Written Testimony of Jon B. Hurst, President,
and Erin M. Trabucco, General Counsel
Retailers Association of Massachusetts

Before the Joint Committee on Election Laws
July 18, 2007

RE:           S.438, An Act Relating to the Administration of Political Action Committees Organized by Not-For-Profit Corporations, Trade Unions, Trade Associations or Chambers of Commerce

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The Retailers Association of Massachusetts (RAM), established in 1910, is a statewide trade association of over 3,000 member companies.  Our membership ranges from independent “mom and pop” retailers and restaurants to larger regional and national chains.  The retail industry's contributions to the Commonwealth include $100 billion in annual sales; $4 billion in annual sales and meals taxes; 18% of Massachusetts jobs; and operation in at least 40,000 locations across the state.

RAM would like to be recorded in favor of S.438, An Act Relating to the Administration of Political Action Committees Organized by Not-For-Profit Corporations, Trade Unions, Trade Associations or Chambers of Commerce.

Although some trade associations, trade unions, and local chambers of commerce in Massachusetts currently have Political Action Committees, they are often ineffective due to state fund raising constraints. Unlike regulations in most states – not to mention the federal law – Massachusetts regulations prohibit associations from covering associated administrative expenses, instead forcing them to use PAC dollars to cover the cost of mass mailings, event planning and hosting, and other efforts to administer and fund the PAC.  Taking these overhead costs directly out of the PAC contribution dollars hinders the ability of the committee to fundraise effectively, and thus limits its support of qualified candidates for public office. 

This severe restriction is due to an Attorney General Advisory from 1980, interpreting Massachusetts political finance campaign law as it pertains to “corporate administration of PACs.”  This interpretation states that corporate administration of PACs is not expressly permitted under the statute.  Unfortunately, this interpretation

does not make a distinction between for-profit corporations, and that of not-for-profit, incorporated associations of individuals, employers, or chambers of commerce.  

For those following the letter of the law, this unique restriction severely limits the ability of organizations to get their own members and their members' employees — small businesses and individuals — involved in the political process.  Ideally, we want to be able to charge the expenses of administrative mailings and other fundraising activities to our associations, not our PACs.  This ability would put trade associations and other incorporated not-for-profits on the same playing field as other non-corporate and not-for-profit organizations which ARE NOT incorporated. This is a practice that is permissible under federal law.   

An exemption for not-for-profit organizations, trade associations, incorporated unions, or chambers of commerce, would allow us to organize our members, and have them be more involved in the election process — in recruiting, endorsing and financially supporting like-minded candidates. This proposal is about more effectively channeling these groups' energies and funds into the political arena. 

This proposal deals strictly with the issue of PAC administration by not-for-profit associations.  We are not suggesting or advocating that this exemption be extended to for-profit businesses, but only not-for-profit associations and chambers of commerce.   Such a proposal will allow groups of small businesses and individuals organized under an incorporated, not-for-profit umbrella to be better involved in and to help foster a more competitive election process in Massachusetts.

We respectfully ask the Committee for a “Favorable” recommendation of S.438.  Thank you for your consideration.