The Federal Election Commission approved a proposal earlier this
week to allow contributions via text messaging in federal
elections. With the lawmaking process ill-equipped to keep pace
with developing technologies, the success of this proposal
– a year-and-a-half after the FEC rejected another
text-messaging proposal – suggests that the path to
approval for tech entrepreneurs in the political space lies in
tailoring their business models to forty year-old laws.
The plan approved by the FEC through an advisory opinion has a
number of features that meet longstanding recordkeeping and
reporting requirements, and satisfy rules that apply to vendors
using more traditional means to process political contributions.
Donations will be capped at $50 per cell number per month.
Under current law, a committee has no obligation to collect the
name and address from any contributor giving $50 or less.
Wireless users will "pledge" funds to a political
committee, with an aggregating company
transmitting the amount from its corporate treasury to the
political committee. Once subscribers pay their bills, wireless
service providers will transmit the payments, less fees, to the
aggregating company. The FEC concluded that this arrangement fits
within longstanding rules for giving a political committee an
"extension of credit," primarily because the aggregating
company will provide the same services to commercial customers as
it provides to political committees.
Political committees will have real-time secure access to the
gateway where the tally of contributions is maintained, allowing
committees to identify phone numbers associated with contribution
totals of $200 or more. This will help committees meet the legal
that their reports identify individual contributors who exceed
The FEC advisory opinion contains the usual caution that only
persons involved in transactions that are "indistinguishable
in all material respects" may rely on the ruling. Nonetheless,
tucked in a footnote to the opinion, the Commission acknowledges
that it is likely to receive proposals from other vendors that will
"provide equally viable and compliant methods of raising
campaign funds through text messaging."
For tech innovators and others seeking approval for new
fundraising platforms, the best approach may be to find a way to
pour new wine into old bottles.
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