AO 2009-32: Proposed sale of art on behalf of committees is not a contribution
An individual who conducts a web-based business as a sole proprietor may sell artwork as fundraising items for political committees and provide the political committees with solicitation emails. The sale of these fundraising items, and the provision of the solicitation emails, would not constitute contributions from the sole proprietor to the political committees as long as the fee received by the sole proprietor is the usual and normal charge.
Background
The requestor, Richard Jorgensen, operates a web-based business as a sole proprietor. Through this website, Dr. Jorgensen sells, among other things, prints of President Barack Obama and Secretary of State Hillary Clinton. Dr. Jorgensen sells these prints for $49.95 plus $5 for shipping and handling.
Dr. Jorgensen proposes to enter into agreements with political committees to sell these prints as fundraising items. Dr. Jorgensen plans to draft solicitation emails promoting the artwork and provide those solicitation emails to the committees he deals with. The political committees can request changes to the solicitation emails or customize them. Dr. Jorgensen will charge the political committees a fee for providing the solicitation emails, and the committees will disseminate the emails through their own distribution lists.
The emails will contain images of the products offered for sale and hyperlinks to purchase the products from Dr. Jorgensen’s website. The hyperlinks will contain an embedded ID tag, unique to each political committee, so that purchases resulting from each committee’s fundraising efforts can be appropriately credited to that committee and contributor information can be collected and forwarded to the political committee for reporting purposes. Dr. Jorgensen will request and provide to the committees information from contributors, including their names, addresses and the amount of their purchases and, for contributors whose purchases exceed $200, their occupations and employers.
For sales made through the proposed arrangements with political committees, the price will be marked up by an amount that Dr. Jorgensen and the political committee agree upon, so that Dr. Jorgensen will receive the same dollar amount he would receive from any other sale. When purchases are made from the website, payment will be collected via PayPal Pro, and deposited on a weekly basis into a separate bank account for each political committee. From those accounts, funds will be sent to the artist for the prints and shipping costs, to PayPal Pro for transaction fees and to Dr. Jorgensen for his commissions. The political committees will retain the remaining amount.
Analysis
Dr. Jorgensen asked the Commission whether he could provide solicitation emails to the political committees without the provision of those emails constituting a contribution to the political committees. The Commission determined that Dr. Jorgensen could provide solicitation emails to the political committees, and that his provision of those emails would not constitute contributions to the political committees as long as Dr. Jorgensen receives the usual and normal charge for such services. Under Commission regulations, the "usual and normal charge" for services means the hourly or piecework charge for the services at a commercially reasonable rate prevailing at the time the services were rendered. 11 CFR 100.52(d)(2). As long as the fee for drafting the solicitation email is commercially reasonable at the time the service is provided, it will constitute the "usual and normal charge" and therefore not result in a contribution. The Commission also determined that Dr. Jorgensen could sell artwork on behalf of political committees as fundraising items, and that his provision of the artwork will not constitute a contribution to the purchasing committees because the commission Dr. Jorgensen proposes to receive is the usual and normal charge in a commercially reasonable transaction.
Dr. Jorgensen proposes to sell the artwork for $49.95 in addition to a markup to be agreed upon with the political committees and a $5 fee for shipping and handling. The Commission determined that Dr. Jorgensen will not be making contributions to the political committees because the amount he will receive on sales to the political committees would be the same amount he would receive on sales that are not made to political committees. 11 CFR 100.52(d). Because the political committees will receive funds from individual contributors and not from Dr. Jorgensen’s sole proprietorship, the transactions will not result in contributions from Dr. Jorgensen. See, e.g., AO 2008-18.
The Commission noted that the political committees participating in this proposed plan will authorize Dr. Jorgensen as their agent to receive contributions, and, therefore, Dr. Jorgensen will be subject to certain recordkeeping and reporting obligations. 11 CFR 102.9. Dr. Jorgensen will have to request and forward to the political committees the name and address of any person contributing more than $50, and the date and full amount of the contribution, as well as the occupation and employer of anyone who contributes more than $200 to a particular committee. 2 U.S.C. §432(c); 11 CFR 102.9(a). Also, Dr. Jorgensen will have to forward the contributions, along with the required contributor information, to the treasurer of the recipient committee within the required time period. 2 U.S.C. §432(b)(1); 11 CFR 102.8(a).
Date Issued: January 29, 2010; length: 5 pages