On Thursday, the Federal Election Commission (FEC) was unable to agree on whether Yamaha Motor Corporation, U.S.A. could sponsor a Separate Segregated Fund (a corporate “SSF” or “PAC” in common parlance) that solicited contributions from the employees of its dealers and service centers. The request resulted in an unsurprising deadlock and a surprising discussion about foreign ownership. Three things stand out in that discussion.
First, with the arrival of two new FEC Commissioners in October, many have wondered if there will be a change in the pattern of 3-3 votes that have defined FEC decision making over the past several years. The deadlock preventing the FEC from providing Yamaha with an advisory opinion gave little comfort to those looking for change. Based on the discussion during Thursday’s meeting, it appears that the still-contentious issue of the implications of Citizens United, as well as the FEC’s inability to begin rulemaking, blocked resolution of the more prosaic question of whether to treat Yamaha’s dealers and service centers as affiliated entities.
Second, this matter was raised before the Commission last year. As was true last year, there are no longer four votes to reaffirm the three decades of advisory opinions that have held that domestic subsidiaries of foreign corporations may establish and administer SSFs, so long as certain procedural protections exist. During Thursday’s discussion, FEC Chair Weintraub indicated the issue of a foreign entity’s U.S. subsidiary sponsoring an SSF may be the camel’s nose under the tent, since the concern animating the discussion seemed to be the ability of foreign corporations to move money into United States subsidiaries for use in independent expenditures or electioneering communications. This could be good news for existing SSFs, as some Commissioners may view SSFs less as an issue themselves and more as a bargaining chip to address what they view as issues of greater consequence.
Third, there was an interesting and important legal issue before the Commission that was barely discussed beyond Commissioner Peterson’s opening remarks. The “Draft A” opinion presented to the Commission concluded that Yamaha lacked sufficient control over its dealers’ and service centers’ employees to place them within the company’s restricted class while “Draft B” reached the opposite conclusion. This is an issue of some practical importance, and worthy of the Commission coming to a substantive conclusion, perhaps in a case with somewhat different—and less distracting—facts.