Sunlight Foundation Reporting Group

FEC considers whether company can solicit PAC contributions from its dealers

Can Slim Jim solicit employees of 7-11 for donations to its political action committee? 

Members of the Federal Election Commission mused about that hypothetical prospect today in an open meeting that considered whether companies should be able to ask independent retailers to participate in their PACs, potentially opening the door for corporations to significantly broaden their donor base.

On another non-controversial request, commissioners appear ready to soon approve a request by the Global Transaction Services Group to fundraise for political committees via text messages – the phone user’s credit card would be charged. In another decision, the committee gave the green light to failed Florida senatorial candidate Mike Haridopolos to give the funds he raised for his campaign to a Freedom PAC, a super PAC that has backed Sunshine State Republicans.

But how the FEC will rule on a controversial request that had the commissioners talking about beef jerky is unclear. The Slim Jim analogy was an exaggerated example offered by Democratic Commissioner Ellen Weintraub to make a serious point about the actual case in question:

Yamaha Motor Corporation, a U.S. subsidiary of the Japanese company, has asked the FEC whether its marine division – which makes jets skis, motors and boats --  can solicit contributions for its PAC from employees of independent dealers and service centers that sell its watersports equipment.

The commissioners do not seem sure which way they will answer – and have until Jan. 4 to respond. Yamaha does not even have a PAC yet, though establishing one would not be a problem since American subsidiaries of foreign companies may establish PACs as long the subsidiary has the decision-making authority over the PAC.

Whether it can solicit PAC money from dealers who are independent from the company but yet seem closely tied to Yamaha is unclear. The question hinges on whether Yamaha—which apparently plays an outsize role in the marine sports industry--has sufficient control over the dealers.

Yamaha says it does. The company says that dealers and service centers must get Yamaha approval for changes in ownership, management, key personnel or location. That necessary approval comes in the form of an agreement with the dealer.

Even GOP Commissioner Donald McGahn, who normally favors looser campaign finance regulations, said after the hearing that this is not an easy case. It’s a new issue that has not been explored yet and it’s unclear if the regulations allow the dealers’ employees to be included in the class of employees that can contribute to a PAC.

FEC General Counsel Anthony Herman brought up an interesting twist at the meeting. What if the dealer wanted to establish a strong tie with another motor manufacturer other than Yamaha, allowing that company to have strong control over the dealer’s decisions? Yamaha attorney Bryan Tyson, said the answer would depend on whether the relationship with the other manufacturer—say, Evinrude—would be as significant as Yamaha’s.

But Tyson added that even if Evinrude did gain such power, it wouldn't disqualify Yamaha from including the dealer's employeers in its PAC -- it's just that Evinrude could do the same. He also said that Evinrude gaining such power would be impractical; a dealer would be unlikely to cede as much control as it does to Yamaha to another company as well.