Operating Wilson’s Fountain Within The Federal Election Commission Regulations

By Tulio Tagliaferri and Gabriel Wright

February 1st, 2025 (v 1.0)

Abstract

James Wilson, a founding father of the United States, believed in genuinely free and equal elections. Wilson's Fountain is the modern-day concept that makes free and equal elections a reality. More specifically, Wilson’s Fountain is a concept that facilitates the creation of a publicly-led election process. Central to Wilson’s Fountain’s theory is creating an online, multi-layered nomination platform that allows direct public involvement in candidate selection instead of traditional party mechanisms (Wilson’s Fountain).

Through this process, a 527 Political Action Committee (PAC) can grow into a national committee facilitating its own contest as a national party to determine a winning contestant who will be the authentic voice of the public. Because of the novelty of this concept, complying with Federal Election Commission (FEC) guidelines, particularly the criteria for attaining national committee status, is essential to the success of this process.

Wilson’s Fountain concentrates first on developing the necessary software for its nomination system while adhering to the regulations governing 527 organizations. Unlike traditional PACs, which fund individual candidates, Wilson’s Fountain allows a PAC to fund a preliminary electoral process to revolutionize political engagement in the United States. This electoral process will reflect the broader public’s preferences and values in a candidate, minimizing the influence of traditional party loyalists.

There are specific groups involved in implementing Wilson’s Fountain in a PAC. The National Party will leverage technology to allow the public to select candidates through a multi-layered nomination platform. The Nominating Committee will officiate this process while remaining neutral by not endorsing individual candidates. The Candidate Committee will ensure that an elected candidate (the Wilson’s Fountain contestant winner) stays within financial regulations throughout their tenure. Lastly, a Super PAC is necessary to support the party’s election processes financially on a national scale; the coordinated use of Super PACs in this way has been deemed legal.

This document outlines the process a hypothetical 527 PAC, denoted as The Party, will go through to transform into a national party, working through a paradigm shift. The Nominating and Candidate Committees have specific roles that drive the contest flow, serving as the guardians of a fair election process. This document concludes that while transitioning from a 527 PAC to a national committee presents challenges, adherence to FEC regulations and leveraging innovative technological approaches make it possible for Wilson’s Fountain to redefine the U.S. political landscape.

Section 1: Overview of Wilson’s Fountain and Transition to a National Committee

Summary Overview

Established initially as a 527 PAC, The Party seeks to transform into a nationally recognized political party. This first section highlights the approach taken by The Party, which leverages innovative technology to allow the public to select candidates through a user-friendly yet thorough nomination platform. This candidate selection method contrasts with traditional political parties, where party elites often control candidate selection within their party. This section also discusses the FEC's criteria for national committee status, which includes demonstrating national activity, ongoing voter registration efforts, and advocacy for national issues. Additionally, this section outlines Wilson's Fountain’s phased fundraising strategy, focused on developing software to ensure compliance with 527 PAC regulations.

Analysis

Wilson’s Fountain is a groundbreaking model in the American political system. Under this framework, The Party may be initially created as a 527 PAC but aspires to transition into a national political party. Perhaps the most unique feature of Wilson’s Fountain is its use of technology to foster transparency in the political nomination process. This strategy allows public participation in selecting candidates through an online platform, moving away from the traditional model, where party elites secretly dominate the candidate selection process.

The contests The Party runs will produce candidates for every federal election, and it will need the jurisdiction to do so. The Federal Election Commission (FEC) plays a crucial role in determining The Party's ability to gain national committee status when evolving toward federal compliance. To achieve this, The Party must meet the FEC’s four primary criteria: (1) extending ballot access beyond presidential elections, (2) conducting ongoing voter registration drives, (3) publicizing national issues of importance to the party, and (4) establishing national headquarters and state committees. Upon meeting these requirements, the party must seek an FEC advisory opinion to confirm its status as a national committee.

A key aspect of Wilson’s strategy is its phased fundraising approach. Initially, the focus will be to raise funds to develop the software needed for the online nomination system. This software ensures that The Party adheres to 527 PAC regulations, which allow the organization to fund the election process rather than individual candidates. Once the software is developed, further donations will fund The Party's future operational costs. The platform, when complete, will be in the public domain, further ensuring transparency and compliance with legal standards.

The public domain software also provides that, when a contestant uses it, it will not be considered a campaign donation. This is important because a 527 PAC can only accept donations of up to $5,000 annually from an individual. They may not receive funds from corporations or unions. Additionally, 527 PACs can give up to $5,000 to candidates per election, up to $10,000 per general and presidential election, and $15,000 to political party committees.

While the FEC oversees federal entities, the IRS’s Internal Revenue Code Section 527 regulates PACs. A 527 PAC is tax-exempt and must file with the IRS to maintain this status. Unlike traditional PACs, Wilson's Fountain’s nomination process avoids transferring funds directly to campaigners, which aligns with the legal framework and limits set by the IRS. Once a candidate has been selected by winning the public nomination contest, Super PACs may spend funds to support the candidate, so long as communication does not occur between the Super PAC and the candidate.

In order for The Party to evolve from 527 PAC into a national committee, funds must be allocated strategically when working with the online nomination contest. The purpose of thiscontest is that it allows The Party to filter through contestants who will run from a smaller platform in order to grow a base that is rooted in direct voter support; Having contestants lobby for votes in a lower stage will grant voters the opportunity to actually see who they are voting for before they run for office.

Section 2: The Role of the Nominating Committee in Wilson’s Fountain

Summary Overview

This section explains how Wilson’s Fountain redefines the role of local political committees. Traditionally, local committees endorse candidates, influencing local voters to elect these candidates through grassroots efforts. However, in Wilson’s Fountain’s model, the Nominating Committee’s role is minimized, as this committee cannot endorse specific candidates. Instead, the winning candidate is selected through the aforementioned online nomination. This approach gives the broader voter base a more significant role in candidate selection. The Nominating Committee simply will oversee the nomination process and ensure legal compliance.

Analysis

Under Wilson’s Fountain framework, the Nominating Committee’s function is primarily administrative. This local political committee does not select or endorse candidates but instead oversees the nomination process, ensuring that it remains fair and transparent. This shift allows the party to better align with its commitment to public involvement, increasing the influence of local constituents. A Nominating Committee will be established for each congressional election.

One of the Nominating Committee’s critical tasks is managing prospective candidates' legal compliance. The committee ensures that all contestants meet the necessary qualifications for the office they seek. The basic qualifications will include age, citizenship status, and residency requirements. This legal oversight reinforces the legitimacy of the process while creating a background check on the prospective candidates themselves. The Nominating Committee is also The Party’s primary communication to prospective candidates, providing candidates with updates on the nomination process and guiding them through the campaign's requirements.

While the Nominating Committee’s traditional local role is diminished, its oversight and facilitation help to ensure that Wilson’s Fountain’s primary goal is achieved: making sure the public has a direct role in determining the party’s candidates. This method contrasts with other political parties' more opaque selection processes, reinforcing The Party’s commitment to transparency and inclusivity.

Section 3: Candidate Committees and Financial Management

Summary Overview

This section discusses the role of Candidate Committees in political campaigns once they have been selected, focusing on their responsibilities for fundraising, financial management, and campaign strategy. This section emphasizes the importance of adhering to FEC regulations, particularly concerning contribution limits and financial disclosures.

Wilson’s Fountain integrates a member of the Nominating Committee into the Candidate Committee to ensure that funds are managed transparently throughout The Party. The Candidate Committee’s activities are limited to each election cycle, and any leftover funds must be returned back to the Nominating Committee to prevent the accumulation of war chests for future campaigns and allow the funds to support the next contest.

Analysis

A political Candidate Committee, or a campaign committee, is essential in facilitating a candidate's pursuit of political office. A singular candidate committee is established after a contestant has won the public vote and is named The Party’s candidate. This committee functions as an extension of the candidate, undertaking substantial responsibilities to alleviate the candidate’s workload and organize their campaign.

The Candidate Committee’s core duties include managing campaign finances, developing strategies, and clearing compliance with state and federal regulations. For example, once the candidate raises over $5,000, they must file a Statement of Candidacy, officially declaring their run for political office. This declaration holds the Candidate Committee to the FEC’s strictguidelines, including limits on contributions and requirements when evaluating finances. Data from the 2022 election cycle shows that federal Candidate Committees collectively raised over $4.4 billion, underscoring the importance of operating within these financial parameters.

In Wilson’s Fountain, effective financial management is guaranteed by appointing a treasurer in the Candidate Committee, who maintains organized financial records and facilitates FEC compliance. A key regulation is that if the prospective treasurer is a paid employee of the Nominating Committee, they may need to go on temporary leave or resign before working for the Candidate Committee due to potential conflicts of interest and to avoid any appearance of coordination issues. If the person is a volunteer, they may assist both committees if they comply with FEC guidelines and avoid direct coordination with any Super PACs.

To reiterate, the treasurer of the Candidate Committee, selected from the Nominating Committee, is responsible for ensuring that all donations and expenditures are correctly reported to the FEC. These reports will include details of contributions exceeding $200, such as the donor’s name, address, occupation, and employer. These reports also include unused funds in the election campaign that will be donated back to the National Party, guaranteeing that the electoral process remains fair and focused on public engagement. Throughout the process, the Candidate Committee must adhere to the FEC regulations on contributions they have received: In 2021-2022, this was $3,300 from individuals, $5,000 from party committees, and $2,000 from other Candidate Committees per election cycle.

In the current system, the candidate committee can become inordinately powerful if the candidates themselves are wealthy or can amass a war chest through donations. Wilson’s Fountain further enforces the principle of public participation by requiring all candidates to restart their campaigns through the platform from the grassroots level for each election cycle.

This means the donations received in the election cycle can only benefit the Candidate Committee if they are actively used for a running candidate. The funds are then donated back to the Nominating Committee as the FEC does allow unlimited transfers from a Candidate Committee to the National Party. This ensures that previously elected candidates continuouslyengage with the electorate, proving their merit as rightful contestants rather than relying on accumulated wealth from previous campaigns.

Section 4: Super PACs and Legal Considerations

Summary Overview

This section examines the role of Super PACs in the U.S. political landscape, focusing on their ability to raise and spend unlimited funds to support or oppose candidates as long as there is no direct coordination with the candidate. The Party plans to use a Super PAC to fund its election processes but must strictly avoid direct communication with candidates to comply with legal standards. The section also reviews critical legal cases, such as Campaign Legal Center v. FEC and Colorado Republican Federal Campaign Committee v. FEC, highlighting the importance of maintaining the legal distinction between independent expenditures and coordinated campaign efforts.

Analysis

Super PACs are a powerful force in U.S. elections, capable of raising and spending unlimited amounts of money to support or oppose political candidates. Unlike traditional PACs, Super PACs cannot contribute directly to candidates or coordinate with their campaigns. The Super PAC's role is to support candidate election processes while adhering to FEC regulations, which prohibit direct communication between Super PACs and candidates. Any substantial discussions or sharing of non-public information between the two entities would be considered illegal coordination, and the FEC could impose significant penalties for such violations.

Two significant legal cases help illustrate the boundaries of Super PAC activities: Campaign Legal Center v. FEC and Colorado Republican Federal Campaign Committee v. FEC. In the former case, the Supreme Court upheld the FEC’s decision not to investigate coordination complaints between Super PACs and campaigns, effectively reinforcing the current campaign finance laws. In the latter case, the Court ruled that independent expenditures made without coordinating with a candidate’s campaign are protected under the First Amendment, allowing Super PACs to raise and spend unlimited funds as long as they operate without direct communication between parties controlling the entities.The Party must carefully navigate these legal precedents to ensure that its Super PAC complies with FEC regulations. By maintaining a clear separation between its Super PAC and candidate campaigns, The Party can leverage the financial power of a Super PAC while adhering to the legal standards that protect the integrity of the electoral process.

Glossary Term Definition

Wilson’s Fountain

A modern concept advocating a publicly led election process. It employs a multi-layered online nomination system to ensure free, equal, and transparent elections by directly involving the public in candidate selection.

FEC (Federal Election Commission)

U.S. agency overseeing federal election campaign finance laws, ensuring compliance with contribution limits, disclosure, and organizational status regulations.

527 PAC (Political Action Committee)

Tax-exempt organizations are regulated under IRS Code Section 527. They focus on funding electoral processes rather than individual candidates and adhere to strict fundraising and spending limits.

National Committee

A political party's national governing body must meet FEC criteria, including voter registration, advocacy of national issues, and establishing state committees and national headquarters.

Nominating Committee

An administrative body in Wilson’s Fountain overseeing the public nomination process. It ensures legal compliance and transparency without endorsing candidates.

Candidate Committee

Post-nomination, committees were formed for individual candidates who were responsible for financial management and compliance with FEC regulations during campaigns.

Super PAC

Independent political committees can raise and spend unlimited funds to support or oppose candidates, provided they do not coordinate directly with them.

National Party

A political organization that meets the criteria for national committee status focused on fostering public participation and transparency in elections.IRS Code Section 527 The federal tax code regulates 527 organizations, mandates compliance with filing requirements, and prohibits direct candidate support.

Additional References

Campaign Legal Center v. FEC and Colorado Republican Federal Campaign Committee v. FEC

Legal cases define boundaries for independent expenditures and the relationship between Super PACs and campaigns. “Fundraising by Federal Candidates and Officeholders for Other Candidates and Committees." Fec.Gov, 28 Nov. 2017,

www.fec.gov/updates/fundraising-federal-candidates-and-officeholders-other-candidates-and-committees-2017/. "IRC 527 - POLITICAL ORGANIZATIONS." IRS.Gov, 1 Oct. 1988, www.irs.gov/pub/irs-tege/eotopici89.pdf.

"Campaign Guide for Nonconnected Committees." Fec.Gov/Resources, 1 May 2008, www.fec.gov/resources/cms-content/documents/policy-guidance/nongui.pdf.

"Qualifying As a Political Party Committee." Fec.Gov, 16 Oct. 2023,

www.fec.gov/help-candidates-and-committees/registering-political-party/qualifying-as-a-politicalpartycommittee/#:~:text=Federal%20law%20defines%20a%20national,as%20determined%20by%20the%20Commission.

"Campaign Guide for Congressional Candidates." Fec.Gov, 1 Oct. 2021,

www.fec.gov/resources/cms-content/documents/policy-guidance/candgui.pdf.

“Wilsons Fountain” https://www.wilsonsfountain.us