March 2001 Federal Election Commission Volume 27, Number 3

Table of Contents

Electronic Filing

1 Obtaining an Electronic Filing

Password

Court Cases

1 Commission Statement on

In re: Sealed Case

2 Natural Law Party v. FEC

2 DNC v. FEC

2 Christine Beaumont v. FEC

3 New Litigation

Reports

4 Committees Required to File Tax

Returns

5 California Special Election

Reporting

Compliance

6 Committees Fined Under

Administrative Fines Program

6 Advisory Opinions

Statistics

8 Congressional Campaign

Spending Reaches Record Level

8 Democratic and Republican Party

Fundraising Increases

Budget

10 Commission Makes Supplemental

Request

Outreach

6 Public Appearances

10 Spring Conferences

11 Trade Associations and

Membership Organizations

12 Index

Obtaining an Electronic

Filing Password—First Step

to Electronic Filing

In order for a committee to file its

reports electronically, the treasurer

or assistant treasurer of that committee must first obtain a password

from the Commission. The password functions as the treasurer’s or

assistant treasurer’s signature on an

electronically filed report and

indicates that the electronic filing

originated with the committee in

whose name it is filed.

Requesting the Password

A committee’s treasurer or

assistant treasurer can get a password by faxing a request letter to

the password office at 202/219-

0674. Requests may also be mailed

to the Federal Election Commission,

999 E Street N.W., Washington,

D.C. 20463. A password request

must:

• Include the committee’s name and

nine-digit FEC identification

number;

• Be signed by the treasurer and also

by the assistant treasurer if the

assistant treasurer is the individual

requesting the password;

Electronic

Filing Commission Statement on

In re: Sealed Case

On January 26, 2001, the United

States Court of Appeals for the

District of Columbia Circuit ruled,

in In re: Sealed Case, 00-5116, that

the Federal Election Campaign Act

requires subpoena enforcement

actions filed during an enforcement

investigation to be litigated under

seal. 2 U.S.C. §437g(a)(12). The

Commission decided not to seek

further review in this case and, on

February 15, 2001, issued the

following statement in order to

clarify its subpoena enforcement

policy:

In light of the decision handed

down on January 26, 2001, by the

United States Court of Appeals for

the District of Columbia Circuit in

In re: Sealed Case, 00-5116, the

Federal Election Commission

unanimously believes it should

clarify certain matters for the public

concerning its subpoena enforcement policy. In addition, the Commission seeks to address any

implication that the agency improperly sought to publicize an investigation of particular persons.

For 20 years, the Commission

has had a policy to litigate cases

brought to enforce its administrative

Court Cases

(continued on page 3) (continued on page 2)
Federal Election Commission RECORD March 2001

2

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

800/877-8339 (FIRS)

Danny L. McDonald, Chairman

David M. Mason, Vice Chairman

Karl J. Sandstrom, Commissioner

Bradley Smith, Commissioner

Scott E. Thomas, Commissioner

Darryl R. Wold, Commissioner

James A. Pehrkon, Staff Director

Lois G. Lerner, Acting General

 Counsel

Published by the Information

 Division

Louise D. Wides, Director

Amy L. Kort, Editor

http://www.fec.gov

Court Cases

(continued from page 1)

subpoenas on the public record. The

Commission adopted this policy in

1980 in part because some federal

district courts had criticized the

Commission when it attempted to

file such actions under seal. Although the Federal Election Campaign Act has a confidentiality

provision regarding Commission

investigations, the general rule in

federal court is that the public has a

right of access to all court documents. The Commission’s policy

was intended to reconcile these two

important principles.

Consistent with this long-standing practice, the Commission filed

the subpoena enforcement action at

hand in open court. The

Commission’s attorneys provided

notice to counsel for the subjects of

the investigation and, hence, an

opportunity to seek a seal order.

The district court denied such a

request, but the D.C. Circuit overruled that decision and held that

Commission subpoena enforcement

actions must be conducted under

seal.

The Commission has decided not

to seek review of the D.C. Circuit’s

ruling, which is the first appellate

decision on this issue. The Commission intends to follow this ruling in

all subpoena enforcement filings, in

all judicial circuits, unless directed

otherwise.

The D.C. Circuit’s concern that

filing subpoena enforcement actions

in public might reflect some partisan motivation on the Commission’s

part is not supported by the record.

For 20 years the Commission

followed its policy consistently,

regardless of the political party or

beliefs of the person being investigated, as examination of subpoena

actions filed by the agency shows.

By law subpoena enforcement

actions never are filed in court

without a majority vote of the six

Commissioners, no more than three

of whom may be from any one party.

That procedure was followed in this

case, without regard to politics.

While respectfully adhering to the

holding of the D.C. Circuit, the

Commission hopes this statement

will assure the public of the

agency’s commitment to fair and

impartial administration of the

campaign finance laws.1

✦

1

 This statement was unanimously

adopted by the six Commissioners on

February 15, 2001.

Natural Law Party of the

United States v. FEC (00-

5338)

On November 30, 2000, the U.S.

Court of Appeals for the District of

Columbia Circuit granted the

appellant’s unopposed motion to

dismiss the appeal.

U.S. Court of Appeals for the

District of Columbia Circuit, 00-

5338.✦

Democratic National

Committee v. FEC

(1:00CV00161(CKK))

On December 20, 2000, this case

was dismissed with prejudice

following a stipulation to that effect

by the parties.

U.S. District Court for the

District of Columbia,

1:00CV00161(CKK).✦

Christine Beaumont v. FEC

On January 24, 2001, the United

States District Court for the Eastern

District of North Carolina, Northern

Division, found that the prohibitions

on corporate contributions and

expenditures of the Federal Election

Campaign Act (the Act) and Commission regulations were unconstitutional as applied to North Carolina

Right to Life, Inc. (NCRL), a nonprofit, MCFL-type corporation.1

The court found that the statute and

regulations infringed on NCRL’s

First Amendment rights without a

1

 In FEC v. Massachusetts Citizens for

Life (MCFL) 479 U.S. 238 (1986), the

Supreme Court concluded that 2 U.S.C.

§441b could not constitutionally

prohibit certain nonprofit corporations

from making independent expenditures.

MCFL was exempt from this ban

because it had the following features:

• It was formed to promote political

ideas and did not engage in business

activities;

• It did not have shareholders or other

persons who had a claim on its assets

or earnings, or who had other

disincentives to disassociate themselves from the organization; and

• It was not established by a business

corporation or labor union and had a

policy of not accepting donations from

such entities.

Commission regulations at 11 CFR

114.10 incorporate the MCFL decision.

These regulation establish a test to

determine whether a corporation

qualifies for exemption from the Act’s

prohibition against corporate independent expenditures.
March 2001 Federal Election Commission RECORD

3

compelling state interest. The court

permanently enjoined the Commission from relying on, enforcing or

prosecuting violations of 2 U.S.C.

§441(b) and 11 CFR 114.2(b) and

114.10—or any other parts of the

Act whose restrictions flow from

these provisions—against the

plaintiffs.

The court did not find, however,

that 2 U.S.C. §441(b) and its

implementing regulations were

unconstitutional on their face. In

order to find a statute facially

unconstitutional, rather than merely

invalid as applied to a specific case,

the court must find that its constitutional infringements are “substantial” in relation to its legitimate

uses. The plaintiffs submitted a list

of nonprofit, tax-exempt corporations, arguing that the statute’s

unconstitutional infringement was

“substantial” in that it reached

“hundreds, if not thousands, of

constitutionally protected ideological corporations.” The court,

however, ruled that the plaintiffs

had failed to show that the statute’s

constitutional infringements were

substantial in relation to their

“plainly legitimate sweep.” The

court said, “In light of these numbers [4.5 million for-profit corporations] and the importance of the

statute’s ‘plainly legitimate’ purpose

of regulating for-profit corporations,

its inadvertent infringement on the

rights of ‘hundreds if not thousands’

does not appear ‘substantial’ . . .”

The court concluded that the

constitutionality of the statute

should be considered on a case-bycase basis.

U.S. District Court for the

Eastern District of North Carolina,

Northern Division, 2:00-cv-2-

BO(2).✦

New Litigation

Miles for Senate Committee et al.

v. FEC

On January 18, 2001, former U.S.

Senate candidate Steven H. Miles,

his principal campaign committee,

Miles for Senate Committee (the

Committee), and the Committee’s

treasurer, Barbara Steinberg, filed

suit against the Federal Election

Commission in the United States

District Court for the District of

Minnesota. The complaint appeals a

civil money penalty the Commission

assessed against the committee and

its treasurer and claims that the

Commission’s assessment of that

penalty was arbitrary and capricious, without legal authority, an

abuse of discretion and a denial of

the plaintiffs’ right to due process.

Background. Ms. Steinberg

mailed the Committee’s July 2000

Quarterly report via first class mail

on the filing date, which was July

15, 2000. The Commission received

the report six days later. Under

Commission regulations, if a report

is sent registered or certified mail, it

is considered filed on the date of the

U.S. postmark. However, if a report

is sent by first class mail, it is

considered filed on the date that it is

received by the Federal Election

Commission or the Secretary of the

Senate. 11 CFR 104.5(e).

In August 2000, the Commission

found reason to believe that the

Committee and Ms. Steinberg had

violated 2 U.S.C. §434(a), which

requires the timely filing of reports

by political committees.

In September 2000, the

Commission’s Office of Administrative Review received from the

Committee and Ms. Steinberg a

written response to the

Commission’s reason-to-believe

notice. After reviewing the

Commission’s reason-to-believe

finding with its supporting documentation, as well as the

Committee’s response to that

finding, the Reviewing Officer

recommended that the Commission

make a final determination that the

Committee and its treasurer violated

2 U.S.C. §434(a) and assess a

$2,700 civil money penalty for the

violation. The Commission adopted

the Reviewing Officer’s recommendation on December 14, 2000.

Plaintiffs filed suit against the

Commission on January 18, 2001.

Relief. The plaintiffs ask that the

court:

• Review and reverse or modify the

Commission’s actions, including

the assessment of the civil money

penalty; and

• Grant the plaintiffs their reasonable attorneys fees and costs.

U.S. District Court District of

Minnesota Fourth Division, (No. 01-

CV-83 (PAM) (JGL)).✦

Electronic Filing

(continued from page 2)

• Include the treasurer’s phone

number and, if applicable, the

phone number of the assistant

treasurer; and

• Be printed on the committee’s

letterhead (if the committee has

official letterhead).

A sample request can be viewed

on the FEC’s Web site at http://

www.fec.gov/elecfil/

passreqlet.html.

Requests sent by fax can

usually be processed within a few

hours. However, committees are

encouraged to request a password

as early as possible. Requests

received near a filing deadline

may not be processed in time for a

committee to use the password to

file a timely report.

Assigning the Password

Once the password office receives the letter requesting a password, it will verify that the requester

is listed as the treasurer (and

(continued on page 4)
Federal Election Commission RECORD March 2001

4

assistant treasurer, if applicable) of

that committee on that committee’s

Statement of Organization (FEC

Form 1). Only the committee’s

treasurer and assistant treasurer can

receive a password. If the requester

is not correctly listed on the Statement, then he or she must file an

amended Statement of Organization

before receiving a password.

If the requester is listed on the

Statement of Organization, then a

representative from the password

office will call the requester and ask

him or her to choose a password.

This password will be assigned

immediately. Passwords are case

sensitive and must be entered

exactly as initially assigned.

Lost or Forgotten Password

The Commission cannot provide

a treasurer’s password to a treasurer

or committee if a treasurer forgets

or loses the password because the

passwords are encrypted. Instead,

the treasurer must ask for a new

password, repeating the process

described above.

For more information, go to the

FEC’s Web site at http://

www.fec.gov/elecfil/

passwords.html. Or call 202/694-

1293 for assistance.✦

Electronic Filing

(continued from page 3)

Form 1120 POL

Filed if the committee has

taxable income

Filed if the committee’s

annual gross receipts are

$25,000 or more, or if it

has taxable income

Filed if the

committee is

required to file

Form 1120 POL

Due the 15th day of the

3rd month after the close

of the tax year

Due the 15th day of

the 5th month after

the close of the tax

year

Tax Year

Beginning Before

July 1, 2000

Tax Year

Beginning On or

After July 1, 2000

Reporting

Dates

IRS Filing Requirements

Reports

Committees Required to File

Tax Returns

Last July, Congress enacted Pub.

L. 106-230, which imposes new taxreporting requirements on political

organizations that are established

under Section 527 of the Internal

Revenue Code. These filings are

required under the tax code and,

thus, are administered by the

Internal Revenue Service—not the

Federal Election Commission.

1

 Organizations with gross receipts of

less than $100,000 and assets of less

than $250,000 at the end of the year

may file a Form 990-EZ, Short Form

Return of Organizations Exempt from

Income Tax. All other political organizations file a Form 990, Return of

Organization Exempt from Income Tax.

Form 990

Not Filed

Nevertheless, as a service to readers

of the Record, the Commission is

providing the following information

on tax requirements. Individuals

should contact the IRS for more

information by calling 877/829-

5500.

Under the tax code, the term

“political organization” generally

includes any political committee

that the Federal Election

Commission regulates, including

political party committees, political

action committees and candidate

committees. While committees that

file financial reports with the

Commission are not required to file

IRS Form 8871 (Political

Organization Notice of Section 527

Status) or IRS Form 8872

(Political Report of Contributions),

committees may be required to file

the following tax returns (with the

IRS):

• Form 1120 POL: US Income Tax

Return for Certain Political

Organizations – Political committees currently use this form to pay

section 527 tax; and

• Form 990: Return of Organization

Exempt from Income Tax 1

– Tax

exempt organizations (including

political organizations) use this

form to provide the IRS with

information required by section

6033 of the Internal Revenue

Code.

IRS filing requirements vary

depending on whether a

committee’s tax year began before

or after July 1, 2000, and whether

the committee had taxable income

for the year.

Political Committees with Tax

Years Beginning Before July 1,

2000

Form 1120-POL. Political

committees whose tax year began

before the July 1, 2000, enactment

of Pub. L. 106-230 are required to

file Form 1120-POL only if they

had taxable income.
March 2001 Federal Election Commission RECORD

5

California Special Election Reporting

 The Special Election to fill the U.S. House seat of the late Congressman

Julian C. Dixon in the Thirty-Second Congressional District will be held on

April 10, 2001. Should no candidate achieve a majority vote, a Special

Runoff Election will be held on June 5, 2001, among the top vote-getters of

each qualified political party, including qualified independent candidates.

Note that 48-hour notices are required of authorized committees that receive

contributions of $1,000 or more between March 22 and April 7 for the

Special General Election and between May 17 and June 2 for the Runoff

Election. Committees involved in any of these elections must follow the

reporting schedules below.1

For Committees Involved Only in Special General When No

Runoff is Held:

 Close of Reg./Cert Filing

 Books Mail Date Date

Pre-General Report March 21 March 26 March 29

Post-General Report April 30 May 10 May 10

Mid-Year Report June 30 July 31 July 31

For Committees Involved in Special General and Special

Runoff:

 Close of Reg./Cert Filing

 Books Mail Date Date

Pre-General Report March 21 March 26 March 29

Pre-Runoff Report May 16 May 21 May 24

Post-Runoff Report June 25 July 5 July 5

Mid-Year Report June 30 July 31 July 31

For Committees Involved Only in Special General When

Both Special General and Runoff Elections Are Held:

 Close of Reg./Cert Filing

 Books Mail Date Date

Pre-General Report March 21 March 26 March 29

Mid-Year Report June 30 July 31 July 31

1Reports filed electronically must be submitted by midnight on the filing date.

Reports filed on paper and sent by registered or certified mail must be

postmarked by the mailing date; reports sent by any other means (including

reports sent via first class mail) must be received by the Commission’s close of

business on the filing date.

Form 990. Committees are not

required to file Form 990 for a tax

year that began before July 1, 2000.

Political Committees with Tax

Years Beginning On or After July

1, 2000

Form 1120-POL. All political

committees whose tax year began on

or after July 1, 2000, are required to

file 1120-POL if their gross receipts

are normally $25,000 or more or if

they had any taxable income.

Form 990. Political committees

required to file 1120-POL are also

required to file Form 990.

Reporting Dates

IRS Form 1120-POL is due the

15th day of the 3rd month after the

close of the tax year. For example,

a political committee whose tax year

ended on December 31, 2000, must

file the form by March 15, 2001.

IRS Form 990 is due the 15th day

of the 5th month after the close of the

tax year. For example, a political

committee whose tax year ended on

June 30, 2001, must file the form by

November 15, 2001.

Public Inspection of Forms

Forms 1120-POL that are filed by

political committees with a tax year

that began before July 1, 2000, are

not open for public inspection. All

of the other forms discussed above

are available to the public.

Forms and Information

These IRS forms are available

electronically at the IRS Web site,

www.irs.gov/polorgs, in the “Filing

Requirements” section.✦
Federal Election Commission RECORD March 2001

6

Committees Fined Under

Administrative Fines

Program

The FEC recently publicized its

final action on 41 Administrative

Fines cases. The Administrative

Fines program is intended to reduce

the number of financial reports filed

late or not at all without jeopardizing critical Commission resources

needed for more important and

complex enforcement efforts.

Civil money penalties are determined by the number of days the

report was late, the amount of

financial activity involved and any

Compliance

1

 The United Citizens Party is not

affiliated with any national political

party. The Commission has, however,

recognized the state committee status of

other party committees affiliated with

national organizations that did not

qualify as national committees of a

political party. The most recent

example is the granting of state

committee status to the Pacific Green

Party of Oregon. AO 2000-39.

Public Appearances

March 8, 2001

The George Washington

University

Washington, D.C.

Lynn Fraser

March 17, 2001

Institute for Humane Studies

Naples, Florida

Commissioner Smith

March 25, 2001

Alliance for Justice

Washington, D.C.

Commissioner Wold

March 26, 2001

Yale University

New Haven, Connecticut

Commissioner Sandstrom

March 28, 2001

Federal Bureau of Investigation

Minneapolis, Minnesota

James Pawlick

March 28, 2001

The Federalist Society, Boston

College Law School Chapter

Newton, Massachusetts

Commissioner Smith

prior penalties for violations.

Election sensitive reports (reports

and notices filed prior to an election) receive higher penalties.1

✦

AO 2000-27

Status of State Party as State

Committee of Political Party

The United Citizens Party of

South Carolina (the United Citizens

Party) satisfies the requirements for

state committee status.1

The Federal Election Campaign

Act (the Act) defines a state committee. 2 U.S.C. §431(15). In order

to achieve state committee status

under Commission regulations, an

organization must meet two requirements. It must have:

• Bylaws or a similar document that

“delineates activities commensurate with the day-to-day operation”

of a party at a state level; and

• Ballot access for at least one

federal candidate who has qualified as a candidate under Commission regulations.

The United Citizens Party meets

both requirements. It satisfies the

first requirement because its bylaws

set out a comprehensive organizational structure for the party from

the statewide level down through

local levels, and the bylaws clearly

identify the role of the United

Citizens Party.

The United Citizens Party

satisfies the second requirement—

ballot access for a federal candidate—in that two individuals who

had met the requirements for

becoming a federal candidate gained

ballot access as the United Citizens

Advisory

Opinions

1

The following committees and their

treasurers were assessed civil money

penalties under the Administrative

Fines regulation:

Ann Arbor National PAC ($975),

Association of American Railroads PAC

($700), Aventis Pharmaceuticals

Products Inc., PAC ($900), BankBoston

Corporation PAC ($1,800), Bob Rovner

for US Senate—2000 ($900), Citizens

for Dwight E. Bryan ($1,800), CocaCola Enterprises Inc. Employee

Nonpartisan Cmte. for Good Gov’t

($2,600), Cmte. to Elect Jim Schmitt

($330), Cmte. to Re-Elect Congressman

Dana Rohrabacher ($500), Congressional Black Caucus PAC ($900), Dick

Armey Campaign Cmte. ($2,700),

Dorsey National Fund ($1,350), DRS

Technologies Good Gov’t Fund ($425),

Federal Managers’ Association PAC

($300), Fort James Corporation PAC

($650), International Council of Cruise

Lines PAC ($1,200), Jennifer Carroll

for Congress ($7,500), John Coffey for

Congress ($500), Lincoln Diaz-Balart

for Congress Cmte. ($3,500 and

$2,000)—for two reports, Mary Bono

Cmte. ($2,725), Matthew Martinez

Congressional Cmte. ($900), Meeks for

Congress 2000 ($2,000), Mike Ross for

Congress Cmte. ($3,200), Mike

Serabian for Congress ($350), Miles for

Senate ($2,700)—unpaid, Missouri

Democratic State Cmte. ($6,800), New

Jersey State Laborers’ PAC/Laborers’

Political League ($2,700), News

America Holdings Inc.,—Fox PAC

($900), Noble Willingham for Congress

($1,200), People for Charlie Gerow

($900), Richard Cordray for US Senate

Cmte. ($725), Richard Pombo for

Congress ($2,800), Ronald R. Dickson

for US Senator ($0)—penalty reduced

due to lack of activity on the report,

Sallie Mae Inc. PAC ($600), San

Bernardino County Republican Central

Cmte. ($1,800), Spear, Leeds & Kellogg

Good Government Fund Cmte. ($400),

Steve Money for Congress ($325), Tom

Sullivan for Congress Cmte. ($650),

Trea Senior Citizens League Inc. PAC

($425), United Services Planning

Association Inc. PAC ($775), Wine

Institute PAC ($1,125)
March 2001 Federal Election Commission RECORD

7

2

 An individual becomes a candidate for

the purposes of the Act (2 U.S.C.

§441a(d)) once he or she receives

contributions aggregating in excess of

$5,000 or makes expenditures in excess

of $5,000. Federal candidates must

designate a principal campaign

committee within 15 days after qualifying as a candidate, and the committee

also becomes subject to registration and

reporting requirements. 2 U.S.C.

§§432(e)(1) and 434(a); 11 CFR 101.1,

102.1 and 104.1.

3

 Ralph Nader was the Party’s candidate for President.. George L.

Brightharp ran for U.S. Representative

from the 3rd Congressional District Mr.

Brightharp also held a separate ballot

line for other another party in his

Congressional campaign. The Commission has in the past concluded that

“fusion” candidates—candidates with

ballot lines for more than one party—

may be considered when reviewing a

party’s qualification for state committee

status. AOs 2000-21 and 2000-14.

AO 2000-40

Donations to Legal Defense

Fund of Member of Congress

Representative Jim McDermott,

Representative Fortney H. Stark

and other members of Congress

may donate excess campaign funds

from their respective authorized

committees to Representative

McDermott’s legal defense fund,

the Jim McDermott Legal Expense

Trust (the Trust). Such donations

would not constitute the personal

use of campaign funds under the

Federal Election Campaign Act (the

Act), and funds accepted by the

Trust would not be considered

contributions subject to the prohibitions and limitations of the Act.

account of a present or former

candidate to fulfill a commitment,

obligation, or expense of any person

that would exist irrespective of the

candidate’s campaign or duties as a

Federal officeholder.” 11 CFR

113.1(g). Commission regulations

list a number of uses that would

constitute personal use in and of

themselves. Other types of expenses, however, must be examined

by the Commission individually,

based on the definition of personal

use at 11 CFR 113.1(g). Legal

expenses are specifically listed

among those that require case-bycase analysis. 11 CFR

113.1(g)(1)(ii)(A). See also AOs

1998-1, 1997-12 and 1996-24.

Donations to the Trust from

Representative McDermott’s

Campaign

The conduct at issue in Boehner

v. McDermott resulted directly from

activities Representative McDermott

engaged in as a result of his position

as the Ranking Minority Member of

the Ethics Committee.1

 Thus, funds

donated to the Trust would not be

expended for Representative

McDermott’s personal use because

the expense would not exist irrespective of his duties as a federal

officeholder. The donation of

Representative McDermott’s

campaign funds to the Trust is

permissible under Commission

regulations as long as funds in the

Trust are separate from any other

campaign or personal accounts and

as long as they will only be used for:

• Legal expenses related to Boehner

v. McDermott or other legal

(continued on page 8)

Background

The Trust funds legal expenses

related to a civil suit filed by

Representative John Boehner

against Representative McDermott.

The suit, Boehner v. McDermott,

alleges that in 1996 Representative

McDermott, then the ranking

Democratic Member of the Ethics

Committee, distributed to newspapers an unlawfully-taped phone

conversation between Representative Boehner and other House

Republican leaders.

In October 2000, the House

Ethics Committee conditionally

approved the establishment of the

Trust to pay for legal expenses

incurred by Representative

McDermott in connection with his

duties as an officeholder. According to the Trust Agreement, funds

from the Trust may not be used to

pay for any legal expenses that arise

from any matter that is “primarily

personal in nature.” The funds are

maintained separately from Representative McDermott’s “personal,

political, or official funds” in

accounts that are established exclusively for administering the Trust.

If the Trust has excess funds, the

trustee in charge of its administration, and not Representative

McDermott, will distribute the

remaining funds to the contributors

in proportion to their donations.

Personal Use of Campaign Funds

Under the Act, a committee has

wide discretion in its use of excess

campaign funds: A Member of

Congress may use excess campaign

funds to pay any ordinary and

necessary expense incurred in

connection with his or her duties as

a federal officeholder (or for any

other “lawful purpose”), but may

not convert these funds to personal

use. 2 U.S.C. §§431(9) and 439a;

11 CFR 113.1(g) and 113.2(a) and

(d). See also AOs 2000-37, 2000-

12, 1998-1 and 1997-27. Commission regulations define personal use

as “any use of funds in a campaign

1

 In AO 1997-27, the Commission found

that Representative Boehner could use

campaign funds to finance his case

against Representative McDermott

based on the fact that his involvement

in the taped conversation and others’

interest in its contents were results of

his role as a federal officeholder.

Party’s candidates on the South

Carolina ballot in 2000. 2 They were

Ralph Nader and George L.

Brightharp 3

Date Issued: January 11, 2001;

Length: 4 pages.✦
Federal Election Commission RECORD March 2001

8

Advisory Opinions

(continued from page 7)

Statistics

Democratic and Republican

Party Fundraising Increases

The Democratic and Republican

parties raised a total of $1.2 billion

between January 1, 1999, and

November 27, 2000. This amount,

which includes both federal and

nonfederal funds, is nearly double

the amount raised during the same

period in the 1998 election cycle

Advisory Opinion Request

AOR 2001-3

Principal campaign committee’s

purchase of car to take candidate

and staff to campaign events

(Representative Gregory W. Meeks,

February 8, 2001)✦

Congressional Campaign

Spending Reaches Record

Level

Congressional campaign spending for the 2000 general election

exceeded $858 million—a 39

percent increase from the 1997-98

cycle. Apart from this general

election spending, candidates in

special elections spent at least $9

million, and candidates who ran

only in the primaries spent more

than $109 million. This information

is based on reports filed by candidate committees during the period

covering January 1, 2000, through

November 27, 2000.

According to post-general

election reports, U.S. Senate and

House candidates raised an unprecedented $908.3 million during the

1999-2000 election cycle, up 37

percent from the amount raised in

1997-98. Receipts for House

candidates increased by 28 percent,

while spending rose by 32 percent

from the last election cycle. Senate

candidates showed a 51 percent

increase in receipts and a 50 percent

1

 Some of this spending increase was

due to the amount of financial activity

in the New York and New Jersey races.

Comparisons of Senate races are

always problematic because different

states are involved in each two-year

election cycle.

expenses arising from the same set

of facts;

• Administrative expenses necessary

to manage the Trust and to compensate the trustee in charge; and

• The distribution of funds remaining at the termination of the Trust

in accordance with the Trust’s

agreement, in order to prevent the

personal use of campaign funds.

Donations to the Trust from

Other Members’ Campaign

Funds

Although 11 CFR section 113.1

(g)(6) provides that donations to a

Member’s legal defense trust,

established under the House rules,

are not contributions, Commission

regulations do not specifically

address whether the donation of

campaign funds by one Member of

Congress to the legal defense fund

of another constitutes the personal

use of campaign funds by the donor.

In this case, such donations on the

part of Representative Stark and

others would be permissible because

the expense would not exist irrespective of their duties as federal

officeholders. The Commission

based its view on two arguments.

First, Boehner v. McDermott may

present matters of institutional

concern for all Members of the

House and may be relevant to the

conduct of each Member in his or

her capacity as a Member of the

House. Second, the use of Trust

funds is restricted, as described

above, in order to prevent the

personal use of campaign funds by

the Member or other persons and to

assure that they are used exclusively

to pay legal expenses arising from

the circumstances under scrutiny in

Boehner v. McDermott.

Reporting of Donations

Donations to the Trust would not

be contributions subject to the

contribution limits and prohibitions

of the Act. See 2 U.S.C. §§441a,

441b, 441c, 441e, 441f and 441g

and 11 CFR 100.7. Any candidate

committee that makes such donations to the Trust, however, must

disclose them as other disbursements in its regular reports to the

Commission.

Date Issued: February 7, 2001;

Length: 7 pages.✦

increase in spending.1

 In the aggregate, Democratic House and Senate

candidates spent slightly more than

Republican candidates. Democrats

spent $439.5 million, a 56 percent

increase over the last election cycle,

and Republicans spent $411.2

million, a 24 percent increase.

The largest percentage of funds

raised in this election cycle came

from individual contributors.

Individuals contributed $490.9

million, while political action

committees and other committees

contributed $243.1 million. The

candidates themselves contributed

$128.9 million in loans and other

types of contributions.

Additional details are available in

a news release dated January 9,

2001. The release includes overall

summary data by political party, by

candidate status and by past election

cycle (covering the past six cycles).

The news release is available:

• On the FEC Web site at http://

www.fec.gov/news.html;

• From the Public Records Office

(800/424-9530, press 3) and the

Press Office (800/424-9530, press

5); and

• By fax (call the FEC Faxline at

202/501-3413 and request document 612).✦
March 2001 Federal Election Commission RECORD

9

and 37 percent greater than that

raised during the last Presidential

cycle in 1996.

Democratic Party

Between January 1, 1999, and

November 27, 2000, Democrats

raised $269.9 million in federal

funds—a 29 percent increase from

the previous election cycle—and

spent $253.4 million in federal

funds. They disclosed $37.8 million

in cash-on-hand and $17.7 million

in debts in their post-general

election reports.

Democrats spent a total of $26.3

million in direct support of their

candidates. They spent $3.8 million

of this total in contributions, $20.2

million in coordinated expenditures

and $2.2 million in independent

expenditures.

Democrats also raised $243

million in nonfederal funds during

this period, an amount which

represents a 99 percent increase

over funds raised during the last

Presidential cycle. Nonfederal funds

represented 47 percent of Democratic Party fundraising.

Republican Party

Between January 1, 1999, and

November 27, 2000, Republicans

raised $447.4 million in federal

funds. This fundraising represents a

ten percent increase over the 1996

election cycle. Republicans spent

$406.6 million in federal funds, and

they disclosed $36.6 million in cashon-hand and $4.5 million in debts in

their post-general election reports.

Republicans spent a total of $33.7

million in order to directly support

their candidates. Contributions to

candidates represented $2.7 million

of this total, and coordinated party

expenditures represented nearly $29

million. Republicans also spent

almost $2 million on independent

expenditures.

Additionally, Republicans raised

$244.4 million in nonfederal funds

during this period—a 73 percent

increase over nonfederal funds

raised during the last Presidential

cycle. Nonfederal funds represented

35 percent of Republican Party

financial activity.

For more information, see the

chart below. Additional details are

available in a news release dated

January 12, 2001. The release,

which includes statistical information dating back to the 1992 election

cycle, is available:

• On the FEC Web site at http://

www.fec.gov/news.html;

• From the Public Records Office

(800/424-9530, press 3) and the

Press Office (800/424-9530, press

5); and

• By fax (call the FEC Faxline at

202/501-3413 and request document 613).✦

Republicans

Party Receipts

January 1—November 27, 2000

Democrats

0

100

200

300

400

500

600

700

1992 1994 1996 1998 2000

Millions of Dollars

0

100

200

300

400

500

600

700

1992 1994 1996 1998 2000

Millions of Dollars

Nonfederal

Federal
Federal Election Commission RECORD March 2001

10

Budget

Commission Makes

Supplemental Request

On January 31, 2001, the Commission approved a Fiscal Year

2001 Supplemental Appropriation

Request, which would allow the

FEC to expand its Office of Election

Administration (OEA) in order to

provide assistance to state and local

election administrators. The

supplemental proposal requests $3

million in “no-year”1

 funds that

would be spent to:

• Develop election operations

standards, including guidelines for

training election workers, administering and maintaining automated

voting systems, and designing

ballots;

• Update and develop OEA publications that address current election

issues, including many of those

arising from the 2000 Presidential

election;

• Identify needs and resource

requirements of local and state

election officials;

• Design grant program criteria by

which federal funds could be

distributed to state and local

jurisdictions should Congress

decide to provide funds for the

replacement of voting systems or

for other election administration

needs; and

• Expand the OEA staff.

The proposal was submitted to

the House Appropriations Committee in conjunction with a request for

additional funding for the OEA in

the Commission’s Fiscal Year 2002.

The plan places the Commission in

a position to respond to federal

initiatives regarding the election

administration issues highlighted

during the recent Presidential

election. The proposal would allow

1

 No-year funds are funds that would be

available beyond September 30, 2001.

Outreach

Spring Conferences

This year the Federal Election

Commission will hold three spring

conferences. Each conference will

be tailored to meet the specific

needs of a different type of organization:

• Corporations;

• Trade Associations; and

• Labor and Membership Organizations.

The conferences will consist of a

series of workshops presented by

Commissioners and experienced

FEC staff, who will explain how the

requirements of the federal election

law apply to the organization for

OEA to act quickly to enact both

short-term and long-term improvements in election administration.

OEA, which currently serves as a

national clearinghouse with respect

to the administration of federal

elections, is well positioned to

respond to such federal initiatives in

that it already:

• Serves as an objective moderator

among issue groups, election

officials and political office

holders;

• Works with voting machine

vendors and the election administrators charged with acquiring and

operating voting machines;

• Addresses issues key to election

administrators, such as polling

place accessibility, Internet voting,

and Voting System Standards; and

• Participates in the implementation

of federal initiatives in election

administration.

OEA’s plan is structured to use

the Office’s expertise to implement

both immediate and long-term

improvements to the administration

of federal elections without creating

any new or duplicative

bureaucracy.✦

which the conference is designed.

The conferences will cover the basic

provisions of the federal election

law and explain the rules governing

participation by corporations, trade

associations or labor/membership

organizations and their political

action committees (PACs). Seminars will also address the new

electronic filing requirements. In

addition, a representative from the

Internal Revenue Service will be

available to answer election-related

tax questions. Each conference is

two and one-half days long and will

be held in the Washington D.C.

area.

Conference for Corporations,

April 4-6

The Corporate Conference will

be held April 4-6, 2001, at the

Loews L’Enfant Plaza Hotel, 480

L’Enfant Plaza, S.W., Washington,

D.C. The registration fee for this

conference is $375, which covers

the cost of the conference, materials

and meals. The registration form

and fee must be received by March

21 in order to avoid a $10 late

registration fee. Individuals who

cancel their registration on or before

March 21 will receive a full refund.

A room rate of $209 (single) and

$229 (double) is available to

individuals who make their reservations by March 14. After this date,

room rates will be based on availability. The hotel is located near the

L’Enfant Plaza Metro and Virginia

Railway Express stations, and

parking is available at the hotel for

$14 a day and $22 overnight.

To make hotel reservations, call

(800)635-5065 or (202)484-1000

(extension 5000). In order to receive

the conference rate, you must notify

the hotel that you will be attending

the FEC conference.

Conference for Trade

Associations, April 9-11

The Trade Association Conference will be held April 9-11, 2001,

at the Hilton Crystal City, 2399

Jefferson Davis Highway, Arling-
March 2001 Federal Election Commission RECORD

11

ton, VA. The registration fee for this

conference is $350, which covers

the cost of the conference, materials

and meals. If the registration form

and fee are not received by March

26, a $10 late registration fee will be

assessed. Individuals must cancel

their registration by March 26 in

order to receive a full refund.

For hotel reservations made by

March 12, a room rate of $149

(single) and $169 (double) is

available. After March 12, rates will

be based on availability. The hotel is

located near the Crystal City Metro

station and five blocks from the

Crystal City Virginia Railway

Express station. Limited parking is

available for a daily fee of $12.

Call (800) HILTONS or

(703)418-6800 to make hotel

reservations. You must notify the

hotel that you will be attending the

FEC conference in order to receive

the conference rate.

Conference for Labor and

Membership Organizations, June

11-13

The Conference for Labor and

Membership Organizations will be

held June 11-13, 2001, at the Hilton

Crystal City, 2399 Jefferson Davis

Highway, Arlington, VA. The

registration fee for this conference is

$375, which covers the cost of the

conference, materials and meals.

Further registration information will

be made available next month in the

Record and on the FEC Web site.

Registration Information

Conference registrations will be

accepted on a first-come, first serve

basis. Attendance is limited, and

FEC conferences have sold out in

past years, so please register early.

Individuals may now register for

FEC conferences on line at

Sylvester Management

Corporation’s secure Web page at

www.fec.gov/pages/

infosvc.htm#Conferences. Individuals may submit the registration form

and credit card payment information

on line, or they may complete the

screen-fillable conference registration form available at the Web site,

print it, and:

• Fax it to Sylvester Management

Corporation at (803)732-0135; or

• Mail it to Sylvester Management

Corporation, P.O. Box 986, Irmo,

South Carolina 29063.

Conference registration information is also available:

• By telephone—call (800)246-

7277); and

• By e-mail—send inquiries to

toni@sylvestermanagement.com.

Program Information

For specific program information

about any of these conferences, call

the Federal Election Commission’s

Information Division at (800)424-

9530 (press 1, then 3) or (202)694-

1100.✦

Trade Associations and

Membership Organizations:

Which Conference Should

You Attend?

The FEC’s Trade Association

Conference is intended only for

trade associations. Representatives

from other types of membership

organizations should attend the

conference for Labor and Membership Organizations. If you are not

certain which type of organization

you represent, please read the

following descriptions of trade

associations and membership

organizations. Membership organizations and trade associations share

many of the same characteristics—

indeed, trade associations are a type

of membership organization. Trade

associations, however, have certain

unique characteristics and rules,

which set them apart from other

kinds of membership organizations.

Definition of Membership

Organization

Generally, a membership organization is defined by the following

criteria:

• It provides for members in its

articles and bylaws;

• It seeks members;

• It acknowledges the acceptance of

members (e.g., by distributing

membership cards); and

• It is not organized primarily for the

purpose of influencing the election

of an individual for federal office.

Definition of Trade Association

In addition to having the characteristics above, a trade association

possesses two unique features:

• Its membership is comprised of

persons and/or companies engaged

in a similar or related line of

commerce or business; and

• It is organized to promote and

improve the business conditions of

its members.1

Thus, if your organization

qualifies as a trade association, you

should attend the FEC Conference

on April 9-11, 2001, which will

focus on the unique rules particular

to your type of membership organization. If, on the other hand, you

represent any other type of membership organization (such as a nonprofit ideological 501(c)(4)

corporation, a cooperative, a mutual

insurance company or a business

organization with members in more

than one line of commerce), the

FEC asks that you instead attend the

FEC Conference for Membership

and Labor Organizations on June

11-13, 2001.✦

1

 In past advisory opinions, the Commission cited examples of organizations

which qualified as trade associations or

membership organizations. For

examples of trade associations, see AOs

1995-12 (association for a particular

type of banking), 1994-19 (medical

society for a particular field of medicine) and 1977-44 (association for a

particular specialty of law). For

examples of membership organizations,

see AOs 1999-10 (mutual insurance

company), 1996-21 (business council),

1990-18 (credit union) and 1985-37

(local chamber of commerce).
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Bulk Rate Mail

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Printed on recycled paper

Federal Election Commission RECORD March 2001

Index

The first number in each citation

refers to the “number” (month) of

the 2001 Record issue in which the

article appeared. The second

number, following the colon,

indicates the page number in that

issue. For example, “1:4” means

that the article is in the January

issue on page 4.

Advisory Opinions

2000-24: Preemption of state

election law mandating fixed

allocation ratio for administrative

and voter drive expenses, 2:2

2000-27: Status of party as state

committee, 3:6

2000-28: Disaffiliation of trade

associations and their PACs, 2:3

2000-32: Reporting uncollectable

loan, 1:9

2000-34: Name and acronym of

SSF, 2:5

2000-35: Status of party as state

committee, 1:10

2000-36: Disaffiliation of

nonconnected PACs, 2:5

2000-37: Use of campaign funds to

purchase and present Liberty

Medals, 2:6

2000-38: Registration of party

committee due to delegate

expenses, 2:7

2000-39: Status of party as state

committee, 2: 8

2000-40: Donations to legal defense

fund of Member of Congress, 3:7

Compliance

Committees fined under Administrative Fines Program, 2:6

MUR 4762: Prohibited union

contributions and other violations,

2:9

MUR 5029: Contributions in the

name of another made by corporation and government contractor,

2:10

Court Cases

_____ v. FEC

– Beaumont, Christine, 2:8, 3:2

– Buchanan, 1:10

– DNC, 2:8. 3:2

– Miles for Senate, 3:3

– Natural Law Party of the United

States of America, 1:10, 2:8, 3:2

Other

– Hooker v. All Campaign Contributors, 1:10

Regulations

Final rules for general public

political communications coordinated with candidates and party

committees; independent expenditures, 1:2

Reports

Amendments to Statements of

Organization, 2:1

California special election, 3:5

Committees required to file tax

returns, 3:4

Nevada state filing waiver, 2:2

Reports due in 2001, 1:4