[EL] Business Week story about DreamWorks marketing team assisting Messina (Pres. Obama's campaign manager)

Thu Jun 14 12:57:06 PDT 2012

It's a no brainer on the law - absolutely. As Rick notes, the facts would be the question. Generally, even if the employees didn't mind or were happy to do it, if the boss said, "Here's Jim Messina. He wants to talk about marketing. Can you give him some of your time?" I think you've got a problem.

Bradley A. Smith
Josiah H. Blackmore II/Shirley M. Nault
  Designated Professor of Law
Capital University Law School
303 East Broad Street
Columbus, OH 43215
(614) 236-6317
bsmith at law.capital.edu<mailto:bsmith at law.capital.edu>
http://www.law.capital.edu/faculty/bios/bsmith.asp

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Rick Hasen
Sent: Thursday, June 14, 2012 3:28 PM
To: Joe La Rue
Cc: law-election at uci.edu; Scarberry, Mark
Subject: Re: [EL] Business Week story about DreamWorks marketing team assisting Messina (Pres. Obama's campaign manager)

Absolutely.   And I agree we have no idea what happened here and that the issue of coercion is always going to be a factual question.

On 6/14/2012 12:25 PM, Joe La Rue wrote:
Rick clarified the question, and it is exactly what I suggested it is. 11 CFR 114.9 describes when corporate facilities may be used for volunteer campaign activity by corporate employees, but it also says that the safe harbor is violated if the employees perform their "volunteer" services to a candidate or campaign because they were "under coercion". 11 CFR 114.9(a)(2)(ii)(C). So the question is, were the DreamWorks employees told by their employer to meet with Obama's campaign officials? If so, I think that would be an illegal contribution. (By the way, I'm not saying that's what happened here -- I don't think you can really tell from the article what, exactly, occurred).

Rick, please correct me if I'm wrong, but you would agree that, if a corporate employer told corporate employees to provide free services to a candidate, that would be an illegal in-kind contribution, would you not?

Joe
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On Thu, Jun 14, 2012 at 11:59 AM, Rick Hasen <rhasen at law.uci.edu<mailto:rhasen at law.uci.edu>> wrote:
>From the FEC's brochure on volunteer activity:
http://www.fec.gov/pages/brochures/volact.shtml#corporate

I work in a corporate office.  Can I conduct campaign-related volunteer work while at the office?

In general, if an individual provides services to a campaign during paid working hours, the employer is making a contribution.  11 CFR 100.54<http://edocket.access.gpo.gov/cfr_2011/janqtr/11cfr100.54.htm>.  However, if you are an employee, stockholder or member of a corporation or labor organization you may use the organization's facilities during paid working hours.  For example, an employee could use the office phone to make calls pertaining to political volunteer work, but the activity must not interfere with the employee's work or the organization's normal activity.

In order for the activity not to be counted as a contribution, the Commission suggests limiting the activity to "incidental use" of the corporate facilities.  Incidental use is considered to be one hour a week or four hours a month.  11 CFR 114.9(a)(1) and (b)(1)<http://edocket.access.gpo.gov/cfr_2011/janqtr/11cfr114.9.htm>.  If the activity exceeds incidental use or the individual uses the organization's equipment to produce campaign materials, the individual must reimburse the organization within a commercially reasonable time.  The reimbursement is considered a contribution from the individual to the political committee and must be reported.  11 CFR 114.9(a)(2), (b)(2) and (c)<http://edocket.access.gpo.gov/cfr_2011/janqtr/11cfr114.9.htm>.

Can I conduct volunteer Internet activity from my corporate office?

Yes, an individual can conduct volunteer Internet activity at work as long as the individual complies with the employer's rules for personal use of computers and Internet access.  This kind of activity can include anything from forwarding political emails to signing up to work at a candidate fundraiser.  The individual must complete the normal amount of work for which the individual is paid and the activity must not increase the overhead or operating costs of the organization.  In addition, the Internet activity cannot be coerced or conditioned upon being used for particular candidates. 11 CFR 100.94<http://edocket.access.gpo.gov/cfr_2011/janqtr/11cfr100.94.htm>, 114.9(a)(2)(ii) and (b)(2)(ii)<http://edocket.access.gpo.gov/cfr_2011/janqtr/11cfr114.9.htm>.

On 6/14/2012 10:44 AM, Scarberry, Mark wrote:
Joe,

On your first point, all I can say is "duh." Of course Citizens United didn't affect contribution rules; I try to make that point whenever I can, so  I don't know how I could have made that mistake!

For the rest of it, thanks for confirming what I thought was the case, that if the marketing team provided services at the direction of their corporate boss, then that would be considered a corporate contribution.

Thanks!

Mark

Mark S. Scarberry
Professor of Law
Pepperdine Univ. School of Law

From: Joe La Rue [mailto:joseph.e.larue at gmail.com]
Sent: Thursday, June 14, 2012 10:33 AM
To: Scarberry, Mark
Cc: law-election at uci.edu<mailto:law-election at uci.edu>
Subject: Re: [EL] Business Week story about DreamWorks marketing team assisting Messina (Pres. Obama's campaign manager)

Mark,

Even post Citizens United, corporations are prohibited from making contributions to candidates, whether direct or in-kind. Citizens did nothing to change that. A corporation may, however, offer its services to a candidate so long as the candidate pays the fair market value for the services. Employees and officers of corporations are free to make contributions up to the contribution limits, of course. But under current federal law the corporation itself may not make contributions.

So this article really raises only four questions. First, did Spielberg offer advice in his private capacity or as an extension of DreamWorks? (I think it would be hard to argue that he's an extension of a corporation; therefore, I think his advice has to be considered private). Second, does advice from one person to another, offered in a private conversation, count as a contribution, such that a monetary value must be attached to it to determine whether one has given 'too much advice' and violated the applicable contribution limit? (I don't know the answer to this, not having researched it; but, I find it difficult to conceive that private advice would be counted as a contribution). Third, did the DreamWorks employees offer advice as private individuals, or was it offered within the scope of their employment? This is, I think, the key question: for, if they acted within the scope of their DreamWork employment because a DreamWork executive told them to do so, then this seems to be an illegal in-kind contribution.

Finally, here's another key question: why is it Democrats are so worried that corporate money is going to go to SuperPACs supporting Romney? Obama did quite well with donations from corporate executives in 2008. Might it be because Democrats realize that Obama's policies have been bad for business? And, if Obama's policies are bad for business, aren't they also, by extension, likely bad for job creation?

Joe
___________________
Joseph E. La Rue
cell: 480.272.2715<tel:480.272.2715>
email: joseph.e.larue at gmail.com<mailto:joseph.e.larue at gmail.com>

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On Thu, Jun 14, 2012 at 10:14 AM, Scarberry, Mark <Mark.Scarberry at pepperdine.edu<mailto:Mark.Scarberry at pepperdine.edu>> wrote:
>From Business Week (http://www.businessweek.com/printer/articles/30696-obamas-ceo-jim-messina-has-a-president-to-sell):

"At DreamWorks Studios, Steven Spielberg spent three hours explaining how to capture an audience's attention and offered a number of ideas that will be rolled out before Election Day. An early example of Spielberg's influence is RomneyEconomics.com, a website designed by the Obama team to tell the story-a horror story, by their reckoning-of Mitt Romney's career at Bain Capital. Afterward, Spielberg insisted that Messina sit down with the DreamWorks marketing team. Hollywood movie studios are expert, as presidential campaigns also must be, at spending huge sums over a few weeks to reach and motivate millions of Americans."

Pre-Citizens United, would free consulting from a corporation's marketing team, at the CEO's direction, be an illegal corporate contribution? I'm not that familiar with rules about in-kind contributions. Spielberg as an individual surely had the right to provide free advice to Messina, without it being counted against contribution limits, right? I suppose the members of the DreamWorks marketing team might have volunteered as individuals, rather than as a corporation's employees, to provide these consulting services, but the story suggests that they did so at Spielberg's direction.

Mark S. Scarberry
Professor of Law
Pepperdine Univ. School of Law

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