TEXAS ETHICS COMMISSION

ETHICS ADVISORY OPINION NO. 554

June 19, 2020

ISSUE

Whether a contribution from a federal political committee to a federal “Super PAC”¹ is a political expenditure made “in connection with elections voted on in Texas.”² (AOR-632)

SUMMARY

In our opinion, a contribution from a federal political committee to a federal Super PAC is a political expenditure made in connection with elections voted on in Texas only if the federal political committee intends for the contribution to be used to support or oppose a candidate or measure in an election voted on in Texas. Conversely, a contribution to a Super PAC for a general or unspecified purpose is not a political expenditure made in connection with elections voted on in Texas.

FACTS

The requestor of this opinion is a federal political committee (“the committee”) that files reports with the Federal Election Commission (“the FEC”). The committee states that it makes contributions to state and local candidates in Texas as an out-of-state political committee and that it complies with reporting requirements under the Texas Election Code and Ethics Commission Rules by sending a letter to the Texas Ethics Commission (“the Commission”) specifying where the committee’s reports may be found. ³ The committee would like to make contributions to certain federal political committees, informally known as Super PACs, which are required to file reports with the FEC and are functionally identical to direct campaign expenditure-only committees under Title 15 of the Texas Election Code.⁴ The committee states that it does not know with certainty whether or how much of its contributions to a Super PAC will be spent on elections voted on in Texas. The recipient Super PACs may support or oppose candidates in only one election or in multiple elections and states. The recipient Super PACs may focus on Presidential candidates in elections that will be voted on in all 50 states or on United States House and Senate candidates in elections that will be voted on in any state.

The committee states that it has no control over a Super PAC’s use of any contribution from the committee and receives no binding assurance on how or where a Super PAC will spend the contributions. The committee acknowledges that it may have an expectation as to what a Super PAC is likely to do based on past actions or public statements, but states that those expectations are neither enforceable nor certain to be fulfilled. The committee asserts that its contributions to Super PACs should not be considered political expenditures made in connection with elections voted on in Texas for purposes of calculating whether the committee is an out-of-state political committee.

ANALYSIS

The question addressed by this advisory opinion is whether a contribution from a federal political committee to a federal Super PAC—which could ultimately make political expenditures to support or oppose Texas candidates or measures—is considered a political expenditure made “in connection with elections … voted on in Texas.”⁵ This question concerns the definition of “out-of-state political committee” and how a contribution made by the committee to a Super PAC affects the committee’s status as an out-of-state political committee.⁶ A political committee’s status as an out-of-state political committee determines whether the committee may accept political contributions or make political expenditures in connection with a state or local election in Texas without appointing a campaign treasurer who is required to file campaign finance reports under Title 15 of the Texas Election Code.

Requirements for Out-of-state Political Committees

Generally, a political committee must file a campaign treasurer appointment before accepting more than $870 in political contributions, or making or authorizing more than $870 in political expenditures, in connection with a state or local elective office or a measure in Texas.⁷ Once a political committee files a campaign treasurer appointment, the person appointed as campaign treasurer must subsequently file campaign finance reports to disclose the political committee’s political contributions and political expenditures.⁸

However, an out-of-state political committee is not required to file a campaign treasurer appointment under Title 15 of the Texas Election Code.⁹ Section 251.001(15) of the Texas Election Code defines an “out-of-state political committee” as:

[A] political committee that:

(A) makes political expenditures outside this state; and

(B) in the 12 months immediately preceding the making of a political expenditure by the committee inside this state (other than an expenditure made in connection with a campaign for a federal office or made for a federal officeholder), makes 80 percent or more of the committee’s total political expenditures in any combination of elections outside this state and federal offices not voted on in this state.

Tex. Elec. Code § 251.001(15).

Section 20.13(c) of the Ethics Commission Rules paraphrases the Texas Election Code using similar language, stating that a political committee is an out-of-state political committee only if 80% or more of its total political expenditures during the past 12 months were made in connection with elections not voted on in Texas.¹⁰

Contributions to Super PACs

The committee states that it has been acting as an out-of-state political committee that makes contributions to candidates in Texas and other states. Except for its contributions to Super PACs, we assume that the committee would otherwise qualify as an out-of-state political committee. The question here is whether the committee’s contributions to Super PACs, which may ultimately use the contributions to make expenditures in connection with elections voted on in Texas, are political expenditures made in connection with elections voted on in Texas for purposes of determining whether the committee is an out-of-state political committee.

Neither Title 15 of the Texas Election Code nor the Ethics Commission Rules clarifies when a political expenditure is “inside this state,” as provided by Section 251.001(15) of the Texas Election Code, or “in connection with elections … voted on in Texas,” as provided by Section 20.13(c) of the Ethics Commission Rules. The Commission has not addressed this question before.

In our opinion, whether the committee’s political contribution to a Super PAC is a political expenditure in connection with elections voted on in Texas depends not on how the recipient Super PAC ultimately uses the contribution, but rather on the committee’s intent in making the contribution.

The laws of other jurisdictions have recognized that contributions to political committees may be “earmarked” for a particular use.¹¹ In our opinion, a political committee would intend that a contribution to a Super PAC be used in connection with elections voted on in Texas if the committee were to earmark or otherwise designate the contribution to be used in connection with an election voted on in Texas.

Examples of such an earmarking or designation include: (1) the committee contributes to a Super PAC in response to a solicitation from the Super PAC for a contribution to be used to support or oppose a candidate or measure in an election voted on in Texas; or (2) the committee contributes to a Super PAC subject to a condition or agreement between the committee and the Super PAC, or subsequently agrees with the Super PAC after the contribution is made, that all or a portion of the contribution would be used to support or oppose a candidate or measure in an election voted on in Texas.

Conversely, a contribution not earmarked or designated to be used by the Super PAC to support or oppose a candidate or measure in an election voted on in Texas, such as a contribution to a Super PAC for a general or unspecified purpose, is not a political expenditure made in connection with an election voted on in Texas.