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AO 2022-03: SSF’s use of LLC’s web platform to solicit and track contributions – FEC.gov

A limited liability company (LLC) may create a customized website to enable its corporate separate segregated fund (SSF) client to solicit the public for contributions to candidates and political committees under the circumstances proposed in the request and may provide the SSF real-time data about the resulting contributions. While the LLC will host the website on its platform, the site would be the internet website of a political committee available to the general public, so it must include the required disclaimers.

Background

Democracy Engine is a for-profit LLC that offers web-based payment services to help individuals make contributions to political committees in the ordinary course of its business.

Democracy Engine proposed to sell a new service to corporations and corporate SSFs, to create a customized website on their behalf for a fee. Democracy Engine’s corporate or corporate SSF client would solicit members of the corporation’s restricted class and the general public to make contributions to candidates and political committees selected by the corporation or corporate SSF through the customized website, and Democracy Engine would provide its client with real-time data about resulting contributions. Democracy Engine would deduct a commercially reasonable convenience fee from an individual’s contribution for its payment processing services before forwarding the contribution to the recipient candidate or political committee.

Analysis

Democracy Engine, LLC asked: (1) whether a corporation may use Democracy Engine’s platform to communicate with its restricted class about contributing to candidates and committees, and then receive real-time data about any contributions made using the platform; and (2) whether a corporation or its SSF may use Democracy Engine’s platform to communicate to the public about contributing to candidates and committees – excluding the corporation’s own PAC and any other SSF – and then receive real-time data about any contributions made using the platform.

The Commission could not approve a response to the first question by the required four affirmative votes.

On the second question, the Commission concluded that Democracy Engine’s corporate SSF client could solicit contributions from the public to be submitted indirectly to candidates and political committees using the Democracy Engine platform without violating the FEC’s regulation prohibiting corporations from facilitating the making of contributions to candidates and political committees. The FEC regulation excludes an SSF “soliciting contributions to a candidate or political committee” from the definition of “facilitation” and does not require the solicitation to be for direct contributions to candidates or limited to the restricted class.

The contribution data the SSF receives would be gathered from Democracy Engine’s own records of contributions processed on its platform and not from reports or statements filed with the FEC. As such, the prohibition on the sale or use of contributor data obtained from FEC reports does not apply. Finally, an SSF’s website hosted by Democracy Engine and available to the public must include disclaimers because the proposed customized website would be the website of a political committee.

On the second question, the Commission could not approve a response to whether a corporate client of Democracy Engine not operating through the SSF could engage in the same activity by the required four votes.

Date issued: June 27, 2022; Length: 8 pages

Citations

Regulations

11 C.F.R. § 104.15
Sale or use restriction

11 C.F.R. § 110.2
Contributions by multicandidate political committees

11 C.F.R. § 110.11
Communications; advertising; disclaimers

11 C.F.R. § 112.4
Issuance of advisory opinions

11 C.F.R. § 114.2
Prohibitions on contributions, expenditures and electioneering communications

11 C.F.R. § 114.5
Separate segregated funds

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