Mobile Device Fundraising Update: FEC Advises, Campaign Pros Chafe

Last Friday, C&E Insider Blog wrote about Aristotle Inc.

Last Friday, C&E Insider Blog wrote about Aristotle Inc.’s proposal that the FEC should create an advisory panel to inform vendors and campaigns on best practices relating to fundraising via new technologies, specifically mobile devices.

On Monday, the FEC issued an advisory opinion clarifying its position on how current campaign finance law applies to donations made from mobile devices, and the news was not good for most campaigns and vendors. Notably, the FEC declined to endorse fundraising via anonymous text message and created new barriers for technology providers involved in fundraising through mobile devices.

In its opinion, the commission identified three main problems:

1)      Mobile companies are not forwarding funds raised quickly enough to individual campaigns.   2)      There was not an adequately robust system of segregation in place to separate campaign funds raised from corporate funds derived through commerce. (The law requires that all political donations be kept in a separate account from corporate profits). 3)      In order to ensure that the donations were not received from corporations or foreign nationals, mobile providers and vendors of political fundraising technology will have to screen contributions against their billing records.

This clarification is certainly welcomed by campaign professionals unclear on the commission’s requirements for mobile fundraisers. At the same time, it raises a host of new problems; perhaps the most impactful is the requirement that mobile companies screen their contributors, which would require a significant amount of labor. That would make fundraising through mobile devices, as charities do, prohibitively expensive for all but the best-funded of campaigns.

Dave Mason, former FEC commissioner and Aristotle, Inc.’s vice president of compliance services, does not believe the commission’s intention was to make this process onerous for those seeking to be compliant. That was, however, the unintended result. “When you look at the federal statute to regulate campaigns, I have a hard time believing they wanted to cut off campaigns from commercial fundraising technologies,” says Mason. “[Yet] this is what is happening with some of the forwarding and screening requirements.”

Mason says that this further underlines the need for the FEC to establish an advisory panel to ensure that political campaigns are legally compliant when employing new fundraising technologies. Mason, like the company’s CEO, John Aristotle Phillips, is optimistic that this will happen eventually, though he observes that bureaucracies don’t change overnight.

Mason believes that the FEC could put this panel in place quickly, and he believes that most of the commissioners are behind Aristotle’s proposal. “They have done similar things before; they held a series of hearings on enforcement procedures which were really useful for both the commission and people outside the commission,” says Mason. “this would really be a technological version of those hearings, but on an ongoing fashion.”

Noah Rothman is the online editor at C&E. Email him at

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