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The S T R A T E G I S T

October 2011

A victory for speech: FEC concedes, All PACs are now "Super PACs"

 

After conceded defeat in Carey v FEC, the FEC recently issued new reporting guidance for PACs that are adding "non-contribution" (Independent Expenditure) accounts in addition to their primary candidate contribution accounts. While that guidance was for non-connected PACs - which are all essentially now SuperPACs as well - Carey v FEC has wrought profound changes in the landscape for every PAC and savvy political/advocacy operation. 

 

DB Capitol Strategies was lead counsel in Carey v FEC, joined by exceptional co-counsels Steve Hoersting, Ben Barr, and the Center for Competitive Politics (CCP), including former FEC Chairman Brad Smith, Alison Hayward, and Allen Dickerson.  Read CCP's press release on the new guidance HERE.

 

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DB Capitol Strategies

and Dan Backer, Esq.

 

DB Capitol Strategies PLLC provides legal, strategic, and operational guidance to political organizations with a focus on PAC treasury and FEC compliance through its principal attorney, Dan Backer. Mr. Backer holds a B.A. in Political Science from the University of Massachusetts Amherst, a J.D. from George Mason University School of Law, and a Masters Certificate in PAC Management from George Washington University. In 2009, Mr. Backer earned the Professional Lobbying Certification (PLC) from the American League of Lobbyists.

 

Mr. Backer is admitted to practice law in Virginia and Washington DC, and before the U.S. District Courts for the Eastern & Western Districts of Virginia and Washington, DC. Most recently, Mr. Backer was lead counsel in the ground-breaking Carey v FEC case, which won the right for all non-connected grassroots PACs to engage in both candidate contribution activity from amount and source restricted funds and Independent Expenditure activity from unlimited individual, corporate, or union contributions.

 

Mr. Backer has previously served as a legal policy analyst and subject matter expert in military and overseas voting for the Department of Defenses' Federal Voting Assistance Program (FVAP). Mr. Backer has extensive experience with public policy and advocacy programs, grassroots organizations, and political action committees, and is Treasurer, Assistant Treasurer, or Counsel to numerous PACs.

 

 

Thank you for reading The Strategist

This information is not intended as legal advice, which turns on specific facts. Seek specific legal advice before acting with regard to the subjects mentioned herein.  For more information, visit our website at www.DBCapitolStrategies.com.  ©2011 DB Capitol Strategies PLLC, All rights reserved.
Ask yourself the right questions

 

The depth of that impact is not yet fully appreciated by many PAC practitioners, or those who might now see a PAC as a key part of an overall advocacy or electoral strategy. For non-connected PACs, it boils down to whether you would be better off if you could solicit & accept unlimited sums from almost any individual or entity into a newly added non-contribution (IE) account, and paying a significant portion of your operating expenses from that new account?

 

For Connected PACs - the analysis is more complex:

  • Would your PAC be better off if you were able to solicit the general public for both candidate-contributable dollars and IE-dollars?
  • Would you raise more money by being able to solicit up and down the food chain of your industry or interest groups' supply chain & vendor relationships?
  • Would eliminating pre-clearance make your life any easier?
  • Would the ability to rebrand (including your name) and refocus your messaging to a broader audience and for a broader purpose help you better achieve your policy, or electoral, objectives?
  • Are you willing to disclose operating costs now paid by the connected entity in order to achieve these benefits?
PAC managers should carefully consider, in consultation with counsel, the range of new strategic opportunities available to them, and the interplay with ever-changing legal and compliance concerns.
 
Corporations have a unique set of factors to weigh, including the tax-treatment implications of disconnecting their PAC or providing support to outside PACs, the availability of alternate means to preserve tax-treatment and donor non-disclosure benefits (Steven Colbert's "Anonymous Shell Corporation 501c4"), and how the relationship with employees, vendors, suppliers, customers, and other stake holders will be effected by such a shift.
 
The first detected corporate-supported non-connected PAC is discussed by the Washington Post HERE.  This is an area of campaign finance law that is rapidly moving from theoretical to practical, smart organizations should take advantage of their opportunities.

Advisory Opinion Request filed for Leadership PACs

On October 17, DB Capitol Strategies filed an Advisory Opinion Request for the Constitutional Conservatives Fund, a Leadership PAC started by United States Senator Mike Lee of Utah. The request seeks to clarify that Leadership PACs are treated in the same manner as all other non-connected PACs when it comes to maintaining both a "traditional" contribution account and a post-Carey non-contribution (IE) account. CLICK HERE to download the submitted AOR.

 

Earlier AOR withdrawn for Western Representation PAC

On October 13, DB Capitol Strategies withdrew Advisory Opinion Request 2011-18 for Western Representation PAC. While the core issue at play - unreasonable reporting burdens on grassroots PACs during the presidential primaries - will likely be revisited, the analysis of email-as-IE might have created new opportunities for regulating political speech and that would lead to unwanted opportunities for further FEC regulatory over-reaching.