FEDERAL
ELECTION
COMMISSION
WASHINGTON,
D.C
20463
Timothy
Swain, Esq.
Gibson,Dunn&CrutcherLLP
FEB 2 0
2009
200
Park
A
venue
47* floor
New
York,
New
York
101664)193
RE:
MURs
5987.5995
&
6015
Sir
Elton John
Dear
Mr.
Swain:
On
April
9*,
16
th
and May
28.2008,
the
Federal Election Commission notified your
clients
of
complaints alleging violations
of
certain sections
of the
Federal Election Campaign
Act
of
1971,
as
amended.
On
February
12,2009,
the
Commission found,
on the
basis
of the
information
in the
complaint, that there
is no reason to
believe Hillary Clinton
for
President
and
Shelly Moskwa,
in her
official
capacity
as
treasurer. Senator Hillary Clinton
and Sir
Elton John
violated
2
U.S.C.
§
441e.
Accordingly,
the
Commission
closed
its files in
these matters.
Documents
related to the
cases
will
be
placed
on the
public
record
within
30
days.
See
Statement
of
Policy Regarding Disclosure
of
Closed Enforcement
and
Related
Files,
68
Fed. Reg.
70,426
(Dec.
18,2003).
The
Factual
and
Legal Analyses, which explain
the
Commission's
findings, is
enclosed
for
your
information.
If
you
have
any
questions, please contact Kimberly Hart,
the
attorney assigned
to
this
matter
at
(202)
694-1650.
Sincerely,
)
.->.
<pr"-*^J
+t*''*'-'"
SidRodfe
Assistant General Counsel
Enclosures
Factual
and
Legal Analyses
I
2
3
FEDERAL ELECTION
COMMISSION
4
5
FACTUAL
AND
LEGAL
ANALYSIS
6
7
8
MURi
5987,5995
&
6015
9
10
11
RESPONDENT:
Sir
Elton John
12
13
14
I.
INTRODUCTION
IS
16
The
complaints
in
these matters involve allegations that Hillary Clinton
for
17
President
and
Shelly Moskwa,
in her
official
capacity
as
treasurer, ("the Committee"),
18
and
Senator Hillary Clinton accepted
an
in-kind contribution
from
a
foreign national,
Sir
19
Elton
John,
in
violation
of 2
U.S.C.
§
441e.
See
MURs
5987.599S
&
6015
Complaints.
20
The
complaints
further
allege
that
Sir
Elton
John,
through
the
Committee,
sent
out a
mass
21
email announcing
the
conceit
and
soliciting
support
for
Senator
Hillary
Clinton's
22
presidential campaign
in
violation
of 2
U.S.C.
§441e.
Id.
23
IL
FACTUAL
AIMp
l^ffi/M, ANALYSIS
24
On
April
9,2008,
Sir
Elton John perfonned
at a
solo
concert
on
behalf
of the
25
Committee
at
Radio City Music Hall
in New
York.
See MUR
5995
Complaint.
26
Attachment
1.
Before
the
event,
the
Committee
drafted
and
sent
out a
mass electronic
27
mail,
on
behalf
of
Elton John, announcing
the
conceit
and
soliciting support
for the
28
Committee.
Id.
Ultimately,
the
concert raised more than
$2.5
million
(from
the
sale
of
29
5,000
tickets)
for the
Committee.
See MUR
5995
Complaint, Attachment
3.
1
As
more
fully
discussed below, Elton John's artistic performance
at the
2
Committee's
fundraiser
constitutes
a
volunteer service that
is
exempted
from
the
3
definition
of
"contribution" under
the
Act. Therefore,
the
Committee
has not
received
an
4
in-kind contribution
from
a
foreign national
as
alleged
in the
complaints.
In
addition,
5
there
is no
information
to
suggest that
the
electronic mail communication distributed
by
6
the
Committee, using Elton John's name
and
likeness,
to
announce
the
concert
and
solicit
7
support
for
Senator Clinton constitutes participation
in the
decision-making
process
of
8
the
Committee
on the
part
of
Elton John
in
violation
of 2
U.S.C.
§
441e.
9
A.
Concert Performance
10
It is
unlawful
for a
foreign national, directly
or
indirectly,
to
make
a
contribution
11
or
donation
of
money
or
other thing
of
value,
or
make
an
expenditure
in
connection
with
12
a
Federal, State,
or
local election.
2
U.S.C.
§
441e.
ft is
also
unlawful
for a
person
to
13
solicit,
accept,
or
recei
ve a
contribution
or
donation
from
a
foreign national.
Id, A
14
"foreign national"
is an
individual
who is not a
citizen
of the
United
Stales
or a
national
15
of the
United States
and who is not
lawfully
admitted
for
permanent
residence. Id. The
16
term "individual"
has
been interpreted
by the
Commission
to
include foreign nationals.
17
See
Explanation
and
Justification
for
Contribution Limitations
and
Prohibitions,
67
Fed.
18
Reg.
69946
(Nov.
19.2002).
The
term "contribution" does
not
include
the
value
of
19
services
provided without compensation
by any
individual
who
volunteers
on
behalf
of a
20
candidate
or
political committee.
See 2
U.S.C.
§
431(8XBXO;
and 11
CF.R.
*
100.74
21
(the
so-called
"volunteer services
exemption**).
Because Elton John appears
to
have
22
provided uncompensated services
to the
Committee
in a
volunteer capacity,
we
conclude
23
that
his
concert performance meets
the
criteria
for the
volunteer
services
exemption and,
1
therefore, does
not
constitute
a
contribution
by a
foreign
national
in
violation
of 2
U.S.C.
2
§441e.
3
The
complaints assert that Advisory Opinion
1981-51
(Metzenbaum) supports
4
the
conclusion that Elton John
1
s
artistic performance does
not
meet
the
criteria
for the
5
exemption
and
thus constitutes
an
in-kind contribution under
the Act and a
violation
of
6
Section 441e.
We
agree
with
the responses to the
complaints, however, that this advisory
7
opinion
is
distinguishable
and
that other advisory opinions support
the
conclusion that
the
8
exemption applies here.
9
Advisory Opinion
1981-51
concerned
a
campaign committee that planned
to
have
10
an
artist,
who was a
foreign national, create original artwork
and
allow
the
committee
to
11
reproduce, at its own
cost,
a
limited edition
of the
original artwork
for
fundraising
12
purposes.
See
Advisory Opinion
1981-51.
The
committee asked whether this proposed
13
activity would constitute
a
prohibited contribution
or
whether
it
would
be
permitted under
14
the
volunteer services exemption,
and the
Commission concluded that
the
activity would
15
constitute
a
prohibited contribution.
Id. In a
brief opinion,
the
Commission explained
16
that, under Section 441e,
a
foreign national
may not
donate
his
volunteer services
for
17
purposes
of
providing original artwork
for the
committee's
use in
fundraising
and
that,
18
because
of
this conclusion,
the
Commission
did not
reach
the
issue
of
whether
the
19
volunteer
services
exemption applied
to the
proposed activity.
Id.
20
A few
years later,
in
Advisory Opinion
1987-25
(Otaola).
the
Commission
21
considered
whether
a
foreign national could work, without
any
compensation,
as a
22
volunteer
for a
1988 presidential campaign
and
concluded that
the
proposed activity
23
would
not
violate Section
44 le
because
it
would
fall
within
the
volunteer
services
1
exemption and, therefore, would
not
constitute
a
contribution
by the
foreign
national.
In
2
effect,
unlike
in
Advisory Opinion 1981 -51,
the
Commission considered whether
the
3
exemption applied before determining whether
the
activity would violate Section 441c.
4
In
support
of its
conclusion that
the
exemption applied,
the
Commission cited similar
5
advisory opinions that
did not
involve
foreign
nationals
but
nevertheless concluded that
6
volunteering
for
campaigns
is the
type
of
uncompensated volunteer service that
is
7
specifically exempted
from
the
definition
of
"contribution."
See
Advisory Opinion 1987-
8
25; see
also
Advisory Opinion
1984-43
(Brunswick) (donation
of
corporate officer's
9
volunteer
services
to
appear
in a
campaign advertisement
not
considered
a
contribution);
10
Advisory Opinion
1982-3
l(Koenig)
(a
student
may
volunteer uncompensated services
to
11
a
campaign without making
a
contribution).
The
opinion
also
noted that
the
Commission
12
considered
the
extent
to
which this conclusion conflicts with Advisory Opinion
1981-51
13
and
declined
by a
vote
of 2-4 to
supersede
or
overrule
the
opinion.
Id
14
The
Commission
has
cited
to
Advisory Opinion
1987-25
in
concluding
in two
is
subsequent advisory opinions that volunteer
services
by
foreign nationals would
not
16
constitute prohibited contributions, including
one
opinion that contemplated
fundraising
17
by a
foreign national.
See
Advisory Opinion
2004-26
(Welter) (campaign-related
18
activities
by a
foreign national without compensation, including
soliciting
contributions
19
and
support
for a
federal candidate, would
not
constitute
a
prohibited contribution);
20
Advisory Opinion
2007-22
(Hurysz) (campaign-related activities
by
foreign nationals,
21
including
M
lit
drops,
door
to
door canvassing, handing
out
literature
at
transit
stations,
22
telephone banking,
and get out the
vote" activities, would
not
constitute prohibited
23
contributions).
1
In
addition, there
is a
distinguishing factor between
the
proposed
activity
in
2
Advisory Opinion 1981
-S1 and the
proposed activities
in the
subsequent advisory
3
opinions
in
that
the
former
concerned
the
donation
of a
tangible good (original artwork
4
and the right to
reproduce it), whereas
the
latter concerned only donations
of a
service.
In
5
the
present matter, Elton
John's
uncompensated
conceit
performance would constitute
6
the
donation
of
service,
not a
tangible good,
and is,
therefore, significantly
different
from
7
the
activity considered
in
Advisory Opinion
1981-51.
Further,
the
conclusion that
the
8
concert performance
falls
within
the
purview
of the
volunteer
services
exemption
is
9
consistent
with Advisory Opinion
2007-08
(King)
in
which
the
Commission recently
10
concluded
that
uncompensated performances
by
individuals
in the
entertainment industry
11
would
be
exempt
from
the
definition
of
"contribution"
as
long
as the
performers provided
12
the
services
in
their individual capacities
and all
costs
associated
with
the
performances
13
themselves would
be
paid
for by the
federal
candidate committee
or
party committee.
14
See
Advisory Opinion
2007-08.
In
this matter, Elton John appears
to
have donated
his
15
own
personal
services
to the
Committee,
and the
Committee paid
for all the
costs
16
associated
with
the
production
of the
concert event.
See
Committee
Response,
17
Attachment
A.
18
Specifically, with respect
to the
costs,
the
Committee paid
$275,695
of the
total
19
$278,328.70
in
expenses
submitted
by
Elton John prior
to his
concert performance
on
20
April
9,2008.
See
Committee Response, Attachment
A.
These
payments
($275,695)
21
were made
by the
Committee between March 17
th
and
April
8,2008,
of
which
the
22
majority
were
for the
deposit
for the
venue rental
($50,000),
and
costs
associated
with
the
23
actual concert including building
services,
stage labor, security, wardrobe, printing.
1
equipment, sound system
and
license fees, etc.
($138,211.16).
Id. The remaining
2
invoices, documented
in the
Committee's
response,
were paid
on
April 9
lh
,
April
24
th
,
3
and May
9,2008,
totaling
$8,528.00.
Id
4
The
Committee submitted
a
letter, dated August
14,2008,
supplementing
its
5
earlier
response. See
Supplemental Letter dated August
14,2008.
In the
letter,
the
6
Committee states that
it
paid
two
invoices, totaling
$48,207.25,
not
previously submitted
7
by
Elton John
in
connection
with
the
concert
for
expenses such
as
airline travel, hotel
8
incidentals,
per
diems
and
ground transportation.
Id. The
letter attaches
a
copy
of the
9
two
invoices
and the
payment check.
Id.
According
to the
documentation,
the
additional
10
expenses were submitted
to the
Committee
on
June
12,2008,
after
the
complaints were
11
filed
and
approximately
75
days
after
the
conceit.
Id.
Nevertheless, these expenses were
12
paid immediately, approximately
75
days
after
the
concert,
and the
vast majority
of the
13
expenses were paid before
the
concert.
14
Accordingly,
the
Commission concluded that
the
artistic performance donated
by
15
Elton John,
a
foreign
national,
in
connection with
the
Committee's
fundntising
concert
16
does
not
constitute
an
in-kind contribution
to
Senator Clinton
or her
Committee
in
17
violation
of 2
U.S.C.
§
441e
but
rather
is the
type
of
volunteer activity specifically
18
exempted
from
the
Act.
19
B.
Alleged
Participation
in
Decision-Majgng
20
Commission
regulations
implementing
2
U.S.C.
§
441e prohibit
foreign
nationals
21
from
participating
in the
decisions
of any
person involving election-related activities.
See
22
11
C.F.R.
§
110.20(0.
Such participation
in
decisions includes directing, dictating,
1
controlling,
or
directly
or
indirectly
participating
"in the
decision-making process
of any
2
person, such
as a
corporation, labor organization, political committee,
or
political
3
organization
with
regard
to
such person's Federal
or
non-Federal election-related
4
activities, such
as
decisions concerning
the
making
of
contributions, donations,
5
expenditures,
or
disbursements
in
connection
with
elections
for any
Federal, State,
or
6
local
office
or
decisions concerning
the
administration
of a
political committee."
Id.
This
7
broad prohibition encompasses
foreign
national involvement
in the
management
of any
8
political
committee,
and its
decisions
regarding
its receipts and
disbursements
in
9
connection
with
Federal
and
non-Federal
elections.
See
Explanation
and
Justification
for
10
Regulations
on
Contribution Limitations
and
Prohibitions,
67
Fed. Reg.
69946
(Nov.
19,
11
2002).
12
The
Committee's electronic
mail
is the
only
information
that
the
complaints
in
13
MURs
5987
and
5995
provide
as
support
for die
allegation that Elton John participated
in
14
the
decision-making process
of the
Committee
in
connection
with
the
fundraising
15
conceit.
The
Committee states that
it was responsible for
drafting
the
language contained
16
in the
electronic mail
as
well
as its
mass distribution.
See
Committee
Responses.
Elton
17
John admits
to
being involved only
by
allowing
the
direct
and
indirect
use of his
likeness
18
and
name
with
the
Committee's electronic
mail
but
asserts that this does
not
amount
to
19
the
type
of
decision-making envisioned
by the regulations. See
Elton John Response
at 2;
20
s^fltollCJF.R. §110.20(i).
21
Elton
John's
limited participation
in the
direct
and
indirect
use of his
likeness
and
22
name
in the
Committee's electronic mail does
not
constitute participation
in the
detision-
23
making process
of the
Committee.
In
fact,
the
pertinent
regulation
speaks
of
decisions
1
concerning
the
making
of
contributions, donations, expenditures,
or
disbursements
in
2
connection
with
elections
for any
Federal, State,
or
local
office
or
decisions concerning
3
the
administration
of a
political committee.
See 11
CJ.R.
§
110.20(i).
The
Commission
4
considered
the
applicability
of
Section
1
L0.20(i)
of the regulations in
Advisory Opinion
5
2004-26
(Weller). Welter involved
the
question
of
whether
the
foreign national fiancee
6
(Rios
Sosa)
of a
candidate could engage
in
activities such
as:
attending committee events,
7
participating
in
said events
by
speaking
or
soliciting
funds,
participating
in
meetings
8
regarding
events
or
political strategy
or
accompany
the
candidate
to
fundraising
and
9
campaign events
of
other political committees.
See
Advisory Opinion
2004-26.
The
10
Commission concluded that, based
upon
Section
110.20(0,
Ms.
Rios
Sosa,
as an
11
uncompensated volunteer, could attend committee events, solicit
funds
from
persons
who
12
are not
foreign
nationals,
and
give
speeches
at
committee events.
Id. at 3.
However,
13
while
it
allowed
Ms.
Rios
Sosa
to
attend committee meetings
regarding
committee events
14
or
political strategy,
the
Commission concluded that
she
could
not be
involved
in the
15
management
of the
committees.
Id. at 3.
16
Advisory Opinion
2004-26
is
consistent
with
our
conclusion that Elton John,
as a
17
foreign
national,
is
allowed
to
provide uncompensated volunteer
service
to the
18
Committee, including soliciting contributions
from
those
who are not
foreign
nationals
as
19
long
as he is not
involved
in the
decision-making
process
of the
Committee.
See
also
20
Explanation
and
Justification
for
Regulations
on
Contribution Limitations
and
21
Prohibitions,
67
Fed. Reg.
69946
(Nov.
19,2002).
In the
present matter, there
is no
22
information
to
suggest that Elton John
had any
involvement
in the
decision-making
23
process
of the
Committee
in
connection
with
the
making
of
contributions, donations,
J
expenditures,
or
disbursements,
as
envisioned
by 11
C.F.R.
§
110.20(i).
Therefore,
we
2
recommend
that
the
Commission
find
no reason to
believe
that
Elton John violated
3
2
U.S.C.
ft
441e
by
participating
in the
decision-making
process
of the
Committee.
4
Accordingly,
the
Commission
found
no reason to
believe
that
Sir
Elton John
5
violated
2
U.S.C.
§
44le
of the Act
with
respect
to
these matters.
6
7
8
9
10
II
