Super PAC Not Independent Enough to Escape Contribution Limits - State and Federal Communications

July 7, 2014  •  

Super PAC Not Independent Enough to Escape Contribution Limits

On Wednesday, July 2, a federal appeals court affirmed the judgment of a district court; independent expenditure committees can lose the right to make unlimited expenditures in certain circumstances.

Vermont state sealIn Vermont Right to Life v. Sorrell , the U.S. Court of Appeals for the 2nd Circuit ruled a state-level super PAC was not functionally distinct enough from a sister committee actively contributing to candidates and parties. Whether a group is functionally distinct from a non-independent-expenditure-only entity depends on factors including, but not limited to, the overlap of staff and resources, the lack of financial independence, the coordination of activities, and the flow of information between the entities.

Creating two committees and managing two separate bank accounts is not sufficient to prove the committees’ funds are actually treated as separate. To alleviate the danger of quid pro quo corruption, contribution limits may apply to super PACs when they are not functionally distinguishable from committees directly contributing or coordinating expenditures with campaigns.

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