Congressman Adam Schiff’s re-election committee has been given a pass by the Federal Election Commission to rent its email list to Random House to promote Schiff’s book, Midnight in Washington.
On the one hand, this is not a precedent-setting opinion. “The Commission has long recognized that a political committee’s mailing lists are assets that have value and that are frequently sold, rented, or exchanged in a market,” according to an earlier advisory quoted in FEC documents.
But given the hyper-partisan environment that now exists in Washington, it may pay to spell out just what the decision says, and to note that any politician, including former President Trump, has similar options.
First, some background: The Schiff for Congress committee asked the FEC in October to allow it to either to “rent its list directly to Random House or to rent the list to Schiff, who would later be reimbursed by the book publisher for use of the list.
“This e-mail list was developed over time by the Committee for its own use, and is not merely a compilation of lists purchased from other sources,” writes Stephen J. Kaufman, of the Kaufman Legal Group, the law firm representing Schiff.
Kaufman says: “The list has been primarily used for the Committee’s own purposes, and was not developed for sale or lease to others.”
Schiff’s agreement with Random House calls for him to receive 50% of the net proceeds from the book. Random House will assume the costs of advertising, publicity and promotion, and subtract those from the gross proceeds when calculating the net.
The email list’s rental value would be determined by “an independent list appraiser,” or broker.
The decision? The Commission concluded that “both proposals are permissible because 1) the rental of the Committee’s email list for fair market value is not a personal use of a committee asset.” And, the payment to rent the list is “not a contribution where the Committee would receive the fair market value of the list rental.”
Two separate opinions were drafted, each coming to the same conclusion, but with slightly different nuances. The concurring opinion, signed by Chair Shana M. Broussard and Commissioners Steven T. Walther and Ellen L. Weintraub, notes that “no Committee resources or personnel would be used to promote the book, and any royalties paid to Congressman Schiff would reflect net profits under the publishing agreement after Random House recoups its costs in promoting the book.”
The opinion continues that “because Random House would pay fair market value to rent the list, the transfer would not result in a prohibited personal use of a committee asset.”
Not everyone is thrilled with the decision. The Daily Beast contends that the decision could “pad the wallets of other elected officials,” and that it “navigates the collision of two big-ticket fundraising draws: candidate book sales and email list rental. Both practices have attracted criticism, and can carry serious legal risks if not handled cleanly.
But the result is not new, and the decision seems non-partisan. A 2006 opinion determined that Congressman Paul Ryan’s rental of his leadership PAC’s mailing list to promote his book using personal funds “was not a contribution from his leadership PAC to Congressman Ryan,” Kaufman notes.
Schiff’s book chronicles “the high-stakes drama of defending the Constitution in the face of former President Donald Trump,” Kaufman writes.
During a virtual discussion of the matter on November 10 , Commissioner Weintraub wryly observed that a 50% royalty would have been considered very high in her early days reviewing book contracts.
“Have changed things in the publishing industry since I last reviewed publishing contracts?” Weintraub asked.
Kaufman answered that while Schiff’s deal is a little different from some arrangements, “once you deduct all the expenditures and the way they’re being allocated and such, I don’t think leads to any more robust return for the Congressman than other contracts.”