Uncapped: What the Coordination Ruling Means for Your PAC

The wait for NRSC v. FEC is over — and it landed with a bang. On June 30th, the Supreme Court ruled 6-3 to strike down federal limits on party coordinated expenditures, overruling a 25-year-old precedent and clearing the way for national party committees to spend unlimited amounts coordinating directly with their own federal candidates' campaigns.

Hosts Micaela Isler, Adam Belmar, and David Schild bring back NABPAC general counsel Mark Renaud of Wiley to break down what actually changed and what didn't. Mark walks through why this ruling only touches the six national party committees — NRSC, DSCC, NRCC, DCCC, RNC, and DNC, plus the federal accounts of state parties — and doesn't touch contribution limits, disclosure rules, or coordination bans anywhere else in the system. He also flags the specific dollar limits multi-candidate PACs now need on their radar for giving to national and state party committees, and draws a bright line on earmarking: covering a member's party dues is fine, directing money toward a specific race is not.

The conversation also covers why state-level coordination limits in roughly two dozen states could be the next domino to fall, and what PACs with genuinely novel questions should do while the FEC still lacks a quorum to issue advisory opinions. A clip from LexPolitica's Steve Roberts rounds things out with practical budget advice for PAC directors weighing bigger party contributions this cycle.

Transcript

Mark Renaud (00:00):

This case only addressed that small sliver, although important sliver that applied to the party committees at the federal level.

Micaela Isler (00:13):

Welcome back to the Facts About PACS podcast. I'm Michaela Isler NAVPAC's president and CEO, and I'm joined today by my co-host, as always, Adam Belmar and David Shield. And today we're picking up on something we've been tracking all year.

David Schild (00:28):

Michaela, back in December, we sat down with Steve Roberts of LexPolitica to preview a case that was headed to the Supreme Court for oral arguments. That's the NRSC versus the FEC, a fight over party coordinated spending limits.

Adam Belmar (00:42):

Well, just like 4th of July fireworks, the wait is over. On June 30th, the US Supreme Court ruled six to three to strike down those limits overruling a 25-year-old precedent. In plain English, political parties can now spend unlimited amounts coordinating directly with their own federal candidates campaigns.

Micaela Isler (01:02):

That's right, Adam. And today we have our NABPAC general counsel, the one and only, Mark Renaud from Wiley, to help all of us figure out what it means for our employee-funded and business trade association PACS.

Adam Belmar (01:16):

The Facts About PACS podcast is produced especially for the members of the National Association of Business Political Action Committees. In every episode, we recap this week's NABPACTivities, share actionable intelligence and better practices all while connecting the PAC community.

Micaela Isler (01:31):

Great. Thanks so much, Adam. Well, Mark, you're certainly a friend to NABPAC and to the show, so welcome back to the Facts About PACS.

Mark Renaud (01:40):

Thanks, Michaela. I appreciate being back here in this important time, and especially as the country continues its celebration of 250 years of independence.

Micaela Isler (01:49):

Yes, indeed. Well, last time you were with us, we were talking through the FEC's quorum problem and now the Supreme Court has struck down the federal limits on party coordinated expenditures in, as Adam mentioned, the NRSC versus FEC overruling Colorado two. We also had you on a Let's Talk webinar in June to sort of talk through what this could mean for our members. But before we get into all of that and sort of what this all really does mean now that we do have a ruling, give us the headline. What did the court actually decide and why does it matter?

Mark Renaud (02:25):

Well, Michaela, I think the case, the NRSC versus the FEC is important for political parties and for the political space generally at the federal level. As Adam and you previewed already, Justice Kavanaugh and his opinion, 6.3 said that the limits that the Congress had placed on the coordinated party expenditures were unconstitutional and violated the First Amendment, particularly the ability of a party to work closely, obviously in coordination with its own candidates and that meant that there was no reason for these rules to be around and that they didn't help prevent actual corruption or the appearance of corruption, which is the standard that the court uses in these campaign finance cases. And so why is it important? It's important because it does allow the party committees to spend unlimited funds that they have in coordination with their own candidates for federal office. So right now for the midterms, with the Senate candidates and the House candidates, and of course presidential candidates are also their own candidates as well.

(03:41):

So we'll see that in the future.

David Schild (03:43):

Mark, when you guys sent out your client alert about this, there was an emphasis on what this ruling does not change, right? Contribution limits into parties, you're making rules, disclosure requirements, coordination bans, things like that. I'm sure there's some common misunderstandings out there. For our audience, PAC managers who have to explain this inside their organizations, what are the common misunderstandings when people hear coordinated limits are gone?

Mark Renaud (04:07):

Well, coordinated limits to folks that are not at the party committees usually means what they can do with their own funds, meaning their super PAC funds or their PAC funds if they run independent expenditures out of their PAC, or their corporate or association funds if they're doing advertising and they happen to be electioneering communications, or even in the broadest sense, communications that are paid ads within 90 days of an election that mention a candidate. All of those may not be coordinated with candidates, parties or their agents or else that coordinated activity becomes an in - kind contribution to the candidate. And those rules haven't changed. This case did not address those rules. This case only addressed that small sliver, although important sliver that apped to the party committees at the federal level. And so don't hear that the coordination rules have been struck down and think that now you can coordinate your advertisements that expressly advocate the election or defeat of a candidate with a candidate or with a party.

(05:09):

Those rules still exist in all those other areas as well.

Micaela Isler (05:13):

Mark, and I also just want to be clear, something we alerted our members to, this applies to the six national political party committees. So not just the NRSC, it would be the DSCC, the DCCC, the NRCC, and then obviously the RNC and the DNC and also the federal accounts of the state parties, correct?

Mark Renaud (05:33):

That's correct, Kayla. Yep.

David Schild (05:35):

So Mark, back in December when we were previewing this case, Steve Roberts said something really interesting and that is that hard dollars to party committees will become more important than they have been in a generation. So now I'm looking at my PAC budget going forward. In light of this decision, do our directors need to be talking to their PAC boards mid-cycle about hard dollars to national party committees or do you think that waits until the 2027 budget cycle?

Mark Renaud (05:59):

Well, David, I hate to tell you, but there's an election coming up, so I think now's the time for most employee-funded PACs and most association PACs. Now obviously some PACs, they don't have the financial wherewithal to increase their activity. Those could obviously reallocate funds if they think that they should go to the party committees now instead of certain candidates. But for those that do have the budget and those that haven't already maxed out to the party committees, they're going to be getting those solicitations. They're going to be invited to those events they weren't already. And those funds of course can go to the normal party activities, but also now be used for these party coordinated communications and expenditures. The limit for multi-candidate PACs to the national party committees is $15,000 per calendar year for the main candidate account and for state party committees, the federal account of those committees is $5,000 per calendar year for multi-candidate PACs.

Adam Belmar (07:05):

Mark, for those of us who know just enough to be dangerous and for the rest of us who are just gathering string for good questions to turn around and ask our superiors, earmarking rules are still fully enforced. So if a candidate's team asks a PAC to help cover party dues or to credit a party contribution toward a specific member, where's the line between a permissible party contribution and an illegal earmark pas-through? What do we need to know? How do we get this straight in our minds and how do we phrase this appropriately?

Mark Renaud (07:39):

Adam, that's a great question because this is kind of inside baseball, even for those of us who are already inside the game.This is an area that not everybody deals with day-to-day, but candidates, basically members of Congress are allocated a portion of the party funds to be raised on a yearly basis. So they're dialing for dollars as it used to be said constantly, one of the great downsides of holding those positions. But in doing that, they're trying to hit what they've been allocated, their dues. So if they're raising that money for dues purposes, that's just the ticker inside the box of the party committee that's going to be ticked off and it's not going to be used for those candidates necessarily. It's just raised by those candidates to fulfill their obligation. People in leadership have a bigger obligation, people on the rise, bigger obligation, et cetera.

(08:34):

And so what you want to look for, the dues part is fine. What you don't want to hear is, "Hey, give to the party so they can use it in my race or use it in my election or use it against my opponent," whether that's in the primary or the general, because the opinion doesn't matter. The rule is going to be in all elections, not just the general election when we think of it the most. So you don't want to have that and you obviously don't want to be contributing and saying, "Please use this for X, Y, and Z's election," because that is a violation of the provisions.

David Schild (09:06):

Now, Mark, again, looking to the Wiley note that you sent around, this is a decision that really right now only affects federally coordinated expenditure caps. State limits are still on a state-by-state basis. So if I've got a packet I'm giving at the federal and the state level, what should I be watching for? Do we expect that the two dozen or so states that have similar coordinated limits may revisit this issue now in light of this ruling?

Mark Renaud (09:32):

Well, David, the states are funny in all areas of political law and election law and they all have their own rules and not all of them even have contribution limits to begin with. Virginia, where I live doesn't have any limits. But those that do have it, I think the writing's on the wall. Some of them will be forward-thinking and if their legislature is in session, which may not be because it's an election year, they may try to get rid of it on their own, go out and proactively get rid of it. Some attorneys generals will write opinions saying we're not enforcing the rule in light of the decision. Others will be dragged across the line at the very last minute. And so we can see a repeat. I don't think it'll happen in Montana, but what did happen in Montana after Citizens United is they said, "Well, no, our law is different for these reasons.

(10:21):

We're keeping it. " And it had to go back up to the Supreme Court to smack the state down and say, "No, no, even though your Supreme Court of Montana may have said X, Y, and Z, that's not the rule of the land with respect to the First Amendment." So we'll see a combination of those things and it'll be interesting to watch. But I mean, ultimately, I think there should be no reason that those survive. I'm not going to predict what the court has to say, but they shouldn't survive. And these details can be found in that alert, the Wiley issued authored by my partner, Brandy Zare, which is in the NABPAC Library online and obviously can also be found at our website.

Micaela Isler (11:07):

Well, Mark, this ruling also lands while the FEC still does not have a quorum, so no advisory opinions, no enforcement movement. So if a PAC has a genuinely novel question about restructuring its party committee giving under this new landscape, where do they go? Who do they even ask right now?

Mark Renaud (11:26):

Right. Well, if it's a legal question, I would definitely say don't use AI to find your answer. Don't crowdsource it, et cetera. I mean, it is legal professionals like myself who help fill in the gaps. And so right now we do have a gap because questions can't be asked to the FEC. Well, they can be asked, they won't be answered. And so most people are not asking unless you just want to put it out there in the ether. But there are legal issues to consider here, but a lot of it is practical as well. And obviously folks at NABPAC on the NABPAC hotline that's not legal can help with those kinds of considerations. And of course, as it goes over to legal, we can help through the hotline as well.

Adam Belmar (12:10):

So basically what you're saying is if you just want to chat with someone about this and the facts about PAC's conversation is not enough, you can call Amy Adams, but if it's serious, they should call you.

Mark Renaud (12:20):

That's right. Well, if it's serious, but legal. I mean, Amy does lots of serious stuff.

Adam Belmar (12:26):

Well, Mark, this week following the amazing festivities of America 250, I was able to catch up with the aforementioned Steve Roberts. And I asked him to consider from his perch, what are his clients, what are people asking him about how employee-funded and business trade association PACS should be thinking about how they posture and go forward? Here's what Steve told me.

Steve Roberts (12:50):

PACs should find new room in their annual budgets to make political party contributions. And maybe they're maxing out to both sides, maybe they're maxing out to the senatorial and the congressional committees on both sides, as well as the national party committees, RNC and DNC, as their budget will allow. And the reason I say that is because they're going to be able to demonstrate support for their champions through these political party contributions, not because they're now able to earmark. They're certainly not able to earmark going into the party committees, but because they'll show that they get the game, they understand that this is a way more efficient use of money. And you may get more asks from individual candidates to help them out with their party committee dues by giving those contributions to political parties and say, "Hey, credit Representative Smith towards their dues. You may see more of that.

(13:46):

You may even see the political parties raise their due levels to get more money in the door so that it can be spent in a sufficient way.

Adam Belmar (13:53):

Is that the way you see it, Mark? Do you think we're going to see a lot more of that?

Mark Renaud (13:57):

Yeah, Adam, I mean, I think you are. I mean, obviously the parties have raised money from time immemorial and everyone knows that, but it is becoming more important because they have a bigger role to play. And one of the things that's going to affect the role that they play is the lowest unit charge for broadcast radio and television ads. It's a very technical aspect of campaign finance, but candidate ads are afforded a lower charge on radio and television broadcast than are other speakers like commercial speakers or super PACs or others. And so there is a case pending in I believe the Fourth Circuit, it might be the Sixth Circuit, about that, whether the party coordinated communications are going to fall under that or not. But assuming that that's held up because that's what the FCC has pronounced that the coordinated ads do come within the purview of that rule, the parties have a bigger role to play and they're going to want to maximize what they can do.

(15:08):

Now they can't take corporate money. They can't take big checks from wealthy individuals. They can take hard money contributions from employee-funded PACs and association PACs and of course from individuals. So they're going to be out on all levels. And the party giving doesn't work for everybody. And it's about your budget. It's about the kinds of things your political directors, your lobbyists, the folks who go to the events, the kind of events they like to go to and the kinds of things that interaction they like to have. But there's no doubt that there's going to be more of this so that the parties can fulfill the role that this basically is giving them, which is seen by many in political science circles and others as a moderating force and by others as a pro - business force as opposed to some of the candidates on the fringe of both of the parties that may not have party support.

(16:10):

So we'll see what happens, but I'm optimistic that we'll have more political activity, which of course from my point of view is always good. I'm also in a state that doesn't have all the ads, so I guess I can say that easily. It's too bad we don't have the ads because we don't have a two-party system where I live in Northern Virginia. But in any event, we will have more political activity. People will receive more information about their candidates and they'll be able to make a better choice in the end based on that information.

David Schild (16:43):

For some of our PAC directors listening today, the question will be asked and answered. You down with RNC? Yeah, you know me.

Micaela Isler (16:50):

So Mark, I like a bottom line. And so for all of our PAC directors listening here on their commute, what is the one thing they should seriously consider doing differently because of this ruling? And then maybe what's the thing you'd tell them very deliberately not to change?

Mark Renaud (17:07):

Well, I think we'll start with a not to change, and that's really their own compliance. So again, these rules do not affect anything that the PACs do directly or that the connected company or the connected association does directly. So focus on your knitting, which is your limits, your disclaimers, your prior approval if you're a trade association, your restricted class and your reports. Make sure those reports are accurate. Line up the audit for next February so you can get that done and checked off to make sure that nobody's going to come to you because some public filing or some statement by one of your employees or members gets into a blog somewhere or whatnot. As far as what changes, I think what could change is the views, kind of what I just mentioned, which is the views of the party's role in the arena. They've been a little bit marginalized because of other big players and of course those other big players are still there and they still have their role, super PACs, 501 other C organizations.

(18:14):

But the party has a bigger footprint now. And again, if you view that favorably, and not everybody does, but I do view it favorably. Even though they're partisan, they are a moderating voice because without them, the partisans goes even more perhaps out to the edges. So people may have to rethink their view of that and of course socialize that with their PAC boards and the executives and corporate board members that oversee their PAC to find out whether that's the direction you want to head. And the hope is that it'll produce stronger pro - business, pro - association majorities in the Congres.

David Schild (18:58):

And Mark, breaking news today that Graham Platner has ended his campaign up in Moose Country for the main Senate seat. I'm hearing Janet Mills, I'm hearing Patrick Dempsey. Can you go on the record and confirm you are not a candidate for the Maine Senate?

Mark Renaud (19:11):

That's right. I've not ever stepped foot in the state of Maine, unfortunately, especially my wife wants to go up there. So residency will be difficult.

Micaela Isler (19:21):

Well, Mark Renaud, thank you so much for just an insightful conversation and for being such an excellent resource to our membership.

Mark Renaud (19:28):

Well, thank you Michaela for having me on. It's always a fun time and I look forward to talking about this case and what it means for well into the future as things progress.

Micaela Isler (19:40):

Great. We look forward to that and thank you to everyone downloading and sharing this podcast. Subscribe and meet us right back here next week.