When Elton John performed at a Radio City fundraiser for Sen. Hillary Rodham Clinton’s (D-N.Y.) candidacy in April 2008, neither the entertainer nor the campaign likely foresaw the legal implications.

But for Elton, the ensuing hue and cry brought to mind another theme from “The Wizard of Oz”: When it comes to federal campaign finance law, “we’re not in Kansas anymore.”

Because Elton is not an American citizen or green card holder, he was prohibited from making contributions to federal campaigns. Luckily for everyone involved, a Federal Election Commission (FEC) spokesman quickly confirmed that foreign nationals may volunteer their personal time and services. Still, the incident reminds us of the many restrictions that lobbyists and their clients face when volunteering for federal candidates — the extent to which they may use corporate or partnership resources and the paperwork they must file when raising money.

Before considering each of these issues, one must first understand the difference between contributions, which are extensively regulated, and volunteering, which is generally unrestricted. Federal law imposes various limits on how much individuals, partnerships (including some limited liability corporations, or LLCs) and political action committees (PACs) may contribute to federal candidates and parties. And it outright prohibits contributions from certain other sources (such as corporations, labor unions and foreign nationals). Those limitations apply to non-monetary, “in-kind” contributions as well.

Accordingly, if Sir Elton were to give away a thousand copies of his greatest hits CD to induce donations to the Clinton campaign, he would be making an illegal “in-kind” contribution as a foreign national. Moreover, the CDs’ fair market value likely would exceed his individual contribution limit. On the other hand, if he were to voluntarily write a song honoring the campaign (“My gift is my song, and this one’s for you”), that would be fine by the FEC, even if that song goes platinum and earns a small fortune. If readers feel confused at where volunteering ends and where “in-kind” contributions begin, just re-read the last sentence of the first paragraph.

Related News