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FEC Releases Bundling Disclosure Rules

Lobbyists Scouring Draft Proposal; Comment Period Ends on Nov. 30

The Federal Election Commission took the first step toward developing the shape and scope of a new bundling disclosure requirement Tuesday, though many key details of the regulation remain up in the air.

The draft proposal, which commissioners adopted unanimously, defines bundling to include fundraising events hosted by lobbyists and appears to favor a quarterly reporting schedule, while leaving open for discussion the precise approach to both.

Though Democratic Commissioner Ellen Weintraub said she favored a more wholesale overhaul of federal bundling rules — one not limited solely to federally registered lobbyists and the organizations that employ them — she called the plan a “victory for sunshine and transparency.”

Democratic Chairman Robert Lenhard struck a note of caution that the final product will gather data “a little less certain, a little less precise” than what the FEC is used to. “This is somewhat inescapable because of the nature of politics and the nature of how credit is given, or not given, on political campaigns.”

The comment period closes Nov. 30, and the commission is expected to release the final rules early next year.

Bundling disclosure proved to be one of the most contentious issues in this year’s Congressional debate over lobbying reform. Democratic leaders managed to overcome strong resistance from within their own ranks to include a sweeping disclosure requirement in the final package. But they left the finer points to the FEC, and ever since, lobbyists who raise political cash to keep their profiles up have fretted about how, exactly, the new rules will work.

Reform advocates and business groups alike were still studying the early version of the bundling plan Tuesday. But the proposal garnered one positive, if qualified, review from Public Citizen lobbyist Craig Holman.

“It looks like a good, fairly solid proposal when it comes to implementing S. 1,” said Holman, referring to the reform package by its Senate bill number. “But I think there is a great opportunity for the FEC to go way beyond what S. 1 is calling for and enhance their current bundling disclosure requirements.”

Those rules require any fundraiser — lobbyists and non-lobbyists alike — not officially designated as an agent of a campaign to disclose only those checks they physically bundle together and deliver. Holman said that standard reflects the 1980s vintage of the rule, before campaigns began employing more sophisticated electronic tracking devices to assign credit to fundraisers.

For lobbyists, the draft proposal offers a much broader definition of what constitutes bundling. A lobbyist or organization employing them would simply need to receive official credit for the bundled checks — “through records, designations, or other means of recognizing that a certain amount of money has been raised” — to trigger a reporting requirement by the campaign.

Major questions remain. Contributions by a lobbyist’s spouse don’t count toward the reporting threshold. But what about contributions from the lobbyist’s employees? Co-hosting a fundraising event counts. But how should campaigns assign credit to multiple lobbyists hosting a single event? Give each credit for raising the total sum, or divide it among them?

The commission has further left undecided the timing of the reporting requirement. Instead, it laid out two alternatives. The first would require political committees to disclose quarterly any bundlers who gather more than $15,000. Semiannual reports would aggregate bundling totals from the previous two quarters.

The second approach proposes to follow the timing of the committee reports themselves. Those on semiannual reporting schedules would disclose bundlers semiannually. Committees reporting monthly or quarterly would list bundlers on their quarterly reports, and no aggregate reporting would be required.

Fred Wertheimer of Democracy 21 and Meredith McGehee of the Campaign Legal Center said they were still reviewing the proposal Tuesday afternoon. But both said they would be submitting comments to the commission. They said they would be pointing to language in the law that instructs the commission to develop rules providing the “broadest possible disclosure of activities.”

“There is a bottom line here and it’s in the statute itself,” Wertheimer said. “The mandate tilts toward broad disclosure and away from any efforts to narrow the disclosure or narrow its coverage.”

An official with the American League of Lobbyists was unavailable for comment.