FEC Shoots Down Proposal For Texted Campaign Contributions
Cell phone industry lawyer says FED relying on 'regulatory relics.'
Dec. 12, 2010 — -- Federal regulators have recommended against a proposal from the cell phone industry that would've allowed voters to send donations to political candidates via text.
An advisory report from the Federal Election Commission voiced concerns that the program would not adequately "separate corporate funds from political contributions" and would allow people to exceed the $50 limit for anonymous donations. It left the door open, however, for a new proposal for texted donations, provided it meets certain conditions.
Caleb Burns, a lawyer representing the Cellular Telecommunications & Internet Association (CTIA), the trade group that submitted the proposal in September, said he was "disappointed" in the FEC's recent advisory opinion, and that "CTIA and its members must now assess whether implementing those requirements is economically viable."
Burns said that the FEC's opinion would place "additional burdens" on cell phone providers. "Many of those burdens," said Burns, "are regulatory relics that do not account for new technologies or the realities current business and campaign practices."
The proposal would have permitted candidates to collect $10 contributions through texts sent by supporters. Each donor would have had to agree to respond to questions certifying that the donation was legal. The donor would have had to agree, for instance, that he had not given a cumulative amount more than $50 by text, that the donation was not coming from a corporation or union, and that he was not a foreign national.CTIA's lawyers pointed out the massive amounts of charitable money raised through cell phone contributions after Haiti's earthquake as evidence this new method of giving had come into its own.
"The effectiveness of [cell phone messaging] to initiate small dollar contributions in short order was clearly demonstrated in the Haiti relief context earlier this year," the petition to the FEC said. "Accordingly, [cell phones] are potentially significant tools in grassroots campaign organizing and fundraising and a means to promote small dollar support for federal candidate, party, and political committees."
Some observers wondered, however, whether cell phone giving could be reconciled with existing FEC rules about anonymous donors. "The way this technology works," said Brett Kappel, a campaign finance lawyer, "campaigns wouldn't know if multiple anonymous contributions came from one person or twenty different people."
But Scott Thomas, a former FEC chairman who is now with the Washington law firm Dickstein Shapiro, said he thought those concerns could be alleviated. For instance, he said, phone companies could be required to decline transactions for any cell phone where the $50 limit on anonymous contributions has been reached.
In recommending against the CTIA proposal, the FEC advisory opinion pointed out a person could "make repeated pledges to the same political committee within a single billing cycle, resulting in a wireless subscriber making a contribution more than $50 when paying the monthly bill." The proposal by the wireless group, said the report, did not "satisfactorily address these concerns."
The report also questioned whether a system of text donations could guard against donations by foreign individuals or corporations: "A wireless subscriber's address, as provided by the wireless subscriber, may be the only information that wireless service providers may have regarding nationality."
In addition, the opinion noted that the cell phone companies would not segregate the funds in a separate account, which is required by the FEC, and would not forward the contributions to political committees within mandated time limits. The FEC requires that contributions under $50 be forwarded within 30 days, and within 10 days if the contribution is over $50. The CTIA proposal would not forward the contribution until the cell phone user paid his bill.
"The [FEC] is stuck in a rotary-dial set of rules," said Scott Thomas, reacting to the opinion, "applying them to the iPhone real world."
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But he also he was optimistic that the wireless industry could introduce enough 'certifications, warnings and transactions limits" to satisfy the FEC. "I do think the wireless industry can find a way to reformat their proposal, develop needed protections, and ultimately get approval for texted donations."
