FEC Clarifies Rules for Food and Drink at Fundraisers | A Question of Ethics
Q. As someone who has worked on campaigns for Members of the House for many years, I have a question about campaign fundraisers. I had always thought that when donors attend a fundraiser where food and drink are served, their entire ticket price counts as a contribution from the donor. I heard recently though that when donors pay for the cost of food and drink they enjoy at a fundraiser, campaigns do not have to treat the payments as contribution. That seems rife for abuse. Is it true?
A. Yes and no. A recent opinion issued by the Federal Election Commission says that, in limited circumstances, donors may pay for food and drink at campaign fundraisers without the payments counting as “contributions.” But, the circumstances in which this is permissible are narrowly defined, so be careful.
As you know, federal election law requires campaigns to record and disclose the source and amount of contributions they receive. It also imposes strict limits on the amounts that individuals may contribute to a campaign. In the current election cycle, an individual donor may contribute no more than $2,700 to a candidate’s committee, per election.
Candidates of course raise a substantial portion of funds via fundraising events. Typically, when a candidate’s committee hosts a fundraiser, the committee treats the full price of each ticket as a contribution from the purchaser. Federal law defines a contribution as “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.” “Anything of value” includes an in-kind contribution, as well as “[t]he entire amount paid to attend a fundraiser or other political event.”
Hillary Rodham Clinton’s campaign committee recently asked the FEC to clarify application of these rules to fundraisers where ticket prices do not include food, drink, and valet parking services, but instead attendees have the option to purchase their own such food, drink and parking services while in attendance. In making the request, the committee’s attorney argued that attendees’ payments for their own food, drink and parking, at their own discretion, should not count as contributions. “If an event attendee purchases a hot dog at a cart that happens to be set up outside of a Campaign event,” he wrote, “clearly the payment for the hot dog is not considered an in-kind contribution to the Campaign.” On-site purchases of food and beverages, he argued, should be no different.
The FEC agreed. Under the circumstances described in the campaign committee’s request, the commission said, payments for food, drink and valet parking do not count as contributions to the committee.
In reaching its conclusion, the commission first affirmed that if a committee includes the cost of food or beverages in the charge that donors must pay to attend the event, an attendee’s payment of that charge constitutes a contribution as a payment “to attend a fundraiser. The commission also warned that its conclusion about the treatment of attendees’ payments for their own food and beverage was based on the campaign committee’s representation that there would “not be any monetary consequences” to the committee related to whether fundraiser attendees chose to purchase food or beverages.
This point is significant, and the FEC took it to mean that whether attendees purchase or do not purchase food at the fundraiser would “not in any way affect the Committee’s costs for the event.” Thus, for example, the event venue could not offer the committee any discounts based on attendees’ actual or anticipated purchases of food and drink. And, there could not be a minimum charge for food and drink that the committee would be obligated to pay if attendees did not purchase enough food and drink. “Assuming that attendees’ purchases do not factor into the pricing of these or other charges to the Committee,” the commission said, “the purchases by attendees of their own food or beverages would not constitute in-kind contributions.”
The reasoning as to valet parking services was similar. The committee had told the commission that it did not plan to request the provision of valet parking services at the fundraiser. Thus, the commission concluded, “the attendees’ payments for their own valet parking will not relieve the Committee of expenses it would not otherwise incur, and those payments therefore will not be in-kind contributions.”
For campaigns looking to get the most bang for their buck out of fundraisers, this is good news. Provided they comply with the commission’s criteria, it’s one less expense to incur when hosting a fundraiser.
C. Simon Davidson is an attorney with the law firm McGuireWoods. Submit questions to firstname.lastname@example.org. Questions do not create an attorney-client relationship. Readers should not treat his column as legal advice.