After seeking public comments on ways to improve campaign finance regulation, enforcement, and compliance, the Federal Election Commission (FEC) heard a common theme: its rules and procedures can hinder nonprofits and small organizations from effectively participating in the political process. Nonprofits, including OMB Watch, recommended improvements that the FEC can make to ensure that all groups can fully participate in our democracy. A public hearing on the rules will be held on Jan. 14.

OMB Watch's comments asked the FEC to address problems that vagueness in several key regulations and case-by-case enforcement creates for nonprofit organizations. These problems arise in the electioneering communications rule, definition of "express advocacy," and definition of "major purpose."

The electioneering communications rule, which was established in the implementation of the Bipartisan Campaign Reform Act (BCRA) of 2002, prohibits corporations, including nonprofits, from airing broadcasts that refer to a federal candidate 30 days before a primary election and 60 days before a general election. In Wisconsin Right to Life v. FEC, the U.S. Supreme Court limited the electioneering communications prohibition to broadcasts that are "susceptible of no reasonable interpretation other than as an appeal to vote for or against a clearly identified Federal candidate." OMB Watch expressed concern with the FEC's ability to fairly and adequately enforce the restrictions due to the lack of clarity in the FEC's rule interpreting the Supreme Court's ruling.

OMB Watch also noted the uncertainty that arises under the FEC's case-by-case approach to deciding whether a communication is permissible. This method provides little guidance as to what is and is not prohibited activity and may ultimately have a chilling effect on groups that want to engage in issue advocacy through broadcast communications.

The FEC rule provides a safe harbor and gives some examples of communications that fall within it. However, this approach has the same kinds of problems charities and religious organizations are experiencing with the vagueness of the Internal Revenue Service's (IRS) "facts-and-circumstances" standard for enforcing the tax code's ban on partisan intervention in elections by 501(c)(3) organizations. The comments asked the FEC to consider moving away from the safe harbor and toward a more explicit rule that is less ambiguous.

The OMB Watch comments also noted that the definition of express advocacy, which plays an important role in triggering FEC contribution limits and reporting requirements, is very similar to the standard set in the Supreme Court's opinion in WRTL and leaves too much room for interpretation. As a practical matter, this vagueness makes it impossible for citizens' organizations that want to communicate with the general public to judge whether their broadcast is allowable or not, which causes them to assume a risk of sanctions.

The major purpose test, established in Massachusetts Citizens for Life (MCFL), is used to determine which organizations should be considered political committees. The MCFL decision notes that if the "major purpose" of an organization is to influence federal elections, it should be considered a political committee subject to FEC rules. However, the definition of the term "major purpose" is unclear, making it difficult to determine when an organization is considered a political committee and subject to FEC rules. OMB Watch urged the FEC to provide better guidance.

OMB Watch also asked the FEC to consider working with the IRS to harmonize the definitions of "major purpose" and "primary purpose." Organizations exempt under 501(c)(4) of the Internal Revenue Code, known generally as "social welfare" organizations, are allowed to engage in partisan political activity as long as it is not their "primary purpose." However, similar to the FEC's "major purpose" test, there is no IRS definition that clearly defines what constitutes "primary purpose." Harmonizing the definitions will help alleviate confusion that is sometimes caused due to the similarity of the terms, the lack of clarity surrounding both terms, and the FEC and the IRS using different standards.

Additional Comments Urge Simplification, Improved Disclosure

Other groups that commented to the FEC focused on procedural issues. Virginia Red State wrote that the record keeping burden discourages small political action committees from engaging in the grassroots political process. The group wants the FEC to allow small PACs to submit financial statements instead of the FEC form. Diane Valentino, who wrote on behalf of a local Democratic club, shared a similar sentiment. She wrote that the "rules, regulations, paperwork, [and] filings are so complex" that it is impossible for small groups to operate without expensive professional assistance.

The Sunlight Foundation's comments focused on technical and electronic issues. It wants the FEC to provide new web services, make the information available in a timelier, more user-friendly manner, improve electronic filing procedures, and provide online disclosure of significant agency contacts. The organization believes that transparency will improve "the public's confidence in government."

Craig Donsanto, Director of the Election Crimes Branch in the Department of Justice's Public Integrity Section, submitted a comment stating the DOJ should have a larger role in enforcement matters. Donsanto argues that since BCRA increased the penalties and seriousness of campaign finance violations, DOJ should be involved. He says that when FECA crimes are involved, enforcement efforts should be "coordinated with a federal prosecutor."