COMMITTEE TREASURER’S2009 WORKSHOP California Democratic Party Executive Board Meeting July 18, 2009 Presented by: LANCE H. OLSON RICHARD R. RIOS Olson, Hagel & Fishburn, LLP 555 Capitol Mall, Suite 1425 Sacramento, California 95814 (916) 442-2952 www.olsonhagel.com
BASIC CONCEPTS • Volunteer activities are not regulated by local, state or Federal campaign finance laws. • The receipt and expenditure of money for political activities may result in registration and reporting under state and/or Federal campaign finance laws. • The type of political organization (Central Committee v. Club) may determine how it is regulated under state and/or Federal campaign finance laws (e.g., limits on contributions to candidates).
BASIC CONCEPTS • Different political activities e.g., voter registration, GOTV will likely be regulated in different ways by state and Federal campaign finance laws • Many election activities at the State or local level are Federally regulated and subject to Federal contribution limits and source prohibitions • Other state and Federal laws may impact your political organization (e.g., IRS, state employment laws, ADA) • “Contribution” includes monetary contributions, non-monetary contributions and loans
BASIC CONCEPTS • Nonmonetary contributions can include use of office space, phones, equipment, paid staff, public communications and other payments coordinated with a candidate or political party organization • An independent expenditure is a payment for a communication that identifies a candidate or ballot measure and expressly advocates the election or defeat of the candidate or measure, but is not done in coordination with the candidate or ballot measure • Must have individual who will be responsible for learning and complying with laws and regulations
WORKSHOP OBJECTIVES • Educate treasurers and bookkeepers for County Central Committees and Democratic Clubs • Overview of Federal and State Campaign Reporting laws • Topics covered include qualification as a committee, contribution limits, disclaimers, prohibitions and reporting • Materials include copy of this presentation and Campaign Finance Guide for Local Democratic Party Organizations in California
FEDERAL LAW Qualification as a Federal Committee – Registration and Reporting for County Central Committees • Make more than $1,000 in contributions (including nonmonetary) or expenditures on behalf of specific federal candidates in a calendar year • Receive more than $5,000 in contributions during a calendar year raised to be used in connection with Federal elections. • Specific solicitations for contributions refer to a Federal candidate or Federal election • Making contributions to Federal candidates or committees
FEDERAL LAW • Make more than $5,000 in expenditures for “exempt party” activities • Mailed slate cards featuring Federal candidates • Volunteer distributed and non-commercially mailed campaign literature, buttons, brochures, signs featuring Federal candidates • Voter registration and GOTV on behalf of presidential nominee Qualification as a Federal Committee – Clubs • Receives contributions in excess of $1,000 or makes expenditures in excess of $1,000 during a calendar year for the purpose of influencing a Federal election
FEDERAL LAWFederal Prohibitions and Limitations on Contributions Received and Made • Receipt of corporate, union and foreign national contributions prohibited and should not be deposited into Federal bank accounts • $5,000 per calendar year limit on contributions from permissible sources received by Clubs or Central Committees • $10,000 limit from individuals and PACs for Central Committees if affiliated with State Party; $5,000 per year from multi-candidate PACs • $2,400 per election limit on contributions made to Federal candidates unless “multi-candidate committee,” then $5,000 per election • Expenditures by County Central Committees for exempt party activities are not limited • Slate mail • Volunteer distributed brochures, buttons, bumper stickers • Voter registration for presidential nominee
FEDERAL LAWAffiliation with State Party • FEC presumes Central Committees are affiliated with State Party, but . . . • County Central Committees are not affiliated if not established, financed, maintained or controlled by State Party; FEC Form 1 Section 5(d) should indicate that Central Committees are subordinate (SUB) Section 6 should indicate “None” to reflect no affiliation with CDP. • Clubs are not affiliated with County Central Committees or State Party
FEDERAL LAW General Rules for Operating a Federal Political Committee for Central Committees and Clubs • Solicitation of contributions to a Federal committee must advise donor of use, limitations and prohibitions of Federal law • No cash contributions over $100 • Must use “best efforts” to collect donor occupation / employer information • Disclaimer rules require printed materials contain “paid for by” with committee name, and phone number, address or website printed in 12-point type in box. Also, if communication is authorized by any federal candidate
FEDERAL LAW SUPPORT FROM FEDERAL CANDIDATES FOR FUNDRAISING • Federal candidates are prohibited from raising non-Federal money. There is an exception that allows Federal officeholders or candidates to attend local party fundraising events (not Clubs) as featured speakers or honored guests. • Federal Candidate may participate fully if only Federally-permissible funds are raised. • May appear on “save the date” announcements that do not solicit funds. • Must provide disclaimer if soliciting funds at event where non-Federal funds are being raised.
FEDERAL LAW Operating a Federal Political Committee and State Committee of a County Central Committee • Maintain separate bank account for Federal committee • Deposit only Federally permissible funds in Federal account • Except as noted below, pay for all activities from Federal bank account and reimburse allocated share from state bank account - Exceptions for using non-Federal account: - contributions to state and local candidates - meetings and conventions - 100% non-federal fundraising expenses - Employees who spend no time influencing federal elections
FEDERAL LAW • Basic allocation ratio is 21% Federal / 79% non-Federal for 2009-2010 cycle (e.g., rent and other overhead expenses) • Employee salaries vary • Employees who spend more than 25% of their time working in connection with a federal election must be paid with 100% Federal funds • Employees who spend between 1% and 25% of their time working in connection with Federal elections may be paid 21% Federal/79% non-Federal • Fundraising expenses allocated based on “funds received”
FEDERAL LAWPaying Bills BILL Federal Account Non-Federal Account WITHIN 60 DAYS
FEDERAL LAW Federal Election Activity • Applies to County Central Committees but not Clubs • Basic Rule: “Federal Election Activity” must be paid with Federal hard dollars. No union or corporate funds may be used • Exception: BCRA allows local parties to pay a share of some “Federal Election Activity” with either a share of federal and non-federal funds ora share of federal and Levin funds • Levin Funds: Non-Federal contributions (e.g., unions and corporations) up to $10,000 per source per calendar year.
FEDERAL LAW Federal Election Activity Includes: • Voter Registration • Voter Identification • Get-out-the-vote activity (GOTV) • Generic campaign activity • Public communication • Salary of a party employee (if more than 25% of time is spent in connection with a Federal election)
FEDERAL LAW VOTER REGISTRATION • Contacting individuals by telephone, in person or by other individualized means to assist in registering to vote in the 120 days before an election at which Federal candidate will appear • No reference to a Federal candidate is required • Includes: • Printing and distributing registration and voting information • Providing people with voter registration forms • Assisting individuals in completing and filing voter registration forms • Within 120 days of election must pay with 100% Federal funds or allocate 21% Federal and 79% Levin • Outside 120 days of election may pay with 100% federal funds or allocate 21% federal and 79% non-federal
FEDERAL LAW VOTER IDENTIFICATION • Creating or enhancing voter lists by verifying or adding information about the voters’ likelihood of voting in an upcoming election or their likelihood of voting for specific candidates • No reference to a Federal candidate is required • Time Frame: March 12 through November 2, 2010; March 10 through July 14, 2009 for CD32 Special Election • During the time frame must pay with 100% Federal funds or allocate 21% Federal and 79% Levin
FEDERAL LAW GOTV • Contacting voters by phone, in person or in other individualized ways to assist them in voting • Includes providing individual voters, within 72 hours of the election information such as: • Date of election (Los Angeles DCC exception) • Time polls are open • Polling place information • Offering or providing transportation to the polls • GOTV activity need not mention a Federal candidate • Time Frame: March 12 through November 2, 2010; Note: March 10 through July 14, 2009 for CD32 Special Election • During time frame must pay with 100% Federal funds or allocate 21% Federal and 79% Levin.
FEDERAL LAW GENERIC CAMPAIGN ACTIVITY • Campaign activity that promotes a political party and does not promote any Federal or non-Federal candidates • Includes: • Public communication urging voter to “VOTE DEMOCRAT!!” • Promotes party principles • Time Frame: March 12 through November 2, 2010; Note: March 10 through July 14, 2009 for CD32 Special Election • During Time Frame must pay with 100% Federal funds or allocate 21% Federal and 79% Levin.
FEDERAL LAW PUBLIC COMMUNICATIONS • Communications that refer to a clearly identified candidate for Federal office (regardless of whether a state or local candidate is also mentioned) that promotes, supports, attacks or opposes a candidate for Federal office • Includes • TV, radio, magazines, billboards, mass mailings (more than 500 pieces), telephone banks (more than 500 substantially similar phone calls) or other general public political advertising • Use of the internet (i.e., a website or email) is not public communication, unless paid for and posted on the website of a third party • Applies at any time • Must be paid with 100% Federal funds
FEDERAL LAW 25% OF EMPLOYEE SERVICES • Salary of a State or Local Party employee who spends over 25% of his or her compensated time in a month in connection with any federal election must pay with 100% Federal funds • If 25% or less pay with 100% Federal funds or allocate 21% Federal and 79% non-Federal • If 0% spent in connection with Federal elections, then may pay 100% non-Federal • Rules apply at all times
FEDERAL LAW WHAT IS NOT FEDERAL ELECTION ACTIVITY? • Voter registration outside 120 days before a Federal election (allocate 21% federal funds and 79% non-Federal funds) • The cost of a state or local political convention and meetings (100% non-Federal funds) • Public communications that refer only to a candidate for state or local office as long as it is not a form of “Federal Election Activity”, e.g., GOTV activity (100% non-Federal funds) • Contributions to state or local candidates (100% non-Federal funds) • Grassroots campaign materials (buttons, posters, yard signs, and bumper stickers) that depict only candidates for state or local office (100% non-Federal funds)
FEDERAL LAWVOTER IDENTIFICATION • For Central Committees voter identification activities between March 12, 2010 and November 2, 2010 must be paid with 100% Federal funds or allocated between Federal 21% and Levin 79% funds
FEDERAL LAW GOTV EFFORTS • GOTV activity outside the Federal Election Activity window if specific to a non-Federal candidate may be paid for with 100% non-Federal funds • GOTV within the FEA window must be paid with 100% Federal funds or allocated between Federal and Levin funds (21% Federal and 79% Levin)
FEDERAL LAW MAILERS • For Central Committees, more than 500 pieces of substantially-similar mail that refer to a clearly identified candidate for Federal office and promote, support, attack or oppose a candidate for that office must be paid using 100% Federal funds – no allocation permitted
FEDERAL LAW MAILERS • For Central Committees mail pieces that promote a political party (e.g. Vote Democrat), do not promote any candidates, and are sent outside the FEA window may be paid with 100% Federal funds or allocated between Federal and non-Federal funds (21% Federal and 79% non-Federal)
FEDERAL LAW PHONE BANKS • For Central Committees, more than 500 substantially-similar calls that refer to a clearly identified candidate for Federal office and promote, support, attack or oppose a candidate for that office must be paid using 100% Federal funds.
FEDERAL LAW PHONE BANKS • For Central Committees, phone banks that promote a political party (e.g., Vote Democrat), do not promote any candidates, and are sent between March 12 through November 2, 2010 may be paid with 100% Federal funds or allocated between Federal and Levin funds 21% Federal and 79% Levin)
FEDERAL LAWVOTER REGISTRATION • Central Committees conducting voter registration within 120 days of Federal election must pay with 100% Federal funds or allocate between Federal 21% and Levin 79% funds. • Central Committees conducting voter registration outside 120 days must pay with 100% Federal funds or allocate between Federal 21% and non-Federal 79% funds.
FEDERAL LAW OFFICE SPACE AND RELATED EXPENSES • If expenditure for office space is nonmonetary contribution to a Federal candidate then must be paid with 100% Federal funds • If registered with FEC, Central Committees must pay general office overhead expenditures with 100% Federal funds or with allocated Federal and non-Federal funds (21% Federal and 79% non-Federal)
CALIFORNIA LAW Qualification as a Political Committee – Registration and Reporting Required Central Committees and Clubs which receive $1,000 in con- tributions for political purposes. Includes receiving funds to: • Make Contributions to state and local candidates and ballot measures • Make independent expenditures for state and local candidates and ballot measures • Conduct partisan voter registration or GOTV activities
CALIFORNIA LAW Contribution Limits – Clubs Contributions Received (including nonmonetary) • $6,500 calendar year limit on contributions from any one source received for the purpose of making contributions to candidates for state elective office (“All Purpose” account) • No limit on contributions received for activities that do not involve contributions to candidates for state elective office, e.g., voter registration, general overhead expenses or independent expenditures (“Restricted Use” account) • Local jurisdictions may impose limits for use in local elections • Contributions received not aggregated with State or County Central Committees
CALIFORNIA LAW Contribution Limits – Clubs Contributions made (including nonmonetary) • $3,900 per election on contributions to legislative candidates • $7,800 per election on contributions to legislative candidates if a “small contributor committee” • $6,500 per election on contributions to statewide candidates other than Governor
CALIFORNIA LAW • $12,900 per election on contributions to Statewide candidates other than Governor if a “small contributor committee” • $25,900 per election on contributions to candidates for Governor • Primary and General are separate elections • Local jurisdictions may impose limits on contributions to local candidates
CALIFORNIA LAW Contribution Limits – County Central Committees Contributions Received (including nonmonetary) • $32,400 calendar year limit on contributions from any one source received for the purpose of making contributions to candidates for state elective office (“All Purpose” account) • No limit on contributions received for activities that do not involve contributions to candidates for state elective office, e.g., voter registration, general overhead, ballot measures or independent expenditures (“Restricted Use” account) • Local jurisdictions may impose limits for use in local elections • Contributions received are not aggregated with contributions to State Party
CALIFORNIA LAW Contribution Limits – County Central Committees Contributions made (including non-monetary) • No limit on contributions made to candidates for state elective office • Local jurisdictions may impose limits on contributions to local candidates • County Central Committees may coordinate contribution activity with State Party
CALIFORNIA LAW Member Communications • Payment by County Central Committees for targeted communication to voters registered as Democrats for the purpose of supporting or opposing candidates are not contributions or independent expenditures • Expenditures by County Central Committees for member communications must still be reported by the committee (but not the candidate) • If the member communication is coordinated with a candidate, the expenditure must be paid from the “All Purpose” account
CALIFORNIA LAW Member Communications • This rule applies to communications to the families of members in the same household • This rule applies in all state and local elections, although some charter cities (e.g. Los Angeles) impose different rules • This exemption does not apply to general public advertising (T.V., radio billboards, lawn signs, web sites, etc.) • Registration as a Democrat does not make a voter a “member” of a Club
CALIFORNIA LAW General Requirements / Prohibitions • No cash receipts or expenditures of $100 or more (includes money orders and cashiers checks) • Subvendor disclosure ($500 threshold) • Disclose street address and occupation / employer information on all $100 or more donors – return contributions within 60 days if missing • No foreign national contributions • File campaign reports timely – SOS / FPPC Penalties • Sender identification rules require name and address of committee printed in 6-point type on outside of mailers • Disclaimer requirements for phone banks of 500 or more calls. Does not apply to all volunteer phone banks • Required to keep records for four years • Independent expenditure communications must include a “not authorized by a candidate” statement
CALIFORNIA LAW ELECTRONIC FILING • Required to file electronically with the Secretary of State if Central Committee or Club has received cumulative contributions or made expenditures totaling $50,000 or more since January 1, 2000. • Paper filing still required even if an electronic filer
CALIFORNIA LAW WHERE TO FILE • County Central Committees are by definition “State general purpose Committees and file original reports with SOS and copies with Los Angeles and San Francisco • Democratic Clubs must conduct quarterly check of activities to determine if State, County or City filer • If 50 percent or more of activities at City, County or State Level, then amend Form 410 to reflect status • If 70 percent or more of activities to support candidates or measures on same ballot (other than state candidates), then club is primarily formed to support candidates or measures • Calculation period is either the prior 24 month period or current 2-year period beginning Jan. 1 of odd year. Pick time frame that best represents current or upcoming activities
CALIFORNIA LAW WHEN TO FILE Semi-Annual Statement (Form 460) ● Due July 31 (period ending June 30) ● Due January 31 (period ending December 31) ● Mandatory Reports Odd Year Reporting (Form 460) ● Odd year Quarterly Reports required if contributions of $10,000 or more to elected state officials during First and Third Quarters (Due April 30 and October 31)
CALIFORNIA LAW Pre-election Reports County Central Committees file Pre-election reports in connection with State elections, including special elections, if they receive contributions of $1,000 or more, or make contributions or expenditures of $500 or more during a pre-election period. Contributions and expenditures do not have to relate to the State election. Supplemental IE Report (Form 465) Required if independent expenditures of $1,000 or more are made during the calendar year. May be filed pre-election and/or semi-annually Supplemental Pre-Election Reports (Form 495) Required if contributions totaling $10,000 or more are made in connection with an election other than June/November even year election (e.g., odd-year local elections Example: City of Hayward has election with a ballot measure and candidates. Alameda Central Committee contributes $5,000 to Candidate A + $5,000 in support of Ballot Measure X, Central Committee files supplemental pre-election report.
CALIFORNIA LAW Late Contribution Reports (Form 497) • County Central Committees – required if committee either receives a contribution of $1,000 or more, or makes a contribution of $1,000 or more to a candidate or ballot measure within 16 days of an election • This includes contributions of $1,000 or more received within 16 days of a special election (e.g., SD 26), or contributions of $1,000 or more to special election candidates in the final 16 days of the election • Clubs have a different rule – required only if committee makes a contribution of $1,000 or more to a candidate or ballot measure within 16 days of an election at which the candidate or measure appear • Must be filed within 24 hours
CALIFORNIA LAW Late Independent Expenditure Reports (Form 496) • Required within 24 hours if committee makes an IE of $1,000 or more within 16 days of an election • Umberg Reports (Form 496/497) -- Electronic filers file within ten days of making contributions or IE’s of $5,000 or more to support or oppose State ballot measures
CALIFORNIA LAW Special Online Independent Expenditure Report • Required if committee makes an IE of $1,000 or more within 90 days of an election • Only for electronic filers – no paper report required • Only for support or opposition to state candidates or state ballot measures • See State Reporting Calendars in Survival Guide, Appendix 1-2.
CALIFORNIA LAW VOTER REGISTRATION • No limits on contributions received or expenditures made for voter registration • Unless express advocacy for candidate, no nonmonetary contribution results from coordinating with non-Federal candidate
CALIFORNIA LAW VOTER IDENTIFICATION • Coordinated expenditures with non-Federal candidate may result in nonmonetary contribution, and expenditures would have to be paid from “All Purpose” account subject to contribution limits.
CALIFORNIA LAW OFFICE SPACE AND RELATED EXPENSES • If expenditure for office space is an in-kind contribution to a non-Federal candidate then must be paid from “All Purpose” account subject to limits