Prohibited Contributions
While most individuals are free to make
political contributions, three categories of individuals are prohibited by law
from making contributions: foreign nationals and Federal government contractors
and, in some instances, minors. These and other prohibitions on contributions
are explained below.
Foreign Nationals
Foreign nationals may not make contributions
in connection with any election--Federal, State or local. This prohibition does
not apply to foreign citizens who are lawfully admitted for permanent residence
in the United States (those who have "green cards").
Federal Government
Contractors
Federal government contractors may not make
contributions to influence Federal elections. For example, if you are a
consultant under contract to a Federal agency, you may not contribute to Federal
candidates or political committees. Or, if you are the sole proprietor of a
business with a Federal government contract, you may not make contributions from
personal or business funds. But, if you are merely employed by a company (or
partnership) with Federal government contracts, you are permitted to make
contributions from your personal funds.
Corporations and Unions
The law also prohibits contributions from
corporations and labor unions. This prohibition applies to any incorporated
organization, profit or nonprofit. For example, the owner of an incorporated
"mom and pop" grocery store is not permitted to use a business account to make
contributions. Instead, the owner would have to use a personal account. A
corporate employee may make contributions through a nonrepayable corporate
drawing account, which allows the individual to draw personal funds against
salary, profits or other compensation.
Contributions in the Name of
Another
Contributions made in the name ofanother are
prohibited. For example, an individual who has already contributed up to the
limit for a candidate's election may not give money to another person to make a
contribution to the same candidate. Similarly, a corporation is prohibited from
using bonuses or other methods of reimbursing employees for their
contributions.
Excessive Contributions
Finally, contributions that exceed the law's limits are prohibited.
What Counts as a Contribution
Most people think of contributions as
donations of money in the form of checks or currency. While these are common
ways of making a contribution, anything of value given to influence a Federal
election is considered a contribution. This section describes several forms of
giving that are considered contributions under the Federal campaign law. All the
contributions you make--whatever their form--count against your $108,200
biennial limit and your separate committee limits.
Donated Items and
Services
The donation of office machines, furniture, supplies--anything of value--is an in-kind contribution. The value of the donated item (the usual and normal charge) counts against the contribution limits. A donation of services is also considered an in-kind contribution. For example, if you pay a consultant's fee or a printing bill for services provided to a campaign, you have made an in-kind contribution in the amount of the payment.
If you sell an item or service to a committee and ask the committee to pay less than the usual and normal charge, you have also made an in-kind contribution to the committee in the amount of the discount.
Under limited exceptions in the law, you may
provide certain goods and services without making a contribution to the
committee. These exceptions are volunteering, travel expenses and business
services.
Fundraising Tickets and Items
Yet another way of making a contribution is
to purchase a fundraising item or a ticket to a fundraiser. The full purchase
price counts as a contribution. If you pay $100 for a ticket to a fundraising
event like a dinner, you have made a $100 contribution (even though your meal
may have cost the committee $30). Or, if you pay $15 for a T-shirt sold by a
campaign, your contribution amounts to $15 (even though the T-shirt may have
cost the committee $5).
Loans and Loan Endorsements
If you loan money to a candidate or political committee, you have made a contribution, even if you charge interest on the loan. The outstanding amount of the loan counts against the contribution limits. Loan repayments, therefore, decrease the amount of your contribution. Nevertheless, if your loan exceeds the limits, it is an illegal contribution, even if it is later repaid in full.
Endorsements and guarantees of bank loans are
also considered contributions. Endorsers and guarantors are liable for equal
portions of a loan unless the agreement states otherwise. You alone, therefore,
may not endorse a $10,000 loan to a candidate committee. There must be four
other individual endorsers so that each one is liable only for $2,300, the
per-election limit. Repayments made on a loan reduce the amount of your
liability and thus reduce the amount of your contribution.
Support Given to
"Test the Waters"
You may wish to support a prospective
candidate who is "testing the waters"--exploring the feasibility of becoming a
candidate. Your total donations are limited to $2,300, just as if they were
given to an actual candidate. If the individual who is testing the waters later
becomes a candidate, the candidate's committee will report your donations as
contributions.