FEC outlines fundraising rules for corporate separate segregated funds

An agency official with the Federal Election Commission outlined federal rules the commission applies to corporate separate segregated funds (SSFs), commonly known as corporate PACs, in an online presentation.

The presenter said the central rule is that all contributions to an SSF must be voluntary. “All contributions must be voluntary,” the agency official said, adding that contributions may not be secured by physical force, job discrimination, or financial reprisal and that it would be illegal to threaten an employee with demotion to induce a contribution.

The presentation listed four core requirements for SSF solicitations: disclose the PAC’s political purpose; state that contributions are voluntary and refusal will not result in reprisal; limit solicitations to a restricted class of persons; and ensure collecting agents forward contributions and records to the SSF in the required timeframes.

On solicitation notices, the presenter said every solicitation, whether oral or written, must inform solicitees of the SSF’s political purpose and their right to refuse without reprisal. If suggested contribution amounts are provided, solicitations must state the amounts are merely suggestions and that contributors may give more or less without benefit or disadvantage.

The presentation defined the limited class a corporate SSF may solicit: the corporation’s executive and administrative personnel, the company’s stockholders, and the families of those groups. The presenter emphasized that soliciting the general public is prohibited, although an SSF may accept unsolicited contributions so long as it does not advertise that ability, which would amount to solicitation.

The speaker explained the role of collecting agents—entities connected to or affiliated with the SSF such as the connected organization, a parent or subsidiary, or an affiliated committee—that may collect contributions for the PAC. Collecting agents must forward each contribution and required records to the SSF within specified deadlines: contributions of $50 or less must be forwarded within 30 days; contributions over $50 must be forwarded within 10 days.

The presenter said if an individual donor’s contributions exceed $200 during a calendar year, reporting records must include the contributor’s name, address, occupation and employer. If a collecting agent receives a check payable to the SSF, it must forward the check directly to the PAC. Collecting agents that temporarily deposit SSF contributions in transmittal accounts (including non-federal accounts) must keep separate records of all SSF receipts and disbursements and retain those records for three years.

The agency official reiterated that the SSF itself remains responsible for ensuring collecting agents comply with transmittal timelines, recordkeeping rules and reporting requirements, and that contributions routed through collecting agents should be reported as coming from the original donors rather than as transfers from the collecting agent. The presenter also clarified that for payroll deductions the date of receipt for reporting purposes is the date the contribution is deducted, not the date the SSF actually receives the money.

The presentation closed with a reminder that the Federal Election Commission provides compliance resources on its website, a toll-free information line, prompt email responses, conferences around the country and informational sessions in Washington, D.C.