Gmac 2007 Request for Advisory Opinion

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1776 K STREET NWWASHINGTON, DC 20006PHONE 202.719.7000FAX 202.719.7049

7 9 2 5 J O N E S B R A N C H D R IV EM C L E A N , V A 2 2 1 0 2PHONE 703.905.2800FAX 703.905.2820

www.wileyrein.com

RECEIVED

July 30,2007

FEC MAILMl JUL 30

Jan Witol202.719.73jbaran@wi

CENTER

Baran30eyreih.com

20*7BY HAND DELIVERYFederal Election CommissionOffice of General Counsel999 E Street, NWWashington, DC 20463Re: Request for Advisory OpinionDear Commissioners:O n behalf of GMAC LLC, we respectfully request an advisory opinion from the^Federal Election Commission ("FEC" or "Commission") pursuant to 2 U.S.CJ 437f of the Federal Election Campaign Act of 1971 ("FECA" or "Act"), asamended. Ourclient seeks the Commission's guidance regarding the extent io ^which a separate segregated fund ("SSF") may be administered by GM AC L ^Qlgnbehalf of a subsidiary corporation that is wholly owned and controlled by G> IAQ

L L C . . . : FACTUAL BACKGROUND

GMAC L LC is a financial services company that primarily operates in theautomotive finance, mortgage, and insurance lines of business. Its subsidicompanies in these lines of business are wholly owned and controlled by GMA CLLC . Almost all of its U .S. subsidiary companies are organized as limited liabilitycompanies ("LLCs") with the exception of the insurance companies whichincorporated. A list of GM AC L LC's significant subsidiaries from Exhibit 2J1 of itsDecember 31,2006, Securities and Exchange Commission 10-K filing is enclosedfor your reference. In addition, GMAC LLC is majority owned and controlled byFIM Holdings LLC, which is an investment consortium led by Cerberus FINInvestors, LLC (its sole managing member), an affiliate of Cerberus C apitalManagement, L.P.

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GMAC LLC has filed an election with the Internal Revenue Service to be treated asa partnership.1 O ne of the incorporated insurance companies owned by GNL iCLLC, GMAC Insurance Holdings, Inc., intends to establish an SSF. GMACwould like to use its own personnel and resources to administer the SSF.1 FIM H oldings LLC has also filed an election with the IRS to be treated as a partneijship.Information about Cerberus FIM Investors, LLC's IR S election is not available.

LLC


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Federal Election CommissionJuly 30,2007Page 2 u

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QUESTIONS PRESENTEDMay GMAC LLC use its own resources to pay for the expensesassociated with administering the SSF of a wholly owned andcontrolled subsidiary corporation?May the SSF be named "GMAC LLC PAC" and use "GMAC PAC"as an abbreviation?

LEGAL ANALYSIS1. The Commission's affiliation doctrine permits the use of GMAC LLCresources to administer the SSF of a wholly owned and controlled corporatesubsidiary.In general, the FECA prohibits the use of corporate resources in connection withfederal elections. 2 U.S.C. 441b(a). However, the FECA permits "theestablishment, administration, and solicitation of contributions to a separatesegregated fund to be utilized fo r political purposes by a corporation." 2 U.Sl.C. 441b(b)(2)(C).2SSFs and connected corporations are "affiliated" with other entities that are'established, financed, maintained or controlled" by the same persons. 11 C F.R. 100.5(g)(2); 110.3(a)(l)(ii). The regulatory and practical effect of affiliat on isto treat all affiliated entities as one. See, e.g., 11C.F.R. 110.3(a)(l) (affilis tedcommittees share a single contribution limit). As a result, the Commission h aspermitted notonly the corporation that establishes the SSF to administer the SSF,but has permitted its non-corporate affiliates to do so as well.FE C regulations specifically contemplate the use of an affiliated entity's resourcesto administer a corporation's SSF:

Any corporation, including its subsidiaries, branches,divisions, and affiliates, that uses a method ofsoliciting voluntary contributions or facilitating the

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2 An LLC that elects to be treated as a corporation by the IRS may also establishancadminister an SSF pursuant to this statutory provision. 11 C.F.R. 110.1(g)(3).


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Federal Election CommissionJuly 30,2007Page 3

making of voluntary contributions from itsstockholders or executive or administrative personneland their families, shall make that method available toa labor organization representing any membersworking for the corporation, its subsidiaries, branches,divisions, and affiliates for soliciting voluntarycontributions or facilitating the making of voluntarycontributions from its members and their families.

11 C.F.R. 114.5(k) (emphasis added). As explained in the preceding parag aphFEC regulations explain mat affiliation can apply notjust to corporations, bu to anyperson or organization. Id. 100.5(g); 110.3(a). Accordingly, the FEC'sregulations appear to permit the payment of SSF administrative expenses by anyaffiliate, regardless of whether it is incorporated.In the Commission's most recent pronouncement in this area, Advisory Opin on2004-42 ("Pharmavite"), the Commission permitted an LLC that was whollyby a corporation to pay the administrative costs associated withthe corporati

owned>n'sSSF. The Advisory Opinion began with the proposition that business organisationsare deemed per se affiliated when one owns a majority interest in another. T leCommission noted that it "generally permits a corporation's affiliates to pay theadministrative and solicitation costs of the corporation's SSF," and concluded thatthe LLC "may perform the functions of a connected organization for the PAincluding paying administrative and solicitation costs." The Commission's analysisand ultimate conclusion can be traced back through a series of advisory opinions toAdvisory Opinion 1987-34 (Telenet).In Advisory Opinion 1987-34, the Commission held that the affiliated relatic nshipof a joint venture partnership and its corporate subsidiary meant that either e ititycould pay the administrative expenses associated with the corporate subsidia y'SSF: "[T]he affiliate status of [the joint venture partnership] in relation to [tcorporate subsidiary], also means that either [the corporate subsidiary] or [th jjointventure partnership] may establish and finance a payroll deduction plan ...." Tofurther reinforce its conclusion, the Commission included a footnote citing tl eabove-quoted regulation at 11 C.F.R. 114.5(k) that contemplates the paym ;nt ofadministrative expenses by any affiliate of a corporation or its SSF. The san efootnote explained that the joint venture partnership's affiliation with its controllingcorporate partners was yet another reason the partnership could pay the SSFadministrative expenses.


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Since then, the Commission has largely addressed this issue in the context ofaffiliated relationships like that just described in the footnote of Advisory O p nion1987-34.3 Itdoes not appear that the Commission has since addressed a sitw tionwhere, as here, the SSF administrative expenses would be paid by a non-corp orateentity that owns - andis therefore affiliated with - a subsidiary corporation t latestablishes the SSF. Nonetheless, the conclusion of Advisory Opinion 1987-34would permit such an arrangement.Three years earlier, however, the Commission reached a seemingly differentoutcome. Advisory Opinion 1985-23 (Goldman Sachs) addressed whether a whollyowned corporate subsidiary of a partnership that maintained federal governmentcontracts could establish an SSF. The requestor represented that any partner; hipresources used to administer the corporation's SS F would be paid for in advance bythe corporation. The Commission permitted the establishment of the SSF bithis representation and explained in a footnote: "Any other conclusion woulcpermit [the partnership] to participate in financing the fund, which would not] bepermissible."It is notable that although Advisory Opinion 1985-23 has been cited in subsequentadvisory opinions, it has never been cited for this proposition.4 There appeaij to bethree principal reasons. First, and as detailed more thoroughly above, this aspect ofthe Advisory Opinion was effectively - though notexplicitly - superseded b theconclusion of Advisory Opinion 1987-34 that any affiliated non-corporate erltitymay pay the administrative costs of an affiliated corporation's SSF.Second, the logic of this aspect of Advisory Opinion 1985-23 is inherently flawed.If a partnership wholly owns a corporate subsidiary, the assets of that subsid ary-are3 Advisory Opinion 2004-42 confirms as much stating: "[T]he Commission has interpretedthe Act and Commission regulations to permit a partnership, or an LLC treated as a partners hipunder Commission regulations, that is owned entirelyby one or more corporations and affilat least one of those corporations, to pay the administrative and solicitation costs for the par nership'spolitical action committee."

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4 Advisory Opinion 1985-23 was, in fact, cited in Advisory Opinion 1987-34, but fo theproposition that "individual partners of a partnership that owned all the stock of a corporatii n wereheld to be solicitable by the corporation fo r contributionsto the corporation's political f u n d ' becausethe partnershipand corporation were affiliated. As discussed more fully two paragraphs inj -a, thisconcept further supports the conclusion that affiliated entities may pay SSF administrative< xpenses.


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Federal Election CommissionJuly 30,2007PageSthe assets of the partnership. Thus, when the corporate subsidiary administerSSF with its resources, it is using the resources of the partnership. Presumabpartnership should be able to use its other resources to administer the SSF.5Lastly, permitting affiliated entities to pay SSF administrative expenses is co isistentwith other allowances provided by the Commission in the affiliation context. Forexample, the Commission permits corporate SSF's to solicit contributions fix m theexecutive and administrative personnel of non-corporate affiliates, includingpartnerships and LLC s. See FEC Advisory O pinions 2004-32 (Spirit Airline) &.1979-77 (Trammell Crow). The Commission has even allowed a foreign subsidiarycompany to pay the administrative costs associated with collecting contributions tothe SSF of its U.S. parent. See FEC Advisory O pinion 1982-34 (Sonat).6 Tl

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Commission has repeatedly recognized that once entities are deemed affiliatmay participate in the operations of an affiliate's SSF.

Notwithstanding Advisory Opinion 1985-23, the Commission's recognition n itsregulations and advisory opinions that affiliation permits a non-corporate en ity topay the administrative costs of a corporate SS F should allow GMAC LLC to pay theadministrative expenses associated with the SSF of one of its wholly ownedcorporate subsidiaries.

hehis reasoning is also consistent with that in the series of advisory opinions whereCommission has perm itted subsidiary non-corporate entities that are owned by, and are thereforeaffiliated with, corporations to pay the admin istrative expenses of an SSF. In those advisoropinions, the Commission further justified its conclusions by analogizing to the FEC's "duaattribution principle" for partnership contributions. Th e "dual attribution principle" requirepolitical contributionsby a partnership be attributed to both the partnership and the individualpartners that own the partnership. Similarly, the advisory opinions reason that the administ ativesupport provided by a non-corporate sub sidiary "may be construed as coming from the afficorporations" that own or control the subsidiary. Advisory O pinion 1997-13. This concept] appliwith equal force here where the wholly owned corporation is similarly standing in the shoe:non-corporate parent entity by virtue of their parent/subsidiary relationship. It is indisputabthe subsidiary corpo ration may administer an SSF with its own resources. Those resourceshowever, can also be attributed to the non-corporate parent entity that ow ns 100% of the corporatesubsidiary.6 Of course, GM AC LLC, its affiliates, and the SSF w ould observe all of the legalrequirements related to foreign nationals contained in the Act, regulations, and the Commisadvisory opinions.

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2. "GMAC LLCPAC" should be an appropriate name - and "GMACPAC" should be an appropriate abbreviation - for the SSF.Federal law generally requires that the name of the connected corporation beincluded in the name of an SSF. 2 U.S.C. 432(e)(5); 11 C.F.R. 102.14(c)However, Advisory Opinion 2004-42 recently allowed an SSF to replace thereference in its name to "Otsuka America, Inc.," the SSF's connected corporation,with "Pharmavite LLC," the affiliated LLC that was incurring the administrativeexpenses of the SSF. The Commission explained that it will allow the nameSSF to reflect the name of an affiliated LLC "where the LLC was perform!functions of the SSF's connected organization." The Commission also explathat because the SSF would be focused on candidates and issues of importantthe LLC, the use of the LLC's name in the name of the SSF "will provide the)publicwith a more accurate understanding of the PAC's funding and purpose.

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Assuming the Commission allows GMAC LLC to pay the administrative costsassociated with the SSF, and because the SSF will be supporting candidateson issues of importance to GMAC LLC and all of its U.S. subsidiaries, the publicwill be better informed of both the SSF's funding and purpose if the name includesGMAC LLC.Advisory Opinion 2004-42 also held that the SSF could abbreviate its name toyomitting "LLC." Assuming "GMAC LLC PAC" is an acceptable name for trie SSF,we are also requesting confirmation that "GMAC PAC" would be an acceptableabbreviation to use on checks, letterhead, and for other common uses. As explainedin the Advisory Opinion and FEC regulations cited therein, both the full andabbreviated names of the SSF will be used on the SSF's Statement of Organ!on all reports filed with the FEC, and on all disclaimer notices.


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Federal Election CommissionJuly 30,2007Page?

CONCLUSIONBecause GMAC LLC is affiliated with GMAC Insurance Holdings, Inc.,GN'LLC should be able to use its resources to administer an SSF established byInsurance Holdings, Inc. Furthermore, GMAC LLC's administration of thecoupled with the SSF's broad purpose, suggests that "GMAC LLC PAC" isappropriate name for the SSF and that "GMAC PAC" is an appropriateabbreviation.Sincerely,

Witold BaranCaleb P. BurnsEnclosure

ACMACSF,


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SEC Info - Gmac LLC - 10-K- For 12/31/06 -EX-21

Exhibit 21GMAC LLCGMACLLCSubsidiaries as of December 31.2006Subsidiary companies of GMACLLC are listed below.

Name of subsidiary State or sovereign power ofincorporationGMAC LLC DelawareAutofinanciamiento GMAC S.A.de C.V. MexicoBanco GMAC S.A. BrazilBasic Credit Holding Company, L.L.C. DelawareAmerican Suzuki Financial Services Company LLC DelawareNuvell Credit Company LLC DelawareNuvell Financial ServicesLLC DelawareNuvell National Auto Finance LLC DelawareSaab Financial Services LLC DelawareCapital Auto Receivables LLC DelawareCentral Originating Lease, LLC DelawareG.M.A.C. Comercio e Aluguer deVeiculos, Lda. PortugalG.M.A.C. Financiersde Colombia S.A. Compania deFinanciamiento Comercial ColombiaGammaAuto Receivables LLC DelawareGeneral Motors Acceptance Corporation (N.Z.) Lmited New ZealandGeneral Motors Acceptance Corporation de Portugal, InstituicaoFinanciera de Credito, SA PortugalGeneral Motors Acceptance Corporation del Peru S.A. PeruGeneral Motors Acceptance Corporation Hungary CommercialLmitedLability Company HungaryGeneral Motors Acceptance Corporation Italia S.p.A. ItalyGeneral Motors Acceptance Corporation Nederland N.V. NetherlandsGeneral Motors Acceptance Corporation of Canada, Lmited CanadaGeneral Motors Acceptance Corporation Suisse S.A. SwitzerlandGeneral Motors Acceptance Corporation, S.A. de C.V. MexicoGM Credit AB SwedenGMAC (Thailand) Ltd. ThailandGMAC Prestadora de Services de Mao-de-Obra Ltda. Brazil

GMAC Arrendamiento S.A. de C.V. MexicoGMACAustralia LLC DelawareGMACAutomotriz Lmitado ChileGMACBank UtahGMACBank Polska Spolka Akcyjna PolandGMACBanque FranceGMAC Colombia S.A. LLC DelawareGMACComercial Automotriz Chile S.A. ChileGMACComercial Finance (Holdings) Lmited EnglandGMAC Commercial Finance LLC DelawareGMAC Commercial LLC DelawareGMAC Compania Financiera S.A. ArgentinaGMAC Continental LLC DelawareMasterlease Lmited EnglandGMAC d.o.o. (domiciled inCroatia) CroatiaGMAC del Ecuador S.A. EcuadorGMAC Financial Services IndiaLmited Inda

m %t_ Z_O

http://www.secinfo.com/dsvR3 .u 1 Dg. 1 .htm 7/12/2007


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SE C Info - Gmac LLC - 10-K- For 12/31/06-EX-21

Exhibit 21GMAC LLC

Name of subsidiary State or sovereign powerofincorporationGMAC Holdings (U.K.) Lmited EnglandGeneral Motors Acceptance Corporation (U.K.) pic EnglandGMAC HungaryFinancial Services Private Lmited Company HungaryGMAC Insurance Holdings, Inc. DelawareGMACRECorp. DelawareGMACSecurities Corporation DelawareMEEMIC Insurance Services Corporation DelawareMotors Insurance Corporation DelawareMEEMIC Insurance Company MichiganMICGeneral Insurance Corporation MichiganMICProperty andCasualty Insurance Corporation MichiganUniversal Warranty Corporation MichiganGMAC International Finance B.V. NetherlandsGMAC International Holdngs CoSperatief U.A. NetherlandsGMAC International LLC . DelawareGeneral Motors Acceptance Corporation Italia S.pA. ItalyGMAC MEXICANA, S.A.de C.V. Sociedad Financiera deObjetoLmitado Filial MexicoGMAC Latin America Holdings LLC DelawareGMAC Lease B.V. (aka Masterlease Europe) NetherlandsGMAC Leasing GmbH (Austrian entity) AustriaGMAC Leasingof DE LLC DelawareGMAC MEXICANA, S.A.de C.V. Sociedad Financiera deObjetoLmitado Filial MexicoGMACMortgage Group LLC DelawareGMAC Mortgage Holdings LLC DelawareResidential Capital, LLC DelawareGMACResidential HoldingCompany, LLC DelawareGHSGlobal Relocation U.K. Lmited United KingdomGMACHome Services, LLC DelawareGMACMortgage, LLC DelawareGMACB Service Company.LLC DelawareGMACRHSettlement Services, LLC DelawareGMAC-RFCHoldng Company, LLC DelawareResidential Fundng Company, LLC DelawareGMAC Residential Fundng of Canada Lmited CanadaGMAC-RFC Auritec, S.A. MexicoGMAC-RFC Australia Pty Lmited AustraliaGMAC-RFCEurope Lmited EnglandGMAC-RFCHoldings Lmited EnglandHomecomings Financial, LLC DelawareResidential Funding Securities, LLC DelawareGMACNorth AmericaLLC DelawareGMACSouth America LLC DelawareGMAC Sverige AB SwedenGMAC Taiwan LLC DelawareGMAC a.s. Czech Republic

http://www.secinfo.com/dsvR3.ul Dg. 1 .htm 7/12/2007


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SEC Info - Gmac LLC - 10-K- For 12/31/06-EX-21

Exhibit 21GMAC LLCName of subsidiary

State or sovereign power ofincorporation

GMAC Australia (Finance) LmitedGMACI HoldingsLLCMaster Lease Austria GmbHMasteriease LmitedPardo Rabello Inversiones S.A.SA HoldingOne LLCSA Holdng Two LLCSemperian LLCServicios GMAC S.A. de C.V.Servicios, Representaci6n y Asesoramiento de Personal PersoservS.A.Wholesale Auto Receivables LLC

AustraliaDelawareAustriaEnglandArgentinaDelawareDelawareDelawareMexicoEcuadorDelaware

http://www.secinfo.eom/dsvR3.ulDg.l.htm 7/12/2007

Documents

Gmac 2007 Request for Advisory Opinion