The Federal Election Commission (FEC) recently announced a $16,000 civil penalty against a political campaign, to settle allegations that the campaign had inappropriately used FEC contributor data in an algorithm used to aid its fundraising. The settlement is the latest in a series of decisions this year cracking down on the practice of using the FEC’s public contribution data to facilitate fundraising operations.
Contributor Data Disclosure
Federal campaign finance laws require all federal political committees to disclose the name, address, occupation, employer, and contribution amounts from donors who have given more than $200 per cycle. When the law was first written in the mid-1970s, there was no internet, so access to the records was very limited. Moreover, $200 then was worth nearly $1,000 in current dollars (so in fact it was a much larger contribution than it may first appear). Today, the FEC makes these disclosures public in a searchable online database, a tempting trove in an age when data has become integral to improving the efficiency of organizations’ public outreach.
Limits on Use
To protect political donors from harassment, however, Congress has long prohibited the “sale or use” of FEC contributor data for the purpose of soliciting contributions for commercial purposes. This prohibition applies equally to anyone who seeks to use FEC contribution records as a source of data for solicitation or commercial activities, including political campaigns, nonprofit organizations, and for-profit companies.
Over time, the FEC has made clear that this prohibition forbids using FEC contributor data to create or add to donor prospect lists, but there has been less clarity on how the restriction applies to more modern use cases, particularly when such data is incorporated into analytics and models that do not reveal individual donor identities to a user or client of data services.
Modern Data Uses
The recent enforcement action arose in 2016 after a technology company sold software that used a proprietary algorithm to rank and score a client’s existing contacts based on their likelihood of making a contribution to the client’s fundraising effort. The algorithm incorporated a wide variety of data inputs to generate the score, including FEC contributor data. The company argued that it did not violate the “sale and use” prohibition because the incorporation of FEC contributor data into the scoring metric was an aggregated use of data that did not allow clients to obtain new names or contact information from FEC reports. Indeed, the software did not even function if a client did not first provide its own preexisting list of contacts. Nevertheless, the FEC concluded that the company had violated the FEC’s prohibition because the software paired contribution data with contact information to facilitate the solicitation of contributions.
This enforcement decision follows a similar advisory opinion the FEC issued earlier this year. In that opinion, the FEC likewise found that the incorporation of FEC contributor data into data analytics to optimize contact lists was impermissible where the requestor intended to use the lists for solicitation purposes.
The FEC’s rules on the sale and use of contributor data have not been updated to keep pace with the increasingly sophisticated uses of data for fundraising and engagement in the political and nonprofit worlds. But the recent decisions suggest consensus within the Commission that the law does not permit use of FEC contributor data for fundraising purposes, even when data is being aggregated and incorporated into analytical models to enhance existing lists. Technology companies, political committees, nonprofits, and others seeking to optimize fundraising lists should therefore be aware of the risks of tapping into the FEC’s public contribution data.