Help Repeal FEC's Burdensome Prior Approval Requirement Imposed on PACs

NASBP is seeking help from its membership to repeal the Federal Election Commission’s (FEC’s) unnecessary requirement that trade associations must obtain written prior approval/authorization from their member companies before they can directly solicit them for a political action committee (PAC) contribution. Please consider sending a letter to your members of Congress supporting a rider in the Financial Services and General Government (FSGG) Appropriations bill, which repeals the prior approval provision from the Federal Election Campaign Act of 1971. NASBP has provided a sample letter. Your letter will help NASBP and other associations persuade key members of Congress to support including language in the FSGG Appropriations bill to address this issue.

The documentation and retention requirement for prior approval is a record-keeping burden for trade associations, like NASBP. The prior approval process originates from the 1978 amendments to the Federal Election Campaign Act, which requires trade association PACs obtain separate and specific approval in writing from its member corporations before soliciting their executive or administrative staff (or, in very rare instances, shareholders). This process is made more complex when permission is granted for multiple years. Plus, the FEC requires these forms be maintained for three years. Furthermore, the regulation states that a corporate member may approve solicitations by only one trade association per calendar year. For example, if a NASBP member company has already signed a prior approval for another organization’s PAC, that company cannot sign one for the NASBP SuretyPAC, precluding NASBP from contacting that company's employee(s) for contributions.

You may recall last year NASBP joined the Prior Approval Reform Coalition (PARC), a coalition that includes several NASBP construction industry strategic partners to repeal the FEC’s requirement. The PARC believes that prior written authorization is an unjustified requirement and should be eliminated for the following reasons:  
  • Requiring trade associations to seek prior approval is inequitable and restricts First Amendment rights. No other class of political action committee, including corporate, labor union and individual membership association PACs, is subject to the prior approval requirement. Members of trade associations have a constitutional right to join together in support of or in opposition to candidates for political office. 

  • Ensuring compliance with the prior approval regulation is burdensome, extremely time-consuming and costly. A PAC manager spends countless hours communicating the need for prior approval to his or her association’s membership. Should company representatives be unfamiliar with the regulation, even more time must be dedicated to educating those individuals on its background, purpose, and application. For staff at larger associations with thousands of member companies, this becomes unduly taxing.

  • Confusion at the corporate member company level is a consequence of the prior approval regulation. First, individuals eligible to contribute are confused as to why their company must first give permission for them to be solicited. Most often, PAC managers have to repeatedly explain the arduous process. Second, many companies are members of multiple corporate trade associations. When presented with the stipulation that prior approval can only be granted to one PAC in a calendar year, companies do not understand why they are limited. As a result, many are apprehensive to choose one PAC over another and simply choose not to participate at all.

Be Sure to Register for NASBP Events Held June 7 to 9

It is spring and that time of year again to make plans to come to Washington, DC to attend the NASBP annual Legislative Fly-in to advocate for surety and to attend the Federal Construction Contracting Seminar to learn about requirements for contractors doing federal work. Registration for the NASBP Fly-in and Federal Construction Contracting Seminar is now open. The deadline to obtain a hotel room at the Hyatt Regency Washington on Capitol the NASBP discounted room rate is May 6. The Fly-in takes place on June 7 and 8, while the Federal Construction Contract Seminar begins on June 9. Register for the NASBP Fly-in and receive a discount on your Seminar registration fee in the amount of your Fly-in registration fee. For more information concerning both events, access the NASBP Legislative Fly-in  and NASBP Federal Construction Contracting Seminar

For more information, contact NASBP Director of Government Relations Larry LeClair at