Bank accounts of political party committees
State and local party committee accounts
State, district and local party committees that engage in both federal and nonfederal activities must follow certain rules to ensure that federal activity is financed with funds that comply with the limitations, prohibitions and reporting requirements of the Federal Election Campaign Act (the Act). Federal activities include, for example:
- Contributions and other spending on behalf of specific federal candidates;
- The federal portion of allocable expenses, such as administrative expenses and generic voter drive costs;
- Certain transfers of funds to other party committees;
- Contributions to federally registered PACs; and
- Certain Federal Election Activity (FEA).
Any state, district or local party committee that finances activity in connection with federal elections must maintain a federal account. A committee that finances activity in connection with both federal and nonfederal elections can choose to:
- Maintain only a federal account;
- Maintain a federal account used exclusively for federal activity and a nonfederal account used for nonfederal activity; or
- Maintain a federal account, a nonfederal account and a Levin account used for certain FEA.
Federal accounts
A state or local party committee may choose to set up one or more federal bank accounts for all of its activity, both federal and nonfederal. All funds deposited into this account must comply with the limitations and prohibitions of the Act, regardless of whether the funds are used to pay for federal activity, nonfederal activity or FEA. Such an account cannot accept Levin funds. Additionally, all receipts and disbursements must be reported, including those that involve nonfederal activity and federal election activity. The committee’s nonfederal activity is subject to nonfederal law.
Nonfederal accounts
A committee may choose to set up both federal and nonfederal accounts. Again, only funds permissible under the Act may be deposited into the federal account. The committee must use the federal account—or an allocation account, as described—for all disbursements, contributions, expenditures or transfers in connection with any federal election.
By contrast, funds in the nonfederal account may not be used to finance any federal activity. The nonfederal account has no registration or reporting obligations under federal law but is subject to nonfederal laws, such as state registration and reporting requirements. The nonfederal account may be used for nonfederal activity and, if the committee chooses to raise Levin funds, it may also be used for the Levin component of allocable FEA. The committee must demonstrate through a reasonable accounting process that it has adequate Levin funds in the nonfederal account to cover any payments for the Levin component of allocable FEA that come from this combined account. Receipts and disbursements of Levin funds from the nonfederal/Levin account are subject to the disclosure provisions of the Act.
Because administrative and other mixed federal/ nonfederal expenses cannot be paid from a nonfederal account, the committee may transfer funds from the nonfederal account to the federal account to cover the nonfederal share of allocable expenses. No other nonfederal-to-federal transfers are permissible.
Alternatively, a committee may choose to establish a special account, called an allocation account, solely for the purpose of paying mixed federal/ nonfederal expenses. Funds are then transferred from the federal and nonfederal accounts into the allocation account to pay for allocable activity. Once a party committee establishes such an allocation account, all allocable expenses must be paid for from that account as long as it exists. No funds from an allocation account may be transferred to any other account maintained by the committee or organization.
Levin accounts
In addition to maintaining federal and nonfederal accounts, a state, district or local party committee can also choose to set up one or more Levin accounts used for certain federal election activity (FEA). In this case, payments for FEA must be paid from the federal account or from an FEA-specific allocation account, which is separate from any federal/nonfederal allocation account. If the federal account pays the expenses, the committee may transfer funds from its Levin account to cover the allocable share. If an FEA-specific allocation account is used, the committee must transfer funds from both its federal and Levin accounts to cover the allocable expenses. No other transfers of Levin funds are permissible.
Depositing Levin funds
Levin funds may be kept in an account with other nonfederal funds or may be placed in an account exclusively for Levin funds.
National party accounts
Prohibition on nonfederal and Levin fund accounts
National party committees may not solicit, raise, direct or spend funds, or anything of value that are not subject to the prohibitions, limitations and reporting requirements of the Act. This prohibition of nonfederal and Levin funds also applies to any agent or officer acting on behalf of the national party committee or any entity that is directly or indirectly established, financed, maintained or controlled by a national party committee.
National party accounts for certain expenses
National party committees may establish accounts to defray certain expenses incurred with respect to:
- Presidential nominating conventions;
- National party headquarters buildings; and
- Election recounts and contests and other legal proceedings