Federal Election Commission Main Page
November 7, 2003
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2003-23
Joseph E. Sandler, Esq.
Neil P. Reiff, Esq.
Sandler, Reiff & Young, P.C.
50 E Street, S.E.
Washington, DC 20003
Dear Messrs. Sandler and Reiff:
This responds to your letter of July 25, 2003,
requesting an advisory opinion on behalf of WE LEAD Women
Engaged in Leadership, Education, and Action in Democracy
("WE LEAD"), concerning the application of the Federal
Election Campaign Act of 1971, as amended ("the Act"), and
Commission regulations, to the earmarking, collection, and
forwarding of contributions from individual donors to the
presumptive Democratic Presidential nominee.
You state that WE LEAD is a non-connected, Federal
political committee that has not been established, financed,
maintained, or controlled by any political party committee,
other political committee, or any candidate for any Federal
office. WE LEAD registered with the Commission on July 17,
You indicate that WE LEAD plans to solicit and accept
contributions up to $2,000 from individuals who would
earmark such contributions to the "presumptive nominee" of
the Democratic Party ("Party") for the office of President
of the United States. You define the "presumptive nominee"
as the candidate who, no later than 5:00 P.M. Eastern
Daylight Time ("EDT") on the seventh day prior to the start
of the 2004 Democratic National Convention, has received
enough pledged delegates to win nomination on the first
ballot at the 2004 Democratic National Convention. The
pledged delegates must be registered with and certified by
the Secretary of the Democratic National Committee ("DNC").
You state that WE LEAD plans to forward all earmarked
contributions to the primary committee of such presumptive
nominee as soon as the nominee is identified, but not later
than July 20, 2004, which is the sixth day prior to the
scheduled start of the 2004 Democratic National Convention.
You indicate that if no presumptive nominee has been
identified by 5:00 P.M. EDT on July 19, 2004, WE LEAD plans
to forward the earmarked contributions to the DNC. You
indicate that if the contributions are forwarded to the DNC,
they will not be forwarded to any candidate for President or
other Federal office.
You state that, in soliciting the earmarked
contributions, WE LEAD plans to inform prospective
contributors that their contributions are being earmarked,
pursuant to 11 CFR 110.6(b), and that the presumptive
nominee who receives the contribution will be publicly
identified on WE LEAD's disclosure reports. You also state
that prospective contributors will be informed that any
earmarked contributions must be limited to a total of
$2,000. In addition, you indicate that each prospective
contributor will be informed that if he or she has made
other contributions to the committee that receives his or
her earmarked contribution (e.g., the presumptive nominee's
authorized committee or the DNC), those contributions will
be aggregated with his or her earmarked contribution and any
amount exceeding the relevant contribution limit will be
refunded by the recipient committee.
You also indicate that all disclaimers required by
Commission regulations with respect to WE LEAD's
solicitation of contributions will be included in all
solicitations. You further indicate that WE LEAD
understands, and will communicate to the presumptive
nominee's primary committee, that the earmarked
contributions would not qualify for matching funds under the
Presidential Primary Matching Payment Account Act pursuant
to 11 CFR 9034.3(f).
You state that WE LEAD plans to identify each
contribution as earmarked for the presumptive nominee on its
disclosure report for the reporting period in which each
such earmarked contribution was received, in accordance with
11 CFR 110.6(c)(1)(ii). You also state that, at the time
the earmarked contributions are forwarded to the presumptive
nominee's campaign committee, WE LEAD plans to send the
recipient committee a check from WE LEAD for the total
amount of all earmarked contributions along with a report
containing all required information with respect to each
earmarked contribution in accordance with 11 CFR
110.6(c)(1)(i), (iii) and (iv). Finally, you indicate that
WE LEAD plans to report the disbursement of the earmarked
contributions to the recipient committee on its disclosure
report for the reporting period during which the
disbursement was made.
May WE LEAD accept earmarked contributions from
individuals to be forwarded to the Party's presumptive
nominee for the office of President of the United States or
to the Democratic National Committee?
Legal Analysis and Conclusions
Yes, as long as WE LEAD complies with the requirements
set forth below.
1. Earmarking contributions to the presumptive nominee's
The Act provides for the earmarking of contributions
"made by a person, either directly or indirectly, on behalf
of a particular candidate." 2 U.S.C. 441a(a)(8). All
contributions by a person that are made on behalf of, or to,
a candidate, including contributions that are in any way
earmarked or otherwise directed to the candidate through an
intermediary or conduit, are contributions from the person
to the candidate.
2 U.S.C. 441a(a)(8); 11 CFR 110.6(a). If the intermediary
or conduit exercises any direction or control over the
choice of the recipient candidate, however, the
contributions are treated as contributions from both the
original contributors and from the intermediary or conduit
to the recipient candidate. 11 CFR 110.6(d). The
Commission's regulations define "earmarked" as "a
designation, instruction, or encumbrance, whether direct or
indirect, express or implied, oral or written, which results
in all or any part of a contribution or expenditure being
made to, or expended on behalf of, a clearly identified
candidate or a candidate's authorized committee." 11 CFR
110.6(b)(1). Earmarked contributions must be forwarded to
the candidate or the candidate's authorized committee in
accordance with 11 CFR 102.8. 11 CFR 110.6(b)(2)(iii).
Section 432(b) of the Act and Commission regulations at
11 CFR 102.8(a) require that persons who receive
contributions on behalf of an authorized committee must
forward the contributions to the treasurer no later than 10
days after receiving them. If the contribution exceeds $50,
the name and address of the contributor and the date of
receipt must be forwarded with the contribution, and, if the
contribution exceeds $200, the contributor's employer and
occupation must also be forwarded. The date of receipt of
the contribution is the date that the person receiving the
contribution obtains possession. 11 CFR 102.8(a). The Act
and Commission regulations also require the intermediary or
conduit to report the original source and the intended
recipient of an earmarked contribution to the Commission and
to the intended recipient. 2 U.S.C. 441a(a)(8);
11 CFR 110.6.
A. Unidentified Candidate
As noted above, the Commission's regulations define an
earmarked contribution, in part, as one that is made to a
"clearly identified candidate or a candidate's authorized
committee." 11 CFR 110.6(b)(1). The Commission has
interpreted this regulation to allow contributions to be
earmarked for an undetermined Federal candidate in certain
circumstances. In Advisory Opinion 1982-23, the Commission
concluded that it was permissible for a local committee to
earmark $1,000 through a local party committee to the as-yet
unknown Republican nominee for New York's 24th Congressional
District. In Advisory Opinion 1977-16, the Commission
concluded that it was permissible for a local committee to
accept contributions and make expenditures on behalf of an
undetermined Federal candidate. In both instances, the
Commission concluded that it was permissible to earmark
contributions to undetermined Federal candidates because the
candidates were identifiable as to specific office, party
affiliation, and election cycle, although the names of the
eventual nominees were not known.
Under WE LEAD's proposal, because the presumptive
nominee is identifiable as to specific office (President of
the United States), party affiliation (Democratic Party),
and election cycle (2004), the Commission concludes that
contributors may earmark contributions to the primary
committee of the presumptive nominee through WE LEAD, as
long as the earmarked contributions are forwarded to the
treasurer of the presumptive nominee's authorized committee
once the presumptive nominee is identified, consistent with
the 10 day forwarding and other requirements of 2 U.S.C.
432(b)(2) and 11 CFR 102.8(a).
B. Direction and control
Based on the facts presented in your request, WE LEAD
will not exercise any direction or control over the choice
of the recipient candidate, which will be the presumptive
Democratic Presidential nominee no matter who that person
is.1 11 CFR 110.6(d). Accordingly, WE LEAD will exercise
no discretion over which candidate receives the earmarked
contributions. Your request describes a clear method to
identify the presumptive nominee based on a sufficient
number of pledged delegates as certified by the state
Democratic Chairs. WE LEAD will not have any role in, or
control over, the selection of the delegates or their
certification. Your request also clearly identifies the
entity - the DNC - that will receive the earmarked
contributions if no Presidential candidate receives
sufficient delegates to secure the nomination seven days
before the start of the Democratic National Convention.
Thus, WE LEAD must forward the earmarked contributions to
the presumptive nominee or the DNC, depending on the
circumstances, within the time periods discussed below.
Generally, contributions earmarked for a candidate must
be forwarded to the authorized committee's treasurer within
10 days of receipt. 2 U.S.C. 432(b)(2) and
11 CFR 102.8(a). The 10 day forwarding rule is designed to
prevent individuals and entities from being able to
influence or manipulate cash-on-hand figures by holding onto
contributions for designated candidates. In Advisory
Opinion 1982-23, however, the Commission concluded that the
10 day forwarding requirement of 11 CFR 102.8(a) did not
apply until such time that the Republican congressional
candidate for the 24th congressional district of New York
was determined. Like the requestor in that advisory
opinion, WE LEAD will not know, and has no way of knowing,
the identity of the Democratic Party's nominee when it
solicits and receives earmarked contributions until the DNC
certifications show that a candidate has become the party's
presumptive nominee. Thus, the timing requirements of 2
U.S.C. 432(b)(2) and 11 CFR 102.8(a) are not triggered until
the presumptive nominee is chosen by the method described in
your request. Once the presumptive nominee is known, WE
LEAD must forward the earmarked contributions to the
presumptive nominee's authorized committee within ten days.
See Advisory Opinion 1982-23 (applying the same rule in the
context of congressional elections).
WE LEAD must report the original source of each
earmarked contribution on its reports for the reporting
period in which the earmarked contributions were received.
11 CFR 110.6(c)(1). The reports must identify each
earmarked contribution as earmarked for the presumptive
Presidential nominee of the Democratic Party. For the
reporting period in which the earmarked contributions are
forwarded to the presumptive nominee, WE LEAD must report
the disbursement in accordance with 11 CFR 110.6(c)(1). In
addition, at the time WE LEAD forwards the earmarked
contributions to the presumptive nominee's primary
committee, it must also send the committee a report
containing all required information with respect to each
earmarked contribution pursuant to 11 CFR 110.6(c)(1)(i),
(iii), and (iv). WE LEAD's plan to address excessive
contributions is acceptable.
Two additional issues arising from the proposed
activity are whether WE LEAD's direct costs of solicitation
should be treated as in-kind contributions or independent
expenditures and the contents of any required disclaimer.
If WE LEAD's solicitations in this earmarking program were
made independent of any candidate, candidate's authorized
political committee, or its agents, by virtue of this
independence the direct costs of solicitation incurred by WE
LEAD would constitute independent expenditures.
2 U.S.C. 431(17); 11 CFR 100.16. Thus, to the extent that
Advisory Opinion 1980-46 concludes that the direct costs of
the solicitation incurred would constitute an in-kind
contribution to the candidate's campaign merely on account
of a candidate's subsequent acceptance of earmarked
contributions, it is overruled. Furthermore, if the
solicitations are independent expenditures triggering the
disclaimer requirements, the disclaimer shall clearly state
WE LEAD's full name and permanent street address, telephone
number, or World Wide Web address and that the communication
is not authorized by any candidate or candidate's committee.
2 U.S.C. 441d(a)(3); 11 CFR 110.11(b)(3) and (c).
Alternatively, if the solicitations are coordinated with a
candidate, an authorized committee of a candidate, or an
agent of either (11 CFR 109.20), the direct costs of
solicitations would constitute an in-kind contribution to
the campaign and the disclaimer shall state that the
communication has been paid for by WE LEAD and that the
communication is authorized by such candidate, authorized
committee, or agent. 2 U.S.C. 441d(a)(2); 11 CFR
110.11(b)(2) and (c).
2. Earmarking contributions to the DNC
In the event that the presumptive nominee cannot be
determined within seven days of the Democratic National
Convention, WE LEAD intends to forward the contributions to
the DNC. Neither the Act nor Commission regulations
specifically address contributions earmarked to political
committees that are not authorized committees of candidates.
See 2 U.S.C. 441a(a)(8) and 432(b); 11 CFR 110.6. The
Commission has held that this omission does not bar such
earmarking, but that it would be subject to other
regulations concerning the receipt of contributions by any
person on behalf of a political committee. Advisory
Opinions 1983-18 and 1981-57. Section 432(b) of the Act and
Commission regulations at 11 CFR 102.8(b) require persons
who receive a contribution in excess of $50 on behalf of an
unauthorized committee to forward the contribution, as well
as the contributor's name, address, and receipt date, to the
treasurer no later than 10 days after receipt. 2 U.S.C.
432(b)(2)(B); 11 CFR 102.8(b)(2). If the contribution
exceeds $200, the contributor's employer and occupation must
also be forwarded. 11 CFR 102.8(b)(2). Contributions of
$50 or under to unauthorized committees must be forwarded
within thirty days (with no information forwarding
requirement). 2 U.S.C. 432(b)(2)(A); 11 CFR 102.8(b)(1).
Because the DNC is not an authorized committee of any
candidate, if WE LEAD forwards the contributions to the DNC,
then the time period in which WE LEAD must forward each
earmarked contribution would depend on the amount of the
contribution: (1) contributions of $50 or less must be
forwarded to the treasurer of the DNC within 30 days of
receipt; and (2) contributions over $50 must be forwarded to
the treasurer of the DNC within 10 days of receipt. For
purposes of WE LEAD's program, the date of receipt is the
date on which the presumptive nominee is determined.
The requirements set forth above regarding solicitation
and reporting of earmarked contributions and handling of
excessive contributions also apply to contributions
forwarded to the DNC. The only difference is that the
contribution limit for individuals is $25,000 per calendar
year rather than $2,000 per election because the
contribution is made to a national political party rather
than a Federal candidate.
2 U.S.C. 441a(a)(1).
This response constitutes an advisory opinion
concerning the application of the Act and Commission
regulations to the specific transaction or activity set
forth in your request. See 2 U.S.C. 437f. The Commission
emphasizes that, if there is a change in any of the facts or
assumptions presented, and such facts or assumptions are
material to a
conclusion presented in this opinion, then the requestor may
not rely on that conclusion as support for its proposed
Bradley A. Smith
Enclosures (AOs 1983-18, 1982-23, 1981-60, 1981-57, 1980-
109, 1980-46 and 1977-16)
1 At least one Democratic candidate, General Wesley Clark,
was not even in the Presidential race when WE LEAD submitted
its advisory opinion request to the Commission in July.
Nevertheless, if General Clark wins the Democratic
nomination for President, WE LEAD will forward the earmarked
contributions it has collected to General Clark's campaign.