On September 18, the Supreme Court left in place the district court decision in CREW v. FEC, a case that dramatically increased the disclosure obligations for nonprofits and other entities that spend money on public communications that encourage people to vote for or against specific candidates.

We previously described the anticipated effects of the CREW decision, but guidance issued today by the FEC answers some questions even as it raises others.  While the CREW decision and new guidance do not change the reporting requirements for Super PACs and other political committees, they do change the donor disclosure requirements for other groups that pay for independent expenditures, such as trade associations and 501(c)(4) social welfare organizations.  The following are key takeaways from the guidance for these types of entities when making independent expenditures:

The following are key takeaways for entities making independent expenditures other than political committees:

  • There is no change in filing requirements for these entities whose only independent expenditures were made before September 18.
  • For entities making independent expenditure on or after September 18 aggregating to more than $250, the information required to be reported regarding their donors depends, in part, on when they received the contribution:
    • Contributions received 7/1/18 – 8/3/18 (beginning of the quarterly filing period through the date of the district court opinion):  Identify any person who contributed more than $200 in 2018 for the purpose of furthering the reported independent expenditure, which was the rule prior to the CREW decision.
    • Contributions received 8/4/18 – 9/30/18 (the end of the quarterly filing period) and beyond:  Identify any person who contributed more than $200 in 2018 if the contribution was intended to influence elections.  The filer must separately identify those contributors who gave for the purpose of furthering any independent expenditure.

“In the interests of fairness,” the FEC decided that more expansive disclosure is required only for contributions received on or after August 4 because “no one was on notice” that expanded disclosure would be necessary until after the August 3 CREW decision.

The FEC also provided several important clarifications about which contributions are—and are not—reportable going forward:

  • Filers must identify, with a special notation, all donors who contribute over the $200 threshold for the purpose of supporting any independent expenditure (not necessarily the specific reported independent expenditure).
  • For other contributions intended to influence elections, there is still considerable ambiguity as to how far-reaching the disclosures must be.  The FEC states that such contributions must be disclosed if they were “earmarked for political purposes.”  But it does not define when a contribution is “earmarked for political purposes.”  What about a contribution that was solicited to influence federal elections, but that was accompanied by written instructions making clear that the recipient could use the contribution for any purpose.  Is that contribution “earmarked for political purposes”?
  • The guidance also includes an odd quotation from the CREW decision stating that contributions are reportable when “used for other purposes in support or opposition to federal candidates by the organization for contributions directly to candidates, candidate committees, political party committees, or super PACs.”  It is not clear if the FEC meant that contributions for other purposes are disclosed only if they are used to support other political committees, or if it referred to such a use as merely an example of a case where contributions must be disclosed even when not made for purposes of furthering independent expenditures.
  • Interestingly, the CREW decision may in one respect lead to less disclosure.  The FEC’s new guidance indicates that 24-hour and 48-hour reports filed shortly after the public dissemination of an independent expenditure no longer need to disclose the contributors who supported the corresponding independent expenditure.  Now, contributors need only be disclosed on quarterly reports, which may mean that disclosure of a contributor could be delayed until months after the independent expenditure was disseminated—and potentially months after the election.

We will continue to closely monitor the evolution of this significant development.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

Photo of Kevin Glandon Kevin Glandon

Insurance Advocacy for Policyholders

Kevin Glandon has helped policyholders recover over $1 billion for first party losses and third-party liabilities. Kevin has extensive experience with complex, multimillion-dollar property damage and business interruption claims arising out of catastrophic events, including damage to or destruction…

Insurance Advocacy for Policyholders

Kevin Glandon has helped policyholders recover over $1 billion for first party losses and third-party liabilities. Kevin has extensive experience with complex, multimillion-dollar property damage and business interruption claims arising out of catastrophic events, including damage to or destruction of commercial real estate, hotels, and manufacturing plants caused by hurricanes, floods, and fires–prominent risks potentially impacted by climate change. Kevin also has significant experience litigating and advising on coverage for environmental and products liability claims.

Kevin also assists clients with insurance recovery under cyber, fidelity and crime insurance, builder’s risk, and product recall policies, and has advised on impacts due to communicable disease and insurance-related due diligence in connection with major acquisitions. He advises clients regarding efficient and practical insurance strategies to prepare for and respond to first-party losses and third-party claims, and has worked extensively with forensic accountants, insurance brokers, and subject matter experts to achieve an effective, multidisciplinary approach to claim resolution. Kevin’s insurance-related experience spans the fields of commercial real estate, hospitality, manufacturing, government contracting, energy production, and professional sports.

Political Law

He also has experience advising clients in compliance and defense matters regarding political and election law, including the Foreign Agents Registration Act, the Securities and Exchange Commission’s pay-to-play rules, the Federal Election Campaign Act, Senate and House ethics rules, and numerous state and local political and election laws and regulations.