The following excerpt is taken from The Election Law Primer for Corporations, Fourth Edition by Jan
Witold Baran. Copyright 2004 by the American Bar Association. Reprinted here with
permission. The material contained herein represents the opinions of the authors and editors
and should not be construed to be the action of either the American Bar Association or the
Section of Business Law unless adopted pursuant to the bylaws of the Association. Nothing
contained herein is to be considered as the rendering of legal advice for specific cases, and
readers are responsible for obtaining such advice from their own legal counsel. To request
reprint permission, contact the Manager, Copyrights and Licensing, at (312) 988-6102.
4.1 GENERAL RULES
Communications financed by a corporation that are “in connection with” federal election
campaigns are regulated by federal law. While political messages to the restricted class
are permitted, public political advertising is highly circumscribed.
The scope of FEC regulations depends upon the political content of the message
and the audience to whom the message is communicated. If the communication contains
“express advocacy” of the election or defeat of a clearly identified candidate, the message
may only be directed to the restricted class. Public advertising in some circumstances is
prohibited. For example, both “express advocacy” and “electioneering communications”
by corporations to the public are illegal. Accordingly, the discussion below addresses the
rules based upon the audience attending a corporate-sponsored political event or
receiving a corporate-sponsored political message.
Audience and content restrictions apply only to communications funded by the
corporation, not to those paid by the PAC. Political communications by the PAC may
contain any message and may be directed to any person (so long as the message does not
solicit contributions to the PAC—see Chapter 2 for those rules).1 PAC communications
made to influence the election of a federal candidate may be in-kind contributions to the
candidate subject to contribution limits, unless the expense is made independent of any
candidate or political party. Independent expenditures, however, must be reported by the
PAC to the FEC.
4.2 COMMUNICATIONS TO THE RESTRICTED CLASS
Candidate and Party Appearances
A corporation may invite a candidate, a candidate’s representative or the representative
of a political party to appear on corporate or other premises before the restricted class—
i.e., shareholders, executives, administrators and their families—at a corporate meeting,
convention, or other function.2 A limited number of persons from outside the restricted
class also may attend these functions, including employees necessary to administer the
meeting, limited guests and observers, and representatives of the news media.3 In the
discussion that follows, references to a “candidate” should also be read to include a
candidate’s representative or the representative of a political party.
A corporation may coordinate with a candidate on the candidate’s plans, projects,
or needs when planning an event or communicating with its restricted class. However, the
FEC may view this coordination as compromising the independence of later public
communications by the corporation or its PAC.4 The candidate may ask for contributions
for his or her campaign or request that contributions to the company’s PAC be designated
for his or her benefit.5 The candidate also may collect contributions before, during, or
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after the event, but no officer, director, or representative of the corporation may collect
contributions as such contributions would be considered illegal corporate facilitation of
the contribution (discussed next).6
The corporation may endorse the candidate appearing before the audience and/or
limit any appearances before the restricted class to only certain candidates or political
parties.7 If the corporation allows the news media to cover one candidate’s appearance,
however, and later invites another candidate for the same office to address the restricted
class, the media must be allowed to cover the other candidate’s appearance as well.8
Additionally, the corporation must allow all media representatives access to cover the
event, if some media are allowed to do so.9
Partisan Communications and “Facilitation”
In addition to candidate appearances, the corporation, at its own expense, may
communicate with the restricted class on any topic, including overtly political subjects.10
These communications may expressly advocate the election or defeat of a named
candidate or party. The communications may solicit contributions, but the corporation
may not “facilitate” the making of the contributions. This means that the company or its
employees may not physically collect or otherwise assist in the transmittal of
contributions. Recipients can only be urged to send or deliver their contributions directly
to the candidate, whose address can be provided. A stamp or envelope may not be
provided. If contributions are collected at the corporate offices, they are subject to
“bundling” rules discussed in Section 2.12.
Any materials generated for this purpose must be produced at the company’s
expense, must express the views of the corporation, and shall not simply constitute the
republication or reproduction of materials prepared by a candidate.11 A corporation may,
however, use brief quotations from the candidate’s materials.
Partisan Telephone Banks
In addition to printed material, the corporation is permitted to establish and operate
telephone banks to contact members of the restricted class urging them to register to vote
or to vote for specified candidates.12 Actual assistance in registering or voting cannot be
withheld to favor a particular candidate or party.13
Transportation to Polls or Registration Site
The corporation also may provide transportation to the polls in conjunction with partisan
registration and get-out-the-vote efforts aimed at the restricted class.14 Transportation
to the polls or to the registration site, however, may not be denied to an individual
because he or she will not vote for a particular candidate or register with a particular
party.15
Reporting
The cost of corporate internal communications generally need not be reported to the
FEC. However, costs directly attributable to communications that are primarily devoted
to the express advocacy of the election or defeat of a clearly identified candidate must
be reported to the FEC if the costs exceed $2,000 per election.16 The $2,000 threshold
Copyright 2004 by the American Bar Association
The Election Law Primer for Corporations, Fourth Edition
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applies separately to parent and subsidiary corporations.17 The disclosure is made by
filing a completed FEC Form 7, a copy of which can be found in Appendix A.18
4.3 COMMUNICATIONS TO OTHER EMPLOYEES
A corporation may not finance communications that contain “express advocacy” to other
employees (who are not stockholders) or others outside the restricted class. Express
advocacy messages unambiguously advocate the election or defeat of a “clearly
identified” candidate, using words such as “vote for,” “vote against,” “elect,” “defeat,” or
“Smith for Congress.”19 Candidates are clearly identified when their names or pictures
appear in a communication or when their identity is apparent by unambiguous
reference.20
Candidate Appearances before All Employees
A corporation may invite a candidate or a political party spokesman to the company’s
facilities or any meeting, convention or other function to address any of its employees,
including those outside the restricted class.21 The candidate may expressly advocate his
or her election, but the corporation and the PAC may not make any preference known
and may not encourage employees to support or oppose a particular candidate.22 The
candidate may solicit contributions, but the corporation and the PAC may not. Corporate
and PAC agents are not permitted to collect contributions for the candidate.23 In
appearances before all employees, even the candidate may not collect contributions, but
he or she may leave return envelopes and campaign materials for attendees to use to
forward contributions if they choose.24
If a corporation permits a candidate to appear before employees outside the
restricted class, it must provide (upon request) the same opportunity for all other
candidates seeking the same office.25 The corporation may only coordinate the
appearance with the candidate to determine the structure, format and timing of the
appearance—it may not discuss the candidate’s plans, projects or needs more broadly.26
The same media access rules apply as with the restricted class appearances.27
4.4 CORPORATE COMMUNICATIONS TO THE GENERAL PUBLIC
Candidate Appearances
Corporations may only sponsor “noncampaign” candidate appearances before the
general public. A corporation may feature a candidate, for example, in the candidate’s
capacity as an officeholder or community leader. The candidate may speak about issues
of concern to the corporation or industry. The candidate may not discuss the election
campaign, solicit contributions or advocate that people vote for him or her or against his
or her opponent.28
Registration and Voting Information for the General Public
A corporation may provide to the general public (or any employee) registration and
voting information. No express advocacy is allowed as part of any such communications,
or of a voter registration or get-out-the-vote drive, directed beyond the restricted class.29
These communications may be made through posters, billboards, broadcasting media,
newspapers, newsletters, brochures, or similar means.30
Copyright 2004 by the American Bar Association
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The Election Law Primer for Corporations, Fourth Edition
The corporation may also distribute registration and voting information prepared
by official election administrators as well as registration-by-mail forms.31 All forms must
be distributed in a manner that does not favor the election or defeat of a particular
candidate or party and may not be accompanied by any endorsements or appeals by the
company that promote registration with a particular party.32 A corporation also may
donate money to state or local election officials to help pay for the cost of printing or
distributing registration or voting information or forms.33
Corporate registration or get-out-the-vote efforts may not be coordinated with a
federal candidate or political party.34 Any services provided in a registration or get-outthe-vote drive (i.e., transportation) may not be provided or withheld based upon the
voter’s political preferences, nor may individuals working on the drive receive
compensation based upon the number of people registered or transported who support a
particular candidate or party. The corporation must notify registrants or voters of these
requirements in writing at the time of the registration or get-out-the-vote drive.35
Voter Guides
The corporation may prepare and distribute voter guides or brochures to its employees
and the public. Alternatively, a corporation may distribute guides prepared by nonprofit
organizations.36 In either case, these materials shall feature at least two candidates and
their positions and may not expressly advocate the election or defeat of one candidate
or political party over another.37 The content and distribution of the voter guide may not
be coordinated with candidates other than by sending written questions and receiving
answers from candidates to those questions.38
If a corporation produces a voter guide based upon written questions submitted to
candidates:
• the corporation must direct questions in writing to all candidates for a particular
congressional seat and receive responses in writing;
• if questioning candidates for U.S. president, the corporation may direct
questions only to candidates of one party for a primary election or those on a
sufficient number of general election ballots to win a majority of the electoral
votes cast;
• the corporation may not feature one candidate more prominently than another;
and
• the guide shall not contain an “electioneering” message or score the candidates’
responses to convey an electioneering message.39
Voting Records
A company may prepare and distribute to the general public (or to all employees) the
voting records of members of Congress, provided the records and all communications
distributed with it do not expressly advocate the election or defeat of a particular
candidate or political party.40 Decisions on content and distribution of voting records may
not be coordinated with a candidate or political party.41
Nonpartisan Candidate Debates
The corporation may provide funds to certain nonprofit organizations for the purpose
of defraying the costs associated with staging a candidate debate.42 The debate must
Copyright 2004 by the American Bar Association
The Election Law Primer for Corporations, Fourth Edition
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include at least two candidates, meeting face to face, and may not promote one candidate
over another.43 Debate participants must be selected on the basis of established objective
criteria.44
Internet Communications and Hyperlinks
A corporation cannot post web pages that contain express advocacy unless access to
the pages is limited to the restricted class via user-specific passwords.45 Solicitations of
contributions to a corporate PAC conducted on the Internet similarly must be limited to
the corporation’s restricted class.46
A corporation may provide hyperlinks to candidate web sites from a publicly
available corporate web site, provided that the corporation does not normally charge
similarly situated nonpolitical entities for hyperlinks to their web sites.47
NOTES
1. See AO 1991-3, Fed. Election Camp. Fin. Guide (CCH) ¶ 6012 (1991) (concluding that copies of a PAC
newsletter may be sent to persons who are ineligible to be solicited for contributions if there is no
solicitation in the newsletter and no candidates are endorsed).
2. 11 C.F.R. § 114.3(c)(2); AO 2000-3, Fed. Election Camp. Fin. Guide (CCH) ¶ 6320 (2000). These rules
differ slightly for incorporated trade associations.
3. Id.
4. Id. § 114.2(c).
5. Id. § 114.3(c)(2)(ii).
6. Id. § 114.3(c)(2)(ii)-(iii).
7. Id. § 114.3(c)(2)(i).
8. Id. § 114.3(c)(2)(iv).
9. Id.
10. 2 U.S.C. § 441b(b)(2)(A); 11 C.F.R. § 114.3(a).
11. 11 C.F.R. § 114.3(c)(1).
12. Id. § 114.3(c)(3).
13. Id. § 114.3(c)(4).
14. Id.
15. Id.
16. 2 U.S.C. § 431(9)(B)(iii).
17. 11 C.F.R. §§ 100.8(b)(4), 100.134(a).
18. Id. § 104.6(a).
19. Id. § 109.21.
20. Id. § 109.21(c).
21. Id. § 114.4(b).
22. Id. § 114.4(b)(v).
23. Id. § 114.4(b)(iv).
24. Id.
25. Id. § 114.4(b)(i)-(iii).
26. Id. § 114.4(b)(vii).
27. Id. § 114.4(b)(viii).
28. AO 1996-11, Fed. Election Camp. Fin. Guide (CCH) ¶ 6194 (1996); AO 1988-27, Fed. Election
Camp. Fin. Guide (CCH) ¶ 5934 (1988); AO 1980-22, Fed. Election Camp. Fin. Guide (CCH) ¶
5479 (1980).
29. 11 C.F.R. § 114.4(c)(2), (d)(1).
30. Id. § 114.4(c)(2).
31. Id. § 114.4(c)(3)(i)-(ii).
32. Id. § 114.4(c)(3)(iv).
33. Id. § 114.4(c)(3)(iii).
34. Id. § 114.4(c)(3)(v), (d)(2).
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The Election Law Primer for Corporations, Fourth Edition
35. Id. § 114.4(d)(3)-(6).
36. Id. § 114.4(c)(5).
37. Id.
38. Id. § 114.4(c)(5)(ii)(A). This restriction on contacting candidates was held unconstitutional in
Clifton v. FEC, 114 F.3d 1309 (1st Cir. 1997), cert. denied, 118 S. Ct. 1036 (1998).
39. 11 C.F.R. § 114.4(c)(5)(ii)(A)-(E).
40. Id. § 114.4(c)(4).
41. Id.
42. Id. § 114.4(f)(1).
43. Id. § 110.13(b).
44. Id. § 110.13(c).
45. AO 1997-16, Fed. Election Camp. Fin. Guide (CCH) ¶ 6246 (1997).
46. AO 2000-7, Fed. Election Camp. Fin. Guide (CCH) ¶ 6325 (2000).
47. AO 1999-17, Fed. Election Camp. Fin. Guide (CCH) ¶ 6308 (1999).
Copyright 2004 by the American Bar Association