September 17, 2014
To put flesh on the bones of the latest Massachusetts campaign-finance statute, the Office of Campaign and Political Finance (OCPF) has drafted some new regulations, which are available for your viewing pleasure here.
Among the proposed changes, a new rule for organizations that make independent expenditures. Here is what it says:
“If an organization makes a contribution, electioneering communication, or independent expenditure from its general treasury that is not fully paid from general organizational income, it must organize a political committee and identify additional donors to the extent that general treasury funds and those contributors described in 970 CMR 1.22(6)* did not provide the full balance of the funds used to make the contribution, electioneering communication, or independent expenditure.” 970 CMR 1.22(8).
First, can you really “make an electioneering communication… from [your] general treasury”? Certainly you can pay for one; but can you make one? Probably not, unless your organization’s general treasury is a crafts box replete with markers, Elmers Glue, and scissors.
Second, what is an organization’s “general organizational income,” as opposed to its “general treasury”? The proposed regulation implies that the former is something that ends up in the latter, but neither the regulation nor its authorizing statute defines the term “general organizational income.”
Third and final question: Why should you care? This one I can answer. You should care because failure to comply with the regulations would have serious consequences.
Let’s say your non-profit spends $500 on a newspaper advertisement urging readers to vote “yes” on a certain statewide ballot question that would have a direct impact on the non-profit’s constituency. You do not set up a separate political committee or file any reports with OCPF listing all the donors who have given the organization more than $250 over the last year. After all, not all your donors want the world to know they support your organization. And so long as the organization pays for the ad out of its general treasury fund, you do not need to go through all that palaver, right?
On that reasonable basis, your treasurer just writes a check to the newspaper, drawn on the general treasury account, and the newspaper runs the ad.
Not everyone feels the same way about the ballot question, and an opponent informs OCPF of your ad. Remember, you did not organize a political committee or file any reports with OCPF identifying your organization’s supporters. Should you have? Yes, alleges the opponent, because he’s heard that a couple of your donors made contributions for the specific purpose of funding the newspaper ad. True, the donors did not indicate that intent on memo line of their checks, and your treasurer deposited the donations into the general fund, but these donors knew the organization planned on buying the ad and they wanted to help.
So, alleges your opponent, although the check was drawn on your general treasury fund, not all the money for the ad came from your “general organizational income.” You should have organized a political committee and provided OCPF (and anyone who cares to peruse the agency’s website) with your donor list.
OCPF is inclined to agree with your opponent. This could lead to the agency — after giving you 10 days to respond — passing your name along to the Attorney General who may then ask the District Attorney to commence criminal proceedings against you.
Will you and the board of directors really end up in jail because of one little newspaper ad? Not likely. But in the future, when you think about sharing your organization’s political opinion in a manner that has proven effective, will your mind turn to the possibility of a protracted entanglement with OCPF, conversations with lawyers from the Office of the Attorney General, maybe having to hire your own lawyer, and the negative publicity and consequent decline in donations? Will these thoughts, perhaps, dissuade you from speaking out?
To deter an activity, make the applicable regulations unclear and the price of non-compliance high. When the regulations affect political speech, this is called the chilling effect.
OCPF invites public comment on its proposed regulations, due no later than 10:00 a.m., Monday, September 22, 2014. Click here for the OCPF website where you can find out how to submit your opinion.
* This means a donor of $250+ who knows** that the organization will use her/his payment to pay for an electioneering communication or to make a contribution to, or an independent expenditure to support/oppose, a Massachusetts candidate or ballot question.
** As you might expect, the word “knows” encompasses more than actual knowledge. Under 970 CMR 1.22(6) OCPF may deem a donor to “know” if the “circumstances, including the timing and context of the donations, indicate that a donor knew that the payment would be used for such purpose.”