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Political Fundraising: Federal Election Regulators Approve Donations Via Text Message

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* Donations capped at $10 per text, $50 per month

* Campaigns of Obama, Romney both support text donations

By Alina Selyukh

WASHINGTON, June 11 (Reuters) - U.S. campaigns and political groups can now receive donations through text messaging, thanks to a new ruling by federal election regulators that creates a new cash-gathering tool in this election year's race to raise unprecedented amounts.

The Federal Election Commission on Monday gave its unanimous approval to allow candidates' political action committees to collect contributions submitted via text messaging, a near-instant way to garner small-donor cash often viewed as a sign of grassroots support.

Fundraisers and campaign finance reform advocates have long argued in favor of the move seen as giving small donors a chance for a bigger say in the 2012 campaign that has been marked by abundant six-figure donations to political groups known as Super PACs, or political action committees, which have no limits on spending and donations.

Similar to the way mobile users can send a text message to a specific short code to donate to a charity or a cause, they will now be able to give to a candidate or a PAC. Or they could also donate online by using their cell phone number instead of a credit card.

In both cases, the contribution will be added to the donor's cell phone bill that month.

Of each texted contribution, the political solicitor is likely to receive about 50 percent to 70 percent of the total, the rest shared by the carrier and the aggregator, according to the FEC documents on the ruling.

To comply with federal political donation limits on sums given anonymously, the contributions from one donor to one PAC will be capped at $50 per month, which would be monitored by the company aggregating the messaging and billing that will act as a middleman between the phone companies and political groups.

Donations will also be capped at $10 per text, according to Craig Engle, a lawyer with Arent Fox LLP, who brought the new text-for-donation proposal to the FEC representing political consulting firms Red Blue T LLC and ArmourMedia Inc and corporate aggregator m-Qube Inc.

"Nobody is going to be soliciting or receiving contributions greater than $10 at a time," Engle said.

Giving less than $50 a month allows Americans to donate anonymously even to the recipient. Beyond that, PACs have to gather records internally. If someone's giving reaches a total of more than $200, PACs have to disclose the donor's identity and address.

With phone numbers attached to contributions, the aggregator will be monitoring total contributions received from each phone to ensure none exceed $200.

"This is something that is in my opinion an interesting hypothetical to talk about but it's not a real probability," Engle said. "Someone would have to donate $10, 20 times. It's very unlikely that is actually going to happen."

The new request for text-for-donation approval came to the FEC this year after a similar proposal failed in 2010 because of concerns that it created opportunities to break donor record-keeping compliance rules.

Campaigns of both Democratic President Barack Obama and his Republican challenger Mitt Romney had submitted letters to the FEC in support of the proposal.

Obama's campaign, known for its small-donor prowess, as of the end of April raised $88.5 million, or 43 percent of its total, from donors who had given less than $200, according to the nonpartisan Campaign Finance Institute. Romney by the same time raised $9.8 million from such donors, or 10 percent of his campaign's total. (Editing by Lisa Shumaker)

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