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ridip
06-28-2007, 11:51 PM
We have questions about setting up a corporation or PAC, possibly something similar to moveon.org in order to raise money and work on fund raising, public education and grow to support for Ron Paul.

This started as part of the freenode ##RonPaul discussion and there are some unanswered questions.

If anyone has legal experience with setting up any of these or recommendations for the right and legal way to do it, your input would be appreciated.

Specifically, there are questions about the limitations of a 501(c)(?) corporation and a PAC as far as donations, tax status, and the ability to send funds to a candidate or party are considered.

Also is one more likely to get public attention than another?

Is one subject to stronger scrutiny than another?

Why is MoveON a Civic Action 501(c)(4) and a PAC?

What are the repercussions or restrictions of someone giving more than the $2,300 political donation limit to these organizations?

What are the accounting requirements? Do these change if ads or other media are created, funded or distributed?

If you have answers or resources please contribute or contact doc|home or ridip on ##RonPaul or an associated network.

We want to help, but we want to do it wisely and avoid problems later on.

Thank you,

ridip

"Hopping to help"

angelatc
06-29-2007, 01:28 PM
Did you check the FEC? THey have some pretty good FAQs available.

A political action committee, or PAC, is the name commonly given to a private group, regardless of size, organized to elect or defeat government officials or to promote legislation. Legally, what constitutes a "PAC" for purposes of regulation is a matter of state and federal law. Under the Federal Election Campaign Act, an organization becomes a "political committee" by receiving contributions or making expenditures in excess of $1,000 for the purpose of influencing a federal election.



This is what I got from the IRS site:

A 527 group is created primarily to influence the nomination, election, appointment or defeat of candidates for public office. 527 organizations do not make expenditures to directly advocate the election or defeat of any candidate for federal elective office they avoid regulation by the Federal Election Commission. The line between issue advocacy and candidate advocacy is the source of heated debate and litigation.

Many 527s are run by special interest groups and used to raise unlimited amounts of money to spend on issue advocacy and voter mobilization. Examples of 527s include Americans for Dr. Rice, Americans for Honesty on Issues, Swift Boat Veterans for Truth, Texans for Truth, The Media Fund, America Coming Together, the Moveon.org Voter Fund, the Progress for America Voter Fund, United American Technologies and the November Fund.



To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare. Pursuant to changes enacted as part of the Taxpayer Bill of Rights 2, the earnings of a section 501(c)(4) organization may not inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction. See the FY-2002 CPE topic entitled Introduction to IRC 4958 for more information about this excise tax. For a more detailed discussion of the exemption requirements for section 501(c)(4) organizations, see the FY-2003 CPE topic entitled IRC 501(c)(4) Organizations. For more information about applying for exemption, see Application for Recognition of Exemption.

Donations are not tax exempt, unless you're donating to a volunteer fire department or a veterans group.

angelatc
06-29-2007, 01:34 PM
http://www.fec.gov/pdf/nongui.pdf - FEC's guide to starting a non-committed PAC.

(Noncommitted means not connected to a corporation, trade association or labor organization.)

(PS: if anybody can unencode the above posters contact instructions for me, I would be happy to contact him directly.)

austinphish
06-29-2007, 05:06 PM
I would be happy to talk about this with Riptide. I have done some research on this. Here is what I have written in past threads:

Technically all organizations (whether or not incorporated) that are organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures for influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office or office in a political organization is a 527.

527 Group – A tax-exempt group organized under section 527 of the Internal Revenue Code to raise money for political activities including voter mobilization efforts, issue advocacy and the like. Currently, the FEC only requires a 527 group to file regular disclosure reports if it is a political party or political action committee (PAC) that engages in either activities expressly advocating the election or defeat of a federal candidate, or in electioneering communications. Otherwise, it must file either with the government of the state in which it is located or the Internal Revenue Service. Many 527s run by special interest groups raise unlimited "soft money," which they use for voter mobilization and certain types of issue advocacy, but not for efforts that expressly advocate the election or defeat of a federal candidate or amount to electioneering communications.

That teaches us 2 important things:

1. Really all PACs are 527s. The diference is most PACs that we will be forming are going to directly support RP.

2. A 527 that doesn't directly advocate RP doesn't have as strict monetary limits as other PACs but they can't directly support a candidate. See - Moveon.org and Swift Vote Veterans for Truth.

I think there are many options for a theme that could be developed that pushes RP's views w/o directly saying "vote RP" and which therefore could be turned into an umlimited softmoney "527". There are actually a lot of groups in place that strongly support RP's libertarian issues, but are a single interest groups which fit this bill perfectly. Such as the Medical Marijuana community - this is their big chance to get their issue in the mainstream and have a realistic shot at a president who is sympathetic to their cause. Antiwar.com, people against the War on Drugs, smokers rights, those against the Federal Reserve etc.

angelatc
06-29-2007, 07:23 PM
I'd guess that a PAC supporting the Constitution would be the answer.

austinphish
06-29-2007, 11:02 PM
I'd guess that a PAC supporting the Constitution would be the answer.

LOL - we formed just that w/ our Austin meetup group. Constitutional Candidates PAC.

however, it isn't that simple

angelatc
06-29-2007, 11:20 PM
I suspect the hard part is raising money. :)

hroos
06-30-2007, 08:40 AM
Ridip thanks for dropping this thread here. I need more basic questions answered in regards to incorporation like this. Why do it at all? What is the purpose? Pros and Cons. Eventually, I would like to see a step by step how-to guide to setting a 527 or other type of organization to support Ron Paul / Constitutional Issues.

Thanks. I have an RP event tonight and an RP meetup Monday night so I will have opportunities to ask a few people about this.

ChrisM
07-06-2007, 02:28 PM
I think this should be a national effort or else it will never get off the ground. We need a lawyer to dedicate time for this. Everybody, please contact your local meetup groups and we can try and assemble a team of volunteer lawyers.

Here's the great thing about this: The contribution limits toward a nonconnected PAC is $5,000, allowing those who have maxed out to the campaign to donate further! Now, we aren't allowed to include the name "Ron Paul" in anything that is done with the PAC, but we can make it clear in discussions that we do support Ron Paul's message.

Again, I feel the strong need for this to be a unified national effort. We can't have fifteen or twenty PACs going around for Ron Paul with no central coordination. I know that grassroots (bottom-up management) is important, but something this "legalized" needs top-down administration.

After a little bit we could probably establish a new PAC for people to be able to donate more.

hroos
07-08-2007, 08:54 AM
So the PAC would be helpful in providing another source of fundraising?

The idea is that those who have maxed out their $2,300 contribution to the campaign they can donate to the PAC and the PAC can then donate directly to the campaign or at least fund pro-campaign issues and events. Correct?

What is the advantage of doing this through the PAC instead of just a non-legal entity such just a gathering of citizens?

StagirasGhost
07-08-2007, 07:45 PM
shoot me an email at stoddard.jason@gmail.com

I have PAC/legal instrument information for distribution.

ChrisM
07-09-2007, 10:38 PM
So the PAC would be helpful in providing another source of fundraising?

The idea is that those who have maxed out their $2,300 contribution to the campaign they can donate to the PAC and the PAC can then donate directly to the campaign or at least fund pro-campaign issues and events. Correct?

What is the advantage of doing this through the PAC instead of just a non-legal entity such just a gathering of citizens?
It is illegal to give money to somebody else to donate, so a PAC is the best way.

ronpaulitician
07-11-2007, 11:29 AM
Do meetup groups HAVE to register as PACs if they're going to support a candidate and if they're going to ask for donations from its members to pay for that meetup groups activities and materials?

ChrisM
07-11-2007, 04:53 PM
Do meetup groups HAVE to register as PACs if they're going to support a candidate and if they're going to ask for donations from its members to pay for that meetup groups activities and materials?
No, a PAC gives money to a campaign directly. Supplies and things don't require a PAC.

ronpaulitician
07-11-2007, 05:42 PM
No, a PAC gives money to a campaign directly. Supplies and things don't require a PAC.
What would the advantage of a PAC be, then? If there are ten people in a PAC, they all get to donate an additional $500 to the campaign on top of the $2,300 they've already donated?

The downside of a PAC seems to be that individual contributions are capped at $5,000. If we do not become a PAC, I can spend as much as I want in the meetup group, without ever having to register any of those contributions to the feds?

ChrisM
07-11-2007, 05:58 PM
What would the advantage of a PAC be, then? If there are ten people in a PAC, they all get to donate an additional $500 to the campaign on top of the $2,300 they've already donated?

The downside of a PAC seems to be that individual contributions are capped at $5,000. If we do not become a PAC, I can spend as much as I want in the meetup group, without ever having to register any of those contributions to the feds?
No, a PAC would be an independent entity of the meetup groups. Meetup groups are informal and don't need any regulation, but a meetup group also is barred from giving directly to the campaign due to FEC regulations. You seem to be confusing direct contributions to the official campaign with purchasing campaign materials.

A PAC would allow people to donate $5,000 on top of the $2,300 they already have donated. It would allow the maxed-out folks to give more. It would also serve for publicity.

Bradley in DC
08-13-2007, 03:54 PM
No, a PAC gives money to a campaign directly. Supplies and things don't require a PAC.

I'd double check on that with an election lawyer. There is, I think, a limit ($1,000?) before one falls into a different category.

ashevillejerry
11-20-2007, 03:51 AM
I believe a 527 is what is needed now. There are many uncoordinated projects which are really PAC's that are supporting Ron Paul, no matter what they may be called. For those who want to proceed with this, I am a paralegal putting together a 527 soft money org. Please go to this thread (http://www.ronpaulforums.com/showthread.php?t=1384).

Yours in Liberty,

Jerry

P.S. To list other projects for maxed out donors, post them at RonPaulMax.com (http://www.ronpaulmax.com/submit_website.html).

Rhys
12-02-2007, 02:53 PM
I'm about to do advertising for Ron Paul. I know how to do that, but I'm so damned confused on if it's legal. I want to take donations for targeted expensive ads in places like Wall Street Journal and full page NH and Iowa.

I read your stuff, but I don't get it honestly. Anyone have a lawyer I could call?

John P Slevin
12-10-2007, 08:32 PM
Rhys,

you do need some legal help, I am not a lawyer (I do work for PAC's professionally, and have alot of experience in what you are asking). Here are some general points.

yes and no is the correct answer to your question. You CAN do it, but there ARE serious restrictions on what you can do, how it is done and on the types and amounts of contributions you can receive.

Probably your only two avenues to do this are a federal PAC or a 527 (unless, of course, you follow the model of the blimp project, which I think is a good model (new, groundbreaking, subject to possible legal problems if the FEC gets mischievious.

As a federal PAC, you probably would be choosing to do so as an "independent expenditure" committee (go ahead and read about the "single candidate committee...but don't choose it, it is the WRONG answer for many reasons which you will understand---and you won't qualify as a multi-candidate PAC. Go ahead to FEC.gov and check out the manual, chapters 3 and 5 are short, and somewhat to the point about what you can and cannot do on candidate support, and at the end of the manual you'll find info on Independent Expenditure committees.

There are serious restrictions on what you can say in the ad, like, you probably won't get away with anything like Vote for Ron Paul, President, as the main gist of your ad.

If you need any free help, email me directaction@yahoo.com and I answer any questions you have or steer you to the answers, and I'll give you my phone. Good luck.

JSutter
01-08-2008, 07:46 AM
I suspect the hard part is raising money.

If anyone has a 501c3 that is supporting education on the issues that Ron supports such as the Constitution, Gold Standard, etc then a great way to raise money would be to fill out the paperwork on eBay for people to donate 10%-100% of their auction proceeeds to you. I think that would be a great way to bring in cash to promote the issues. If only 10,000 people that supported Ron sold a $100 worth of stuff they no longer need we could get a million bucks for brochures, dvd's etc that educated on the issues but they couldn't overtly support Ron. But you could use a quote or clip from Ron on them in regards to the issue, just dont mention he is running for President.

We could approach it the same way as a money bomb and have a day for people to list their stuff. I have a bunch of stuff I'll list myself if a 501[c]3 signs up on there