[EL] contractors and super pacs

Tue Jul 7 14:41:36 PDT 2015

I don’t see how Craig can be correct as regards the SEC’s pay-to-play rule. In issuing Rule 206(4)-5, the Commission expressly disclaimed any intention of regulating independent expenditures. https://www.sec.gov/rules/final/2010/ia-3043.pdf “For example, the rule imposes no restrictions on activities such as making independent expenditures…” (p. 23); (“Citizens United deals with certain independent expenditures (rather than contributions to candidates), which are not implicated by our rule.” (p. 22 n. 68).

It would be difficult for the SEC to claim that the Rule does not regulate independent expenditures, but nonetheless regulates the giving of money for the purpose of independent expenditures. After all, even contributions to political parties are generally permitted. P. 46, n. 154 (“Contributions to political parties are not specifically covered by the definition and thus would not trigger the rule’s two-year time out unless they are a means to do indirectly what the rule prohibits if done directly (for example, the contributions are earmarked or known to be provided for the benefit of a particular political official”).

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Craig Holman
Sent: Tuesday, July 07, 2015 1:43 PM
To: rhasen at law.uci.edu; law-election at uci.edu
Subject: Re: [EL] contractors and super pacs

Hello Rick:

Every indication at this point is that the federal pay-to-play law applies to super PACs, though this question has yet to be litigated. The federal law explicitly prohibits federal contractors from making campaign contributions to federal candidates, parties and PACs, and super PACs are federal PACs.

This was the basis of a "recent" FEC complaint filed by Public Citizen, in which Chevron made a $2.5 million contribution to Boehner's super PAC, the Congressional Leadership Fund. The FEC dismissed the complaint on the grounds offered by Chevron:  that the campaign contribution to the super PAC was made by Chevron Corporation, while the federal contract was held by Chevron USA, a different division of the same corporate family. (This rationale of allowing one division of a company make campaign contributions while another division of the same corporate family holds the contracts is currently the subject of an FEC rulemaking petition).

The issue of whether the federal pay-to-play law applies to super PACs was not questioned in that decision, and individual commissioners have on occasion said that they believe the law does indeed apply to super PACs.

Public Citizen contends that the law does indeed apply to super PACs. It makes sense. Not only is the law clear that it does apply to all PACs, the very close association and coordination of super PACs with candidates and parties warrants such an interpretation. Such an interpretation is not only appropriate for the federal pay-to-play law, but also for SEC rule 206(4)-5. The SEC has not yet made it clear that the SEC pay-to-play rule applies to super PACs, but the agency has routinely applied the pay-to-play rule in other situations where it deemed appropriate to close evasion of the pay-to-play rule.

Craig Holman, Ph.D.
Government Affairs Lobbyist
Public Citizen
215 Pennsylvania Avenue SE
Washington, D.C. 20003
T-(202) 454-5182
C-(202) 905-7413
F-(202) 547-7392
Holman at aol.com<mailto:Holman at aol.com>

-----Original Message-----
From: Rick Hasen <rhasen at law.uci.edu<mailto:rhasen at law.uci.edu>>
To: law-election <law-election at UCI.edu<mailto:law-election at UCI.edu>>
Sent: Tue, Jul 7, 2015 12:52 pm
Subject: [EL] contractors and super pacs

Can someone tell me the status of the issue at the FEC whether federal

contractors may make contributions to Super PACs supporting federal

candidates?  I recall some action about this, but do not remember where

things stand.

Thanks.

--

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<mailto:rhasen at law.uci.edu>

http://www.law.uci.edu/faculty/full-time/hasen/

http://electionlawblog.org

_______________________________________________

Law-election

mailing

list

Law-election at department-lists.uci.edu<mailto:Law-election at department-lists.uci.edu>

http://department-lists.uci.edu/mailman/listinfo/law-election
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20150707/66f05ade/attachment.html>