Types of Political Action Committees
There are several different types of political action committees (“PACs”) which include (1) corporate or labor separate segregated funds (“SSFs”), (2) nonconnected committees and
(3) leadership PACs.
A nonconnected committee is a political committee that is not a party committee, an authorized committee of a candidate or a separate segregated fund established by a corporation or labor organization. Certain features distinguish a nonconnected committee from an SSF. A nonconnected committee does not have a connected organization. No corporation or labor organization establishes, administers or raises money for a nonconnected committee. An SSF always has a sponsoring corporation or labor organization. A nonconnected committee may receive limited financial and administrative support from a sponsoring organization that is not a corporation or labor organization, such as a partnership or an unincorporated association. All forms of support including money and other items of value received by a nonconnected committee from a sponsoring organization are considered contributions which are subject to annual limits, prohibitions and disclosure requirements under the Federal Election Campaign Act. By contrast, an SSF generally may receive unlimited administrative support from its connected organization and such support is usually not subject to federal disclosure requirements. Unlike an SSF, a nonconnected committee may solicit contributions from anyone in the general public who may lawfully make a contribution in connection with a federal election. By contrast, an SSF may solicit only a limited class of individuals who have specific relationships with the connected organization (i.e., stockholders or members and certain employees of the connected organization and their families).
Members of Congress and other political leaders often establish nonconnected committees, generally known as “leadership PACs”, to support candidates for various federal and nonfederal offices. A leadership PAC is defined as a political committee that is directly or indirectly established, financed, maintained or controlled by a candidate or an individual holding federal office. A leadership PAC is not an authorized committee of the candidate or officeholder and is not affiliated with an authorized committee of a candidate or officeholder. Leadership PACs do not include political party committees. While leadership PACs may be associated with a candidate for federal office, they remain legally unaffiliated with the candidate’s principal campaign committee (also known as the candidate’s authorized committee) and they operate under the same rules as other nonconnected committees. Any financial support to the leadership PAC from a candidate’s authorized committee is a contribution to the leadership PAC. Any support from the leadership PAC that could be paid by the candidate’s authorized committee is a contribution from the leadership PAC to the candidate. Additional requirements apply to leadership PACs that do not apply to other nonconnected committees. Due to restrictions on the types of funds that federal candidates may raise and spend, any PAC that is directly or indirectly established, financed, maintained or controlled by a federal candidate may not solicit, receive, direct, transfer, spend or disburse funds in connection with an election for federal office, including certain federal election activity. Such a PAC may solicit, receive, direct, transfer, spend or disburse funds in connection with a nonfederal election only if the amounts and sources are consistent with state law and the Federal Election Campaign Act’s contribution limits and source prohibitions are observed.