Coalition Letter to the Federal Election Commission Secretary Expressing Concerns about Draft Advisory Opinion 2003-37, as It Applies to Federal Political Committees, Nonfederal Political Organizations and Other Nonprofit Corporations

Commission Secretary
Federal Election Commission

Re:       Draft Advisory Opinion 2003-37

Dear Commission Secretary:

The 324 undersigned environmental, civil rights, civil liberties, women's rights, public health, social welfare, senior, religious, and  social justice organizations submit these comments on the General Counsel's draft of Advisory Opinion 2003-37 prepared in response to a request by Americans for a Better Country (""ABC"").  For the reasons set forth below, we wish to express our profound concern over the broad scope of the draft opinion, both as it applies to federal political committees and as it appears to reach the educational, advocacy and voter participation activities of nonfederal political organizations and other nonprofit corporations.  There is no authority under the Commission's regulations, the Federal Election Campaign Act (""FECA"") or the Supreme Court's recent opinion in McConnell v. FEC to regulate these activities in the manner suggested in the draft opinion.

The organizations signing this letter are organized as nonprofit corporations under state law and are exempt from federal income taxation under sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code (""Code"").  Several organizations operate as qualified nonprofit corporations under 11 C.F.R. § 114.10.  A number of the signatories have established separate segregated funds that are registered with the Commission as political committees; many also maintain nonfederal political organizations established under IRC section 527(e)(3) that are not registered with the Commission.  The common interest among all of these organizations is that we regularly seek to educate the public and to advocate positions on progressive legislative and policy issues, including the positions taken by federal officeholders with respect to these issues.  

If the draft opinion is adopted as proposed by the General Counsel, the result may be that we could no longer conduct these activities unless we raise and spend funds in accordance with the source and contribution limitations of the FECA.  For most of our organizations, raising funds under these restrictions would be impossible.  For those organizations represented here that are exclusively organized under IRC section 501(c)(3), we are not permitted under federal tax law to establish or maintain a separate segregated fund to engage in political activity.  Therefore, this opinion would entirely shut down many of the advocacy activities of our organizations.  As 501(c)(3) and 501(c)(4) organizations, we are funded by large and small donors.  Most of the undersigned organizations could not exist without the large grants and contributions from foundations, corporations and individuals that are prohibited under FECA.  See 2 U.S.C. § 441a and 441b.  Even those of us that operate federal political committees are able to raise relatively small amounts from our members for these purposes - amounts that could never support the extensive educational and advocacy programs we have conducted for many years.  In any event these limited contributions are desperately needed to support our  [SL1] political programs as required by law.  We therefore urge the Commission, with the greatest sense of urgency and in the strongest terms possible, not to issue the draft opinion in its present form.  

Discussion 

Although numerous aspects of the draft opinion are extremely troublesome, we are most concerned by the opinion's proposed reworking and expansion of the definition of ""expenditures"" in FECA § 431(9) to include any communication that ""promotes, supports, attacks, or opposes"" a candidate for federal office.  While the facts of the current request concern a nonconnected political committee, by adopting this analysis the opinion can be read to extend to independent issue groups as well.  As nonprofit corporations, the vast majority of us are flatly prohibited by FECA § 441b from making any ""contribution or expenditure in connection with any election to any political office.""  Because we frequently refer to federal officeholders and candidates in our communications with the general public, and do so in a manner that may be highly critical of the officeholders' positions on issues, the proposed redefinition of ""expenditures"" would cause many of our currently lawful communications to become unlawful corporate expenditures.  

Just in the past few months, for example, the organizations represented here have criticized Congress' and the Administration's policies and actions concerning such issues as tax cuts for the rich, Medicare and prescription drugs, oil exploration in the Arctic, nominations to the federal judiciary, abuses of civil liberties in connection with the war on terror, and numerous other issues.  There is little doubt, we fear, that these communications would be perceived both by our opponents, who are constantly looking for ways to handcuff our efforts on behalf of our causes, and, based on the reasoning of this draft, by the Commission itself, as ""opposing"", or even ""attacking,"" President Bush and other federal officeholders.  This is the case even though these communications have not identified Mr. Bush or any other officeholder as a candidate for re-election, referred to the November 2004 election, or otherwise urged or implied opposition to the President's or any other individual's candidacy.  

These communications have been aimed, not at these individuals as candidates, but as current officeholders in an attempt to influence legislation and public policy.  Making it unlawful to criticize the policies and actions of a sitting President or Members of Congress except under the auspices of a registered political committee is one of the most fundamental attacks on the freedom of speech and freedom of association of American citizens ever contemplated by a governmental agency.

The proposed definition of ""expenditures"" is nowhere to be found in section 441b, even though it is the only provision of federal election law governing contributions and expenditures by nonprofit corporations such as those represented here.  Under the Supreme Court's decisions in Buckley v. Valeo and Massachusetts Citizens For Life v. FEC, section 441b was authoritatively construed to prohibit corporate communications that expressly advocate the election or defeat of clearly identified candidates.  We have relied on this long-standing interpretation and have fully complied with it in all of our educational and advocacy programs.  In passing the Bipartisan Campaign Reform Act of 2002 (BCRA), Congress restricted certain limited broadcast communications, but it did nothing to modify the express advocacy test as applied to communications in other forms of media or even to broadcast communications disseminated outside of BCRA's 30/60 day black-out periods. 

In redefining ""expenditures,"" the draft opinion relies on the Supreme Court's recent decision in McConnell v. FEC, that upheld the constitutionality of BCRA's provisions limiting, and in some case prohibiting, political party committees from using nonfederal funds to support communications that ""promote, support, attack or oppose"" federal candidates.  But, these restrictions are contained in a separate provision of BCRA, 2 U.S.C. § 441i, that applies exclusively to political parties and no other organization or entity.  Most importantly, Congress did not amend the provisions applicable to corporations in a similar manner, nor did it revise the statutory definition of ""expenditures"" as proposed in the draft opinion.[1]  The Commission has no authority to enact a new standard for corporate communications when Congress itself chose not to do so.[2]         

The extent to which the draft advisory opinion reaches far beyond Congress' intent is also demonstrated by recent legislation governing so-called ""527" or ""soft-money"" political organizations.  Even prior to BCRA, Congress considered the operation of these organizations and concluded that, in the interest of greater public disclosure, they should register and file reports with the Internal Revenue Service.  See Pub.L. 106-230, 114 Stat. 477 (July 1, 2000), codified at I.R.C. §§ 527(i)-(j).  In 2002, shortly after it enacted BCRA, Congress again considered the disclosure obligations for these organizations and amended the registration and reporting requirements to ease the burden on some of the organizations covered by the 2000 amendments.  See Pub.L. 107-276, 116 Stat. 1929 (Nov. 2, 2002).  In neither instance, however, did Congress outlaw 527 political organizations or even authorize the IRS to curtail their activities.  Furthermore, in ruling on the constitutionality of BCRA, the Supreme Court expressly noted that despite the Act's limitations on the fundraising abilities of political parties, ""interest groups, however, remain free to raise soft money to fund voter registration, GOTV activities, mailings, and broadcast advertising.""  McConnell v. FEC, 540 U.S. ________ at _________ [slip op. at 80].  This plain reading of the statute is inconsistent with the approach of the proposed advisory opinion.  If the Commission adopts the ABC opinion as drafted, it would be to appropriate to itself authority which Congress has twice refused to provide.

The draft opinion is also inconsistent with the Commission's own rulemaking excluding section 501(c)(3) organizations from the ban on electioneering communications.  Several months ago, the Commission recognized the need to limit the scope of BCRA's prohibition on 501(c)(3) organizations to protect advocacy communications by these groups:  

The Commission believes the purpose of BCRA is not served by discouraging such charitable organizations from participating in what the public considers highly desirable and beneficial activity, simply to foreclose a theoretical threat from organizations that has not been manifested, and which such organizations, by their nature, do not do.

Final Rules and Explanation and Justification, ""Electioneering Communications,"" 67 Fed. Reg. 65190, 65200 (Oct. 23, 2002)

Based on this draft opinion, it appears the Commission is prepared to consider denying all 501(c) organizations the ability to engage in this ""highly desirable and beneficial activity.""  Even if this conclusion is not mandated by the terms of the opinion itself, it is the logical conclusion based on the reasoning set forth here.  

Recent IRS guidance, in stark contrast to the position set forth in the draft opinion, confirms that 501(c) organizations are permitted to continue their advocacy activities, including attempts to influence legislative and administrative actions, throughout an election year.  See Rev. Rul. 2004-6.  These communications may in some cases oppose the position of an officeholder, who is also a candidate, in a manner that could be deemed, under the broad language of the General Counsel's draft, to ""support"" or ""attack"" a candidate for federal office.  Nevertheless, the IRS ruled that such communications, under the circumstances described in the ruling, are consistent with the exempt purposes of a 501(c) organization and would not subject them to tax or jeopardize their exempt status.

While we have focused on the impact of the draft opinion on nonprofit organizations' educational and advocacy activities, we are also concerned about how the opinion would handcuff our ability to undertake voter participation activities such as voter registration and get-out-the-vote, especially among minority and other under-represented communities.  In response to question 8 of the opinion, the draft proposes that voter registration and GOTV public communications that do not expressly advocate, but ""promote, support, attack or oppose"" a federal candidate, must be paid entirely with federally permissible funds.  Therefore, a nonprofit organization that informs the public that President Bush and his Administration has permitted corporations to increase harmful mercury emissions and encourages individuals to register to vote would be required to pay for this activity with federal funds.  The regulations at section 114.4 state only that voter registration conducted by a corporation must not contain express advocacy or be coordinated with a candidate or political party.  The Commission has no authority to broaden the restriction placed on these voter participation activities.  

We would like to address two other aspects of the draft opinion, which cause equally deep concerns.  First, the draft opinion states that any fundraising communications that ""support, promote, attack or oppose"" a federal candidate must be paid for with federally permissible funds and may only raise funds subject to the federal source and contribution limits.  Unlike other portions of the opinion, this language is not even arguably limited to the nonconnected PAC making this request but applies to any solicitation.  Thus, it appears that a fundraising letter from our organizations that appeals for contributions to ""fight against President Bush's policies that threaten to undermine effective international family planning"" would be subject to this requirement.  The effect of such a conclusion is staggering.  In addition to soliciting contributions, fundraising communications provide another critical avenue for reinforcing and generating public support for our advocacy messages.  We, and other nonprofit organizations like us, would be required to choose to forgo either the messages that inform our supporters about the public policy debate or the funds that are vital to our existence.  There is no legal basis for imposing this restraint on the broader nonprofit community.

Finally, the draft opinion proposes to extend the prohibition on foreign national contributions to any organizations that engage in voter registration, get-out-the-vote and other activities in connection with a federal, state or local election for public office as well as ballot measures.  Many of our 501(c) organizations conduct these activities.  For some of us, these activities comprise a major part of our program; others engage in these activities only as the need arises related to a specific policy objective or program.  Our ability to continue to engage in these activities would be threatened if we were required to screen all of our contributions to determine whether or not they were made by a foreign national as defined under the FECA.  The Commission, even in its own rulemakings on foreign national contributions, has never suggested that there is a need to extend the coverage of this provision to all nonprofit organizations that conduct voter participation activities.  Such an intrusion would have a severe impact on these nonpartisan activities that are vital to fostering civic participation.

Conclusion

This draft opinion poses an unprecedented threat to the advocacy and educational activities of the undersigned organizations as well as many organizations that are not represented. We respectfully urge the Commission to reject this draft in its current form.

Respectfully submitted,

Alliance for Justice            
NAACP National Voter Fund                
People For the American Way
Leadership Conference on Civil Rights    
NARAL Pro-Choice America         
Sierra Club
Planned Parenthood Federation of America
League of Conservation Voters
ACCESS, Inc.
ACCESS/Women's Health Rights Coalition
Adams County Citizens Alliance 
Adequate Housing for Missourians
Advancement Project
AIDS Alabama
AIDS Foundation of Chicago
AIDS Action
AIDS Action Baltimore, Inc.
AIDS Institute
AIDS Legal Council of Chicago 
AIDS Treatment Data Network
AIDS Research Alliance
Albany Advocacy Center
Albuquerque Mental Health Housing Coalition, Inc.
Arlington Community Temporary Shelter
Alliance of Cleveland  HUD Tenants
Alliance for Better Housing 
Alliance for Healthy Homes
Alliance for Retired Americans
American Association of University Women
American Friends Service Committee
Americans for Democratic Action
American Planning Association
Amnesty International USA
Aurora Project, Inc.
Appleseed Community Mental Health Center, Inc.
Assistance Fund
Asian & Pacific Islander American Health Forum
Association of Asian Pacific      
Community Health Organizations
Association for Neighborhood & Housing Development
Bailey House
Bethany House Services in Cincinnati
Bethlehem Haven
Brattleboro Area Affordable Housing Corporation
Bread and Roses Community Fund
Bronx AIDS Services
Cabell-Huntington Coalition for the Homeless
Cancer Action
CAP Services, Inc.
Capital District African American Coalition on AIDS
Catholic Charities AIDS Services
Catholics for a Free Choice
Catholic Health Initiatives
Center for American Progress
Center for Housing Policy
Center for Impact Research
Center for Law and Social Policy
Center for Responsible Lending
Center for Women and Families
Central City Concern
Central City Development Council, Inc.
CHAMP
Charlotte County Homeless Coalition, Inc.
Chicago Community Development Corporation
Chicago Jobs Council
Choice USA
CitiWide Harm Reduction
Citizens Housing Coalition
Citizens' Housing and Planning Association
Clermont Counseling Center
Cleveland Tenants Organization
Cleveland Housing Network
CNY Environmental Institute, Inc.
Coalition for the Homeless, Inc.
Coalition on Homelessness and Housing in Ohio
Coalition to Stop Gun Violence 
Columbus Coalition for the Homeless
CommonBond Communities 
Community Coordinated Child Care (4-C)
Community Partners for Affordable Housing, Inc.
Community Stabilization Project
Community Toolbox for Children's Environmental Health
Connecticut AIDS Residence Coalition, Inc.
Connecticut Housing Coalition
Corporation for Supportive Housing
Cooperative Services Inc.
Contoocook Housing Trust
Corporation for Supportive Housing
Crossroads Urban Center
Cumberland Court Housing Commission, Inc.
Dane Fund 
Davidson Housing Coalition
Disabled Action Committee
Domus Transitional Housing of St. Cloud Minnesota
Earthjustice
East Bay Asian Local Development Corporation
East Bruinswick Community Housing Corporation
East Metro Women's Council
Eden Housing, Inc.
Episcopal Diocese of Ohio
Equinox
Fairmount Housing Corporation
Fairness in Rural Lending
Family Services of King County
Fayetteville Urban Ministry
Feminist Majority
Florida Coalition for the Homeless
Florida Housing Coalition
Florida Non-Profit Housing, Inc.
Food Finders
Fordham Bedford Housing Corporation
Friends Committee on National Legislation
Friends of the Earth
Friends of Midcoast Maine
Friends of Youth
Frontier Housing
Gay Men's Health Crises
Genesis Community Loan Fund
Goodhue County Habitat for Humanity
Grand Valley Housing Initiatives
Greater Metropolitan Housing Corporation of the Twin Cities
Greater Syracuse Tenants Network
Greene County Fair Housing
Harm Reduction Coalition
Health and Disability Advocates
HEARTH
HELP
Hepatitis Education Project
HOME Line
Homeless and Housing Coalition of Kentucky
Homes for Families
Housing Alliance of Pennsylvania
Housing & Community Development Network of New Jersey
Housing Development Consortium of Seattle - King County
Housing Development Corporation
Housing Preservation Project
Housing Resources Group
Illinois Drug Education and Legislative Reform
ICAN, Inc.
Inglewood Neighborhood Housing Services
Interfaith Housing of Western Maryland
Interdependent Living Solutions Center
Improving Kids' Environment
Jefferson Behavioral Health System
Jewish Community Action
J-Linch Inc.
King County Coalition Against Domestic Violence
Latino Commission on AIDS
Lawyers' Committee for Civil Rights Under Law
Learning Disabilities Association of Washington
Lifelong AIDS Alliance
Los Angeles Housing Partnership, Inc.
Low Income Investment Fund
Lutheran Social Services of Southern California
Maine Lead Action Project
Maxfield Research Inc.
McKinley Towers Tenant Association
Mercy Housing California
Mercy Housing, Inc.
Mercy Services Corporation
Metropolitan Boston Housing Partnership
Metropolitan Housing Coalition
Metropolitan Interfaith Council on Affordable Housing
Metropolitan Tenants Organization
Mi Casa, Inc.
Mid-Minnesota Legal Assistance
Minnesota Coalition for the Homeless
Minnesota Housing Partnership
Montpelier Housing Task Force
Montrose Clinic
Moveon.org Voter Fund
Nashville CARES
National Abortion Federation
National AIDS Housing Coalition
National Alliance of HUD Tenants
National American Indian Housing Coalition
National Congress for Community Economic Development
National Council of Jewish Women
National Family Planning and Reproductive Health Association
National Housing Conference
National Housing Law  Project
National Low Income Housing Coalition
National Low Income Housing Policy Center
National Organization for Women
National Organization for Women Foundation
National Partnership for Women & Families 
Native American Rights Fund
Neighborhood Development Services, Inc.
Neighborhood Housing Services of Fort Worth and Tarrant County, Inc.
Neighborhood Housing Services of Waterbury, Inc.
New Home Development Company, Inc.
New Housing Opportunities, Inc.
Nevada Shakespeare Company
Non-Profit Housing Association of Northern California
Northeast Missouri Client Council for Human Needs, Inc.
Northeast Ohio Coalition for the Homeless
North Carolina Coalition To End Homelessness
Northwoods Wilderness Recovery
NOW Legal Defense and Education Fund
NRDC Action Fund Office of Rural & Farmworker Housing
Ohio Association of Second Harvest Foodbanks
Older Women's League 
OMB Watch
Oregon Housing and Community Services
Organ Health Forum
Otero Arts Concil
Restart Inc.
Partnership Center, Ltd.
Partners In Active Living Through Socialization, Inc.
Philadelphia Association of Community Development Corporations
Physicians for Social Responsibility Planned Parenthood
Population Action International
Presbyterian Church (USA), Washington Office
Project H.O.M.E.
Provincetown AIDS Support Group
Psychiatric Rehabilitation Services, Inc.
Religious Coalition for Reproductive Choice
Religious Coalition for Reproductive Choice Educational Fund
Residents for Affordable Housing
Rhode Island Coalition for the Homeless
Rhode Island Public Housing Tenants Association 
Rock River Valley Mental Health Association
Rogers Park Community Action Network
Roots of Mankind Corp.
RPJ Housing
Rural California Housing Corporation
SAGE
San Diego Housing Federation
San Francisco AIDS Foundation
Scott County Housing Council
Sierra Club
Sisters of Mercy of the Americas Regional Community of Chicago
Society for Equal Access
Society of St. Vincent de Paul, Council of Louisville, Inc.
Southern California Association of Non-Profit Housing
Stopping Woman Abuse Now
Staten Island AIDS Task Force
Suburban Essex Housing Development Corp.
The Home Connection
Title II Community AIDS National Network
TransAfrica Forum 
Treatment Action Group
TuscoBus, Inc.
United Ministries
United Pennsylvanians 
Utah HUD Tenants Association
Utah Progressive Network
Utah SOS 8 Coalition
Virginia Housing Coalition
Virginia Housing Coalition Information Service
Wake Housing and Homeless Coalition
Washington Defender Association's Immigration Project
Washington's Action for New Directions
Washington Association of Churches
Washington Low Income Housing Alliance
Wellspring
West Hollywood Community Housing Corporation
West Central MN Housing Partnership
Western States Center
Westgate Housing Inc.
Westmoreland Human Opportunities, Inc.
White Earth Investment Initiative
Wilderness Society
Will-Grundy Center for Independent Living
Wisconsin Citizen Action
Wisconsin Partnership for Housing Development, Inc.
YouthLink
Greater Upstate Law Project 
New York AIDS Coalition
Amethyst, Inc.
Virginia Housing Development Authority
Institute for Caregiver Education
FACES of Stark County, Inc.
Lutheran Social Services of Illinois
Center for Health and Gender Equity 
National Women's Law Center
Boston Community Loan Fund
Chemical Sensitivity Disorders Association
Citizens for Elderly Services, Inc.
National Latina/o Lesbian, Gay, Bisexual & Transgender Organization
South Side Office of Concern
National Law Center on Homelessness & Poverty
Citizen Action/Illinois
VIDA/SIDA 
Housing Virginia Campaign, Inc.
National Housing Institute
Center for Civil Justice
Community Housing Coordinators
Statewide Housing Action Coalition 
The November Coalition
Northwoods Wilderness Recovery 
Ohio Empowerment Coalition
Tennessee Fair Housing Council
Jewish Alliance for Law and SocialAction
The Advocacy for the Poor
Trinity Services, Inc. of Joliet, IL
FreeStore/FoodBank Inc.
Environmental Working Group
AIDS Treatment Activists Coalition
St. Vincent DePaul Society, Dayton District Council
Coalition of Citizens With Disabilities in Illinois
The Christian Community Action Coalition - Addictions Outreach Ministry Inc.
Northwestern Housing Enterprises, Inc.
American Civil Liberties Union
Welfare Law Center
North Carolina Community Action Association
South Westerly Tenants Organization
P.A.L. Mission Community Development Law  Center
AIDS Alliance for Children, Youth and Families
Neighborhood Housing Services of Asheville, NC, Inc.
National Community Capital Association
Cleveland Diocesan Social Action Office
Chenango Housing Improvement Program, Inc.
The Other Place
Environmental Health Watch
Mississippi Center for Justice
The Brady Campaign to Prevent Gun Violence United with the Million Mom March
Latino Commission on AIDS, New York, NY
Unitarian Universalist 
Service Committee, Delaware Valley
The I Am Your Child Foundation
Women Employed, Chicago, IL 
Just Harvest, A Center for Action Against Hunger, Pittsburgh, PA 
Housing Rights, Inc.
Institute for Policy Studies, Paths for the 21^st Century Project