Restrictions on Political Speech


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There are numerous government restrictions on political speech, defined and enforced by the Federal Election Commission. The restrictions are particularly sharp on corporations -- including non-profit corporations -- and labor unions. Some of these restrictions were recently challenged in court by a non-profit corporation, Massachusetts Citizens for Life, that claimed they violated their Constitutional right to free speech. As a result, the regulations were loosened somewhat.

The remainder of this article is a memo written by the Federal Election Commission describing the new, less-restrictive regulations. We present these for the guidance of any organizations who wish to engage in political speech or political activity, and want to know what the law is.

Note: This is not a "photographic image" of the original memo, but we have attempted to preserve the structure of the table which makes up the bulk of the memo.

FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 20463


April 15, 1996

MEMORANDUM

TO: Treasurers of Separate Segregated Funds and Other Members of the Regulated Community
FROM: Information Division
SUBJECT: New Rules on Corporate and Labor Organization Activity; Express Advocacy and Coordination with Candidates
New regulations regarding activities that may be undertaken by corporations and labor organizations took effect March 13, 1996. These rules implement the Supreme Court's decision in FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986) (MCFL), by substituting an express advocacy standard for the partisan/nonpartisan standard that had applied to corporate and labor organization expenditures.

The enclosed Record summary of the new rules and Federal Register reprint of the regulations and their explanation and justification offer detailed information regarding the new provisions.

Questions regarding these rules should be directed to the FEC's Information Division at 202/219-3420 or 800/424-9530.

Celelbrating the Commission's 20th Anniversary

YESTERDAY, TODAY AND TOMORROW
DEDICATED TO KEEPING THE PUBLIC INFORMED

4/96

FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 20463

MCFL Rules on Corporate/Labor Activity1

On March 13, 1996, new and revised FEC regulations on corporate and labor communications and the use of corporate/labor facilities and resources went into effect.2 These rules, which represented the second part of the Commission's MCFL rulemaking, reflect recent judicial and Commission interpretations of 2 U.S.C. §441b. This section of the law prohibits corporate/labor organizations from using treasury funds to make contributions or expenditures in connection with federal elections. The new rules modify FEC regulations in five significant ways:
  • They provide a new standard for determining which communications must be limited to the restricted class;
  • They set guidelines for communications made by corporate/labor organizations;
  • They clarify that coordination between a corporation (or labor organization) and a candidate generally results in an illegal contribution to the candidate;
  • They provide guidelines on the permissible uses of corporate and labor facilities and resources; and
  • They clarify that corporate and labor facilitation of contributions to candidates and committees is prohibited.

New Standard for Identifying Communications Appropriate for Restricted Class

The new rules substitute a new standard for the partisan/nonpartisan standard previously used for deciding which communications had to be limited to the restricted class (i.e., members, stockholders, executives, administrative personnel and the families of each group) and which could be distributed to a broader audience (i.e., all employees or the general public). The new standard is based on "express advocacy" (i.e., a communication that expressly advocates the election or defeat of a clearly identified candidate for federal office or the candidates of a clearly identified political party). See also the August 1995 Record, page 1. Under this new standard, corporate and labor communications that contain express advocacy may be sent only to the restricted class.

Corporate/Labor Communications

The new rules also provide guidance on the following:
  • Candidate appearances and speeches at corporate/labor events;
  • Endorsements of candidates;
  • Candidate appearances and speeches on college campuses;
  • Candidate debates;
  • Written political communications, including voter guides, voting records and press releases;
  • Voter registration and get-out-the-vote drives; and
  • Voting information. (See the accompanying chart.)

Coordination with Candidate

A new provision in the revised rules addresses the topic of coordination between a candidate and the corporate or labor sponsor of an election-related communication. When communicating with its restricted class, a corporation or labor organization may coordinate with candidates concerning their campaign plans, projects and needs. That coordination, however, may compromise the independence of future communications to the general public (by the organization or its separate segregated fund).

When communicating beyond the restricted class, coordination with the candidate (other than the kinds of coordination specified in the regulations -- see chart) may result in a prohibited in-kind contribution to the candidate. Additionally, it may compromise the independence of future communications to the general public (by the organization or its separate segregated fund).

Permissible Use of Corporate and Labor Facilities

The new regulations reaffirm that, if a candidate or committee uses the facilities of a corporation or labor organization, the organization must be reimbursed within a commercially reasonable time for the usual and normal rental charge. Reimbursement is not required for the use of meeting rooms if the organization normally makes such rooms available to civic or community groups without charge and if it makes the room available on the same terms to any other candidate (running for the same office) who requests to use it.

Facilitation of Contributions

Additionally, the rules clarify that corporations and labor organizations are prohibited from facilitating contributions to candidates or political committees (other than the organization's separate segregated fund). Facilitation means using corporate or labor facilities or resources to raise funds in connection with any federal election. The new regulations provide several examples. They also explain that, in a few specific cases, a fundraising activity sponsored by a corporation or labor organization is not facilitation if someone, such as a candidate, individual or political committee, pays the organization in advance for the use of the facilities or resources. This principle applies to three situations:
  • Directing staff to work on the fundraiser;
  • Using the corporate or labor organization's mail list; and
  • Using the organization's food services.


1 This handout is based on an article that appeared in the April 1996 Record, page 1.

2 Announcement of Effective Date, 61 FR 10269, March 13, 1996. Final Rule, 60 FR 64260, December 14, 1995, with corrections, 61 FR 4302, February 5, 1996. Use the FEC's automated Flashfax system to have copies of these Federal Register notices faxed to you; use a touch tone telephone to dial 202/501-3413 and request document 230 at the prompt.

Corporate/Labor Communications

Candidate Appearances1 Restricted Class Other Employees2
Campaign-Related Appearance at Corporation or Labor Organization
11 CFR 114.3(c)(2), and 114.4(b)(1) and (2)
Organization and candidate may expressly advocate election or defeat of candidate. Candidate may advocate his/her election, but the organization and its may not; nor may they encourage employees to do so.
Organization may solicit for candidate, but may not collect contributions. Candidate may solicit funds, but neither the organization nor its SSF may solicit, direct or control contributions to candidate, in connection with the appearance.
Candidate may solicit and accept contributions before, during or after appearance. Candidate may not accept contributions at event, but may leave envelopes and campaign materials for audience.
Organization may bar other candidates from addressing restricted class. Organization must, upon request, give opportunity to all candidates seeking the same office. Unless impractical, organization must make equal time and location available to all candidates who wish to appear.
Organization may consult candidate on structure, format and timing of appearance, and on campaign plans, projects or needs.3 Organization may consult candidate on structure, format and timing of appearance, but not on candidate's campaign plans, projects or needs.
If organization allows more than one candidate to appear, and permits news coverage, it must allow media to cover appearances by other candidate(s) for same office. (Same as the adjacent restricted class rules.)
Organization must provide news media equal access. (Same as the adjacent restricted class rules.)
De minimis number outside restricted class may attend: employees who facilitate the meeting, news media, guests being honored or participating. In addition to restricted class, other employees, news media and guests being honored or participating may attend.
Organization must file reports if communication contains express advocacy and costs exceed $2,000 per election.
1 These rules also apply to appearances by party representatives.

2Communications directed to employees outside the restricted class may also go to those within the restricted class.

3That consultation, however, may compromise the independence of future communications to the general public by the organization or its separate segregated fund.

Candidate Appearances General Public
Noncampaign-Related Appearance at Corporation or Labor Organization
AO 1980-22
Candidate may speak about issues of interest to industry or union. Candidate must avoid reference to campaign -- no solicitation and no advocacy of election.

No requirement to offer other candidates equal opportunity.

Proximity to election day is not relevant.

Public Debates
11 CFR 114.4(f)
Any corporation or labor organization may donate funds to support debate conducted by nonprofit organization.

Debate may be sponsored by nonprofit organization -- 501(c)(3) and 501(c)(4) -- that does not support or oppose any candidate or party, or by a broadcaster, newspaper, magazine or other general circulation periodical publication.

Debate must include at least two candidates, meeting face to face, and may not promote one candidate over another.

Organization staging debate must select debate participants on the basis of preestablished objective criteria:

  • In primary election, may restrict candidates to those seeking nomination of one party
  • In general election, may not use nomination by a particular party as sole criterion
Public Appearance at a College or University4
11 CFR 114.4(c)(7)
Tax-exempt educational institution -- either incorporated or not -- may rent facilities to candidate or political committee in normal course of business and at usual and normal charge.

Tax-exempt educational institution -- either incorporated or not -- may make facilities available to candidate or party for free or at discount if it:

  • Makes reasonable efforts to avoid campaign event and ensure that appearance constitutes communication in academic setting;
  • Does not make express advocacy communication; and
  • Does not favor one candidate or party over another.
College or university may host noncampaign appearance under above guidelines.

College or university may host candidate debates under above guidelines.

4 Consult IRS or applicable state rules regarding state colleges and universities, and private tax-exempt schools.

Publications Restricted Class General Public
General Rule
11 CFR 114.3(a), (b) and (c)(1), and 114.4(c)(1)
Organization may expressly advocate election or defeat of candidate or a party's candidates. Organization may not expressly advocate election or defeat of candidate or a party's candidates.
Organization may solicit contributions for candidate or party. No solicitations.
Organization may use brief quotations from candidate, but may not republish candidate materials.
Organization must file reports if communication contains express advocacy and costs exceed $2,000 per election.
Publications General Public
Voting Records of Incumbent Candidates
11 CFR 114.4(c)(4)
Organization may publish factual record of votes on legislative matters.

Voting record may not include express advocacy.

Decision on content and distribution may not be coordinated with candidate or party.

Voter Guides
11 CFR 114.4(c)(5)
Type 1: Based on prepared written questions submitted to candidates
Type 2: Not based on written questions

Characteristics Common to Both Types of Guides:

  • Guide consists of at least two candidates' positions on campaign issues.
  • Guide may include biographical information.
  • Organization may not coordinate with candidates concerning content (other than by receiving prepared questions) or distribution.
  • Guide may not contain express advocacy.

Characteristics of Voter Guide Based on Written Questions (Type 1):

  • Questions may be directed in writing to all candidates for a particular Congressional seat and candidates may respond in writing.
  • Questions may be directed in writing to Presidential candidates (all in one party for primary or all on general election ballot in state where guide is distributed or in enough states to win majority of electoral votes).
  • No candidate may receive greater prominence than another.
  • Guide may not contain an electioneering message.
  • Guide may not score or rate responses in such a way as to convey an electioneering message.
Press Releases/Endorsements
11 CFR 114.4(c)(6)
Organization (except 501(c)(3) nonprofit organization) may announce at a press conference or in a press release sent to regular press contacts that it made a candidate endorsement to its restricted class, as long as costs are de minimis and the announcement is not coordinated with candidate.
Voting Information Restricted Class General Public
Voter Drives: Registration and Get-Out-the-Vote
11 CFR 114.4(d)
Organization may expressly advocate election/defeat of candidate/party. Organization may not expressly advocate election/defeat of candidate/party.
Organization may use phone bank to encourage registration and voting for particular party and candidate.
Organization may provide transportation to registration place and to polls, but cannot condition service on support of particular candidate or party. (Same as the adjacent restricted class rules.)
Organization must give persons receiving services written notice of the nonpartisan nature of the services.
No coordination with candidate or party is permitted.
Organization may not pay individuals conducting drive based on number of persons (registered or transported) who support particular candidate or party.
Organization may not target people it believes will support its favored candidate or party.
Voting Information General Public
Voter Advertisements
11 CFR 114.4(c)(2)
Organization may pay for ads (possters, billboards, broadcasting, print or direct mail) urging public to register to vote and to vote.

The advertisement may not contain express advocacy.

The advertisement may not be coordinated with candidate.

Distribution of Official Voter Information
11 CFR 114.4(c)(3)
Organization may distribute voter information produced by official election administrators, including registration-by-mail forms and absentee ballots.

Voter information may not contain express advocacy.

Voter information may not be coordinated with candidate.

Organization may give funds to state and local governments to defray costs of voter registration, voting information and forms.


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Posted 14 Sep 2000.

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