Last Week at the FEC: Opinion Requested on Credit Card Rewards Programs for Political Committee Contributions

by Holland & Knight LLP

Last week, the Federal Election Commission did not meet, but released two Advisory Opinion Requests (AORs) and the results of several enforcement actions. Earlier in the month, the Commission’s Office of Inspector General released its semi-annual report on the status of its recommendations to improve the Commission’s operations.

Also last week, Commission Vice Chair Anne Ravel headed to Capitol Hill to discuss the role of the Commission with Congressional interns as part of this summer’s 2014 Congressional Intern Lecture Series

Advisory Opinion Requests

The commission publicly released AOR 2014-09, Reed Marketing, which it initially received in May, and AOR 2014-10, Joan Farr, which it received in mid-June. 

Reed Marketing

In its request, Reed Marketing Company (RMC) asked that the Commission opine regarding whether federal election regulations would allow the RMC to enter into agreements with the National Party Committees, and other political committees, to market credit cards with a rebate option that would result in contributions to the committees.

The Commission has previously considered similar questions in AO 2008-18, Mid-Atlantic Benefits, and AO 2006-34, Working Assets Inc..  In Mid-Atlantic Benefits, the Commission found that a political committee’s receipt of a transaction fee from corporate revenues in exchange for market drug discount cards would constitute prohibited corporate political contributions.  Alternatively, in Working Assets Inc. the Commission allowed a telecommunications company to direct a customer’s 10% rebate on service to an affiliated political committee, with the proviso that customers were notified on an annual basis of their right to receive the rebate as a credit on their bill rather than continuing to contribute to the political committee.

Reed Marketing should provide the Commission with an opportunity to clarify the distinctions between these potentially conflicting prior opinions.

Joan Farr

In Joan Farr, an independent candidate for Senator from Oklahoma has asked that the Commission provide an opinion as to whether she may give away free copies of a book she published via a non-profit organization that she controls.  Although it is apparent from amendments to the AOR that the Commission’s staff has pointed to AOs 2011-02, 2004-18, and 2001-08, which provide applicable guidance, she has proceeded to amend her AOR and has asked for expedited 20-day review, which is only available within 60 days of a contested election.

Enforcement Actions Dismissed

The Commission also made public two dismissed enforcement actions along with their accompanying legal and factual analyses. 

In MUR 6520, the Commission dismissed a complaint brought by a Massachusetts Realtor, who alleged that the National Association of Realtors and its state and local affiliates where coercively requiring her to pay dues that are used to fund independent political expenditures.  Specifically, the realtor alleged that by limiting access to the Multiple Listing Service (MLS) system to dues-paying members, and using such dues for political activity, NAR was coercing her to fund political activies that she opposed. Although the Commission did not address this contention directly, it did note the voluntary nature of participating in NAR, and subsequently exercised its prosecutorial discretion to dismiss the complaint without further action. 

In MUR 6749, the Commission responded to a complaint alleging that the Trust Women PAC had violated the Federal Election Campaign Act (FECA) by making direct loans to, and purchasing goods for, a for-profit women’s clinic.  In its factual and legal analysis, the Commission noted that the FECA permits political committees to make loans, noted that the alleged violations were de minimis in nature, and found that the Committee had fixed, or intended to fix, associated reporting errors.

Meeting Schedules 

The Commission’s next executive session is scheduled for July 22nd and it will meet in open session on Wednesday, July 23rd.   During its open session the Commission will consider Draft Advisory Opinions 2014-05, 2014-06, and 2014-08, which have not yet been released.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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