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Interpretative Opinion 12-01: Independent Expenditures

February 22, 2012

Jan Witold Baran and
D. Mark Renaud
Wiley Rein, LLP
1776 K Street, NW
Washington, DC 20006

Re: Potential Conflict of Interest

Dear Messrs. Witold Baran and Mr. Renaud:

This responds to your request for an opinion regarding whether a political committee may accept more than $5,000 per election cycle from a single contributor if the sole intent of the committee is to make independent expenditures for the election or defeat of a District of Columbia candidate.

You indicated that your client proposes to form a Political Action Committee (PAC) to engage in independent expenditures in connection with District of Columbia elections and intends to contribute more than $5,000 per election cycle to the political committee. You additionally indicated that the PAC would solicit and accept contributions from donors that exceed $5,000 per election cycle.

The “Board of Ethics and Government Accountability Establishment and Comprehensive Ethics Reform Emergency Amendment Act of 2012” provides in Subtitle B. Section 206. (1) that “[e]ach political committee shall file with the Director a statement of organization within 10 days after organization.”

Subtitle D. Section 232. (d)(1) provides that “[n]o person shall make contributions to any 1 political committee in any one election (including primary and general election, but excluding special elections) that in the aggregate, exceeds $5,000.”

Subtitle D. Section 232. (f) provides that “[a]ny expenditure made by any person advocating the election or defeat or any candidate for office which is not made at the request or suggestion of the candidate, any agent or the candidate, or any political committee authorized by the candidate to make expenditures or receive contributions for the candidate is not considered a contribution to or an expenditure by or on behalf of the candidate for purposes of the limitations specified in this subchapter.”

You questioned whether the provisions of former D.C. Official Code § 1-1131.01(d), currently Section 232. (d)(1) of the “Emergency Ethics Act of 2012”, are constitutional in view of the decision of the U.S. Court of Appeals for the District of Columbia Circuit in SpeechNow.org v. FEC, 599 F.3d 686 (2010). The court held in this case that contribution limits similar to those established by District of Columbia law cannot be constitutionally applied to independent committees.

Clearly, in light of the court’s decision in SpeechNow.org, the aforementioned provisions which impose contribution limits of $5,000 are no longer enforceable with regard to political committees that are established solely to engage in fundraising as independent expenditure committees. Further, these committees must not coordinate any activity with candidates or principal campaign committees or make contributions directly to candidates or political committees. However, existing District of Columbia law remains applicable to all other political committees which are not established solely for purposes of engaging in independent expenditures.

Nonetheless, the court additionally held that organizational and reporting requirements for political committees are not unconstitutional. Accordingly, political committees that engage exclusively in independent expenditures are not exempt from registering as Political Action Committees, and reporting their financial activities as prescribed by District of Columbia law.

The foregoing is an Interpretative Opinion of the Director of the Office of Campaign Finance. Pursuant to D.C. Official Code §1-1103.05, you are entitled to request an Advisory Opinion from the Board of Elections and Ethics on this transaction or activity.

Should you have any additional questions, please contact William O. SanFord, General Counsel, at (202) 671-0550.