In August 2011, the FEC conceded and settled Carey v FEC, a case led by DB Capitol Strategies' Dan Backer, Stephen Hoersting (who has since joined our firm), Ben Barr, and the Center for Competitive Politics.  The practical result, discussed by the FEC here, was to ensure the right of non-connected PACs to accept BOTH traditional contributions up to $5000 from individuals that could be contributed to candidates, AND unlimited contributions from almost any US individual or incorporated entity into a second, segregated bank account to conduct Independent Expenditures.

These new bank accounts are Carey Accounts, which are established to accept these now-unlimited contributions - Carey Contributions - as distinguished from "traditional" and more tightly regulated accounts and activities.

Carey Accounts can be used to pay for all of a PAC's Independent Expenditure activity and an appropriately tailored share of its administrative expenses.  For a non-connected PAC, accustomed to paying all operating expenses out of contributions capped at $5000, Carey Accounts offer the potential to significantly enhance operations.  Despite allocation and reporting challenges - courtesy of the FEC - for those exercising their free speech rights through Carey Accounts, this is the way of the future.  Every non-connected PAC should be setting up Carey Accounts, identifying potential Carey Contribution donors, and adjusting to the new allocation & reporting needs.  Anything else is tying a hand behind your back, something your policy-opponents seeking an advantage likely won't do.

While the FEC's public guidance after Carey v FEC was limited to non-connected PACs, the principle also applies to connected PACs - those sponsored by corporations, membership/trade associations, and unions.  That is the subject of Advisory Opinion Request 2012-01 (ELF) that was filed by DB Capitol Strategies.  If we are successful, as expected, this will ensure the right of connected PACs to have Carey Accounts and accept Carey Contributions as well.

For a connected PAC, a Carey Account offers the potential to expand support for their political agenda - and in some cases grassroots operations - to the entire universe of those who might be interested.  A corporate PAC could solicit its entire employee pool, including union employees, as well as individuals and entities up and down their supply chain who may want to support their advocacy efforts.  For association PACs, the new universe of potential donors includes all those who share the group's mission or would seek to be "in front" of the associations' human or corporate members.

Connected PACs that seek to reap the benefits of these hard-won freedoms and take full advantage of their fundraising and communications capabilities under the law should be actively planning today.  Having a Carey Account and accepting Carey Contributions enhances the influence and reach of any PAC.  Why would you tie your hand behind your back?

Connected or non-connected, all PACs will benefit from having (or being prepared for) Carey Accounts, accepting Carey Contributions, and understanding the unique compliance challenges these freedoms entail. Having led the way in Carey v FEC and other pending free speech challenges, DB Capitol Strategies understands the new environment and how savvy PACs and political organizations can untie their hands.