FEC Relaxes Donation Rules for Hybrid PACs

Posted October 5, 2011 at 5:24pm

The Federal Election Commission said today that it is changing its rules for a new type of political action committee that is a hybrid of a super PAC and a traditional hard money committee.

The agency released a legal guidance saying that it would no longer enforce previous prohibitions on how much corporations and labor unions may give to hybrid PACs as long as funds given to the super PAC component are kept in a separate bank account than the funds for the traditionally regulated PAC.

The FEC’s new guidance was prompted by a mid-June decision by the U.S. District Court for the District of Columbia in Carey v. FEC, which ruled in favor of the National Defense PAC. The court said super PACs should be allowed to solicit and accept unlimited contributions for independent expenditures in federal elections even if they have a second part of the committee that is reserved for hard money donations to federal candidates.

Such hybrid PACs will be allowed to accept unlimited donations for their own campaign ads, while raising and donating money to Congressional candidates. The key is that the unlimited soft money from individuals, corporations and nonprofits cannot be mixed with the funds raised under the current $5,000 limit from individuals, campaigns and hard money PACs.

Organizations planning on soliciting and spending money under this new hybrid model are asked to notify the FEC and follow the agency’s guidance on how to report such transactions.