Hybrid PACs: Super PACs And Traditional PACs Can Merge
WASHINGTON -- The Federal Election Commission announced new rules Wednesday allowing traditional political action committees to open a segregated account for a super PAC, which can accept unlimited contributions from corporations, unions and individuals to spend directly on elections.
The new rules came about after the FEC lost the court case Carey v. FEC. That ruling stipulates that PACs can operate two banks accounts, one for the unlimited super PAC money and another for the limited traditional PAC money, and use money from each account to pay for administrative functions in amounts proportional to the activity of each account.
National Defense PAC had originally petitioned the FEC for an advisory opinion on the spending mechanism, but after FEC did not give an opinion, the PAC took its case to court -- and won.
Traditional PACs are mostly used to make contributions to elected officials or to other PACs. Super PACs cannot make these contributions, but can spend money on electoral efforts, including advertising, direct mail and grassroots mobilization.
“This is a fantastic opportunity for grassroots & citizens PACs ... to significantly enhance their electoral & political advocacy, and they’d be nuts not to hire a campaign finance lawyer to help them navigate through this," Dan Backer, National Defense PAC's counsel and the principal attorney for DB Capitol Strategies, said by email. “I think folks have so far radically underestimated the profound changes that Carey v FEC will have on the entire PAC landscape.”
The new FEC rules give guidance on how to register and disclose contributions for a hybrid PAC. This guidance includes a new form letter to be appended to PAC registrations announcing the intention of forming a PAC and super PAC under the same umbrella and new directions on how to use the current disclosure forms to differentiate unlimited contributions from limited contributions.
This new guidance is one of many directions from the FEC on how to use the current disclosure forms in new ways that they weren’t originally intended.
The Campaign Legal Center’s Paul S. Ryan told HuffPost, “Even before this stipulation there was confusion about how to use the FEC’s registration forms. The forms are very out of date now.”
“The FEC is trying to fit the new rules into their old reporting system,” Backer told HuffPost. “An update will be needed soon if the FEC hopes to continue providing understandable transparency for PAC activities.”
There is currently already one hybrid PAC in operation. Efficient America PAC formed after the Carey v. FEC ruling was handed down, but before the new FEC rules were issued. This committee plans to use its hybrid activities to reach out to voters to educate them about energy efficiency legislation and contribute to supportive lawmakers.