate political contributions
5. Miscellaneous
B. Special Questions Relating to State Ballot Proposals and Referendum/Petition-Type Activity
1. Complete prohibition unconstitutional
2. States with statutes prohibiting corporate ballot-question contributions
3. Limitations on the amount of corporate contributions or expenditures related to ballot questions

V. Penalties and Remedies
. Introductory Material
A. Federal Enforcement
1. Complaint and investigation
2. Conciliation
3. Civil proceedings
4. Other proceedings
5. Administrative Fine Program
6. Alternative dispute resolution
7. Internal Revenue Service disclaimer
8. Criminal penalties
9. Enforcement of other criminal statutes
10. The Foreign Corrupt Practices Act of 1977
11. The Honest Leadership and Open Government Act of 2007
B. State and Local Enforcement
C. Shareholder Actions
1. Derivative actions
2. Proxy actions and other control measures initiated by shareholders