When the owner of a business runs for public office, he or she has to be careful not to use the assets of the business for the campaign. In the past, this issue has come up when the business owner uses money from a business account, uses customer mailing lists, or business equipment in a campaign. Prepaying the company for services, renting lists at fair-market value, or taking an authorized distribution are some ways to avoid illegal corporate contributions.
The FEC recently dealt with a novel argument that a letter from a business to a newspaper asking for a retraction from the newspaper was an in-kind contribution to the candidate who was the owner of the business.
The newspaper ran two columns critical of Linda McMahon, the owner of World Wrestling Entertainment Inc. (“WWE”) and the 2012 candidate for Senate in Connecticut. The columns did not mention the WWE by name, but referred to the “pornography and mock violence of the wrestling business from which” the candidate had made her living and referred to her business of “violence, pornography, and raunch.” In response, WWE sent a letter demanding a retraction of the columns because WWE was not engaged in violence or pornography, and threatened a lawsuit against the paper if a retraction was not forthcoming.
In response to the letters, the newspaper filed a complaint with the FEC, alleging that the WWE letter was an attempt to support the campaign by silencing the newspaper. The FEC unanimously disagreed. The General Counsel’s report explains that the WWE had a clear business interest in defending its reputation and made no mention of the campaign in its letters. The FEC found that the letters were not for the purpose of influencing a federal election.
This is obviously a unique case, but it serves as a reminder of the need to erect high walls between a candidate’s business interests and the campaign.