“Going forward,” the Federal Election Commission (FEC) will require disclosure requirements for contributions received from limited liability companies (LLCs) be applied to independent expenditure-only political committees (i.e., Super PACs) in the same manner in which they are applied to all other political committees.

On April 15, four of the six commissioners issued a “Statement of Reasons” for their conclusion of a closeout of a complaint. In the statement, which refers to Matters Under Review (MUR) 7454, Chairman Allen Dickerson, Vice Chair Steven T. Walther, Commissioner Shana M. Broussard, and Commissioner Ellen L. Weintraub assert, “contributions from LLCs to committees must be attributed pursuant to Commission regulations, and those regulations apply to all committees, including [Super PACs]. The Commission will apply that understanding going forward, and may seek civil penalties in appropriate future cases.”

In MUR 7454, the Super PAC in question had not obtained the required attribution information for two contributions made by LLCs. The Super PAC attributed the contributions only to the LLCs. Regulations require committees to report certain attribution information for contributions from LLCs.

An LLC that has a single natural-person member and is not taxed as a corporation must be attributed only to the natural person member, and not the LLC. A contribution by an LLC that is disregarded for tax purposes and does not have a single natural-person member is treated as a partnership contribution; and, a partnership contribution must be attributed to both the partnership and each partner, either in proportion to his or her share of the partnership profits or by agreement among the partners.

In prior cases premised on similar facts, the FEC could not agree whether, following the Citizens United and SpeechNow.org v. FEC court decisions, LLC reporting rules and conduit contribution rules applied to contributions made to the newly formed Super PACs authorized by those judicial rulings. The commissioners determined that “with the passage of time, [Super PACs] have become a regular part of the campaign finance landscape, and…there is no longer a lack of clarity concerning the application of LLC reporting rules and conduit contribution rules in these circumstances.”

Because the FEC has not previously made this conclusion under similar cases, they did not seek a civil penalty against the Super PAC.

The Seattle City Council is considering legislation limiting the ability of Super PACs to spend unlimited amounts of money in Seattle elections.

Council Member Lorena González introduced the Clean Campaigns Act to reduce the amount of money Super PACs funnel into elections.

The proposed legislation would limit Super PACs from receiving more than $5,000 per year from any single individual or corporation.

The act would also block multinational corporations, defined as companies with more than one percent ownership from a single foreign national or more than five percent ownership from multiple foreign nationals, from spending money on local elections.

Another proposed change would require all political advertising outside of election years to follow similar reporting requirements to current rules for election advertisements.

The Clean Campaigns Act is currently being considered in council chambers and could see a full council vote as early as next week.

Contributions by federal contractors to federal independent expenditure-only political action committees, also known as super PACs, may violate the federal pay-to-play prohibition.

On September 25, 2017, the Federal Election Commission (FEC) entered into a Conciliation Agreement with a federal contractor after finding the contractor had violated pay-to-play prohibitions by making contributions to a federal independent expenditure-only political action committee.

The FEC fined the contractor, Suffolk Construction Company, $34,000 for making two $100,000 contributions in 2015 to Priorities USA Action, a super PAC supporting then presidential candidate Hillary Clinton. Because the matter was resolved by agreement between the FEC and the contractor, there was no challenge made to the FEC’s fine.

Today, a federal court ruled an unconnected committee should be allowed to use candidates’ names in the titles of their websites and social media pages while the case is being resolved.

In Pursuing America’s Greatness v. FEC, the United States Court of Appeals for The District of Columbia Circuit reversed the district court’s denial of a preliminary injunction and remanded the case for the district court to enter a preliminary injunction enjoining the Federal Election Commission (FEC) from enforcing the application of 11 C.F.R. § 102.14(a) against the plaintiff pending the outcome of the case.

Federal law requires a candidate’s committee to include the name of the candidate in the committee’s title and requires an unauthorized political committee to not use a candidate’s name in its title. The purpose of the law is to avoid confusion. Through regulation, the FEC has extended the naming prohibition to other committee activities, solicitations, and communications, including special project names for websites or social media pages.

The court found there is a substantial likelihood the regulation violates the First Amendment and the plaintiff will prevail in the lawsuit because the FEC has not shown the regulation is the least restrictive means of achieving the government’s interest.