Must-read: Campaign finance attorney Andrea Reilly’s solution to the Summer fundraising “dead-zone”

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A glitch in Florida’s new political fundraising laws has created a “Zen-like” dead zone for receiving large donations: Committees of Continuous Existence are barred from accepting donations after July 31 and will be transfer their funds to newly created political committees. But these political committees cannot accept contributions of more than $500 until November 1. The Miami Herald‘s Mary Ellen Klas described this snafu, and others within HB 569, in a June 12 column.

But there are some ways around this 90-plus day blackout period, according to Andrea Reilly, campaign finance attorney with Smith, Bryan & Myers.

“CCEs seeking to accept large contributions before November 1 should consider establishing an Issue PC rather than a Candidate PC,” Reilly states. “Candidate PCs can make contributions to candidates but may not accept more than $500 from any contributor.  Issue PCs are prohibited from making candidate contributions but may accept unlimited contributions immediately.”

Although this distinction will be irrelevant after November 1, it would replace the 3-month fundraising blackout period to a one month period in October, during which candidate contributions are prohibited but unlimited fundraising is possible.

To make this work, Reilly continues: “Entities seeking to make candidate contributions during this time should consider postponing the termination of the CCE and maintaining sufficient funds in the CCE account to continue making candidate contributions until September 30th, when CCEs must disgorge all funds and terminate.”

Reilly acknowledges that the transition from a CCE to a PC is complex and involves a number of issues, nor does she suggest this solution as a formal legal opinion.

Sen. Jack Latvala, chairman of the Senate Ethics and elections Committee, said language to eliminate CCEs and set up the effect dates was written by the House, and he didn’t realize the glitches were there until after it was signed into law.

Here is Reilly’s full explanation:

Committees of Continuous Existence (CCEs) that engage in significant fundraising during August, September and October may benefit from the following solution to the 3 month “blackout period” created by HB 569, the campaign finance bill passed during the 2013 Legislative Session.  Most CCEs plan to shut down by August 1st, 2013, the date after which CCEs will be prohibited from accepting contributions.  CCEs will be able to transfer unlimited funds to PCs (Political Committees), and thus most CCEs will immediately begin operating as PCs. However, until November 1st, 2013, the PC may not accept contributions over $500 from any contributor.  Hence, a blackout period is created from August 1st, 2013 until November 1st, 2013, during which neither the CCE nor the PC may accept large contributions.  

CCEs seeking to accept large contributions (over $500 from any contributor) before November 1, 2013 should consider establishing an Issue PC rather than a Candidate PC.  Under current law, there are two types of PCs: those supporting or opposing one or more candidates (“Candidate PCs”), and those supporting or opposing issues only (“Issue PCs”).  Candidate PCs can make contributions to candidates but may not accept more than $500 from any contributor.  Issue PCs are prohibited from making candidate contributions but may accept unlimited contributions.  This distinction will be irrelevant after November 1, 2013, when all PCs will be permitted to accept unlimited contributions.  An entity that establishes an Issue PC  will be able to accept unlimited contributions immediately, but will not be able to make candidate contributions until November 1st, 2013.  Entities seeking to make candidate contributions during this time should consider postponing the termination of the CCE and maintaining sufficient funds in the CCE account to continue making candidate contributions until September 30th, 2013, when CCEs must disgorge all funds and terminate.  Rather than a 3 month fundraising blackout period, this solution creates a 1 month period (October) during which candidate contributions is prohibited, but unlimited fundraising is permitted.  Starting November 1st, 2013, all PCs may accept unlimited contributions and make candidate contributions.

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Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.