Key Takeaway: Last week, the Federal Election Commission (“FEC”) approved a request by Elias Law Group that authorizes federal candidates and officeholders to solicit unlimited contributions from individuals, corporations, and labor unions, among others, for state ballot initiatives.
The advisory opinion was requested by Nevadans for Reproductive Freedom, a 501(c)(4) organization that is also registered as a Nevada state PAC (collectively, “NFRF”). NFRF’s principal goal is to have a state constitutional initiative on the 2024 general election ballot in Nevada enshrining the right to an abortion. In its advisory opinion request, NFRF asked the FEC whether a federal candidate or officeholder could solicit funds on its behalf, without regard for the amount limitations and source prohibitions of the Federal Election Campaign Act (the “Act”) both before and after an initiative qualified for the ballot.
Dating back to 2003, FEC Commissioners divided over whether ballot measures were “elections” subject to regulation under federal campaign finance law. Some Commissioners concluded that the Act permitted federal candidates to solicit unlimited funds for ballot measure committees before a ballot measure qualified for the ballot, but once the measure qualified for the ballot, the Act and Commission regulations prohibited candidates and officeholders from soliciting such funds. Last week’s decision by the FEC clarified this important area of the law by confirming that ballot measures are not “elections” under the Act regardless of whether the activities in connection with the ballot measure occur pre-qualification or post-qualification.
This means that federal candidates and officeholders may solicit funds without regard to amount limitations or source restrictions, at any time, for ballot measure committees.
Federal candidates and officeholders should confer with counsel prior to soliciting funds for a ballot initiative or referenda to ensure that any solicitations are structured to conform with the FEC’s ruling. Note that if a ballot initiative is found to be established, financed, maintained, or controlled by a federal candidate or officeholder, the ballot initiative will be bound by the amount limitations and source restrictions of the Act. In addition, there may be restrictions that would apply under state law, as well as House and Senate Ethics restrictions.
We look forward to discussing this opinion with you and how it affects your planned activities.