Submitted Electronically
March 26, 2018
Robert M. Knop, Esquire
Assistant General Counsel
Federal Election Commission
999 E Street, NW
Washington, DC 20463
Re: Comments Concerning Notice of Proposed Rulemaking (Notice 2018-01)
Independent Expenditures by Authorized Committees; Reporting Multistate
Independent Expenditures and Electioneering Communications
Dear Mr. Knop:
Citizens United submits these comments for consideration with respect to the above-
referenced Notice of Proposed Rulemaking (“NPRM”). These comments focus on the
portion of the rulemaking concerning the reporting of multistate independent
expenditures and electioneering communications.
Interest of Commenter
Citizens United is a Washington, DC-based membership organization that is
incorporated under Virginia law and exempt from Federal income taxes under Section
501(c)(4) of the Federal income tax code. Citizens United was the Plaintiff/Petitioner in
the landmark case striking down the prohibition on corporate-sponsored independent
expenditures. See Citizens United v. FEC, 558 U.S. 310 (2010). Citizens United is
affiliated with two separate federal political committees — Citizens United Political
Victory Fund, which is a separate segregated fund, and Citizens United Super PAC, LLC),
which is an independent expenditures only committee. Each committee has
undertaken independent expenditures in past elections and each committee is expected
to undertake independent expenditures in future elections.
1006 Pennsylvania Avenue, S.E. + Washington, D.C. 20003
Tel (202) 547-5420 + Fax (202) 547-5421 + wwweitizensunited.org
CContibutions or eis 1 Clicens United ae not as deciComments of Citizens United
Re: FEC NPRM No. 2018-01
March 26, 2018
Page 2 of 4
Comparisons of the Three Alternatives
At the outset, we commend the Commission for offering a pair of alternative proposals
that will undoubtedly simplify the complex and highly burdensome reporting scheme
currently in place for reporting multistate independent expenditures in connection with
the presidential nominating process. Alternatives A and B significantly lessen the
compliance burdens associated with multistate independent expenditures by
eliminating the need to allocate and itemize the costs of those communications among
upcoming presidential primaries. Such allocations and itemizations are especially
burdensome where a communication entails use of multiple vendors, which is often the
case with direct mail communications.’ Under the current reporting requirements, a
committee that uses separate vendors for such things as creative content, design,
stationary, envelopes, printing, assembly, list rental and postage must itemize and
allocate each of those component costs among each of the upcoming presidential
primaries. Thus, for example, a nationwide mailing referring to a single presidential
candidate that uses eight separate vendors and is distributed prior to the first
presidential primary would require more than 400 itemized transaction disclosures on
Schedule €.? But under alternatives A or B, the number of itemized transaction
disclosures for the same mailing would be reduced to just eight. That’s a major
improvement over the current reporting scheme. >
* Direct mail communications are categorized as “mass mailing(s]” under the
Commissions regulations. See 11 CFR § 100.27.
? For each jurisdiction's presidential primary — more than 50 at the time of the
communication ~ there would be eight separate transaction disclosures
3 We submit further that the information provided by way of the eight transaction
disclosures would serve the public’s informational interest better than providing the
information artificially broken down to appear as more than 400 transactions that take
up more than 200 reporting pages on Schedule E. Similar to series of completed jigsaw
puzzles, the information provided by the eight reporting entries would provide the
public with complete and easy to understand pictures of the independent expenditure.
In contract, the 400 plus itemized entries required under the current reporting scheme
would be akin to observing those puzzles prior to their assembly, with the individual
pieces of all eight puzzles mixed together and scattered haphazardly around a table.Comments of Citizens United
Re: FEC NPRM No. 2018-01
March 26, 2018
Page 3 of 4
While both alternatives A and B represent big improvements to the reporting process,
we believe alternative Ais the better of the two alternatives. By setting the date of the
national nominating convention of the clearly identified candidate as the relevant
election date for determining whether a 24-hour report must be filed, alternative A
simplifies the process more so than does alternative B. Alternative A fixes a single date
as the relevant election date for determining whether one or more multistate
independent expenditures require the filing of a 24-hour report. That date, for each
communication, is the first day of the national nominating convention of the party
whose nomination the candidate is seeking. Under alternative 8, however, the relevant
election date is the date of the next upcoming presidential primary occurring after the
communication is disseminated or disbursed. In short, the date of the relevant election
changes throughout the nominating process, making the process of determining
whether a 24-hour report is required more complicated than it would be under
alternative A. Moreover, the complication gets magnified for a committee that
undertakes multiple independent expenditures over the course of the nominating
process, because each communication could have a different relevant election date.
Thus, in our opinion, alternative A is superior to alternative B.
Alternative C is not a desirable alternative to the current filing regime. Specifying that
the costs of a multistate independent expenditure are to be allocated based on the
number of U.S. House of Representative districts allocated to each of state where the
communications is disseminated does little, if anything, to lessen the burdens imposed
under the current system. In the example cited at the top of these comments, the filer
using eight different vendors for its nationwide direct mail independent expenditure
would still need to make over 400 itemized disclosures under alternative C, compared to
just eight entries under either alternatives A or alternative B. We therefore urge the
Commission to reject alternative C.
Distribution Threshold
Lastly, we urge the Commission to set the lowest possible threshold for the number of
states where a communication must be disseminated in order to qualify under the
multistate reporting rule. Distribution in at least three states should be sufficient to
allow the communication to fall within the rule. Under the dictionary definitionComments of Citizens United
Re: FEC NPRM No. 2018-01
March 26, 2018
Page 4 of 4
“multi” is generally defined to mean more than two, although in some instances it could
mean as few as two." If the Commission were to set the threshold at a high number of
states, the rule would effectively become inoperable with respect to presidential
primaries falling in the middle of or near the end of the process, as the majority of
jurisdictions would have already held their primaries. Furthermore, a varying threshold
based on the number of remaining primaries at the time of the communication would
likely cause confusion.
Instead of setting a high threshold for the number of states where a communication
must be disseminated in order to qualify for reporting under the multistate
communication rule, we suggest that the instructions for completing the memo text of
the Schedule E require naming the specific states where the communication is
distributed if the number of states does not exceed a certain specified threshold. Due
to space limitations on the Schedule E, the instructions should allow the states (and
other jurisdictions) to be identified by using their two letter postal abbreviations. Once
the threshold has been exceeded, however, the instructions should allow the
communication to be described as “nationwide”.
Respectfully Submitted,
Tope
Michael Boo
Citizens United’s Executive Vice President
& General Counsel
4 See www.merriam-webster.com/dictionary/multi-. Webpage last visited on March 26,
2018
5 We have no strong views as to the precise number of states that should be required to
meet the threshold permitting a “nationwide” designation in the memo entry, but
requiring it to reach all 50 states or all fifty states plus other U.S. jurisdictions such as
the District of Columbia, Puerto Rico, Guan and American Samoa, comes across as
excessive. We note that allowing such a designation where the communication reaches
more than 25 states could be justified on grounds that it is being disseminated in a
majority of the 50 states, But we would certainly welcome the Commission setting the
“nationwide” description threshold at an even smaller number of states.