An FEC enforcement action recently made public may be of interest to organizations that use members’ dues for political activities.  In a complaint to the FEC, a Massachusetts realtor claimed the National Association of Realtors and its state and local affiliates were forcing her into paying for their political activities.   The realtor’s local affiliate required her to pay dues to the National Association of Realtors (NAR) in order to access the Multiple Listing Service (MLS), which she contended was required for her to perform her job as a realtor.   NAR raised their membership dues by $40 per year, and some portion of this increase went to financing independent expenditures out of NAR’s treasury funds and through a Super PAC.  In effect, the realtor asserted that the dues increase constituted improper coercion of political contributions.

Although the FEC exercised its prosecutorial discretion to dismiss the case, the First General Counsel’s Report and Chairman Goodman’s statement of reasons may be instructive for membership organizations financing political activities with member dues.  Both would dismiss the complaint for failing to state a violation of the federal campaign finance laws.   They identified only two types of coercion that the FECA and FEC regulations prohibit.   First, contributions to a corporation’s or labor union’s PAC may not be coerced.   Because the complaint did not refer to PAC solicitations, this prohibition was inapplicable.   Second, the FEC’s regulations provide that if a corporation facilitates the making of contributions to candidates or PACs by using “coercion, such as the threat of a detrimental job action, the threat of any other financial reprisal, or the threat of force, to urge any individual to make a contribution or engage in fundraising activities on behalf of a candidate or political committee,” the contribution or fundraising activities are attributed to the corporation.  Nonetheless, even assuming that the loss of access to MLS would be a sufficient “threat … of financial reprisal” to constitute coercion, under Citizen’s United and SpeechNow.org, NAR is permitted to use its treasury funds to fund independent expenditures and to make contributions to Super PACs.   Therefore, the First General Counsel’s Report and Chairman Goodman’s statement of reasons determined, NAR’s actions were no more than the group’s own decision to fund political activities and consequently did not violate the FECA.