Lawyer Article

New Leadership PACs Surface, as FEC Applies Bundling Rule to Them, Lobby PACs

The Federal Election Commission is just beginning to implement a new rule designed to shine a spotlight on the activities of political action committees controlled by lobbyists and members of Congress, but the FEC already has received new disclosures from nearly a dozen so-called leadership PACs whose status and sponsors had not previously been revealed.

Registration forms filed with the FEC in recent months have disclosed the sponsorship of PACs by members of Congress ranging from Rep. Jesse Jackson (D-Ill.) to Sen. Jim DeMint (R-S.C.).

Jackson's PAC-called A More Perfect Union PAC-is brand new and has not raised any money yet, but DeMint's Senate Conservatives Fund raised over $300,000 in the 2008 election cycle.

Another newly disclosed leadership PAC-the House Conservatives Fund, sponsored by Rep. Patrick McHenry (R-N.C.)-raised over $1 million in the 2008 cycle, according to FEC disclosure forms.

The revelations were contained in amended registration forms filed by just two dozen leadership PACs that have officially disclosed their sponsorship to the FEC, according to a list compiled by commission officials.

Other newly revealed leadership PACs not on previous, unofficial lists kept by the FEC and private groups like the nonprofit Center for Responsive Politics included the following:

* Giving Willingly Empowering Nationally (GWEN PAC), sponsored by Rep. Gwen Moore (D-Wis.); * Invest in a Strong Secure America (ISSA PAC), sponsored by Rep Darrell Issa (R-Calf.); * Just Permanent Interests PAC, sponsored by Rep. William Clay (D-Mo.); * New Apollo Energy PAC, sponsored by Rep. Jay Inslee (D-Wash.); * People Helping Illinois Lead (PHIL PAC), sponsored by Rep. Phil Hare (D-Ill.); * Renew Ohio PAC, sponsored by Rep. Zack Space (D-Ohio); and * Wyoming Values PAC, sponsored by Sen. John Barrasso (R-Wyo.).

The new filings also revealed that a major PAC linked to former Rep. Jim McCrery (R-La.) is now sponsored by Rep. Charles Boustany (R-La.)

March 29 Deadline Looms

The FEC has imposed a deadline of March 29 for all existing leadership PACs to file amended forms disclosing their sponsors. The deadline was set by a new commission rule implementing provisions of the Honest Leadership and Open Government Act, the reform law passed by Congress in 2007 to require disclosure of lobbyist involvement in campaign financing. HLOGA calls for "bundled" campaign contributions provided by lobbyists to be disclosed by the campaign committees and leadership PACs of lawmakers, which receive the money.

It remains unclear, however, if the hundreds of leadership PACs known to now be operating will meet the deadline to register and officially reveal their sponsors-a key step toward future reporting of bundled contributions.

Leadership PACs are widely used by lawmakers to raise money in addition to the coffers of their primary campaign committees. A lawmaker cannot use this PAC money directly for his or her own campaign expenses but can distribute it to colleagues to help advance general party interests, as well as the career of the PAC sponsor.

The Center for Responsive Politics has on its website at www.opensecrets.org a list of over 350 leadership PACs active in the 2008 election cycle, which collected and distributed over $37 million in campaign money. Most of the money originated from other PACs linked to companies, unions, and organizations with interests before Congress.

Those with well-funded leadership PACs include the top Democratic and Republican leaders of the House and Senate, President Obama, and other high-profile leaders. Of the PACs associated with these leaders only two-Sen. John McCain's (R-Ariz.) Country First PAC and Sen. Richard Durbin's (D-Ill.) Prairie PAC-have filed forms officially disclosing their sponsorship to the FEC.

Lobbyist PAC Disclosure

HLOGA requires disclosure of contributions bundled by lobbyists' PACs, as well as individual lobbyists, meaning that such PACs must reveal their status to the commission. The FEC rule's March 29 deadline for filing amended registration forms thus covers not only leadership PACs but also PACs that are controlled by individual lobbyists, lobbying firms, or other types of organizations that employ lobbyists. These PACs must file a new form just released by the FEC on March 10, which has a box to be checked if a PAC is "established or controlled" by a lobbyist or lobbying organization registered under the federal Lobbying Disclosure Act.

The March 29 deadline represents just the first phase of implementing the FEC bundling rule. The next phase will come this spring and summer, when disclosure reports filed by candidates and political committees will have to list the bundled contributions that they have received from individual lobbyists, lobbying organizations, and their PACs.

The FEC has established on its website at http://www.fec.gov/finance/disclosure/lobbyist.shtml a list of those PACs that have so far registered as lobbyist/registrant PACs. On March 12 the list had the names of just 13 PACs, including those associated with big companies, like Amazon.com, AT&T, Coca-Cola, and Koch Industries, as well as such law and lobbying firms as BGR, McDermott Will & Emery, and Tew Cardenas.

The relatively small number of PACs on the list, so far, means there is a long way to go before the FEC has a complete list of lobbyist-controlled PACs.

'Vast Majority' of PACs Linked to Lobbying

One attorney, Lawrence Norton, said he believes that "the vast majority" of the more than 4,000 PACs now regulated by the FEC will have to register and list their lobbying affiliation. This includes many "connected" PACs, which are formally affiliated with companies, unions, or other organizations with lobbying interests, as well "non-connected" PACs that have no formal affiliation with another organization.

Norton, an attorney with the firm Womble Carlyle who previously served as FEC general counsel, noted that even a non-connected PAC may be required to register under the FEC rule if a lobbyist serves as a treasurer or board member. The requirement could even apply in situations where a lobbyist does not have a formal leadership title but exercises practical control over the PAC, he suggested.

There are many questions in the lobbying community about the impact of these new requirements, and it could take some time for the new rules to be fully understood, Norton said, despite the fact that the FEC has set a deadline just weeks away for amended PAC registration forms to be filed. Norton said he appeared before a recent session sponsored by the American League of Lobbyists to explain the requirements of new FEC rule and "never got more questions in my life."

PAC Activity at All-Time High

The FEC's new requirements come as the overall level of PAC activity is reaching an historic high, reflecting the intense interest of all types of organizations in raising campaign money. The FEC said in a summary released this month that the number of federally registered, active PACs increased by 9 percent in 2008 to 4,611, the highest PAC count ever recorded by the commission. The number of non-connected PACs increased the most, up 23 percent to 1,594 committees. Corporate committees increased by less than 1 percent but still make up the largest group of PACs at 1,598, the FEC said. Other types of PACs include 103 committees sponsored by nonstock corporations, 272 labor PACs, 995 trade, membership, and health organization PACs, and 49 cooperative PACs.

The FEC noted that registration does not necessarily imply financial activity, and many PACs report making no contributions to candidates or independent expenditures advocating for or against candidates.

By Kenneth P. Doyle

More information on the requirements of the bundling rule is available on a special section of the FEC website at http://www.fec.gov/info/guidance/hlogabundling.shtml.