Sometimes contributors give money to political parties or other committees for spending on behalf of one or more candidates or committees. These types of donations are known as earmarked contributions. Earmarked contributions may not simply be passed along to the benefiting candidate; they must be spent by the committee to whom they were sent -- at least for the most part -- for the benefit of the intended recipient.
In the case of earmarked contributions, the "original contributor" is the person making the earmarked contribution. The "conduit" is the committee that is provided the funds by the original contributor for spending on behalf of a candidate or another committee. The "beneficiary" or "benefiting candidate" is the candidate or committee who ultimately benefits from the funds spent by the conduit.
An "earmarked contribution" is any contribution given to an intermediary or conduit -- either a political party, another type of political committee, a candidate or a third party -- with a designation, instruction, or encumbrance, whether direct or indirect, express or implied, oral or written, which is intended to result in or which does result in all or any part of the contribution being made to or for the promotion of a certain candidate, state official or ballot proposition.
An earmarked contribution counts against the original contributor's limit for the benefiting candidate. If the entire earmarked contribution is not spent by the intermediary or conduit for the benefit of the designated recipient, the remainder must be transferred to the recipient unless it is re-designated by the original contributor to another recipient. If the remainder is used to benefit another candidate or committee and the intermediary or conduit directed or had any control over the selection of this recipient, the amount of the remainder is a contribution from both the original contributor and the conduit.
Receipt of an earmarked contribution must be reported by the intermediary or conduit to both PDC and the benefiting candidate or committee within two business days using Special Report E.
If an earmarked contribution is refused by the benefiting candidate or committee, the earmarked contribution must be returned by the intermediary or conduit to the original contributor within five business days of the date the intermediary or conduit is notified of the refusal.
Benefiting candidates and committees will report earmarked contributions as follows:
On the first C-4 report due after receiving notice that an earmarked contribution has been received by the intermediary/conduit, report in Part 1 of Schedule B:
On the first C-4 report filed after being notified by the intermediary/conduit that the actual amount spent was different from the amount originally reported as an in-kind contribution, file a Schedule C detailing the correction. If less was spent than originally reported, explain the correction and reduce the amount of the in-kind contribution in Parts 1 and 2 of Schedule C and on Lines 6 and 15 of the C-4. The correction must be included in both Parts 1 and 2 because an in-kind contribution is both a contribution and an expenditure.
If more was spent, show the amount of the increase and state what source(s) supplied the additional funds in Part 1 of Schedule C. Also include the correction amount in Part 2 and put the amount of the increase on Lines 6 and 15 of the C-4. (Note: The explanation may be an attachment and may consist of the notice received from the intermediary/conduit.)
Intermediaries or conduits will report earmarked contributions as follows:
Complete Special Report E and mail the original version of the report to PDC and a copy to the beneficiary within two business days of receiving the earmarked contribution.
Notify the beneficiary of the actual amount spent as soon as practicable, hopefully no later than the end of month in which the election is held. If more funds than the amount donated by the original contributor were spent, be sure to inform the beneficiary of the source and amount of the additional dollars.
With the first C-4 report filed subsequent to the general election, file a recapitulation of earmarked funds received. For each earmarked contribution, include:
the amount expended on behalf of the beneficiary.