Submitted Electronically March 26, 2018 Robert M. Knop, Esquire Assistant General Counsel Federal Election Commission 999 E Street, NW Washington, DC 20463 Re: Comments Concerning Notice of Proposed Rulemaking (Notice 2018-01) Independent Expenditures by Authorized Committees; Reporting Multistate Independent Expenditures and Electioneering Communications Dear Mr. Knop: Citizens United submits these comments for consideration with respect to the above- referenced Notice of Proposed Rulemaking (“NPRM”). These comments focus on the portion of the rulemaking concerning the reporting of multistate independent expenditures and electioneering communications. Interest of Commenter Citizens United is a Washington, DC-based membership organization that is incorporated under Virginia law and exempt from Federal income taxes under Section 501(c)(4) of the Federal income tax code. Citizens United was the Plaintiff/Petitioner in the landmark case striking down the prohibition on corporate-sponsored independent expenditures. See Citizens United v. FEC, 558 U.S. 310 (2010). Citizens United is affiliated with two separate federal political committees — Citizens United Political Victory Fund, which is a separate segregated fund, and Citizens United Super PAC, LLC), which is an independent expenditures only committee. Each committee has undertaken independent expenditures in past elections and each committee is expected to undertake independent expenditures in future elections. 1006 Pennsylvania Avenue, S.E. + Washington, D.C. 20003 Tel (202) 547-5420 + Fax (202) 547-5421 + wwweitizensunited.org CContibutions or eis 1 Clicens United ae not as deciComments of Citizens United Re: FEC NPRM No. 2018-01 March 26, 2018 Page 2 of 4 Comparisons of the Three Alternatives At the outset, we commend the Commission for offering a pair of alternative proposals that will undoubtedly simplify the complex and highly burdensome reporting scheme currently in place for reporting multistate independent expenditures in connection with the presidential nominating process. Alternatives A and B significantly lessen the compliance burdens associated with multistate independent expenditures by eliminating the need to allocate and itemize the costs of those communications among upcoming presidential primaries. Such allocations and itemizations are especially burdensome where a communication entails use of multiple vendors, which is often the case with direct mail communications.’ Under the current reporting requirements, a committee that uses separate vendors for such things as creative content, design, stationary, envelopes, printing, assembly, list rental and postage must itemize and allocate each of those component costs among each of the upcoming presidential primaries. Thus, for example, a nationwide mailing referring to a single presidential candidate that uses eight separate vendors and is distributed prior to the first presidential primary would require more than 400 itemized transaction disclosures on Schedule €.? But under alternatives A or B, the number of itemized transaction disclosures for the same mailing would be reduced to just eight. That’s a major improvement over the current reporting scheme. > * Direct mail communications are categorized as “mass mailing(s]” under the Commissions regulations. See 11 CFR § 100.27. ? For each jurisdiction's presidential primary — more than 50 at the time of the communication ~ there would be eight separate transaction disclosures 3 We submit further that the information provided by way of the eight transaction disclosures would serve the public’s informational interest better than providing the information artificially broken down to appear as more than 400 transactions that take up more than 200 reporting pages on Schedule E. Similar to series of completed jigsaw puzzles, the information provided by the eight reporting entries would provide the public with complete and easy to understand pictures of the independent expenditure. In contract, the 400 plus itemized entries required under the current reporting scheme would be akin to observing those puzzles prior to their assembly, with the individual pieces of all eight puzzles mixed together and scattered haphazardly around a table.Comments of Citizens United Re: FEC NPRM No. 2018-01 March 26, 2018 Page 3 of 4 While both alternatives A and B represent big improvements to the reporting process, we believe alternative Ais the better of the two alternatives. By setting the date of the national nominating convention of the clearly identified candidate as the relevant election date for determining whether a 24-hour report must be filed, alternative A simplifies the process more so than does alternative B. Alternative A fixes a single date as the relevant election date for determining whether one or more multistate independent expenditures require the filing of a 24-hour report. That date, for each communication, is the first day of the national nominating convention of the party whose nomination the candidate is seeking. Under alternative 8, however, the relevant election date is the date of the next upcoming presidential primary occurring after the communication is disseminated or disbursed. In short, the date of the relevant election changes throughout the nominating process, making the process of determining whether a 24-hour report is required more complicated than it would be under alternative A. Moreover, the complication gets magnified for a committee that undertakes multiple independent expenditures over the course of the nominating process, because each communication could have a different relevant election date. Thus, in our opinion, alternative A is superior to alternative B. Alternative C is not a desirable alternative to the current filing regime. Specifying that the costs of a multistate independent expenditure are to be allocated based on the number of U.S. House of Representative districts allocated to each of state where the communications is disseminated does little, if anything, to lessen the burdens imposed under the current system. In the example cited at the top of these comments, the filer using eight different vendors for its nationwide direct mail independent expenditure would still need to make over 400 itemized disclosures under alternative C, compared to just eight entries under either alternatives A or alternative B. We therefore urge the Commission to reject alternative C. Distribution Threshold Lastly, we urge the Commission to set the lowest possible threshold for the number of states where a communication must be disseminated in order to qualify under the multistate reporting rule. Distribution in at least three states should be sufficient to allow the communication to fall within the rule. Under the dictionary definitionComments of Citizens United Re: FEC NPRM No. 2018-01 March 26, 2018 Page 4 of 4 “multi” is generally defined to mean more than two, although in some instances it could mean as few as two." If the Commission were to set the threshold at a high number of states, the rule would effectively become inoperable with respect to presidential primaries falling in the middle of or near the end of the process, as the majority of jurisdictions would have already held their primaries. Furthermore, a varying threshold based on the number of remaining primaries at the time of the communication would likely cause confusion. Instead of setting a high threshold for the number of states where a communication must be disseminated in order to qualify for reporting under the multistate communication rule, we suggest that the instructions for completing the memo text of the Schedule E require naming the specific states where the communication is distributed if the number of states does not exceed a certain specified threshold. Due to space limitations on the Schedule E, the instructions should allow the states (and other jurisdictions) to be identified by using their two letter postal abbreviations. Once the threshold has been exceeded, however, the instructions should allow the communication to be described as “nationwide”. Respectfully Submitted, Tope Michael Boo Citizens United’s Executive Vice President & General Counsel 4 See www.merriam-webster.com/dictionary/multi-. Webpage last visited on March 26, 2018 5 We have no strong views as to the precise number of states that should be required to meet the threshold permitting a “nationwide” designation in the memo entry, but requiring it to reach all 50 states or all fifty states plus other U.S. jurisdictions such as the District of Columbia, Puerto Rico, Guan and American Samoa, comes across as excessive. We note that allowing such a designation where the communication reaches more than 25 states could be justified on grounds that it is being disseminated in a majority of the 50 states, But we would certainly welcome the Commission setting the “nationwide” description threshold at an even smaller number of states.