What went wrong? Using corporate funds for political fundraisers

Corporations must be vigilant when reimbursing their lobbyists and employees who host or attend political fundraisers and other campaign events. Using corporate funds to purchase a ticket to a political fundraiser, either directly or by reimbursing an employee, violates the ban contained in both state and federal law on the use of corporate funds for political activities. Reimbursing employees for the collateral expenses of hosting or attending a fundraiser is also a violation.

Freddie Mac learned this the hard way in 2006 when it settled with the Federal Elections Commission, agreeing to pay a $3.8 million fine for, among other things, reimbursing members of its government relations staff for catering, event planning services and other expenses associated with political fundraisers.

If you have employees who attend political fundraisers, make sure related expenses are reimbursed by your PAC, not the company.

Federal Elections Commission, Conciliation Agreement, executed Apr. 17, 2006, MUR 5390.

This article was reprinted from the Winter 2015 Compliance Connections Newsletter. Download the complete Winter 2015 issue here.