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Political Contributions: Election Year Reminders for Wisconsin Employers

May 1, 2004
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With the presidential primaries already behind us, the 2004 political season is well underway. During this time, individuals and businesses will be frequently solicited for contributions by various candidates, political parties and political action committees. While the laws affecting campaign finance are complex and compliance requires constant attention to detail, there are some general legal principles that every employer should keep in mind when evaluating these contribution requests.

Corporate contributions are generally prohibited.
Under both Wisconsin and federal law, corporate contributions to candidates, political parties and political action committees (PACs) are strictly prohibited. In fact, making illegal corporate contributions can be a felony. While some states allow corporate contributions, Wisconsin does not. Instead, only individuals and registered political committees can contribute to the campaigns of Wisconsin and federal candidates and political parties. Corporations, however, may establish and sponsor a PAC that is funded with individual contributions and, in turn, makes contributions to candidates, political parties and other PACs.

While corporate contributions to candidates, political parties and PACs are prohibited, corporations may contribute to certain independent political organizations engaged in lobbying and public advocacy activities such as section 501(c)(4) advocacy groups, section 501(c)(6) business organizations and section 527 political organizations. If they accept corporate contributions, however, these organizations cannot make contributions to Wisconsin or federal candidates or engage in other regulated campaign finance activities, such as expressly advocating a candidate’s election or defeat.

Contributions include more than monetary contributions.
As defined under state and federal law, a “contribution” also includes any good, service or property provided to a candidate, political party or PAC at no charge or at less than the usual fair market value. Typical “in-kind” contributions include food or beverages available at a fundraising event, printing costs or postage. Similarly, when an individual is paid to work on behalf of a candidate, the payment for those services is considered an in-kind contribution. Accordingly, the prohibition on corporate contributions to candidates, political parties and PACs applies to in-kind as well as monetary contributions.

Individuals may not be reimbursed for political contributions.
Individuals who make contributions to candidates, political parties or PACs may not be reimbursed by a third party—including a corporation—for the amount of a contribution, in whole or in part. In addition to the absolute prohibition on corporate contributions, contributions may not be made in the name of another entity, and it is unlawful to hide or not disclose the true identity of any contributor.

Political contributions must be voluntary, without employer coercion.
Individual political contributions must be voluntary. While employers may take certain steps to encourage increased political involvement, they cannot require political contributions as a condition of employment or coerce employees through threats of job discrimination or financial reprisals. Any person soliciting employees for contributions to federal candidates, political parties or PACs must inform the employee of their right to refuse to contribute at the time of solicitation.

Contribution amounts are regulated and limited.
Individual contributions to candidates, political parties and PACs are regulated and limited—by the state for state candidates and committees and by the federal government for federal candidates and committees. These two regulatory systems (state and federal) are separate and distinct, with specific contribution limits based on the exact recipient of the contribution. There is also a $10,000 aggregate limit on all of the political contributions made by any one individual to all state candidates, political parties, and PACs in a calendar year, regardless of the contribution’s recipient. Also, all of the contributions made by an individual to influence federal elections may not exceed $95,000 during a two-year election cycle.

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