An FEC enforcement action recently made public may be of interest to organizations that use members’ dues for political activities.  In a complaint to the FEC, a Massachusetts realtor claimed the National Association of Realtors and its state and local affiliates were forcing her into paying for their political activities.   The realtor’s local affiliate required her to pay dues to the National Association of Realtors (NAR) in order to access the Multiple Listing Service (MLS), which she contended was required for her to perform her job as a realtor.   NAR raised their membership dues by $40 per year, and some portion of this increase went to financing independent expenditures out of NAR’s treasury funds and through a Super PAC.  In effect, the realtor asserted that the dues increase constituted improper coercion of political contributions.

Although the FEC exercised its prosecutorial discretion to dismiss the case, the First General Counsel’s Report and Chairman Goodman’s statement of reasons may be instructive for membership organizations financing political activities with member dues.  Both would dismiss the complaint for failing to state a violation of the federal campaign finance laws.   They identified only two types of coercion that the FECA and FEC regulations prohibit.   First, contributions to a corporation’s or labor union’s PAC may not be coerced.   Because the complaint did not refer to PAC solicitations, this prohibition was inapplicable.   Second, the FEC’s regulations provide that if a corporation facilitates the making of contributions to candidates or PACs by using “coercion, such as the threat of a detrimental job action, the threat of any other financial reprisal, or the threat of force, to urge any individual to make a contribution or engage in fundraising activities on behalf of a candidate or political committee,” the contribution or fundraising activities are attributed to the corporation.  Nonetheless, even assuming that the loss of access to MLS would be a sufficient “threat … of financial reprisal” to constitute coercion, under Citizen’s United and SpeechNow.org, NAR is permitted to use its treasury funds to fund independent expenditures and to make contributions to Super PACs.   Therefore, the First General Counsel’s Report and Chairman Goodman’s statement of reasons determined, NAR’s actions were no more than the group’s own decision to fund political activities and consequently did not violate the FECA.

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Brendan Parets

Brendan Parets helps organizations resolve their most sensitive problems involving legal, political, and public relations challenges. He deploys his experiences in a Senate leadership office, as the chief legal officer for a presidential campaign, and representing organizations in Department of Justice and administrative…

Brendan Parets helps organizations resolve their most sensitive problems involving legal, political, and public relations challenges. He deploys his experiences in a Senate leadership office, as the chief legal officer for a presidential campaign, and representing organizations in Department of Justice and administrative investigations and in civil litigation to provide holistic advice that reflects business and political imperatives.

Brendan represents corporations and individuals facing congressional and administrative investigations. He also assists organizations with policy matters before Congress and counsels corporations, non-profit entities, and political committees on compliance with federal and state campaign finance laws.

Brendan rejoined Covington after serving as Chief Counsel to Senator Martha McSally (R-AZ), where he oversaw Senator McSally’s work on the Senate Committee on Banking, Housing, and Urban Affairs. Brendan also managed judiciary, commerce, telecommunications, tax, and trade issues for Senator McSally. He worked closely with Senate leadership, committees of jurisdiction, and executive branch agencies to achieve bipartisan compromise on judicial nominations, reform of Department of Homeland Security grant programs, and trade disputes.

He previously served as Chief Counsel to Senator Jon Kyl (R-AZ), Policy Counsel to the Senate Republican Policy Committee, a Senate leadership office chaired at the time by Senator John Barrasso (R-WY), and as Chief Counsel to Senator Lindsey Graham’s presidential campaign.