The Federal Election Commission has authority only to interpret, enforce and administer the federal campaign finance laws. When it receives a request for an advisory opinion, it decides only how these laws apply to the proposed transaction. One of the most familiar pieces of boilerplate at the end of an FEC advisory opinion is the sentence in which the FEC makes clear that it is not opining on any other laws—for example, the Internal Revenue Code or the House or Senate ethics rules.
Yet FEC decisions can still affect other federal agencies. This has been the case, for example, when the FEC has applied its restrictions on the personal use of campaign funds to the payment of legal expenses. In 2003, a former New Jersey Senate candidate named James Treffinger asked for permission to use surplus campaign funds to pay his personal legal expenses in a criminal investigation that involved his campaign. Chris Christie, then the U.S. attorney for New Jersey, urged the FEC on “public policy” grounds to deny entirely Treffinger’s request. The FEC did not go as far as Christie wanted, but it curtailed significantly the availability of campaign funds for Treffinger’s defense, with consequences for future investigations as well.
Other agencies may be keeping a similar eye on Advisory Opinion Request 2003-15. In that request, the Conservative Action Fund PAC seeks FEC permission to receive Bitcoins from third parties, and then asks whether they should be treated as monetary or in-kind contributions. At one level, the request seeks application of basic campaign finance rules. But it comes at a time when other agencies are pondering how to classify Bitcoins from other regulatory perspectives.
In interpretive guidance issued in March 2013, the Financial Crimes Enforcement Network (FinCEN)—the Department of Treasury agency charged with preventing money-laundering and other illicit uses of funds—found that Bitcoins were a “virtual currency” similar in many ways to real currency, even while lacking legal tender status. The Securities and Exchange Commission and the Commodity Futures Trading Commission have since begun to consider whether they have jurisdiction over Bitcoins.
While an FEC advisory opinion does not bind other agencies, it can still affect their decisions. If the FEC appears to recognize Bitcoins as a legitimate vehicle for making campaign contributions, it could help broaden their use. If it appears to limit Bitcoin contributions, it might contribute toward limiting the growth of the virtual currency industry.
Thus, the request poses a special challenge for the FEC. On the one hand, it must “stick to its knitting” and apply the laws it has been specially tasked to enforce. But, on the other hand, it will want to issue an opinion that does not prejudice how other agencies might classify Bitcoins for their own regulatory purposes.