BACKGROUND:

Like many trade associations, corporations, labor unions and professional societies, NSSGA operates a federal political action committee. NSSGA’s PAC is accountable to both the association’s membership and to the federal government. All contributions to and disbursements from the PAC are fully disclosed to the Federal Election Commission.

Under the Federal Election Campaign Act, trade associations are permitted to establish PACs and may solicit the executive and administrative employees, stockholders and the families of corporate members for a voluntary contribution. However, prior to conducting a PAC solicitation, trade associations such as NSSGA are required to seek written “prior approval” from member corporations’ official representatives. Each company may only grant permission to solicit to one trade association per calendar year. No other class of PACs, including corporate, labor union, professional or ideological, are subject to the administrative burdens under the prior approval requirement.

During the debate of the Bipartisan Campaign Finance Reform Act, the issue of eliminating prior approval was raised. Despite NSSGA and members of the Prior Approval Coalition’s strong support for such reform, it did not make it out of the House Rules Committee. Similar efforts raised in recent years have also failed to gain traction.

NSSGA will continue to advocate the elimination of the prior approval requirement for trade associations.

TALKING POINTS:

• Trade associations are permitted to operate PACs and they may solicit voluntary contributions from the membership. However, unlike corporate and labor union PACs, trade association PACs must first obtain written permission from the membership prior to conducting a solicitation. The prior approval requirement is inequitable.
• The prior approval requirement on trade association PACs and their members is costly, confusing and cumbersome for both the association and the membership. The prior approval requirement is a disincentive for individuals to voluntarily participate in their association’s PAC and it can easily set associations and their membership up for violating federal election law.
• If the prior approval requirement on trade association PACs were eliminated today…
  • Participation in trade association PACs would remain a voluntary activity, free from favoritism or discrimination, just as it is today.
  • Trade association PACs would continue to be heavily regulated by the federal government.
  • Contributions to and disbursements from the PAC would continue to
    be fully disclosed to the federal government.
  • The playing field for trade association PACs would be leveled with other PACs, such as corporate and labor unions, who are not subject to this burdensome requirement.

Updated: November 2008