• FSI PAC Frequently Asked Questions

    What is a PAC?
    A Political Action Committee (PAC) is a legal mechanism for individuals to combine financial resources to support political candidates who support their interests. PACs can give $5,000 to a candidate committee per election—primary, general, or special. They also can give up to $15,000 annually to any national party committee and $5,000 annually to any other PAC. The first PAC was established in 1944, when the Congress of Industrial Organizations (CIO) raised money for the re-election of President Franklin D. Roosevelt. For more information on PACs, visit the Web site of the Federal Election Commission: fec.gov.

    Are PACs regulated?
    Yes. PACs must file periodic reports with the FEC to show where they got their funds and how the funds were used. This allows voters to find out exactly who provides financial backing for candidates. FSI PAC’s FEC Reports are regularly posted at financialservices.org.

    Why did FSI establish a PAC?
    By contributing to PAC—pooling small financial contributions from many to create a larger fund—FSI members can play a significant role in electing to federal office candidates who support our mission and interests: the value of independent financial advice offered through independent broker-dealers and their affiliated financial advisors. The key to success is simple: strength in numbers. 

    How is my FSI PAC contribution used?
    FSI PAC contributes to candidates for federal office who support our views. We do not contribute to buy access—we believe FSI and our members have that right already as citizens in a representative democracy.  Instead, we support the election of candidates who support our philosophy of responsible regulation in a free market. Details of the disbursements from the FSI PAC can be found in the FEC Reports that are regularly posted at financialservices.org.

    Is a contribution to FSI PAC a charitable contribution?
    No. Under federal election and tax laws, it is not a gift, a donation, or a charitable contribution.

    How much can I contribute to candidates, PACs, and party committees in Federal elections?
    Federal law limits the contributions of individual U.S. citizens to:

    • $2,300 per election to a Federal candidate or the candidate’s campaign committee.
    • $5,000 per calendar year to a PAC (see below for more information on PACs).
    • $10,000 per calendar year to a State or local party committee.
    • $28,500 per calendar year to a national party committee.

    Finally, individuals are subject to a biennial (i.e., two year) limit of $108,200 on their total contributions to Federal candidates and Federal political committees combined. Of the $108,200, an individual may contribute no more than $42,700 to candidates and no more than $65,500 to all PACs and parties. When contributing to a candidate, the Federal Election Commission (FEC) encourages you to designate the election to which the contribution relates in order to avoid any confusion as to which election limit applies to the contribution. Please note: The above listed information relates to the period 2007 – 2008.  Updated information can be found at http://www.fec.gov/ans/answers_general.shtml#How_much_can_I_contribute.

    Can my spouse also contribute?
    Yes, each citizen may contribute up to the limits listed above. However, if a contribution is made from a joint checking (or other) account, all contributors must sign the check or an attached statement. The check or signed statement must show how much of the total amount should be attributed to each contributor, unless the contribution is to be equally divided among the contributors.

    What counts as a contribution?
    Anything of value given to influence a Federal election is considered a contribution. Donated items or services, the purchase of fundraising tickets or items and loans are examples of non-cash contributions. All the contributions you make—whatever their form—count against the contribution limits listed above.

    If I volunteer my personal services to a candidate or committee, do these services count toward my contribution limits?
    An individual can help candidates and committees by volunteering personal services without affecting his contribution limits so long as he is not paid by anyone for the services.

    Can my corporation contribute?
    No. Federal law and the laws of many states prohibit corporations and labor unions from using general corporate funds for candidate contributions. In addition, contributions from foreign nationals are prohibited unless the foreign citizen is lawfully admitted for permanent residence in the United States (i.e., has a “green card”).

    What are the guidelines for giving money to a PAC?
    Under federal law, a PAC can only accept contributions from individuals except in extremely limited circumstances. A PAC is not permitted to accept corporate checks, contributions of more than $5,000, contributions from a foreign national unless admitted for permanent residence in the U.S., contributions in the name of another person, contributions from most partnerships, or contributions from an LLC unless the LLC has elected to be treated as a partnership for tax purposes or has only one natural person member. The maximum amount an individual can contribute to multiple PACs is $65,500 per two-year election cycle. This maximum may be further reduced if contributions are made to national or state party committees and these contribution limits are subject to adjustment for inflation every other year. Contributions to FSI PAC are strictly voluntary and not part of any membership “requirement.”

    What impact does MSRB Rule G-37 have on my ability to contribute to FSI PAC?
    The purpose of MSRB Rule G-37 is to promote just and equitable principles of trade by prohibiting brokers, dealers and municipal securities dealers from engaging in municipal securities business with issuers if certain political contributions have been made to officials of the issuer. The rule does not prohibit political contributions. However, it may limit a contributor’s ability to engage in municipal securities business.

    The rule requires each dealer to submit to the MSRB on Form G-37 information on its municipal securities business, as well as contributions to issuer officials and payments to state or local political parties made by the dealer, its municipal finance professionals (MFPs), and non-MFP executive officers, and PACs controlled by the dealer or its MFPs. In addition, Rule G-37 prohibits any dealer from engaging in municipal securities business with an issuer within two (2) years after any contribution to an “official of such issuer” made by:

    • The dealer;
    • Any MFP associated with such dealer;
    • Any PAC controlled by the dealer or any municipal finance professional.

    Finally, Rule G-37 also prohibits any dealer from soliciting any person or PAC to contribute to an official of an issuer with which the dealer is engaging or seeking to engage in municipal securities business.

    What is FSI PAC’s policy with regard to G-37?
    FSI PAC’s policy with regard to Rule G-37 is that contributions will only be made to candidates for federal office who do not currently hold a position as an “official of an issuer,” as Rule G-37 defines that term. As a result, FSI PAC does not contribute to: (1) any candidates for state, county, or local office, (2) any candidates for federal office that currently hold a position as an “official of an issuer”; or (3) any PACs that contribute to any “officials of an issuer.”  This policy insures that FSI PAC will avoid contributions to candidates who are associated with governmental entities that issue municipal securities.

    What percentage of my contribution is used for overhead and administration of the FSI PAC?
    Less than 1%. Virtually every dollar you contribute to the FSI PAC is used in support of our mission. Under FEC rules, FSI is allowed to pay most administrative expenses of FSI PAC with association funds, maximizing our ability to use virtually all member contributions to support candidates.

    Who is in charge of the FSI PAC?
    FSI PAC’s bylaws designate a volunteer Board of Directors comprised of members of the FSI Board, plus other members of the association. The Board appointed FSI President & CEO Dale Brown to serve as Treasurer, charged with the day-to-day operations of FSI PAC.

    Is there someone I can talk to if I have additional concerns or questions?
    Dale Brown can be reached by phone at 770 980-8487 or via email at dale.brown@financialservices.org

    Disclaimer:  The information contained herein is not offered as legal advice, and you should not rely on it as such.  Instead it is offered as general background information. You should consult with a lawyer of your choice for specific legal advice.