Congress Considers Changes To Trade Association Prior Approval Rules

Douglas Dziak is a Senior Counsel in our Washington DC office.

The House of Representatives is considering including several political law changes in Section 630 of the fiscal year (FY) 2018 Appropriations Omnibus Spending Bill. Included in those changes are restrictions in the Federal Election Commission's (FEC) ability to enforce the prior approval requirement that applies to trade association PACs solicitation of its corporate members.

Under the Federal Election Campaign Act of 1971 (FECA), the FEC requires that a trade association, before soliciting the executive or administrative staff and stockholders of a corporate member, must request and receive the member corporation's permission to do so. Moreover, a corporation may only provide prior approval to one trade association per year. This legal obligation does not apply to non-corporate entities or individual members of a trade association.