Late yesterday, as the rain fell for the third consecutive day in Washington, the FEC published its proposed bundling rules.  Congress has passed new disclosure requirements for contributions collected or raised for candidates by lobbyists. It expects rules from the FEC on unanswered questions, such as how bundling will be precisely defined. Now the FEC has sketched some of those answers and asks for comment by November 30, for airing at a public hearing to be announced later.

     Here are specific issues of interest that appear in the Notice:

     1.  New names for old committees.  The bundling disclosure applies to contributions raised by lobbyists or lobbyist-controlled committees.  The FEC may require that committees (PACs) established by organizations registered under the Lobbying Disclosure Act identify themselves as a "lobbyist/registrant PAC."  Under one alternative presented by the FEC, a PAC (of a registered organization) would be both a "separate segregated fund" and a "lobbyist/registrant PAC," and organizations now filing with the FEC under the old name would have to amend their Statements of Organization under the new one. NPRM at 5.

     2.  Other committees "controlled" by a lobbyist?"  Another question asked by the FEC is whether a lobbyist appointed to be Treasurer of a committee requires that committee to be treated as a "lobbyist/registrant PAC."  Id.

     3.  Amount raised or amount credited?  The Commission wants comment on the question of whether the reporting requirement is triggered by the amount raised or the amount credited. It should seem clear that if the candidate (or candidate-controlled committee) has not actually received the promised or expected contribution, the reporting requirement should not apply. The Commission asks whether this is necessarily so:  should the credit given for the amount expected be reported?  Id. at 12.

     4.  Reporting of contributions raised by employees or agents of lobbyists, who are not themselves lobbyists. The Commission asks whether the reporting should extend to fundraising by persons who are not lobbyists but may be raising the funds as employees or agents of a lobbyist or lobbying organization. This is, of course, an anti-circumvention proposal: though the law compels disclosure of contributions bundled only by lobbyists or lobbying organizations, someone might be acting for them. The credit given would actually benefit the lobbyist, under this view. Other requirements of the law turn on the definition of "agent"—e.g,. soft money fundraising restrictions applied to the "agents" of a federal candidate—and this would take the bundling rules into the same direction.  Id. at 13.

     5.  What is credit (or recognition) for fundraising?  The requirement applies to funds raised for which "credit"—or other means of recognition—are received. The FEC adds little to the statutory language and spare legislative history. Among the forms of recognition cited are:

 --"titles base on levels of fundraising";
 
 --access to events "reserved exclusively" for the bundlers; and

 --events offered as a "reward" for success in raising the money.

Id. at 15, 32.

     The Commission adds questions of some importance:  whether it matters that the individual with the title or credit had any "actual" role in raising the money; whether the "means of recognizing" have to be designated in writing; how certain the reporting committee must be that the bundler really raised the money.  Id. at 15.

     6.  Reporting schedules. The Commission is putting out for comment different approaches for reporting. One alternative would have the reporting committee report quarterly as well as semi-annually any amounts bundling raised over the $15,000 reporting threshold. Another would compel quarterly reporting, but only semi-annual reporting in years when a committee—a candidate committee—would only be required under the current statutory requirements to file semi-annually.  Id. at 8-11.

     7. Contribution limit implications.  Under current FEC regulations, a bundler may be subjected to a charge against its contribution limit for the full amount raised and transmitted to a candidate.  This rule applies to an amount that an individual raises if the bundler exercises "direction or control" over the contribution.  11 C.F.R. § 110.6(d)(2).  Not much has happened under these rules for years:  they are largely dormant and certainly poorly understood.  But the FEC is considering whether to require the reporting committee to note as part of its report, for any bundled contribution, whether these "double count" rules applies to affect the bundler’s own limit.  These double count rules also apply where the PAC collects and forwards the contributions to the candidate. 11 C.F.R. § 114.2(f)(4).

     This could be a first step toward reinvigorating these limit-based bundling restrictions and would have a far greater effect on "bundling" then even the reporting requirements passed by Congress and address under the proposed rule. NPRM at 21.

     8. Co-hosting of events.  The FEC will consider how to treat events "co-hosted" by various lobbyists. It asks whether each host should, if the event is treated as a bundling event, be reported as responsible for the full amount of the contributions raised at the event.

     In the coming days, more on these and other issues will be posted here.

Bob Bauer