FEC Adopts NPRM Regarding Political Activity on the Internet

September 27, 2001. The Federal Election Commission (FEC) approved a Notice of Proposed Rulemaking (NPRM) at its September 27 meeting regarding political activity on the Internet. The FEC is the agency charged with enforcing the Federal Election Campaign Act (FECA), which regulates political contributions and expenditures. While the FEC had previously considered wide ranging regulation of political speech on the Internet, this NPRM merely proposes to permit certain personal political web sites, and to allow corporations and unions to put certain hyperlinks and press releases in their web sites.

The FEC's NPRM [PDF] proposes three rule changes. First, it would provide that there would be no contribution or expenditure within the meaning of the FECA when individual, without receiving compensation, uses his or her own computer equipment, software, Internet services or domain names to attempt to influence a federal election. Second, it would allow corporations and unions to include hyperlinks to the web sites of candidates and political committees. Third, it would allow corporations and unions to publish in their web sites copies of press releases endorsing candidates.

Notice of Inquiry. This NPRM is a part on an ongoing process at the FEC that began years ago, and will likely continue for some time. On November 1, 1999, the FEC issued a Notice of Inquiry (NOI) regarding campaign activity and the Internet. That NOI revealed that the FEC was considering treating common activities such as email and hyperlinking as political contributions or expenditures under the FECA, and hence subject to FEC regulation, reporting requirements, and/or contribution limits. See, TLJ story, FEC to Review Campaign Activity on the Internet, November 8, 1999.

Response to NOI. The FEC received about 1,300 comments in response to its NOI. Almost all were critical of the FEC for considering regulation of the Internet or freedom of speech. See, TLJ story, Citizens Urge FEC to Stay Away from the Internet, January 12, 2000.

Zach Exley. One of the events which preceded the FEC's NOI was the filing of a complaint with the FEC regarding a personal web site operated by Zach Exley. Benjamin Ginsburg, an elections lawyer with the law firm of Patton Boggs, who was also affiliated with the George Bush presidential campaign, filed a complaint with the FEC on May 4, 1999. The complaint alleged that Zach Exley's anti-Bush web site violated various technical rules governing campaign money in federal elections. In particular, he alleged that Exley violated the FECA by failing to file campaign expenditure reports. Zach Exley's web site was parodic, defamatory, immature, low budget, and highly critical of George Bush. After receiving public comment in response to its NOI, the FEC determined to take no action against Exley. It released a letter to Exley, and an FEC narrative, on or about April 14, which stated that the FEC would take "no action" against him. See, TLJ story, FEC Takes No Action Against Anti-Bush Web Site, April 20, 2000.

NPRM. The FEC's latest action, its NPRM, is limited in scope. Moreover, it focuses on defining activities that are permissible under the FECA, rather than proscribing conduct. However, while the rule changes proposed in this NPRM are narrow, the FEC cautioned that it "may take additional action on some or all of the other issues raised in the NOI at a later time." The 32 page NPRM reviews the comments which it received in response to its NOI, and lists and discusses three proposed changes to the FEC regulations.

Personal Web Sites. First, the NPRM states that the FEC "is proposing to add a new section 117.1, which would describe certain types of individual Internet activities that would not be treated as contributions or expenditures. Section 117.19(a) would contain an exception from the definition of "contribution" in section 100.7(a) of the current regulations. Section 117.1(b) would contain a parallel exception from the expenditure definitions in sections 100.8(a) and 109.1. Proposed sections 117.1(a) and (b) would state that no contribution or expenditure results where an individual, without receiving compensation, uses computer equipment, software, Internet services or Internet domain name(s) that he or she personally owns to engage in Internet activity for the purpose of influencing any election to Federal office."

Corporate and Union Hyperlinks. Second, the NPRM states "New section 117.2 would state that the establishment and maintenance of a hyperlink from the web site of a corporation or labor organization to the web site of a candidate or party committee for no charge or for a nominal charge would not be a contribution or expenditure ..." However, there are also limitations on this rule.

Corporate and Union Press Releases. Third, the NPRM states that "a corporation or labor organization may make a press release announcing a candidate endorsement available to the general public on its web site ..." However, to qualify, the corporation or union must regularly publish press releases in its web site, the release must be limited to the announcement of the endorsement and the reasons, the release must be made available in the same manner as other releases, and the cost must be de minimis.

The FEC adopted the NPRM by a vote of 6-0. The FEC also requests public comments on its proposed rule changes. Comments are due within 60 of publication of a notice in the Federal Register, which has not yet occurred. Also, the FECA and this NPRM only pertain to federal law. This NPRM does not affect state laws pertaining to state and local elections.