Lawmakers press FEC on bundling regulation

Three Democratic lawmakers are urging the Federal Election Commission (FEC) to implement a proposed rule that would require broad disclosure of bundled contributions by lobbyists.

In a written comment to the FEC, Sens. Russ Feingold (D-Wis.) and Barack Obama (D-Ill.) and Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.) indicated the importance of the commission’s adopting a final rule that is consistent with the congressional intent when lawmakers passed the Honest Leadership and Open Government Act of 2007 (HLOGA).

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The lawmakers were instrumental in adding a bundling provision to the final version of HLOGA, which President Bush signed into law in September. The provision places the burden of reporting bundling contributions on candidates and committees rather than on the lobbyists themselves.  

The proposed FEC rule would define the term “bundled contribution” as any contribution that a lobbyist/registrant or lobbyist/registrant political action committee (PAC) forwards to the reporting committee from the contributor or that the reporting committee receives from the contributor but credits to the lobbyist/registrant or lobbyist/registrant PAC.

This would mean that forwarded contributions would always be considered bundled, regardless of whether the “bundler” receives credit from the reporting committee.

The lawmakers said they believed a definition of “forwarded” would be useful.

“Such a definition would help make clear, for example, that if a lobbyist collects groups of checks for a candidate but arranges for an employee or third party to give them to the candidate rather than deliver them personally, those checks still would have been ‘forwarded’ and the campaign must report that bundling,” they wrote.

While lawmakers praised the new definition, others, like the AFL-CIO, advised caution.

“Because the law reposes responsibility to identify a ‘bundler’ and the amounts he or she ‘bundled’ solely in the recipient committee … those who are potentially so identified are highly dependent upon the recipient getting the identification right, lest they be incorrectly attributed with unpopular conduct that will be reflected in a sworn and well publicized public record,” the organization wrote.

The FEC received eight comments on the proposed rule from various organizations, including: Marc Elias of the law firm Perkins Coie; Public Citizen; the IRS; Sandler, Reif & Young; the Coalition for Tax Equality; and a joint comment from Democracy 21, Common Cause, the League of Women Voters, Campaign Legal Center and U.S. PIRG.

Elias wrote that while he supports and welcomes a definition of “forwarded,” he feels it should be limited to the physical delivery of contributions and not electronic, because there is no statutory language mentioning any other method of delivery.  

Under HLOGA, authorized committees, leadership PACs and political party committees are required to report certain information when lobbyists and registrants, or their PACs, provide bundled contributions totaling in excess of $15,000 during a specific “covered period” of time.

The proposed rule would change the definition of “covered period” to the semi-annual periods of Jan. 1 through June 30 and July 1 through Dec. 31. It would also require committees that file their reports monthly to report bundling on a quarterly basis, a change the lawmakers supported.

The comment letter stated that “disclosure of bundling must be made for any reporting period in which the threshold amount of contributions are bundled. This means that if the semi-annual threshold is reached in the first quarter (or third quarter), there must be disclosure in the reports that cover those quarters.”

In its joint comment, Democracy 21, Common Cause, the League of Women Voters, Campaign Legal Center and U.S. PIRG advocated that the reporting requirements go even further.

In addition to “reporting the aggregate amount bundled within a semi-annual period,” the organizations said they wanted the FEC to require a committee to report “an aggregate amount bundled within a calendar year by any given bundler.”

The FEC also raised the issue of whether an employee who is not a registered lobbyist, but who is acting as an agent of a lobbyist or registrant for bundling activity, should be covered under the disclosure provisions.

“The starting and ending point of this analysis is who is being credited by the campaign with the fundraising,” the lawmakers wrote. “If it is a lobbyist, or a registrant that employs lobbyists, then the bundling must be reported.”

No reporting would be required if bundlers are acting independently of their employers, they reasoned.