New FEC Rule Resolves Debate Over One Word

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By Kenneth P. Doyle

May 19 — After months of debate about the use of a single word in a reporting requirement, the Federal Election Commission unanimously approved a new regulation that includes “technical amendments” to several provisions of existing campaign rules.

The 6-0 vote by the FEC commissioners followed a compromise resolving the thorny dispute about whether to change a reporting requirement to cover “a calendar year,” rather than “the calendar year.”

The disagreement centered on whether to clarify current requirements for reporting “independent expenditures” in campaigns, including spending on ads that support or oppose candidates. Special reporting requirements take effect when expenditures by a single spender aggregate to $10,000 or more in a year.

The compromise provision adopted during an open FEC meeting May 19 makes it clear that the reporting requirement applies in “any calendar year.”

Debate Continued Since March

The provision was proposed by Republican FEC Commissioner Lee Goodman, who had raised questions earlier about the need to clarify the current reporting requirement and whether such a change should be subject to public notice and comment. Goodman always said he agreed, however, with the intent to clarify that independent expenditure reporting is required in every year, not just in election years.

The FEC first discussed the technical amendments rulemaking in March. The provisions, which were proposed by staff attorneys in the Office of General Counsel, generally involved correction of drafting errors and other nonsubstantive changes in existing rules.

The FEC commissioners, whose debates frequently turn contentious, found enough to disagree about in the technical amendments rulemaking that the debate continued during several subsequent commission meetings before a vote occurred.

In other action at the May 19 meeting, the commissioners deadlocked in an advisory opinion vote regarding whether to allow a corporate political action committee to change its name and made little progress advancing another long-pending agenda item involving possible new rules for certain large contributions to political parties.

Party Accounts Rulemaking in Limbo

The latter item involves a possible follow-up to a legislative change made by Congress at the end of 2014. That law greatly increased limits for contributions to special party accounts to pay for conventions, headquarters buildings, and legal and recount costs.

Whether and how to regulate these new accounts has been a subject of debate at the FEC since the 2014 law was passed. But, there appeared to be little consensus among the commissioners on key questions, such as whether money given to the newly created accounts could be transferred to pay for other party functions.

During the May 19 meeting, FEC Democratic Commissioners Ellen Weintraub and Ann Ravel urged their colleagues to direct agency staffers to begin drafting new rules to be in place at least by the 2018 election cycle. The FEC Republican commissioners—including Goodman, FEC Chairman Matthew Petersen, and Commissioner Caroline Hunter—appeared reluctant to move ahead with a new rule and asked for the discussion to be continued at a future meeting.

Deadlock on Corporate PAC Name

A partisan split also was evident during the discussion of the single advisory opinion considered at the May 19 meeting. Designated AO 2016-04, the ruling was requested by the political action committee of the railroad company Grand Trunk Western-Illinois Central. The request noted that the company is an American subsidiary of the Canadian railroad company Canadian National, also known as CN.

The request asked that the PAC be allowed to change its abbreviated name from GTW-IC PAC to CN PAC.

Weintraub said during the meeting that the request highlighted the issue of foreign companies' involvement in American elections and that she could not support granting the request. The other commissioners holding Democratic FEC seats, Ravel and FEC Vice Chairman Steven Walther, sided with Weintraub, while the FEC Republicans voted to grant the PAC's request.

In a prolonged debate with Weintraub, Goodman noted that American subsidiaries of foreign parent companies have long been allowed to have corporate PACs, as long as contributions to the PAC are made only by U.S. citizens or permanent residents. Weintraub countered that she believed these precedents need to be reconsidered in the wake of the Supreme Court's 2010 decision in Citizens United v. FEC, which gave all corporations greatly expanded power to spend money to influence elections.

The commissioners postponed further discussion on another agenda item—a proposal to expand the types of FEC enforcement documents that should be made public after an enforcement case is closed. Weintraub advanced a new proposal in this area, which sought to synthesize previous proposals by Goodman and Ravel regarding which FEC documents should routinely be made public. The commissioners agreed, however, that they needed more time to study the latest proposal.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com