June 25, 2019
On the twenty-fourth day of the sixth month in the year two thousand nineteen of the common era, I, Om Joshi, filed with the Federal Election Commission (FEC) to form an independent-expenditure only committee (commonly referred to as a super PAC). I decided to create this committee because the filing process seemed easy and I enjoy immersing myself in government documents that contain lots of rules and regulations. I named the committee Om Alone PAC because that was the first name that came to me.
A super PAC is a special type of tax-exempt political organization under Section 527 of the U.S. Internal Revenue Code. Super PACs are different from regular PACs because they can receive and spend unlimited amounts of money.
Super PACs were first introduced in 2010 by the FEC in the aftermath of two federal court cases.
In conjunction, these two rulings allowed individuals, and by extension corporations, the right to donate unlimited amounts of money to independent-expenditure only committees. However, committees are still required to report all donations to the FEC.
The biggest regulation on super PACs is that they cannot coordinate with a political candidate or party. However, there is a very high threshold to be considered "coordination," and super PACs have in the past been run by former business partners of candidates.
As stated above, the process is simple. Using the FEC's online form system, I filled out Form 1: Statement of Organization. I proceeded through a series of questions asking about my affiliation to specific candidates or political parties, to which I truthfully responded "No." I then filled in the details of the committee, information such as the street address (my home address), email address, and website. Next, I registered myself as the Treasurer, which meant that I would be in charge of managing receipts and filing documents. After that, I added my local Bank of America location as the committee's most likely location of funds.
Lastly, I added a text memo to the form stating that the committee would be operating as an independent-expenditure only committee, "consistent with the U.S. Court of Appeals for the District of Columbia Circuit decision in SpeechNow v. FEC." (The full text of my memo was easily accessible on the FEC website and is intended to be copied verbatim onto the form.) This memo is necessary to establish the committee as a super PAC rather than a regular PAC.
After submitting the form, I waited until the morning for it to be processed by the FEC. The next day, the FEC emailed me to inform me that I was the treasurer of a brand-new super PAC!
To receive donations, my committee would need a separate business bank account. In order to limit the number of documents I'd need to file as Treasurer, my best course of action would have been to open a non-interest-bearing checking account. Because all donations are tax-exempt (for the recipient organization), making the account non-interest-bearing would eliminate the need for me to pay income tax on any interest earned. (As far as I am aware, stock and investment earnings fall under the IRS umbrella whereas donations are bound only to the FEC.)
To open a bank account, I would need an Employer Identification Number (EIN), even if my entity employed no one. I went ahead and acquired an EIN for my committee, just to get an idea of the process. All it entailed was filling out a short questionnaire and typing in some identification information.
Other than for the exercise of going through the filing process, having a super PAC is pointless for me, especially since I don't expect it to receive any donations. In the event that I ever decide to run for political office, I would have to turn over the super PAC anyway, so I filed the termination report a few months ago. I also mailed the IRS and told them to close the EIN / Business Account I had opened.
Goodbye Om Alone PAC.