Are you a 501(c)(4) making Independent Expenditures? You may be subject to increased disclosure.
On August 21, the United States Court of Appeals for the District of Columbia upheld a District Court decision that corporations that make independent expenditures (“IEs”) must disclose more information about their donors than required by current FEC regulations.
In Citizens for Responsibility and Ethics in Washington (“CREW”) v. Federal Election Commission (“FEC”), the court struck down part of a FEC regulation that specified reporting requirements for non-committee groups (groups that aren’t political committees, including 501(c)(4)s), making IEs).
The regulation in question required that non-committee groups only had to disclose donors who made contributions for the purpose of specific IEs. In other words, a 501(c)(4) would only be required to report a donor if the donor gave money earmarked for a specific IE. The court found that the regulation did not properly reflect the full requirements of the statute.
Accordingly, 501(c)(4)s that spend more than $250 on IEs will have to disclose all donors who gave $200 or more towards any IE operation. In addition, non-committee groups making IEs would also have to report donors who give $200 or more for activities influencing a federal election by the organization, including “contributions directly to candidates, candidate committees, political party committees, or super PACs.”
There has been no further guidance from the FEC, putting non-committee groups that make IEs in a difficult position of having to determine which contributions need to be reported.
For more information on the implications and reporting time frames, see a memo from our colleagues at Trister, Ross, Schadler & Gold here.