AO 2019-15: Nonconnected committee may deduct a fee from earmarked contributions
NORPAC, a nonconnected committee that solicits, processes, and forwards contributions to candidate committees may deduct and retain a flat-rate, fixed percentage fee (“convenience fee”) from the earmarked contributions it forwards. The convenience fee constitutes a contribution from the original contributor to NORPAC.
Background
NORPAC plans to solicit and collect earmarked contributions via credit and debit cards as well as personal checks, with contributors identifying the intended recipient candidate committee. The solicitations will inform contributors of contribution limits and “relevant necessary requirements” for making a contribution. NORPAC will deposit the contributed amount into its own account, then deduct a flat-rate, fixed percentage as a convenience fee to help cover the costs for merchant credit card processing (for credit and debit card contributions) as well as its own administrative and overhead costs. Contributors would be notified of the convenience fee prior to making a contribution. NORPAC will then forward the contribution, less convenience fee, to the recipient candidate committee.
Analysis
NORPAC’s proposal to split a contribution between itself and the recipient designated by the contributor consists of two contributions: one to NORPAC and an earmarked contribution to the candidate committee. The Commission has long held that funds paid to a committee for expenses that it incurs to process a contribution as well as those for administrative and overhead are themselves a contribution. Consistent with those precedents, the entirety of the convenience fee constitutes a contribution from the original contributor to NORPAC, and the Commission assumes that NORPAC will provide this information to contributors.
NORPAC must report the full amount of the convenience fee as a contribution on its FEC Form 3X filing as it would any other contribution, itemizing only contributions from individuals aggregating in excess of $200 in a calendar year and all contributions from political committees. As an intermediary, NORPAC will report the total amount of the forwarded contribution as well as the name and mailing address of the original contributor, the date received, the intended recipient as designated by the contributor, the election designated by the contributor (if any), and the occupation and employer of the original contributor. The forwarded contribution will also be reported as a disbursement on Schedule B of its regularly scheduled report, along with the above, as well as a notation that the contribution was forwarded in the form of a check drawn on NORPAC’s account.
Finally, NORPAC must file a transmittal report with the recipient committees, including the name and address of contributors whose contributions exceed $50 as well as the occupation and employer of those whose contributions exceed $200. This information must be transmitted simultaneously with the funds.
Date issued: June 18, 2020; Length: 8 pages
Citations
Regulations
11 CFR 102.8
Receipt of contributions
11 CFR 104.1
Scope
11 CFR 104.2
Forms
11 CFR 104.3
Contents of reports
11 CFR 110.6
Earmarked contributions