Sunlight Foundation Reporting Group

New Super PAC seeks expansion of role for corporate, connected PACs

Dan Backer, the attorney behind the hybrid super PAC rule that allows political action committees contributing to members of Congress and other candidates to also accept unlimited contributions to make independent expenditures, is trying to extend the favor to political action committees tied to corporate entities.

In a new Advisory Opinion Request filed with the Federal Election Commission, Backer asks the commission to allow Stop This Insanity Employee Leadership Fund, a new independent expenditure-only committee attached to the nonprofit Stop This Insanity organization, to be permitted to have separate accounts to contribute to candidates and make independent expenditures.

MORE: See an up-to-date interactive table of the latest presidential super PAC spending here. 

The FEC ruled on August 24, 2011 that non-connected political action committees--usually ideological groups that are not affiliated with corporations, labor unions, lobbying firms or trade associations--could set up separate accounts to make independent expenditures. The ruling did not affect PACs set up by organizations, like the General Electic Company Political Action Committee, the National Beer Wholesalers Association Political Action Committee, or the International Brotherhood of Electrical Workers Political Action Committee. Known in FEC parlance as "separate segregated funds," those committees can only solicit contributions in amounts no more than $5,000 from members or employees. 

The National Defense PAC, a non-connected PAC, sought approval in 2010 to raise money for independent expenditures; commissioners deadlocked on the request, and the PAC and its founder sued the FEC. Following an unfavorable ruling in that case, Carey v. FEC, the commission approved rules that created hybrid super PACs. 

If Backer's latest request is approved by the FEC, PACs for organizations like General Electric or the International Brotherhood of Electrical Workers would be able to set up separate accounts and fund them directly from their treasuries to make independent expenditures. And those PACs could raise funds for their "Carey accounts"--those used to make independent expenditures--from a much wider pool of donors than an employee PAC can legally solicit.

Under campaign finance regulations, connected PACs can solicit contributions only from a limited group of donors--shareholders, executives, administrators and their family members for corporations, for example. A company could raise funds from a much wider sphere--including suppliers, their executives and even the general public.

"At issue is the constitutional right of individuals and organizations that have a particular philosophical or political goal to work with others that share that goal to call for the election or defeat of candidates who support or oppose that goal in whatever lawful way they want," Backer explained. 

In addition to donating to candidates, these PACs--some of which already contribute millions to members of Congress--could spend millions more on advertising and other activities intended to influence elections. As could organizations that do not have to disclose their donors.

Stop This Insanity Inc., the corporate sponsor of the Stop This Insanity super PAC, is organized under section 501(c)4 of the Internal Revenue Code, and does not have to identify its donors.