FEDERAL ELECTION COMMISSION 

Chairman Bradley A. Smith 

Remarks: Notice of Proposed Rulemaking on Political Committee Status 

March 4, 2004 

A short while back I met with a foreign delegation visiting the U.S. to discuss 

aspects of our election law. We were speaking through an interpreter, and as I spoke 

about our law, with its distinctions between “generic campaigning,” activity “for the 

purpose of influencing an election for Federal Office,” “federal election activity,” 

“activity in connection with an election in which a federal candidate appears on the 

ballot,” and “electioneering communications,” the interpreter ran out of words that 

carried any distinction for my guests. Yet all these terms have different meanings under 

our law, and political actors in the United States must contend with these nuances daily. 

My first concern today, then, is the complexity of some of the proposals before 

us. This concern is epitomized in a single line on page 15 of the narrative portion of the 

proposed rule. We ask, “Should the Commission create by regulation a third definition 

of ‘expenditure’ for determining political committee status?” As if two definitions might 

not be enough! 

Some of that complexity is a result of an effort to restrict slightly the reach of the 

admittedly far-reaching proposed rules. But while I may be sympathetic to those goals, I 

am not certain that the game is worth the candle. We start with a very complex statute, 

the Federal Election Campaign Act as amended in 1974, to which, over the years, had 

accrued a very complex set of regulatory rules. To this was added yet another very 

complex statute, the Bipartisan Campaign Reform Act of 2002, and many more rules. As 

I read some of the proposed rules before us today, I thought, “My gosh, how will the 
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average lawyer or average accountant, not a specialist in this field, even begin to 

understand this – let alone the average citizen.” I would prefer to see us simplify. 

To that end, I hope for comment on the notion that the entire allocation system 

created by the FEC is wrong. The statute is not complex on this point – 2 U.S.C. 

§441a(a)(1)(C) rather clearly states that an individual may not give a federal political 

committee more than $5,000, while §441b prohibits corporate and union contributions. I 

think a strong argument could be made, therefore, that there is no basis for a federal 

political committee to have a non-federal account, but, conversely, that non-federal 

committees remain free to use non-federal funds except where specifically prohibited by 

the Act. So far as I can tell, dual accounts have been a longstanding practice, 

specifically sanctioned by Commission regulations, but this seems to have evolved out of 

piecemeal regulation of existing organizations rather than a holistic approach. 

I think that much of the confusion that this rulemaking is generating comes from 

the debate of the so-called “major purpose” test. This debate over “major purpose” is, I 

think, serving to mystify as much as to clarify. For example, earlier this week one 

Senator claimed that since 1974, groups with a major purpose to influence federal 

elections must register as federal political committees. But that is not quite right. 

The phrase “major purpose” does not appear anywhere in the statute, either preBCRA or post-BCRA. For example, an ambitious member of the House may have as a 

major purpose becoming a member of the Senate, but until he spends or receives $5,000 

for that campaign, the law does not consider him to be a “candidate.” Similarly a group 

becomes a federal political committee for purposes of the FECA only when it has 

received contributions or made expenditures in excess of $1,000. Its “major purpose” is 
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irrelevant to that trigger. And both “contribution” and “expenditure” are defined terms 

under the Act. “Major purpose” comes into play as a minor judicial gloss on the Act, 

found in Buckley and Massachusetts Citizens for Life, that limits the scope of the statute. 

It is not a separate basis for regulation. 

In Buckley v. Valeo, the Supreme Court was concerned about vagueness and 

overbreath in the statute. To save the statute’s constitutionality, therefore, the Court 

narrowly interpreted “expenditure,” (and by implication, “contribution”) as applying only 

to activities that included explicit advocacy of election or defeat of a clearly identified 

candidate, or what we have come to call “express advocacy.” 

BCRA, as I understand it, built on these concepts, but did not change them. It 

was written, I think, with the specific intention of avoiding such overbreadth and 

vagueness concerns. It did not rewrite the definition of “expenditure” or “contribution,” 

but rather added new, specific prohibitions on what it defined as “electioneering 

communications” and “federal election activity.” “Electioneering communications” were 

narrowly defined as broadcast ads that named a federal candidate within 60 days of a 

general election or 30 days of a primary, caucus, or convention. Limits on “federal 

election activity,” or “FEA,” were applied only to state and local political parties, and in 

certain circumstances to officeholders soliciting funds for groups. A plain reading of 

BCRA does not show that it applies any new restrictions on FEA to independent political 

committees. 

As far as I can tell, nothing in McConnell v. FEC changes this, either. The 

Supreme Court does not expand the scope of the statute beyond what Congress passed 

and the President signed. And because BCRA does not change the definition of 
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contribution or expenditure, the Supreme Court had no reason to reconsider the narrow 

construction it gave to the meaning of those terms in Buckley. 

Nevertheless, I agree that the reasoning of the Court’s opinion does strongly 

suggest an argument by which Congress could broaden the definition of expenditure to 

include at least some of the activities it has defined as FEA or electioneering 

communications. 

The question, then, is whether we may, and if we may, whether we should, do 

what Congress might have, but did not, do – change the definition of expenditure to 

encompass much more political activity than in the past. 

To do so in the manner proposed in these draft rules, I think that we must do 

violence to the statute. We must eviscerate 2 U.S.C. §441i(e)(4)(B) which allows 

officeholders to solicit up to $20,000 from individuals for groups seeking to conduct 

Federal Election Activities – because if spending or receiving money for FEA made one 

a political committee, one could not accept that $20,000 contribution. We must make 

superfluous the requirement that state and local parties use hard dollars for FEA, since, if 

disbursements for FEA were expenditures, hard money would have to be used anyway. 

We must render somewhat nonsensical 2 U.S.C. §441b, which requires that 

electioneering communications count as expenditures for that, but only that, section of 

the law. 

Most of all, I think we would have to go well beyond the Supreme Court’s 

understanding of the Act, given that the Court wrote, “Interest groups, however, remain 

free to raise and spend money to fund voter registration, GOTV activities, mailings, and 

broadcast advertising (other than electioneering communications.)” When we discussed 
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Advisory Opinion 2003-37 Americans for a Better Country last month, the Office of 

General Counsel suggested that the Court’s view was not contradicted in the approach 

adopted by the Commission, because the Court may have been referring only to groups 

that were not political committees. But that line of reasoning, even if correct in that 

context (which I think it is not), has no applicability here, since we would be using those 

very activities mentioned by the Court as the basis for limiting the ability of these groups 

to participate freely in the system. 

I must also note the shift in the rationale being offered by those reform groups 

now pressing for these rules – a shift that may bring back into play constitutional 

considerations. 

The purpose of BCRA, we have so often been told, is to sever the link between 

officeholders and large contributions. But that link does not exist in the activity which 

we propose to regulate today. There is no claim that the groups in question are 

contributing soft money directly to candidates or parties. There is no claim that they are 

selling access to officeholders, or that officeholders are soliciting the funds for them. 

There is no claim that they are coordinating their activities with officeholders. There is 

no claim that these groups are established, financed, maintained or controlled by 

officeholders or parties. Any of these facts would render their activity illegal regardless 

of this rulemaking. 

Rather, the argument being made now is simply that they must be regulated 

because they are spending money to influence an election, and that they should have to 

operate under the same rules as candidates and parties. I believe that that argument was 

specifically rejected in McConnell, in the passage I just read. 
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BCRA was not intended to get all money out of politics, as longtime supporters of 

the legislation such as Thomas Mann and Norman Ornstein reminded us in an op-ed in 

the Washington Post earlier this week. “Reformers did not want to drain money out of 

politics – and they didn’t,” they wrote. “The new rules... simply apply to outside groups 

and parties the same standards that apply to candidates and political action committees 

when it comes to a narrow group of electioneering broadcast ads.” (emphasis added). 1 

Our obligation in this rulemaking is, as it always is, to enforce the law. It is not to 

enforce the law as we wish Congress had written it, or think that they ought to have 

written it. Thus, I will be looking, in the comments, for legal arguments. I am not 

particularly interested in claims that some person or group may spend a lot of money if 

we fail to act. When I hear someone claim that something is a “loophole” in the law, I 

am reminded that it is legal. If it were not legal, it would not be a “loophole” but a 

“violation.” 

Finally, I am concerned about our analysis under the Regulatory Flexibility Act. 

Twenty-five years ago, as a young analyst with a small business group, this was the type 

of regulatory reform for which we lobbied at both the state and federal level. Over the 

years, it has become, admittedly, something of a pro forma certification. But it remains a 

legal requirement. I am concerned that we have not adequately addressed the impact of 

these proposed rules on small entities. My experience is that non-federal political 

committees, especially smaller state and local organizations, are already having a great 

deal of difficulty complying with BCRA, and these rules, I think, could add to that 

considerably by making many more groups into federal political committees. While I am 

1

 Thomas E. Mann and Norman Ornstein, So Far, So Good on Campaign Finance Reform, Wash. Post, 
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prepared to make the certification required under the Regulatory Flexibility Act for now, 

I am not entirely convinced that we have properly resolved that issue, which will be 

before us again when we publish a final rule. 

With those thoughts, I am prepared to support this NPRM today, and await the 

public’s comments. 

Mar. 1, 2004, p. A19.