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 onlyindependent 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 CREWdecision.
- 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.
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