Compliance

From Democratic GAIN Wiki

As a fundraiser you will inevitably be involved in making sure that the campaign complies with local, state and federal election laws. In most instances, you will work with the treasurer to prepare campaign finance reports. The following information is specifically geared toward meeting requirements set forth by the Federal Election Commission (FEC).

Compliance is serious business, and in this age of campaign finance reform, ever-changing. Whether you are working on a federal, state or local campaign, reading the applicable compliance manuals and brochures should be your first order of business when you hit the ground. From institutional donors to party officials, you will be working with people who may be unfamiliar with the new laws on the books. Ultimately it is your responsibility that your campaign always complies with the law.

[edit] Role of the FEC

The FEC is an independent regulatory agency that is charged with disclosing campaign finance information and enforcing campaign election law such as limits and prohibitions on contributions for federal candidates.

[edit] Types of Contributions

Candidate committees can directly accept monetary and in-kind contributions. Monetary contributions include contributions made by cash, check or credit card. In-kind contributions include goods offered free of charge or at less than then usual charge or when a contributor pays for services on behalf of the committee. Goods are valued at the price that the item or facility would cost if purchased or rented at the time the contribution is made. Services are valued at the prevailing commercial rate at the time the service is rendered. Limits for in-kind contributions are the same as monetary contributions.

[edit] Contribution Limits

The Federal Election Campaign Act places monetary limits on contributions to support candidates for federal office and prohibits contributions from certain sources. An individual or group is maxed out when they have met the contribution limit for a particular campaign or election cycle. Limits apply to primary, run-off and general elections separately. Note that candidate committees can accept the maximum contribution for both primary and general elections even if they are running unopposed.

[edit] Contributions from Partnerships

A partnership may contribute a maximum of $2,300 per election to a candidate committee. Note that a contribution from a partnership is attributed toward the firm limit and applied equally against the limits of each partner, unless the partnership sends a letter attributing the contribution to partners in a specific proportion.

[edit] Prohibited Contributions

Contributions from corporations, federal contractors, foreign nationals, labor organizations, general funds and national banks are prohibited. Currently, children under the age of 18 may make a contribution to a committee if they choose to do so consciously and make the contribution with their own money.

Contributions in aggregate excess of $100 in cash currency from an individual are also prohibited, as well as anonymous cash contributions in excess of $50. Funds from anonymous donors in excess of $50 can be donated to non-profit organizations.

[edit] Retiring Campaign Debt

A contribution made after Election Day may only be applied to that election if it does not exceed the committee’s outstanding debt for that election and the donor is not maxed out.

[edit] Suspected Illegal Contributions

Suspected excessive or prohibited contributions must be returned or deposited within ten days of receipt. The treasurer must make at least one request to the contributor for evidence that the contribution is legal. If the legality of the contribution cannot be determined, the committee must refund the contribution within thirty days of receipt.

[edit] Disclaimers

All electronic and printed materials must include a disclaimer. If the campaign finances an expenditure, the disclaimer should be Paid for by John Smith for Congress. If the campaign authorizes but does not finance the expenditure, the disclaimer should be Paid for by Jane Doe and Authorized by John Smith for Congress. Note that the Internal Revenue Service requires that political committees include the following disclaimer: Contributions are not deductible for Federal income tax purposes.

[edit] Designation

If a contributor makes an excessive contribution, for instance, before a primary election, the contributor must designate in writing the specific election to which he or she intends to apply the contribution. Documentation can be submitted in the memo line of a check or by an accompanying letter. Remember that those designated funds may not be used during the primary, and must be returned if the candidate does not run in the general election.

[edit] Responsibilities of the Treasurer

The treasurer is legally obligated to file timely and accurate financial reports. The FEC can impose civil penalties on both the committee and the treasurer if the campaign is found to be in violation of the Federal Election Campaign Act. On larger campaigns, consider hiring an accountant to prepare reports.

[edit] Reports

The FEC requires that candidate committees file periodic reports of financial activity including quarterly, pre-election, post-election and 48-hour notices. The FEC mandates that campaigns that expect to raise or spend more than $50,000 in a calendar year must .le their reports electronically. Otherwise, it is recommended that you send your report by certi.ed or registered mail. Reports are considered .led on the date they are postmarked. Note that 48-hour notices can be faxed.

[edit] Best Efforts

The treasurer must make his or her best effort to obtain the name, mailing address, occupation and employer of each individual who has contributed more than $200 to a campaign committee. Note that the treasurer must document that this information has been requested.

The following statement should be included on all materials: Federal law requires us to use our best efforts to collect and report the name, mailing address, occupation and name of the employer of individuals whose contributions exceed $200 in an election cycle.