What is an Exploratory Committee?

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Campaign signs for Congressman Mike McMahon and his challenger, Michael Grimm, in Staten Island.

If you’re thinking about running for federal office, chances are you'll start with an exploratory committee. It’s a cautious-sounding name, and that’s exactly what it is – a precursor to calling yourself  "a candidate" for federal office.

Allows you to raise money

An exploratory committee is a legal entity that allows the potential candidate to spend money "testing the waters" to see if they really want to take the big leap. It's also a great way to start getting attention and to keep the press and the public on the edge of their seats.

More specifically, the committee can pay for things like polling, so an individual can figure how the public reacts to them. It can pay for travel to talk with potential constituents and check their name recognition in key states — anything that has to do with exploring their potential candidacy. The individual doesn't have to report money in this phase either, but there are strict limits to how they can spend it.

The exploratory committee is not allowed to pay for anything that promotes the person as a candidate (since they aren't one yet), like any advertising — radio ads or yard signs, for example. It can't receive contributions from corporations, labor organizations either. The individual has to be careful what they say, too. If they make any public statements calling themselves a "candidate," then they are considered just that and further restrictions apply. The Federal Election Commission (FEC), who makes and monitors these regulations, caps donations to the exploratory committee at $2,500 per donor, per election.

As soon as any of these lines are crossed, the individual is considered a candidate. This triggers a registration process and financial reporting obligations under the Federal Election Campaign Act.

What comes next:                

Candidate Registration

To make it official, within 15 days of deciding to become a candidate (or breaking any of the restrictions above), the individual must designate a principle campaign committee, in writing. This is called a “statement of candidacy.” This principle campaign committee is responsible for contributions and expenditures of the campaign on behalf of the candidate during their campaign.

Candidates for House seats and for the Presidency file with the FEC and candidates for Senate seats file with the Secretary of the Senate.

Once a candidate registers, all the money they spent during the exploratory phase and the money they continue to spend as a candidate, is considered "contributions" and must be disclosed to the FEC where it becomes public information.

Principle Campaign Committee Registration

Within ten days after a candidate registers, their designated committee has to do the same and must begin to define roles within that committee, like who will be the treasurer. They file a "statement of organization." The committee is only allowed to support this candidate, no others.

Forming a Political Action Committee

A political action committee (PAC) is usually formed when the candidate is more established. It enables them to raise money in order to help out other candidates they'd like to see elected. There are two kinds of PACs: separate segregated funds (SSF) and non-connected committees.

The SSFs are run by corporations, membership organizations and trade associations and they can only raise money from these supporting groups. The non-connected committees are just that — not connected. These PACs can solicit funds from the general public. Both types of PACs are required to register with the FEC.