Groups Sponsoring Electioneering Communications Must Disclose All Donors Pending Appeal of District Court Order

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Advocacy groups and trade associations that fund political advertisements may be compelled to make heightened donor disclosures as a result of recent litigation. The expanded disclosure requirements apply to “electioneering communications,” which are ads aired via broadcast, cable, or satellite that refer to a clearly identified candidate for federal office, are made within 30 days of a primary or 60 days of a general election, and are targeted to the relevant electorate. The new ruling will affect many typical issue ads that highlight an official’s position on an issue and urge the public to contact the official. As a result of the litigation, an organization sponsoring an electioneering communication may be required to disclose all donors of more than $1,000.

For trade associations and other nonprofits considering running pre-election ads, the recent court rulings create significant uncertainty about how the disclosure rules will be applied and practical challenges in fundraising and administration.

Rules for Electioneering Communications

The rules governing electioneering communications have shifted dramatically over the last 10 years. The term first found its way into law in 2002 when Congress passed the landmark campaign finance legislation, known as the McCain-Feingold law, which prohibited virtually all corporations (including most nonprofits) from paying for electioneering communications at all. In 2007, the Supreme Court in FEC v. Wisconsin Right to Life, Inc. limited the statute so that corporations were prohibited only from paying for electioneering communications that expressly advocated the election or defeat of a candidate for federal office or that were the “functional equivalent” of express advocacy. This opened the door to more spending on electioneering communications by trade associations and incorporated non-profits. In 2010, the Court struck down the ban entirely in its Citizens United decision.

The electioneering communications provisions of McCain-Feingold not only restricted funding sources, but they also imposed disclosure and reporting requirements. Following the Wisconsin Right to Life decision, the Federal Election Commission (“FEC”) revised its disclosure rule. That rule, which is the target of Van Hollen’s lawsuit, requires corporations and labor unions to disclose and report only those persons who make donations aggregating $1,000 or more to the corporation or labor union, which were made for the specific purpose of furthering electioneering communications.

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