The Federal Election Commission approved a proposal earlier this week to allow contributions via text messaging in federal elections. With the lawmaking process ill-equipped to keep pace with developing technologies, the success of this proposal – a year-and-a-half after the FEC rejected another text-messaging proposal – suggests that the path to approval for tech entrepreneurs in the political space lies in tailoring their business models to forty year-old laws.

The plan approved by the FEC through an advisory opinion has a number of features that meet longstanding recordkeeping and reporting requirements, and satisfy rules that apply to vendors using more traditional means to process political contributions. For example:

  • Donations will be capped at $50 per cell number per month.  Under current law, a committee has no obligation to collect the name and address from any contributor giving $50 or less.
  • Wireless users will “pledge” funds to a political committee, with an aggregating company
    transmitting the amount from its corporate treasury to the political committee. Once subscribers pay their bills, wireless service providers will transmit the payments, less fees, to the aggregating company. The FEC concluded that this arrangement fits within longstanding rules for giving a political committee an “extension of credit,” primarily because the aggregating company will provide the same services to commercial customers as it provides to political committees.
  • Political committees will have real-time secure access to the gateway where the tally of contributions is maintained, allowing committees to identify phone numbers associated with contribution totals of $200 or more. This will help committees meet the legal requirement
    that their reports identify individual contributors who exceed this threshold.

The FEC advisory opinion contains the usual caution that only persons involved in transactions that are “indistinguishable in all material respects” may rely on the ruling. Nonetheless, tucked in a
footnote to the opinion, the Commission acknowledges that it is likely to receive proposals from other vendors that will “provide equally viable and compliant methods of raising campaign funds through text messaging.”

For tech innovators and others seeking approval for new fundraising platforms, the best approach may be to find a way to pour new wine into old bottles.