Should the FEC prohibit contribution laundering?

REG 2015-03 Petition for Rulemaking | comment | docs

Current FEC and IRS regulations permit political committees with independent expenditure accounts (“Super PACs”) to receive contributions from 501(c)(4) “social welfare” corporations — which themselves have no public reporting obligations.

This hole in the regulations, combined with recent Supreme Court court decisions, has made it easy for unlimited, completely anonymous, potentially foreign-sourced money to be used to influence U.S. elections. In the 2012 federal election cycle, this “dark money” totaled roughly $257 million. It’s estimated to be much higher in the 2016 election.

In effect, this is money laundering for political contributions (“contribution laundering”).

We believe that this plainly subverts the purpose of our campaign finance laws, as well as the assumptions of public disclosure relied on by our courts.

Though recent court decisions have allowed corporations to purchase political speech through “independent expenditures”, this right does not extend to the purchase of anonymous speech.

Our proposal to cure this problem is simple and very narrowly tailored: we are asking the FEC to require that any corporation contributing more than $1k/yr to influence elections do so through a publicly reported bank account (known as an “SSF” or “Carey account”) — and that all reporting disclose not just the last hop in what is potentially a chain of shell corporations, but also the original, human contributor.

This would not require issue advocacy organizations to disclose donors for their issue advocacy spending. That remains private. This only affects money used to influence an election.

Public comments are open!
Deadline: October 27, 2015

To comment, just email [email protected] We’d appreciate if you CC us at [email protected], but you don’t have to. You can also use the FEC’s form.

You must include your first & last name, city, state, and zip. Everything you send will be public record, so do not include your phone number, street address, SSN, birthdate, etc.

Every email you send to the FEC will be read, so don’t feel hesitant about adding your comments.

However, if you take the time to make a longer and more well explained comment, and send it as a nicely formatted PDF, it’ll probably get more attention.

Official filings in REG 2015-03 (MYL PAC & C4 re contribution laundering)
2015-07-31 FEC Record page

2015-07-29 Notice of availability

2015-07-15 addendum re Doe v. Reed

2015-05-14 Petition for rulemaking