TLJ News from May 1-5, 2013

FEC Issues Advance NPRM Regarding Contributions Via Internet Payment Processing and Texting

5/2. The Federal Election Commission (FEC) published a notice in the Federal Register (FR) that announces, describes, and requests comments on, proposed rules changes regarding contributions and expenditures made by electronic means, including credit card, debit card, internet based payment processing, and text messaging.

The FEC adopted a draft Advance Notice of Proposed Rulemaking (ANPRM) at its April 25, 2013 meeting. It published the final text in its May 2 FR notice. The deadline to submit comments is June 3, 2013. See, FR, Vol. 78, No. 85, May 2, 2013, at Pages 25635-25638.

This notice does not contain the text of any proposed rules changes. However, it asks numerous questions.

It states that "people increasingly use electronic means to contribute to political committees". For example, "among adults who donated to presidential candidates in the 2012 election, 50 percent donated online
or via email".

Hence, the FEC "is considering whether and how to revise its regulations to address electronic contributions and other transactions." The FEC has already  begun to address some questions raised in this notice by advisory opinions (AO).

First, the notice asks about current industry practices. "How are commercial and consumer electronic transactions conducted generally? What are the industry standards, practices, and safeguards? How do vendors and third-party payment processors, such as PayPal, verify the payer's identity and attribute payments made by credit card? What types and forms of information are typically collected and maintained? What are the standard practices of third-party payment processors, such as PayPal or Square? What are the intermediate steps in processing electronic transactions? Do vendors or third-party payment processors typically process multiple recipients' funds through merchant accounts? What are the general timeframes for each step of these electronic processes? What are typical accounting practices with regard to merchant accounts? How do these practices differ, if at all, for prepaid debit, credit, banking and gift card transactions? How might practices change in light of emerging technologies? Are there other forms of electronic payment--such as by electronic wallet or swipe, P2P (or person to person) platform, mobile app, or Twitter hashtag -- that the Commission should consider if it decides to revise its rules?" (Parentheses in original. Footnotes omitted.)

Second, the notice asks about how political committees receive contributions. "Do political committees' practices differ from general commercial industry standards and practices? If so, how do they differ? Are political committees' practices comparable to those of nonprofit organizations that receive electronic donations at the Federal, State, or local level? What legal or practical considerations or constraints drive any such differences? What role, if any, should commercial industry standards and practices play in the Commission's consideration of requirements for electronic contributions received by political committees?"

The notice also asks numerous questions about recordkeeping practices for electronic transactions.

It also asks whether the FEC should amend its regulations "to address contributions made by text
message". The FEC has addressed this in advisory opinions. See, for example, Advisory Opinion (AO) [20 pages in PDF] adopted by the FEC on June 11, 2012 in response to a request from Red Blue T LLC, ArmourMedia, Inc., and m-Qube, Inc. Also, group of 15 members of the House of Representatives submitted a letter urging the FEC to allow text message campaign contributions. They wrote that "we must find ways to enhance the role of small donors". See also, "More News" section of TLJ Daily E-Mail Alert No. 2,434, August 22, 2012.

The notice also states that the FEC "is also considering whether and, if so, how to revise the paper-oriented definitions of ``money´´ and determinations of ``disbursement´´ in its regulations."

Finally, this notice states that the FEC "is considering whether to revise its regulations that expressly apply only to cash contributions so that they also expressly apply to certain electronic contributions".

President Obama Picks Mike Froman to be USTR

5/2. President Obama gave a speech in which he announced that he would nominate Mike Froman to be the U.S. Trade Representative.

He currently works in the Executive Office of the President as Deputy National Security Advisor for International Economic Affairs. Before joining the Obama administration he worked at Citgroup. He worked in the Department of the Treasury during the Clinton administration.

President Obama said that "we went to law school together".

Demetrios Marantis has been the acting USTR since former USTR Ron Kirk resigned.

Sen. Max Baucus (D-MT), the Chairman of the Senate Finance Committee (SFC), stated in a release that "With an ambitious trade agenda ahead, Mike Froman is the right choice for U.S. Trade Representative. USTR is an effective, nimble agency, and by choosing Mr. Froman to lead it, the administration is sending a clear signal that trade is a top priority. He has been an instrumental player in trade negotiations over the last four years and will hit the ground running."

Sen. Baucus added that "Strengthening our trade ties with Europe and across the Pacific is one of my top priorities for the next year and a half, and I’m eager to work with the administration to make sure those trade agreements bolster our economy and create jobs, including through swift passage of trade promotion authority."

Sen. Orrin Hatch (R-UT), the ranking Republican on the SFC, which has jurisdiction over this appointment, stated in a release that "By negotiating and enforcing strong trade agreements that open up these markets to U.S. exports, the Office of the U.S. Trade Representative plays a critical role in keeping our economy competitive and our standard of living high. With ongoing negotiations to conclude a Trans-Pacific Partnership, which will cover over one-third of all world trade, and negotiations for an agreement with the European Union on the horizon, the President’s nominee must have the trade expertise, political will and leadership skills necessary to effectively lead this small but important agency."

Rep. Dave Camp (R-MI), Chairman of the House Ways and Means Committee (HWMC) stated in a release that "I welcome the President’s nomination of Mike Froman to lead USTR. I look forward to continuing to work with him to promote a robust trade agenda, including bipartisan trade promotion authority legislation, to create good jobs in America. I am confident that his skills and experience will stand him in good stead as he leads the Administration's trade policy and takes the helm at one of the most professional and productive agencies in the U.S. government."

Rep. Devin Nunes (R-CA), Chairman of the HWMC's Subcommittee on Trade, stated in the same release that "I applaud the President’s nomination of Mike Froman to lead USTR. I support Mike's selection and believe that today's announcement bolsters the Administration's commitment to finalizing trade agreements that open up new markets and create strong enforcement mechanisms."

President Obama Picks Democratic Fund Raiser for Secretary of Commerce

5/2. President Obama gave a speech in which he announced that he would nominate Penny Pritzker to be Secretary of Commerce. She is a billionaire from Chicago who has given and raised massive amounts of money for Democratic candidates and committees.

Federal Election Commission (FEC) filings also disclose that she has made a few contributions to Republicans -- for example, to former Rep. Denny Hastert (R-IL), who represented an Illinois district near Chicago.

She is a member of the Pritzker family, which founded the Hyatt hotels.

The Department of Commerce (DOC) includes many technology related components, including the U.S. Patent and Trademark Office (USPTO), the National Telecommunications and Information Administration (NTIA), which is tasked with many spectrum related functions, and the National Institute of Standards and Technology (NIST), which Obama has ordered to write cyber security regulatory standards for the private sector.

Sen. Max Baucus (D-MT), who has received campaign funding from Pritzker, stated in a release that "Penny Pritzker will bring a successful background in the private sector to the Commerce Department. Her leadership will help spur greater innovation across our economy and make us more competitive around the world."

Sen. John Rockefeller (D-WV), who has also received campaign funding from Pritzger, stated in a release that "The federal government can do much more to support private sector expansion and the creation of quality jobs. Penny Pritzker’s decades of business experience would greatly assist her in leading this effort as President Obama’s Commerce Secretary nominee."

Other Presidents have involved the DOC with political fund raising and organizing. Former President Nixon's first term Secretary of Commerce, Maurice Stans, left the DOC to raise money to re-elect Nixon to a second term.

The first President Bush named Robert Mosbacher his Secretary of Commerce. His primary qualifications were that he had led former President Ford's fundraising efforts in 1976, and Bush's in 1980 and 1988. Similarly, former President Clinton named Ron Brown, the Chairman of the Democratic National Committee, his first Secretary of Commerce.

President Obama's first Secretary of Commerce was Gary Locke, a former Governor of the state of Washington, who is now Ambassador to the People's Republic of China. John Bryson then served as Secretary of Commerce for less than one year. Rebecca Blank has been the acting Secretary of Commerce for almost one year.

People and Appointments

5/2. The Motion Picture Association of America (MPAA) announced in internal changes in its communications staff. Howard Gantman is now Vice President, Global Strategic Communications. The MPAA stated in a release that he "will focus on global message coordination and communication strategies for international initiatives, litigation, research and internal communications for the MPAA. He will also work with our key stakeholders, entertainment industry alliances and other third parties on strategic communications priorities." In addition, Kate Bedingfield was promoted to the position of Vice President, Corporate Communications. She will be the MPAA's "chief spokesperson". Laura Nichols is Executive Vice President for Global Communications.

More News

5/2. The National Academy of Sciences (NAS) published report titled "Copyright in the Digital Era: Evidence for Policy". It calls for more data collection and more research. See also, statement by the Computer and Communications Industry Association (CCIA), statement by the Motion Picture Association of America (MPAA), statement by the Authors Guild, and statement by the Copyright Alliance (CA).

Obama to Nominate Tom Wheeler to Be FCC Chairman

5/1. President Obama announced his intent to nominate Tom Wheeler to be Chairman of the Federal Communications Commission (FCC), and Mignon Clyburn to be the acting Chairman. See, reaction from outgoing Chairman Julius Genachowski and Commissioner Mignon Clyburn.

Wheeler is the Managing Director of Core Capital Partners. He has also been the Chairman of the FCC's Technological Advisory Council since 2010.

Thirty years ago, he was head of the NCTA. He was later the long time head of the CTIA.

Trade groups praised the selections of Wheeler and Clyburn. See, Computer and Communications Industry Association (CCIA) release, Consumer Electronics Association (CEA) release, CTIA release, National Association of Broadcasters (NAB) release and release, National Cable & Telecommunications Association (NCTA) release, NTCA release, Public Knowledge (PK) release, and US Telecom release and release.

While most praised and/or congratulated Wheeler, the New America Foundation (NAF) complained in a release that "Wheeler was a major bundler who raised substantial funding for the Obama Administration from the telecommunications market sector he would be overseeing."

Similarly, the Free Press (FP) stated in a release that the FCC "needs a strong leader -- someone who will use this powerful position to stand up to industry giants and protect the public interest. On paper, Tom Wheeler does not appear to be that person, having headed not one but two major trade associations."

Go to News from April 26-30, 2013.