[EL] query on 501c4 IEs and the FEC PAC rules

Fri Mar 16 16:19:20 PDT 2012

Well, it depends upon how far "in the past" you have in mind.  I often
thought the 'good ole days' are in too many cases a myth -- and always in
the eye of the beholder.

But to a more objective point: I don't believe any Republican commissioner
thinks the major purpose test is unconstitutional.  Major purpose, as you
know as well as any, is a Court-created construct; an exercise in
constitutional avoidance to save a "political committee" statute from
obvious overreach.

What some Republican commissioners may object to is the layman's
understanding that major purpose is somehow a form of corruption or a
surrogate for corruption.

Steve

On Fri, Mar 16, 2012 at 7:10 PM, Rick Hasen <rhasen at law.uci.edu> wrote:

>  Absolutely, I am not meaning to suggest that any of the commissioners
> would be acting in bad faith. Some of the Republican commissioners may even
> believe the major purpose test unconstitutional.
>
> But that doesn't change the fact that these commissioners would not be
> enforcing the rules as they have been written in the past.
>
>
>
>
> On 3/16/12 4:07 PM, Steve Hoersting wrote:
>
> You are likely to be correct on both, Rick.  Your predictions are sound.
>
> But, with regard to your point 2. below, I hope you will entertain the
> possibility that some Commissioners may find a major purpose of campaign
> activity at too low a threshold, if you will, or on subjective criteria.
>
> Good weekend,
>
> Steve
>
>
> On Fri, Mar 16, 2012 at 6:50 PM, Rick Hasen <rhasen at law.uci.edu> wrote:
>
>>  Of course each such claim will have to be investigated individually.
>>
>> I am making two predictions
>>
>> 1. there will be (or already are) 501c4 groups which will engage in
>> enough electioneering that under a fair reading of the "major purpose" test
>> the group should have (but didn't) register as PACs; and
>> 2. if complaints are filed, and the composition of the FEC is as it is
>> now, the FEC will deadlock on party lines as to whether such groups should
>> have registered as PACs under the major purpose test.
>>
>> I will be happy if I am wrong on either or both.
>>
>> Rick
>>
>>
>> On 3/16/12 3:45 PM, Steve Hoersting wrote:
>>
>> Respectfully, it seems the following statement puts the *penalizing cart*before the
>> *investigative* *horse*:
>>
>> and lawsuits against the FEC if it does not *take action against* such
>> groups *for violating the PAC rules.*
>>
>> Best,
>>
>> Steve
>>
>>
>> On Fri, Mar 16, 2012 at 6:38 PM, Rick Hasen <rhasen at law.uci.edu> wrote:
>>
>>> It seems to me that there will likely be excesses in this election by
>>> c4s which are acting as shadow super PACs, which will lead to
>>> complaints, potential investigations, and lawsuits against the FEC if it
>>> does not take action against such groups for violating the PAC rules.
>>>
>>> Thanks to both of you and to others who weighed in on this issue in
>>> private messages.
>>>
>>>
>>> On 3/16/12 3:34 PM, Trevor Potter wrote:
>>> > Presumably John's comments that c4s claim " validly" that they do not
>>> have as their "major purpose" the influencing of federal elections do not
>>> apply universally to all entities that chose to claim c4 status. Rather,
>>> that is a factual question to be answered by each entity that expends more
>>> than a significant portion of their resources on federal election activity.
>>> > Trevor Potter
>>> >
>>> > Sent from my iPad
>>> >
>>> > On Mar 16, 2012, at 6:25 PM, "John Pomeranz"<
>>> jpomeranz at harmoncurran.com>  wrote:
>>> >
>>> >> Correct.  501(c)(4)s argue (validly, I think) that their "major
>>> purpose" is not efforts to influence federal elections.  Significant
>>> support for that argument comes from the tax law's requirements for
>>> 501(c)(4) status.  To qualify for its exemption from federal income tax, a
>>> 501(c)(4) must have a primary "social welfare" purpose, which does not
>>> include efforts to intervene in any political campaign.
>>> >>
>>> >> There was some interesting debate on these issues, including the
>>> intersection of FECA's (or, really, the Supreme Court's) "major purpose"
>>> and the tax law's "primary purpose," during the FEC's efforts to craft a
>>> political committee rule in 2004.   Yet what constitutes major purpose and
>>> primary purpose remain, as you know, a hot topic of debate.
>>> >>
>>> >>
>>> >> John Pomeranz
>>>  >> Harmon, Curran, Spielberg&  Eisenberg, LLP
>>>  >> 1726 M Street, NW, Suite 600
>>> >> Washington, DC  20036
>>> >> office: 202.328.3500
>>> >> mobile: 703.597.7663
>>> >> fax: 202.328.6918
>>> >> e: jpomeranz at harmoncurran.com
>>> >>
>>> >>
>>> >>
>>> >> -----Original Message-----
>>> >> From: law-election-bounces at department-lists.uci.edu [mailto:
>>> law-election-bounces at department-lists.uci.edu] On Behalf Of Rick Hasen
>>> >> Sent: Friday, March 16, 2012 6:07 PM
>>> >> To: law-election at uci.edu
>>> >> Subject: [EL] query on 501c4 IEs and the FEC PAC rules
>>> >>
>>> >> I understand that in this election cycle and the last (since CU)
>>> 501c4 organizations (which did not qualify as MCFL/QNC corporations) have
>>> been running not just electioneering communications ads, but also making
>>> independent expenditures (including express advocacy).
>>> >> How do 501c4s which are making IEs argue that they need not register
>>> with the FEC as a political action committee?  Are they arguing that
>>> electioneering is not their major purpose (along the lines of how they
>>> argue to the IRS that election related activity is not the "primary
>>> activity" for tax purposes)?
>>> >>
>>> >> Thanks.
>>> >> Rick
>>> >> --
>>> >> Rick Hasen
>>> >> Chancellor's Professor of Law and Political Science UC Irvine School
>>> of Law
>>> >> 401 E. Peltason Dr., Suite 1000
>>> >> Irvine, CA 92697-8000
>>> >> 949.824.3072 - office
>>> >> 949.824.0495 - fax
>>> >> rhasen at law.uci.edu
>>> >> http://law.uci.edu/faculty/page1_r_hasen.html
>>> >> http://electionlawblog.org
>>> >> _______________________________________________
>>> >> Law-election mailing list
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>>> >> _______________________________________________
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>>> >>
>>>
>>> --
>>> Rick Hasen
>>> Chancellor's Professor of Law and Political Science
>>> UC Irvine School of Law
>>> 401 E. Peltason Dr., Suite 1000
>>> Irvine, CA 92697-8000
>>> 949.824.3072 - office
>>> 949.824.0495 - fax
>>> rhasen at law.uci.edu
>>> http://law.uci.edu/faculty/page1_r_hasen.html
>>> http://electionlawblog.org
>>> _______________________________________________
>>> Law-election mailing list
>>> Law-election at department-lists.uci.edu
>>> http://department-lists.uci.edu/mailman/listinfo/law-election
>>>
>>
>>
>>
>> --
>> Stephen M. Hoersting
>>
>>
>> --
>> Rick Hasen
>> Chancellor's Professor of Law and Political Science
>> UC Irvine School of Law
>> 401 E. Peltason Dr., Suite 1000
>> Irvine, CA 92697-8000
>> 949.824.3072 - office
>> 949.824.0495 - fax
>> rhasen at law.uci.edu
>> http://law.uci.edu/faculty/page1_r_hasen.html
>> http://electionlawblog.org
>>
>
>
>
> --
> Stephen M. Hoersting
>
>
> --
> Rick Hasen
> Chancellor's Professor of Law and Political Science
> UC Irvine School of Law
> 401 E. Peltason Dr., Suite 1000
> Irvine, CA 92697-8000
> 949.824.3072 - office
> 949.824.0495 - fax
> rhasen at law.uci.edu
> http://law.uci.edu/faculty/page1_r_hasen.html
> http://electionlawblog.org
>

-- 
Stephen M. Hoersting
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