If you skipped to the final pages of the omnibus spending bill unveiled last night to see how it ends, you would find a rather dramatic change in campaign finance law related to party committee contribution limits.  Page 1599 (of 1603) of the spending package contains amendments to the Federal Election Campaign Act (FECA) that give national party committees additional avenues for fundraising, effectively returning to the parties some of the power that has been diminished with the rise of super PACs and other outside spending groups.  The law still needs to pass Congress and be signed by the President, but it is not too soon to consider the potential impact of these changes.

What is in the omnibus amendments to FECA?

At its core, the changes to the law would allow national party committees to create up to three additional specialized “accounts,” each of which could receive contributions from individuals and PACs that are triple the amount that can be given to the main party account.  The three separate, segregated accounts can be used to pay for expenses related to the following areas:

  1. Presidential nominating conventions;
  2. Headquarters buildings of the party (which includes construction, purchase, renovation, operation, and furnishing);
  3. Election recounts, contests, and other legal proceedings.

While the presidential nominating conventions account is only available to the RNC and the DNC, the other two accounts are available to all national party committees (RNC, NRSC, NRCC, DNC, DSCC, DCCC).  Based on the language of the statutory amendments, it appears that this could give each party the ability to create seven new accounts, each with triple the existing contribution limits.  The following chart should help summarize how much individuals could give to the various accounts per year.

As this chart shows, individuals would be able to give up to $777,600 to a party’s various accounts each year.  This means that a couple could give up to $3,110,400 to a party in a two-year election cycle.  This is a major increase in the potential spending power of the national parties.

The amendments also allow PACs to contribute more to national party committees.  PACs could contribute up to $15,000 per year to the main accounts of a party committee and up to $45,000 per year to each of the seven new accounts described above.

These changes apply only to contributions from individuals and PACs.  The ban on corporate and union contributions still applies to the new accounts.

In addition to providing several new accounts into which each party can stockpile funds, the FECA amendments in the omnibus spending bill stripped away the coordination restrictions on each of these new accounts.  This would allow the party committees to work with presidential and congressional candidates on activities supported by these funds without violating existing limits on coordinated activities or in kind contribution limits.

What will the parties do with all of this new money?

The answer to this question will be developed over time as the parties figure out the boundaries of the new law.  But the activities supported by these funds will almost certainly extend beyond what is traditionally thought of as relating to the national party conventions, party headquarter buildings, and legal expenses.

This is particularly the case with the building account.  Under the omnibus amendments, this account can be used to pay for construction and operation of party headquarters buildings.  It is possible that “party operations” could include activities such as data mining and modeling projects or opposition research centers.  This is the account to watch to determine how much of an impact these amendments will have on the balance of power between national parties and super PACs.

Other account activities to watch, should the bill become law:  the new party convention accounts could be a route to tickets and passes to the national conventions.  While this might be too much for many PACs, some bigger PACs could afford $45,000 for a convention ticket.  The amendments do contain a $20 million cap on expenditures from the new convention accounts.

Remember, this is not the law yet.  We will continue to monitor the progress of these amendments as the spending bill makes its way through the congressional process and to the President’s desk.

Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

Photo of Robert Lenhard Robert Lenhard

Robert Lenhard has helped guide decision makers in corporations, trade associations, and advocacy groups on complying with the laws regulating political activity for over 20 years. As a senior member of the firm’s Election and Political Law Practice Group, he provides compliance advice…

Robert Lenhard has helped guide decision makers in corporations, trade associations, and advocacy groups on complying with the laws regulating political activity for over 20 years. As a senior member of the firm’s Election and Political Law Practice Group, he provides compliance advice relating to federal and state campaign finance, lobbying, pay-to-play, and government ethics laws. As an advocate, counselor, and regulator, Mr. Lenhard brings a depth of experience on matters that involve legal as well as political risk.

Bob led Covington’s representation of the Biden for President campaign, the Super PAC supporting President Obama’s re-election, as well as several prominent professional sports leagues, pharmaceutical manufacturers, technology companies, advocacy groups, and trade associations.

Prior to joining the firm in 2008, Mr. Lenhard served as Chairman of the Federal Election Commission (FEC) in 2007 and Vice Chairman of the agency in 2006, during which time the agency handled over 10 major rulemakings, had among its most productive years in enforcement and audit, and adopted several reforms to the enforcement process. Mr. Lenhard also led the Presidential Transition Team that reviewed the FEC for the incoming Obama administration in 2008-2009.

Mr. Lenhard is frequently quoted in the press, has lectured at major law schools, and Before his service to the FEC, Mr. Lenhard provided legal advice to labor organizations active in the political process at the federal, state, and local levels. Mr. Lenhard also was involved in litigation in the Florida trial and appellate courts over the counting of absentee ballots in Seminole County, Florida in 2000.

Robert Lenhard is a member of the firm’s Election and Political Law Practice Group and advises corporations, trade associations, not-for-profit organizations, and high-net-worth individuals on compliance with federal and state campaign finance, lobbying, and government ethics laws.

Mr. Lenhard routinely assists clients in establishing and operating federal and state PACs, compliance programs associated with campaign finance and pay-to-play laws; advises advocacy groups and their donors; conducts compliance trainings and audits of federal and state lobbying and political programs; and counsels clients on compliance with congressional gift and travel rules. According to Chambers, sources report: “He is strategic and always sees the big picture. He is a great person who provides excellent non-legal counsel as well.”

Photo of Anthony Herman Anthony Herman

A first-chair litigator and trial lawyer, Tony Herman has tried to verdict more than 25 cases, jury and non-jury, in federal and state courts and before arbitration panels throughout the U.S. His broad ranging general litigation, arbitration and trial practice includes environmental, intellectual property…

A first-chair litigator and trial lawyer, Tony Herman has tried to verdict more than 25 cases, jury and non-jury, in federal and state courts and before arbitration panels throughout the U.S. His broad ranging general litigation, arbitration and trial practice includes environmental, intellectual property and technology litigation, employment litigation, FDA litigation, and general commercial litigation involving contracts, license agreements, and business torts. He has been in charge of large, complex litigation matters for companies such as National Geographic, Thomson Reuters, Gannett, Norfolk Southern, Sanofi, Pfizer, Johnson & Johnson, Merck, Schering-Plough, Novartis Vaccines, Astellas, and Wyeth. He also has advised public officials and high profile individuals and negotiated labor and employment agreements.

He also has advised public officials and high profile individuals and negotiated labor and employment agreements. Tony served as General Counsel at the Federal Election Commission where he was responsible for managing some 100 lawyers in the Office of General Counsel’s four divisions. He had overall responsibility for all of the agency’s enforcement, litigation, and advisory opinion matters.

Photo of Derek Lawlor Derek Lawlor

Derek Lawlor is of counsel in the firm’s Election and Political Law Practice Group. Derek advises corporations, nonprofit organizations, and trade associations on compliance with federal and state lobbying, campaign finance, and government ethics laws.

Clients regularly rely on Derek to assist with…

Derek Lawlor is of counsel in the firm’s Election and Political Law Practice Group. Derek advises corporations, nonprofit organizations, and trade associations on compliance with federal and state lobbying, campaign finance, and government ethics laws.

Clients regularly rely on Derek to assist with their complex questions related to activities and projects that implicate all of these laws. Derek advises federal and state candidates and super PACs on campaign finance and disclosure issues. Derek also represents clients in government investigations and inquiries conducted by the Federal Election Commission, Office of Congressional Ethics, and Congressional Committees and Commissions.

Derek’s representation of clients covers the full range of important political law issues that they face, including:

  • Advising clients on their registration and reporting obligations under the federal Lobbying Disclosure Act, as well as state and local lobbying laws, including helping client organizations evaluate the core questions that arise in this space:
    • Has the organization or any of its employees triggered lobbying registration requirements?
    • What lobbying income, expenditures, issues, or contacts need to be disclosed on lobbying reports?
    • Does procurement or sales activity directed at governmental entities trigger lobbying registration in a particular jurisdiction?
    • What are the best practices for designing a lobbying compliance program?
  • Assisting corporations and trade associations with the establishment and operation of connected PACs, which frequently entails evaluating the following questions:
    • What steps does the organization need to take to start up and register a connected PAC?
    • What are the ongoing reporting requirements under the Federal Election Campaign Act (“FECA”) or state campaign finance laws?
    • Which employees can the organization solicit and what are the rules on conducting a solicitation campaign?
    • What are the limits on making contributions to federal, state, or local candidates, party committees, or other political committees?
    • What are the best practices for designing a PAC compliance program?
  • Evaluating whether a client’s proposed activities might trigger registration under the Foreign Agents Registration Act (“FARA”), and if so, advising on registration and ongoing reporting obligations;
  • Advising federal and state candidates, super PACs, and other political committees on compliance with FECA, FEC regulations and reporting requirements, state campaign finance laws, rules on disclaimers placed on communications, and other political law compliance topics;
  • Counseling individuals who are entering government service, including Senate-confirmed positions, on the various financial disclosure requirements, conflicts of interest considerations, and other ethics law issues they may face;
  • Helping clients establish politically active or policy-focused nonprofit organizations, and proving ongoing support related to tax and political law issues that might arise from their activities; and
  • Advising corporations, nonprofits, and individuals on their proposed donations to candidates, political committees, and other politically active outside groups.

Derek is a Professorial Lecturer in Law at the George Washington University Law School.

Prior to receiving his law degree, Derek worked in the Office of General Counsel at the U.S. House of Representatives.

Photo of Andrew Garrahan Andrew Garrahan

Andrew Garrahan represents and counsels clients at the intersection of law and politics. He guides them through both regulatory compliance issues and government investigations on matters including state and federal campaign finance, ethics, lobbying, and corruption, as well as in congressional investigations.

Andrew’s…

Andrew Garrahan represents and counsels clients at the intersection of law and politics. He guides them through both regulatory compliance issues and government investigations on matters including state and federal campaign finance, ethics, lobbying, and corruption, as well as in congressional investigations.

Andrew’s prior career in political fundraising gives him a unique perspective on the challenges faced by his clients, which include corporations, candidates, government officials, political and nonprofit organizations, and private individuals.

Andrew’s counseling and advisory practice includes:

  • guiding clients on structuring of and compliance for their state and federal lobbying and grassroots advocacy campaigns;
  • representing campaigns, Super PACs, corporations, trade associations, and individuals on the applicability of the Federal Election Campaign Act (FECA) and state campaign finance law;
  • counseling on Foreign Agents Registration Act (FARA) registration and disclosure, and its interaction with the Lobbying Disclosure Act (LDA);
  • helping companies comply with state and federal ethics laws, particularly on gifts and conflicts of interests, and domestic anticorruption; and
  • auditing corporate political law compliance practices.

Andrew’s investigations and defense work includes:

  • representing clients in Congressional investigations, including responding to letter requests and subpoenas;
  • preparing company officers and other individuals for testimony in Congressional investigative hearings;
  • defending clients in Department of Justice matters related to campaign finance, lobbying, ethics, and public corruption; and
  • representing clients before the FEC and state campaign finance, lobbying, and ethics regulators.