10/02/2012 06:15 pm ET

Obama Victory Fund's Online Ads Push Campaign Finance Law

WASHINGTON -- Some people catching up with their favorite television shows on Hulu, especially people living in swing states and zip codes heavy with the right demographic groups, may have seen ads urging President Barack Obama's reelection. They likely don't realize they've also seen the latest innovation in campaign spending.

An ad called "Gotta vote" has run frequently on the video-streaming website in southwestern Virginia, home to big student populations at Virginia Tech and Radford University. The ad features students listing a litany of things they "gotta" do -- "pay that tuition ... get a job ... move out" -- before showing an image of Obama as a voice says, "Gotta keep moving forward." The camera cuts to Republican presidential nominee Mitt Romney, as another voice says, "Not back."

Nothing new there -- college students in general are more likely to vote for Obama. What is different is the small print displayed at the end of the ad: "Paid for by Obama Victory Fund."

The Obama Victory Fund is a joint fundraising committee that disburses the money it raises to the Obama campaign, the Democratic National Committee and a host of Democratic state parties. Campaign finance law states that it's allowed to incur only those expenses related to fundraising.

Those ads on Hulu are not clearly aimed at raising funds, which in turn raises questions about how they fit into the obtuse world of campaign finance rules and regulations.

The victory fund has reported spending $11.6 million on online advertising in August through Bully Pulpit Interactive. It isn't clear how much of that has gone toward ads on video-streaming platforms like Hulu or toward clickable online ads, which could direct a viewer to a fundraising page.

Asked about the Hulu ads, Bob Biersack, a senior fellow at the Center for Responsive Politics and a former Federal Election Commission communications director, said via email, "I don't remember ever seeing this before. Every cycle has little (or sometimes big) innovations, and this kind of reminds me of some of those."

One of those previous innovations, from the days when presidential candidates accepted public financing, involved the money officially raised from individuals and PACs for a compliance fund, meant to defray the legal costs of complying with campaign laws. The candidates started to use the compliance fund money to help pay for ad buys -- on the ground that they were covering the cost of including a legal disclaimer ("Paid for by...") at the end of the ad.

Paul S. Ryan, senior counsel at the campaign finance watchdog Campaign Legal Center, said that the candidates and the parties are always looking for ways around the campaign finance rules.

As for the Hulu use of Obama Victory Fund money, he said it might violate contribution limits and coordination rules, depending on how it's accounted for. If the joint fundraising committee is putting money toward something other than fundraising, Ryan said, one of the recipients of the victory fund's cash -- the presidential campaign, the Democratic National Committee or a state party -- should be reporting that spending as a coordinated expense.

The Obama campaign has not explicitly reported any coordinated expenditures involving the Obama Victory Fund so far.

Under federal law, the campaign is permitted to spend only $21.68 million in coordination with a political party. Assuming the victory fund ads do not qualify as fundraising efforts, not reporting that spending as a coordinated expense could allow the reelection effort to pad the amount it can spend.

The Obama campaign responded to requests for comment with the following statement: "Obama Victory Fund 2012 is a joint fundraising committee between Obama for America, the Democratic National Committee, and state Democratic Parties. All of the contributions that it brings in are divided among these different committees and subject to the relevant contribution limits and reporting requirements. From the contributions it receives, OVF is also required to pay for all the fundraising expenses aimed at raising contributions into the joint committee. These expenses include all types of fundraising activity, such as event expenses, catering, direct mail, online fundraising, and telemarketing."

The Romney campaign operates a victory fund that also is spending money on online ads -- $7.19 million in May and June. The campaign did not respond to a request for comment.


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