FEDERAL ELECTION COMMISSION 

WAStilNCTON. 0 C ?I1401 

MEMORANDUM 

TO: 

FROM: 

DATE: 

SUBJECT: 

The Commissioners 

Staff Director 

Deputy Staff Director 

General Counsel 

Office of the Commission 

June 29,2000 

Supplemental Statement Qf Reasons far 

MURs 4553 and 4671. MURs 4407 and 454& 

and MUR 4713 

Attached is a copy of the Statement Of Reasons signed by 

Commissioner Scott E. Thomas. This was received in the 

Commission Secretary’s Office on Wednesday. June 28.2000 

at 5:08 0.m. 

cc: Vincent J. Convery, Jr. 

Press Office 

Public Information 

Public Records 

Attachment 
t p 

$P 

K 

FEDERAL ELECTION COMMISSION 

WASHINGTON. DC 20463 

In the Matter of 

Dole for President, Inc. and Robert J. Dole, 

as treasurer; Dole/Kemp ’96, Inc., and 

Robert J. Dole, as treasurer; Republican 

National Committee and Alec Poitevint, as 

treasurer; Senator Robert J. Dole 

1 

1 

1 

1 

1 

MURs 4553 and 4671 

The CiintonlGsre ’96 Primary Committee, Inc., ) 

and Joan Pollitt, as treasurer; The Democratic ) 

National Committee, and Carol Pensky, as 1 MUR 4713 

treasurer; President William J. Clinton; and 1 

Harold ha. kkes, Esquire 

The Clinton/Gore ’96 Primary Committee, Inc., ) 

and Joan Pollitt, 8s treasurer; The Democratic ) 

National Committee, rind Carol Pensky, as 1 

treasurer; President William J. Clinton; Vice ) 

President Albert Gore, Jr.; and Cliinton/Gore ) 

’96 General Committee, he., and Joan Pollitt, ) 

as treasurer 1 

MU& 4407 and 4544 

SUPPLEMENTAL STATEMENT OF REASONS 

COMMISSIONER SCOTT E. THOMAS 

I write this supplemental statement to address certain arguments proffered by my 

colleagues, Commissioners Sandstrom and Elliott. The underlying Matters Under 

Review (“I”’) were perhaps the FEC’s greatest test to date. The FEC deadlocked 3-3 

on the most significant issue-whether most of the RldC and DNC ads were in-kind 

contributions to the DoleKemp and ClintonlGore campaigns.’ 

Because this question is now subject to judicial review, at least as to the DNC 

ads? it is especially important that the legal analysis of those commissioners voting not to 

’ See Statement of Reasons of Commissioner Scott E. Thomas dated May 25,2000 for a description of the 

various allegations, recommendations. and votes. * One of the complaiits filed a suit challenging the FEC’s dismissal of the allegations relating to the DNC 

and ClintodGore campaign. Fuluni v. FEC. Civ. Action No. 1:00CV01018 (WBB) (D.D.C., filed May 8, 

2000). - 
2 

proceed be carefully scrutinized. If found contrary to law or arbitrary and capricious, 

there is some possibility that the FEC’s dismissal of these cases will be rever~ed.~ 

H 

I. The significance of the prior votes in the audits regarding repayment of 

public funds 

First, I must address the argument put forward by Commissioner Sandstrom that 

the FEC’s earlier 6-0 vote in the public funding repayment context somehow should 

govern the result in these MURS.~ In law and in fact, the two determinations were very 

different. 

As I explained in my Statement for the Record in Audits of ClintodGore and 

DoleKemp Campaigns dated December 28, 1998 (attached), the vote in the repayment 

setting dealt only with recoupment of public funds, and reflected vastly different 

commissioner viewpoints. Most significantly, three of my colleagues had indicated by a 

preceding vote that they would not approve any repayment whatsoever stemming from 

excess candidate spending in the primary, no matter how clearly the spending involved 

activity coordinated with party operatives and no matter how clearly the ads were 

intended to promote 51 particular candidate’s election or defeat.’ Thus, before any actual 

repayment vote, there was simply no way to get the four votes needed to order any 

repayment of public hnds associated with excess primary spending caused by the party 

ads. 

As Acting Chairman at the time, I suggested that rather than waste days, perhaps 

weeks, analyzing each ad separately to allow for a string of futile votes on whether any 

particular ad would generate a repayment of public funds, commissioners should proceed 

to a single vote to reject the Audit Division’s repayment recommendation which covered 

all the ads. Commissioners who believed none of the ads could generate a repayment 

under the public funding statute, like my three Republican colleagues, could vote to reject 

the recommendations for that reason. Commissioners like myself, who believed that 

some but not all of the ads should generate a repayment, likewise could vote to reject the 

auditors’ recommendations because they lumped all the ads together. This approach was 

See 2 U.S.C. Q 437g(a)(8). 

In a Money & Politics (BNA) article dated June 5,2000. Commissioner Sandstrom was quoted as saying 

my vote in the MURS was “inconsistent” with my earlier vote in the repayment context. In his Saatement of 

Reasons issued June 21,2000, at footnote 19. Commissioner Sandstrom wrote it was “self evident” that the 

commissioners’ vote regarding the party ads in the repayment track presaged the treatment of the ads in the 

MUR lrack. 

This reflected the view of Commissioners Elliott. Mason, and Wold that the primary matching fund statute 

did not contemplate any repayment of public funds corresponding to excessive spending by the candidate. 

See Agenda Documents 98-92 and 98-92A. I noted in my Statement (attached) that this was the first time in 

six presidential cycles such an argument had surfaced, that it ran counter to long-standing Commission 

interpretation of the Statute through regulation (1 1 C.F.R. Q 9034.4(b) provides, “An expenditure which is in 

excess of any of the limitations under 11 C.F.R. Pan 9035 shall not be considered a qualified campaign 

expense.”), and that several courts had upheld the Commission’s interpretation. 

4 

- 
.L 

3 

adopted by my colleagues, and it is the basis for the 6-0 vote rejecting the auditors’ 

repayment recommendations. 

The commissioners underscored their desire to leave any determination about 

whether the ads constituted in-kind contributions for the 

was revised to state: “[Tlhe Commission directed the Audit Division to revise the portion 

of the report relating to party ads to clarify that the Commission has not reached any 

conclusion regarding the Audit Division’s in-kind contribution analysis, and to indicate 

that Commissioners may submit statements for the record.” The bottom line, therefore, is 

that the voting in the audit track regarding repayment did not in fact govern whether the 

patty ads constituted in-kind contributions, and should not be interpreted as having done 

so. The voting in the MUR track was the real deal. 

track. Each audit report 

11. The limited holding in Advisory Opinion 1995-25 

Next, I wish to address Commissioner Sandstrom’s argument that Advisory 

Opinion 95-25,2 Fed. Elec. Camp. Fin. Guide (CCH), 1 6162, ruled definitively that ads 

similar to those at issue here were not attributable to my contribution or coordinated 

expenditure limit? To the contrary, the commissioners involved went out of their way to 

caution that the opinion did not rule on that point. Because the request of the Republican 

National Committee was deliberately vague on whether any particular ad text proffered 

would in fact be used, the Commission was very particular in emphasizing that it was 

issuing no opinion about whether the planned activity of the RNC would constitute an 

“electioneering message”’ and hence a coordinated expenditure by the RNC. The FEC’s 

ruling was confined to the question of whether the RNC’s activity, as generally described, 

would require allocation as partly federal and partly non-federal. * 

Referring to one of the ad texts submitted by the advisory opinion requestor, the Republican National 

Committee (RNC), Commissioner Sandstrom states “the Commission defernitred (it] did not contain an 

electioneering message [emphasis added].” Statement of Reasons of Commissioner Karl J. Sandstrom at 6. 

He later characterizes the various texts submitted by the requestor as “approved.” Id. at 7. 

The “clectioneering message’’ phrase was a shorthand reference to the underlying statutory provisions 

governing whether a particular party communication should be treated as an in-kind contribution under the 

contribution limits (see, e.g., 2 U.S.C. 8 44 la(a)(Z)(A)) or as a Coordinated expenditure under the partyspecific limits at 2 U.S.C. tj 441a(d). This phrasing was eliminated from the campaign finance lexicon by 

the June 24, 1999 Statement for the Record filed by Commissioners Sandstrom, Elliott, Mason. and Wold in 

connection with the DoleKemp and ClmtodGore audit determinations. See Statement for the Record of 

Commissioners Thomas and McDonald dated July 6, 1999 (attached). At the time Advisory Opinion 1995- 

25 was issued, however, the legally correcr way IO describe whether an ad should count toward a particular 

limit was according to whether if mentioned a clearly identified candidate and contained an “electioneering 

message.’’ 

The Commission was aware that the RNC and the Democratic National Cormittee (DNC) were playing 2 

game of ‘cat and mouse’ regarding this advisory opinion request. Apparently, because the RNC wished to 

file a complaint regarding the DNC’s use of purely ‘soft money’ IO pay for some of its ads in the 1993-94 

time frame, it sought an advisory opinion to ascertain whether the Commission would most likely treat the 

1993-94 activity as a violation. Because the original request did not include any specific proposed text, the 

Commission asked for an example of an ad to facilitate analysis. Though the RNC provided three texts, it 

specifically represented that none of the ads served as the basis for the advisory opinion request. , 

6 

1 

8 

- 
4 

The Commission expressly noted it was relying on the requestor’s legal 

representation that no ads would contain an electioneering message and expressly advised 

it was not characterizing any particular ads as containing an electioneering message: 

The Commission relies on your sturenzenf that those advertisements 

that mention a Federal Candidate or officeholder will not contain any 

electioneering message. In view of this representation, the Commission 

does not apress any opinion as to what is or is not an electioneering 

message by a political party committee. 

2 Fed. Elec. Camp. Fin. Guide (CCH), 16162 at 12,108 (emphasis added). 

To drive home the point that it was only addressing the general question of 

whether “legislative advocacy media advertisements that focus on national legislative 

activity and promote the [party] should be considered as made in connection with both 

Federal and non-federal elections,” the Commission’s affirmative conclusion ended wifh 

the proviso, “unless the ads would qualify as coordinated expenditures on behalf of any 

general election candidates of the Party under 2 U.S.C. 9 441a(d).” Id. at 12,109. This 

clearly contrasted the central holding of the opinion with the unresolved question about 

the status of any particular ad as a contribution or coordinated expenditure. 

The foregoing demonstrates that the FEC in no way “determined” or “approved” 

anything about any particular ad in Advisory Opinion 1995-25. Accordingly, no 

precedent regarding application of the contribution or coordinated expenditure limits 

should be gleaned from that opinion. 

That said, Commissioner Sandstrom demonstrates a valid point: there priAably 

were and are some election law attorneys and other political practitioners who missed the 

crucial distinctions the FEC built into Advisory Opinion 1995-25. While that perhaps 

justifies a ‘reliance on counsel’ defense or mitigation of some sort, it does not alter the 

true state of the law. 

Because of tlus vagueness, and because of the iqnnance of nonetheless giving some guidance on the 

overriding question of federahon-federal allocation, the Commission carefully included language limiting 

the scope of ifs opinion. Incidentally, after receiving Advisory Opinion 1995-25, the RNC indeed filed a 

complaint regarding the DNC’s 1993 activity. then sued the FEC when it failed to muster enough votes to 

settle the mner with a conciliation agreement. then withdrew its suit, and then filed a new suit claiming the 

FEC’s regulations unconstitutionally deprived it of the opportunity to use exclusively ‘soft money’ to pay 

for what it characterized as “issue ads.” See FEC Record, Vol. 23. Number 9, p. 1; Vol. 24, Number 6, 

p. 4; Vol. 24. Number 6, p. 1. 

- 
5 

111. The courts have not required “express advocacy” for coordinated 

expenditures. 

Last, I must address Commissioner Elliott’s asserted belief that Euckley v. Vale0 

(“E~ckfey”),~ FEC v. Massachusetts Citizensfor L@ (“MCFL’q),’o and a string of other 

cases cited in her June 23 Statement of Reasons” somehow hold that coordina!ed 

expenditures must rise to the level “express advocacy” to be validly limited. It is a vie\\. 

that does not withstand scrutiny. 

‘The part ofBuckley on which Commissioner Elliott relies, and all the other cases 

she cites except two, deal with independent or non-coordinated communications. Only 

in that realm has the “express advocacy” concept been imposed. See Statement for the 

Record in Audits of 1996 ClintodGore and DoleKernp Campaigns by Commissioners 

Thomas and McDonald dated July 1999 (attached) at 7, 8.12 

In the only case cited by Commissioner Elliott where ads coordinated with a 

candidate were at issue, the court held emphatically that the “express advocacy” standard 

was not applicable. FEC v. Christian Coalition Inc., 52 F. Supp.2d 45 (D.D.C. 1999). 

The court said: “[rjmporting the ‘express advocacy’ standard into 0 441b’s contribution 

prohibition would misread Buckley and collapse the distinction between contributions and 

independent expenditures in such a way as to give short shrift to the government’s 

compelling interest in preventing real and perceived corruption that can flow From large 

campaign contributions.” 52 F. Supp.2d at 88. The court referred to the position 

espoused herein by Commissioner Elliott as “untenable” and “fanciful.” 52 IF. Supp.2d at 

87 and n. 50. I would not use such pejorative phrasing, but only note that the courts 

simply don’t agree. 

As for the other case cited by Commissioner Elliott where activity coordinated 

with a candidate was involved, Orloski v. FEC,I3 the court made clear that the apparent 

FEC policy of using the “express advocacy” test. among others, in the context of federal 

officeholder comrnunity events was neither statutorily nor constitutionally required. The 

fact that the FEC at one time chose to use the “express advocacy” test in that limited 

situation is of no relevarice in the MURs at hand.14 

9424 U.S. I (1976). 

“479 U.S. 238 (1986). 

Seep. 3, footnote 10. of Commissioner Ellion Statement. 

In BucMey, the Court could not have been clearer: “(C]oordina~ed expenditures are treated as 

I1 

I1 

contributions rather than expenditures under the Act.” 424 US ai 46,47. In MCFL, the Coun specified 

that its “express advocacy” construction need only apply to the provision in 2 U.S.C. 5 44 lb “that directly 

regulates independent spending.” 479 US. at 249. 

I’ 759 F.2d 156 (D.C.Cir. 1986). 

Commissioner Ellion notes that the Orloski coun said, “Under the Act this type of ‘donation’ is only a 

‘contribution’ if it first qualifies as an ‘expenditure’ . . . . 759 F.2d at 163. This is inaccurate. The statute 

defies “contribution” as “any gift, subscription, loan, advance, or deposit of money or anything of value 

made by any person for the purpose of influencing any election for Federal office.” 2 U.S.C. 

5 431(8)(A)(i). There is no dependence on the “expenditure” Befition. That said, because the term 

“expenditure” is defined very similarly al2 U.S.C. 5 43 1(9)(A)(I), virtually every “contribution“ would 

I4 

- 
6 

Commissioner Elliott’s stated view herein is at odds with some of her own votes. 

If her view is that even coordinated ads must rise to the level of “express advocacy” in 

order to be regulable, then her votes in MUR 3918 (law firm ads referencing Senate 

candidate Joel Hyatt with the phrase, “Hyatt Legal Services-serving the people of 

Ohio”) and MUR 41 16 ( radio ads paid for by the National Council of Senior Citizens 

Political Action Committee challenging Senate candidate Ollie North’s statement that 

Social Security should be scrapped) are inconsistent. In both of those cases she voted lo 

find probable cause that the coordinated ads were illegal in-kind contributions even 

though no “express advocacy” was incl~ded.’~ I would argue that her votes in those 

MLJRs reflect a more accurate assessment of the law than her stated position herein. 

IV. Conclusion 

It is unusual for a commissioner to issue a supplemental statement commenting on 

the statement of another colleague. I have not taken any of the statements attributed to 

me personally, and I do not intend any of the comments herein to be taken personally. 

This is all purely legal argument, in my view. Only because it involves very high stakes 

interpretations of federal campaign finance law do I feel the need to further explicate the 

topic. 

Commissioner 

Attachments: 12/23/98 Vice Chairman Thomas’ Statement for the Record 

in Audits of ClintoniGore and DoleKemp Campaigns 

7/2/99 Chairman Thomas’ and Commissioner McDonald’s Statement 

for the Record in Audits of 1996 ClintonGore and DoleKemp Campaigns 

~~~ ~ ~ 

qualify as an “expendime.” There is huther overlap because, as Commissioner Elliott notes. and as the 

Supreme Court has noted (see n. 12. supra). a coordinated “expenditure” is to be treated as a 

“contribution.” See 2 U.S.C. 5 441a(a)(7)(B)(i). But the term “expenditure” is much broader in that it 

includes mundane operating expenditures of political committees. as well as independent, non-coordinated 

outlays that would fall under the reporting provision at 2 U.S.C. 5 434(c) or the ban at 2 U.S.C. 6 44 I b only 

if they contain “express advocacy.” 

See certifications of vote dated March 11, 1997 in MUR 3918 and December 9, 1997 in MUK 41 16. IS 

- 
FEDERAL ELECTION COMMISSION 

WASHINGTON, DC 20461 

I OFFICE OF VICE CHAIRMAN 

Statement for the Record in Audits of 

CiintenlGore and DolelKemp Campaigns 

a 

*r ri 

Scott E. Thomas 

Vice Chainnan 

On December 10,1998, the Federal Election Commission ("FEC" or 

'Commission") approved a motion rejecting certain staff recommendations for 

repayment of public funds in the audits of the 1996 Clinton and Dole campaigns. 

The repayment recornmendations in question stemmed from party ads that 

would cause excessive spending if attributed to the candidates' campaigns. 

This vote, although unanimous, reflected several dRerent rationales 

among the six voting commissioners. The media reports and editorials following 

the vote did not capture the distinctions and nuances involved. It is for that 

reason I offer the following preliminary statement explaining nay vote and my avid 

dissent from the legal theory underlying the vote of three of my colleagues. 

I clearly indicated during the previous bo days of discussion my 

agreement that certain of the ads in question should be attributed to the 

candidates' campaigns, and should generate a repayment to the extent 

excessive expenditures resulted. I further indicated, however, that some of the 

ads fell short of being attributable to the candidates' campaigns. Moreover. I 

believed the national parties were legally free to use their available coordinated 

expenditure allowances for any of the ads. Where the parties so chose. the ads 

should not be attributable to the candidates' campaigns. Thus, on the motion 

proffered. I voted in the affirmative because the motion was to reject the staffs 

repayment recofflmendation that encompassed ell the ads in question. 

It would have been an exercise in futility to attempt separate votes on 

whether to seek repayment with regard to each of the ads in question. The 

previous day. December 9. three commissioners (Mason. Wold and Elliott) 

indicated they would not vote to seek repayment relating to excessive spending 

by a primary campaign under any circumstances. Thus, even if at least four 

commissioners believed certain ads should count toward a candidate's spending 

ceiling. there would be no repayment because, according to these three 
commissioners, any repayment order for excessive primary campaign spending 

would be beyond the FEC's authority. Agenda 00s. 98-92 and 98-9%. 

Faced with the reality of no repayment at all regarding excessive spending 

generated by the party ads, the question remained whether to debate further for 

hours-perhaps days-about 'determining" some or ail of the ads to be in-kind 

contributions for purposes of the audit report. &, e.g., Report of the Audit 

Division on ClintonlGore Primary Committee. Inc. at 43. In view of the nsed 'to 

complete the audits in time to meet the three-year statute of limitafions,' and in 

view of the awkwardness of publicly discussing matters that would now only 

have relevance to potential confidential compliance deteninations,' 

commissioners opted to instead direct the Audit Division to revise the report to 

simply clarify that the factual and legal analysis therein regarding the party ads 

does not reflect any commissioner determination^.^ 

The net result of the votes taken on December 9 and 10 is that any 

repayment stemming from the party ads is off the table, and any further action 

regarding the ads will occur, if at all, in the Context of a compliance action. 

Without presaging whether any findings of civil violation will be made, it is 

theoretically possible the FEC will press forward in the enforcement track and 

obtain civil penalties or some other form of monetary or injunctive relief. The 

doom and gloom described by commentators is perhaps premature. 

Regardless, several important points should be made about the view 

taken by three commissioners that no repayment whatsoever may be required 

for excessive spending by a primary candidate. I find this approach plainly 

contrary to public policy, in flat violation of majority-passed FEC regulations, and 

far less justified by the statute than the agency's long-held interpretation. 

It is hardly compatible with the presidential public funding program to 

allow a candidate who spends above the spending ceiling to escape repayment 

of the public funds that were constructively involved. This is just as true in the 

primary matching fund program as it is in the general election program where 

major party candidates have been given a full grant. In both situations, public 

funds should be recovered where they were used to get to the spending ceiling 

but not needed. In other words. a campaign should be forced to return to the 

Treasury the amount of public funds used getting to the limit that corresponds to 

the amount of private funds otherwise spent to go above the ceiling. Where ' 

' 26 U.S.C. §g 9007(c): 9038(c) 

'See 2 USC 9 437g(a)(12)(A) 

'The FEC also voted on December 9 lo treat any RNC ads run before the convention nomination 

as pnmary-related. rather than general-related This was to afford equal treatment with the DMC 

whose ads were subjected by the staff to an FEC regulation allocating to the pnmaly any 

communications not exclusively general-related. Common sense dictates that the RNC ads run 

before the nomination were no more exclusively general-related than those of the DNC. 

2 
campaigns cheat on the spending ceilings, they should disgorge any public 

funds not needed to get to the ceiling in the fkt place.' 

The so-called 'mixed pool theory" in the matching fund context properly 

addresses this public policy. By treating all available resources as fungible-just 

as all the expenditures making up the spending total are fungible-the 

Commission properly requires repayment of the portion of any excess spending 

that corresponds to the public funds ratio. Importantly, the 'mixed pool theory" 

only works if all resources-public funds, private contributions deposited, and in 

kind contributions-are included. Just as in kind contributions must be counted 

as part of the expenditure total, they must be counted as part of the receipt total. 

Only this way does the ratio accurately reflect the owemll financial support 

provided to a campaign and the relative importance of pubiic funding to an 

impermissible expense. It wouldn't make sense to have a repayment ratio 

generate a larger repayment than actually was ju~itified.~ 

' All expenditures should be deemed equally responsible for musing the overage; without the 

early spending. the later spending would not cause a problem. In the general election context, 

where it is obvious that funding other than the full grant was used to cause excessive 

expenditures, it is likewise obvious that the campaign had enough funding to reach the spending 

limit without the full public grant. That is the rationale for recouping an amount of public funds 

equal to the overspending, It is as if the spending from private sources took the campaign to the 

limit. and the campaign then used public funds to go over the limit. Similarly, in the primary 

election context. it is as if purely private funding equal to the amount of the overage was used to 

get to the limit and the mix of private and public funding was used for the overage. Thus, the FEC 

recoups the public funding portion. ' Commissioners 'who relied on Kennedv for President v. FEC. 734 F.26 1558 (D.C. Cir. 1984). for 

the proposition that the mixed pool theory only applies where expenditures made from committee 

accounts are involved are way off base. Though the case hammered home the proposition that 

only an amount representing public funds ean be recouped for nonqualified expenses in the 

matching fund context, it in no way suggested in-kind contributions are not to be included in the 

mixed pool. Indeed. as the General Counsel noted at n. 2 of Agenda Document 98-95, Uis D.C. 

Circuit indicated clearly that such contributions are to be included. 734 F.2d at 1562 n. 5. 

Nor do the FEC's regulations using the term 'deposits' to explain the ratio calculation. 11 C.F.R. 

Q 9038.2(b)(2)(iii). mandate exclusion of in-kind contributions. In kind contributions are treated as 

though they were standard contnbutions of money that were simultaneously used for an 

expenditure. See 11 C.F.R. 5 104.93(a) Thus, where the regulations refer to 'deposits to all 

candidate accounts' when calculating the repayment ratio. in kind contributions must be included. 

If there were any doubt about the Commission's intent. it is resolved by the example in the 

Cornmission-approved Financial Control and Compliance Manual (1996) at pp. 67 and 68 where 

in kind contributions are expressly included in total deposits when calculating the repayment ratio. 

encourage candidates to urge potential donofs to subsidize with in kind contributions nonqualified 

expenses of all soR5 (e.9.. traffic fines. cell phones that will 'disappear.' etc.). This would 

automatically free the campaign of any obligation to make any restitution of public funds, even 

though the in kind donor could just as well have been paying for the cost of any qualified 

campaign expense and standard contribution deposits could just as well have been paying for the 

non-qualified costs. To avoid such chicanery. to prevent mind-numbing calculations separating 

Out all reportable in-kind contnbutians. and to reflect the fact that such contributions indeed are 

. 

To conclude that in kind contributions should be excluded from the mixed pool theoiy would 

3 
Apart from undenining the public policy rationale for seeking repayment 

of primary matching funds constructively used foot excessive spending, my three 

colleagues side-stepped a Commission regulation explicitly treating excessive 

spending as a nonqualified expense that generates repayment.' 

Commissioners cannot simply disobey a duly-promulgated regulation in?erpreting 

the statute. See 2 U.S.C. $5 437c(b). 437d(8), 438(a)(Bj. Even if a 

commissioner believes the majority that passed the regulation misinterpreted the 

statute, the regulation is still the law of the land until rescinded by a majority 

vote.' Thus, in the audits at hand, my colleagues were badly in error in when 

arguing that the agency has no authority to order repayments from primary 

campaigns that exceed the spending limit. 

This emor was compounded by a statutory construction that is less 

plausible than the statutory construction reflected for years in the FEC's 

regulation. The mere fact that the primary-related provisions' do not contain a 

distinct repayment clause regarding excessive spending like that found in the 

general-related provisionsg suggests only that in the few years after the generalrelated provisions were enacted the drafters realized that excessive spending 

was itself a non-qualifred expense already covered by a separate repayment 

clause." Moreover, one could argue the qualified campaign expense limitation 

~ ~~~ ~ 

but one component of the financial support provided. they should be included in the mixed pool 

theory. 

f, 11 C.F.R. g 9034.4(b) provides. Won qualified camDaign expenses+) Genera{. The following 

are examples of disbursements that are not qualified campaign expenses. (2) fxcessive 

expendrfures. An expenditure which is in excess of any of the limitations under 11 CFR. Part 

9035 shall not be considered a qualified campaign expense.' The regulations further specify that 

repayment delerminations for excessive spending are contemplated. 11 C.F.R. 5 

9038.2(b)(Z)(ii)(A). 

' Validly adopted regulations have the force and effect of law. Accardi v. Shauahnessy. 347 U.S. 

260 (1954). United States v Nixon, 418 U.S. 683.695 (1974)rSo long as this regulation 

fs exrant it has the force of law.'). Put another way: 

It is elementary that an agency must adhere to its own rules and regulations. Ad 

departures from those rules. even to achieve laudable aims, cannot be sanctioned, 

Teleprompter Cable Systems v FCC. 543 F.2d 1379, 1387 (D.C.Cir. 1976). for therein 

fies (sic] the seeds of Jesiructron of the orderltness and predjctabjlily which are the 

hallmarks of lawful administrative aclian Simply staled. rules are mles. and fidelity to the 

rules which have been properly promulgated. consistent with applicable statutory 

requirements. IS required of those to whom Congress has entrusted the regulatory 

missions of modem life 

Reuters Ltd v FCC. 781 F2d 946, 950-952 (D.C.Cir 1986)(opinion of J. Stan). 

26 U.S.C. 5 9038(b)(2). 

26 U.S.C. $9007(b)(2) and (4) 

'O By requinng repayment for nonqualified expenses. 26 U.S.C. 5 9038(b)(2). by clarifying that 

qualified campaign expense's do not include expenses incurred or paid in violation of any federal 

law. 26 U.S.C. §9032(9)(B). and by specifying at 2 U.S.C. 5 44la(b)(l) that 'expenditures' in 

excess of the limit are prohibited. Congress provided explicit statuhxy authority for repayment 

stemming from excessive spending in the primary process. 
._ 

.. 

.. >. 

.. 

i. i : il . .- 

at 26 U.S.C. 5 9035, which says *[~IO candidate shall knowingly incur qualified 

campaign expenses in excess of the expenditure limitation" et 2 U.S.C. g 

441a(b)(l)(A), suggests on its face that anything incurred beyond that amount 

would not be deemed "qualified."" To adopt a tortured construction that would 

leave the FEC with authority to seek repayments for general election 

overspending, but not for primafy election overspending, is far less logical than 

these simple interpretations. 

The approach adopted by my three colleagues has caused a serious 

breach in the public funding program. Recouping public funds that were 

constructively used in excessive spending is the most basic of principles. While 

it is true that the FEC can attempt to secure some form of relief in the 

compliance track, the burden of proof, standard of review, and procedural 

posture would be different. Moreover, there is no good reason to simply 'pass' 

on the excessive expenditure repayment process in the 1996 election cycle 

when it has been followed in previous cycles with judicial approval.'2 It makes 

the FEC look somewhat lawless. 

Date Scott E. Thomas, Vice Chaiman 

'l My colleagues argue that the use of the phrase 'qualified campaign expenses in excess of the 

expenditure limitation' in 5 9035 is a sign that Congress did not contemplate treating excess 

spending as nonqualified. Yet. that simply writes off other pa- of the law. @ongress meant 

what it said when it excluded from the definition of 'qualified campaign expense' any expenses 

paid in violation of federal law. Why ascribe to Congress an extremely unlikely approach: 

depriving the FEC of authonly to recoup public dollars that were constructively misused? 

The draften needed to ciarify that only those expenses related to the presidential nomination 

campaign would count toward the expenditure limit. yet they also needed to ensure that anything 

above the limit would generate a repayment Saying a candidate shall not make 'qualified 

campaign expenses' above the limit served the first purpose. while saying anything above the 

limit was not a 'qualified campaign expense' served the second purpose. Hence the awkward 

combination of gg 9032(9). 9035(a). and 9038(b)(2). Perhaps the drafters felt this approach was 

better because in the general-eleaion provisions enacted several years earlier there was no 

separate provision setting a spending limit the exceeding of which would be a violation of law and 

hence a nonqualified expense. 

Leqal History of the Presidential Election Campaiqn Fund Act (GPO 1984), Vol. I1 at 2596. In the 

1974 Amendments which added the pnmary election provisions, a spending limit was included not 

lust once. but twice. at what IS now 2 USC 5 441a(b) and at 26 U.S.C. 5 9035(a). See Pub. L.. 

93-433. 885 Stat. 1263. 55 101(a). 408(c). repnnted in Leqislative Historv of Federal Election 

Campaiqn Act Amendments of 1974 (GPO 1977) at 1135.1169. 

'' Kennedy for President v FEC. 734 F.2d 1558 (D.C.Cir. 1984). approved recouping matching 

funds for spending in excess of the stale-by-state limits for a 1980 cycle campaign. Accord, John 

Glenn Presidential Committee v FEC. 822 F.2d 1097 (D.C.Cir. 1987). vis a vi5 a 1984 campaign; 

Robertson v. FEC. 45 F.3d 486 (D.C.Cir. 1995). vi5 a vis a 1988 campaign. 

Pub. L. 92-178. 85 Stat. 497. Tile Vlll(1971). reprinted ::: 
FEDERAL ELECTION COMMISSION 

WASHINGTON. 0 C 2Mb3 

Statement for the Record in Audits of 

1996 Clinton/Gore and DoleMemp Campaigns 

Chairman Scott E. Thomas 

Commissioner Danny b. McDonald 

Our colleagues, Commissioners Sandstrom, Wold, Biott and Mason, 

recently joined in what must be seen as a very odd Statement of Reasons 

regarding the audits of the 1996 Clinton and Dole campaigns.' Lale is written of 

the audits. Instead, the thrust of their statement is a tirade against an innocuous 

shorthand reference the Commission coined in Advisory Opinion 1985-142 to 

analyze whether party communications are subject to the statutory limits on 

support of particular candidates. The energy expended by our colleagues to 

savage the Commission's own advisory opinion process is surprising. The 

strangest aspect of the Sandstrom et a!. Statement, though, is that it claims to 

abhor vagueness but, in the end, is itself very confusing. 

We write this Statement to explain the state of the law in this area, and to 

clarify that the Sandstrom et a/. Statement does not effect a 'sea change' when 

analyzing which party communications should be subjected to the statutory limits 

on coordinated expenditures. In particular. we wish to emphasize that 'express 

advocacy' is not required. 

1. 

The limits on coordinated expenditures by party commitlees on behalf of 

their candidates have been on the books for over 24 yeas. They were part of 

the Federal Election Campaign Act Amendments of 1974: In addition to the 

' Statement of Reasans of Vice Chairman Wold and Cammissioners Elliott. Mason and Sandstrom 

issued June 24. 1999 (hereinafter 'SafldStrQm et a/. Statemenr). 

Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder). 95819. 

Pub. L. 93443,88 Stat. 9263, f 101. 
$5,000 per election contribution limit available lo all political committees,4 parties 

have coordinated expenditure allowances perniitting additional spending in 

connection with the genera! election campaigns of their candidate^.^ 

The party coordinated expenditure limits serve an important role in 

preventing party donors from having an indirect. way of effecting a 'quid pro quo' 

arrangement with candidates for federal office- the link between money and 

official government action the statute is designed to prevent. If a party 

committee is able to undertake only a limited amount of coordinated expenditure 

activity on behalf of a particular candidate, donors or groups of donors will not be 

able to expect large-scale donations to the paw to result in large-scale spending 

by the party on behalf of such candidate. For example. ten banking industry 

PACs who donate $1 5,000 each to a party's House campaign committee and 

who are close to a particular House committee chairman running for reelection 

would not be able to expect $150,000 in coordinated expenditures by the party 

on behalf such candidate because the coordinated expenditure limit would 

prevent it. 

The direct payment of funds to a candidate's campaign has been treated 

as a "contribution6 subject to the contribution limit. A party's Coordinated 

payment to a third patty on behalf of a candidate has been treated as either an 

in-kind "contribution" or a coordinated "expenditure,"' at the option of the 

expending committee.* If treated as a coordinated expenditure, the party has to 

' Currently codified at 2 U.S.C. § 441a(a)(Z)(A). 

allowance provides: 

1 I C.F.R. 5 110.7(a)(3). (b)(3). Codified at 2 U.S.C. 5 441a(d). the coordinated expenditure 

Notwithstanding any other provision of law with respect to limitations on expenditures or 

limitations on contributions, the national committee of a political party and a State 

committee of a political party. including any subordinate committee of a State committee, 

may make expenditures in connection with the general election campaign of candidates 

for Federal ofice, subject to the limitations contained in paragraphs (2) and (3) of this 

subsection. 

Subsections (2) and (3) set forth formulas that in the last presidential election permitted a national 

party committee to spend over $12 million on behalf of its presidential candidate. and that in the 

1998 congressional elections permitted a national and state party committee each to spend 

$32.550 for a House candidate and each to spend amounts ranging from $65,100 in small states 

like Wyoming to over $1.5 million in California for a Senate candidate. 

2 U.S.C. $431(8). ' 2 U.S.C. 5 431(9). 

FEC Campaign Guide for Party Committees (1996) at 16. The FEC for many years operated 

with a presumption that all parly spending was coordinated with the parties' eventual nominees. 

11 C.F.R. 5 ?10.7(a)(S). (b)(4) (1996). The Supreme Court invalidated that presumption in 

Colorado Republican Federal Campaiqn committee v. FEC. 518 U.S. 604 (1996) (hereinafter 

'Colorado I-). As a result, only party spending that can be shown to meet the legal test of 

'coordinafion' can be subjected to the limits at 2 U.S.C. g 441a(a)(2)(A) and (d). The legal test for 

coordination is set forth at 2 U.S.C. § 5 436(17) and 441a(a)(7)(B) and at 11 C.F.R. $ 109.l(b)(4) 

and (d)(l). 

- 

2 

~~ 
keep within the coordinated expenditure limit, but only the party need report the 

transaction.' 

Because party committees are primarily in the business of electing 

candidates, the Commission has required virtually all party-building activity to be 

at least allocated so that indirect federal candidate support is not paid for with 

funds not permitted under federal law.'' At the same time, recognizing party 

committees sometimes undertake generic party-building activities that may help 

their candidates only in a general way- a way that should not resuM in a 

contribution to or coordinated expenditure on behalf of a particular candidatethe Commission has tried to clarify when a party activity need not be subjected to 

a candidate-specific limitation. Thus, the Commission has specified at 11 C.F.R. 

§ 106.l(c) that an expenditure for rent, personnel. overhead, general 

administrative costs, educational campaign seminars, training of campaign 

workers, or registration or get-out-the-vote drives need not be attributed to 

individual candidates unless the expenditure is "made on behalf of a clearly 

identified candidate, and the expenditure can be directly attributed to that 

candidate." 

When identifying which party activities fail under the candidate-specific 

limits, though, the Commission must deal first and foremost with the underlying 

statutory terms. A "contribution" is a payment or gift of value made "for the 

purpose of influencing any election for Federal ofice."" A coordinated 

"expenditure" is a payment, advance or gift of anything of value made "for the 

purpose of influencing any election for Federal office" and "in connection with the 

general election campaign" of a candidate for Federal office." 

Over the years, the Commission has grappled with the difficult factual 

distinctions that make a party communication a generic party-building 

expenditure on the one hand, or an in-kind contribution or coordinated 

expenditure on the other. The best-known instances were Advisory Opinion 

1984-15'3 and the aforementioned Advisory Opinion 4985-14. In each of those 

opinions, the Commission analyzed the facts according to the basic underlying 

statutory provisions cited above. 

In Advisory Opinion 1985-14, the Commission developed a shorthand 

reference to the legal analysis to be used. Instead of repeating the statutory 

phrases, "for the purpose of influencing" and "in connection with," the 

Commission described the process as a search for whether the cornmur.ication 

11 C.F.R. 5 104.3(a)(3)(iii). 

lo 11 C.F.R. $ 106.5. 

" 2 U.S.C. 5 431(8). '' 2 U.S.C. 55 431(9) and 441a(d). 

" Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), 5766 

3 
contained an "electioneering message." '' The Commission then cited a 

Supreme Court decision for further guidance as to what was meant by 

'electioneering message."' There, the Court simply described its view of the 

reach of the corporate and union prohibition at 2 U.S.C. 5 441b: whether a 

communication is "designed to urge the public to elect a certain candidate or 

party."16 This phrasing, of course, is virtually indistinguishable from the "for the 

purpose of influencing any election for Federal office" language at the heart of 

any 'contribution" or "expenditure" inquiry. Thus, at most, the Commission in 

Advisory Opinion 1985-14 was paraphrasing the statutory language underlying 

any coordinated party expenditure analysis. 

II. 

Our colleagues grossly overstate the significance sf the "electioneering 

message" phrase and then gyrate into an inappropriate constitutional hypothesis 

regarding the vagueness of that phrase and other phrases used in Advisory 

Opinions 1984-15 and 1985-14. Along the way, they grumble about perceived 

improper rulemaking through the advisory opinion process. 

A. 

Dealing with the last 'red herring' first, to our knowledge no commissioner 

has been confused about the legal effect of advisory opinions. While advisory 

opinions clearly have binding consequences, the statute is clear that general 

rules of law have to emanate from the statute or from regulations of the 

Commission." Nonetheless, our colleagues seem convinced that the 

Commission's use in Advisory Opinions 1984-15 and 1985-14 of paraphrases 

and synonyms for the statutory test was, in fact, the creation of a new 

substantive rule of law.'' The reality, of course. is that there are only so many 

words in the English language, and after citing the underlying statutory 

provisions, the Commission simply attempted to explain the legal test in other 

helpful ways." 

" Fed. Elec. Camp. Fin. Guide (CCH Transfer Binder), 75819 at 11.185. 

Is United States v. United Auto Workers, 352 US. 567 (1957) (hereinafter 'XW). 

"d. At 587. 

" 2 U.S.C. §437f(b). 

In At one point our colleagues call the phrases used a 'test" and at other times they refer to them 

as an 'amalgam.' Sandstrom el al..Statement at 2 and 4. 

Lest our colleagues be struck down by a bolt of lightning for insinuating they would never stoop 

to helpful descriptions of the underlying statutory and regulatory provisions, they should concede 

that only recently in Advisory Opinion 1999-1 1. they engineered a description of the statute's 

reach that depended on whether there was 'any campaign activity' at the event in question. See 

Memorandum from Commissioner Sandstrom. Agenda Doc. No. 99-61-A Advisory Opinion 1999- 

11 (unpubiished) at 3. 

4 
Thus, our colleagues have felled a demon they didn't need to imagine in 

the first place. The regulated community has had notice of the underlying 

statutory provisions at 2 U.S.C. 00 431(8) and (9) and 441a(d) all along. 

Advisory Opinions 1984-15 and 1985-14 neither expanded nor diminished those 

underlying rules of law. 

Interestingly, our colleagues do not purport to supersede Advisory 

Opinions 1985-14 and 1384-15, but rather disagree with the phrasing of the legal 

analysis therein. We take that to mean the Commission's conclusions regarding 

specific proposed ads in those opinions still serve as valid legal precedent in 

terms of the underlying statute. For example, a party committee that ran ads 

under materially indistinguishable circumstances could 'rely upon' the 

conclusions reached by a majority of commissioners in those opinions in 

determining whether the ads would be a coordinated expenditure or notz0 This 

rightly diminishes the negative impact of our colleagues' statement and suggests 

only that the Commission cease using the pesky 'electioneering message" 

phrase when explaining its interpretations under the statute. 

We must address our colleagues' suggestion that an advisory opinion 

may not be used as a "sword of enforcement." Sandstrom et a/. Statement at 3. 

Apparently, they disregard the statutory language quoted in the previous 

footnote. Someone who receiwes an advisory opinion that certain conduct would 

be illegal, as well as anyone in materially indistinguishable circumstances, surely 

may 'rely on' that legal conclusion to File a complaint against someone else 

engaging that conduct. Essentially, that is what happened when Democratic 

Party representatives received a response in Advisory Opinion 1985-14 that 

certain targeted communications attacking a likely opponent would be 

coordinated expenditures subject to limit. Other Democratic Party 

representatives then filed a complaint against the Colorado Republican Party 

regarding certain ads that attacked the likely Senate nominee, Tim Wirth. That 

enforcement case became the subject of the Supreme Court's decision in 

Colorado I. w. 

Our colleagues may have missed the fact that the 10" Circuit in that 

case upheld the FEC's use of Advisory Opinion 1985-14 (even its 

'electioneering message" phrase) to bolster its claim?' Although the Supreme 

Court vacated the IO" Circuit's opinion on other grounds, Colorado I, this is a 

strong indication advisory opinions can be used as a "sword." 

~ ~~ ~~~ ~ -~ ~ 

a The statute provides that any advisory opinion rendered by the Commission "may be relied 

upon' by the person to whom the opinion is issued or by 'any person involved in any specific 

transaction or activity which is indistinguishable in all its material aspects . . . .. 2 U.S.C. 5 

437f(c)( 1 ). '' FEC v. Colorado ReDublican Federal Campaiqn Committee. 59 F. 3d 1015 (lom Cir. 1995). 
This proposition is supported by a grn Circuit decision, a case our 

colleagues cite but misconstrue.Y There, in a successful enforcement action 

against a committee that accepted excessive contributions, the FEC used its 

advisory opinion precedent as a "sword," and the court specifically sanctioned 

this appr~ach.'~ 

The courts have strongly indicated the Commission is bound to apply its 

advisory opinion precedent c~nsistently.~' We caution our colleagues not to get 

so agitated over the use of paraphrases and shorthand references In prior 

advisory opinions that they issue statements undermining the ability of the 

agency to enforce the law. 

Our colleagues go well beyond their role as commissioners by opining 

about the possible unconstitutional vagueness and overbreadth of the words 

"electioneering message."2s First, as just explained, everyone should agree that 

"electioneering message" is not a rule of hw and, hence. it is not the proper 

focus of any constitutional debate. Second, even if it were, Commissioners are 

not members of the judiciary entitled to render their own mles 

It is one thing to interpret the statu!e in an advisory opinion, or to interpret the 

FEC v. Ted Halev Conqressional Committee. 852 F.2d 11 11, 11 15 (gm Cir. 1988) (hereinafter 

'Haley') ('interpretation of FECA by the FEC through its regulation and advisory opinions is 

entitled to due deference and is to be accepted by the court unless demonstrably irrational or 

clearly contrary to the plain meaning of the statute'). 

23 We cannot fathom our colleagues' attempt to distinguish &I&. They appear to argue the 

court's reliance on advisory opinions is insignificant because there happened to be a relevant 

regulation to apply as well. Sandstrom et a/. Statement at 4. n. 9. As our cc!!eagues well know, 

the existence of a regulation is not essential to the legal value of an advisory opinion. The law, 2 

U.S.C. 9 437f(a). specifically contemplates advisory opinions applying the statute as well- just as 

was the case in Advisory Opinions 1984-15 and 1985-14. As precedent. such opinions may be 

'relied upon' just as much as advisory opinions applying a regulation. 2 U.S.C. 3 437f(C). 

''See Common Cause v. FEC. 676 F. Supp. 286 (D.D.C. 1986) (certain FEC commissioners. 

including Commissioner Elliott. ordered to issue statement of reasons in dismissed enforcement 

case where advisory opinion precedent seemingly inconsistent); Common Cause v. FEC. Fed. 

Elec. Camp. Fin. Guide (CCH Transfer Binder). fi 9263 (D.D.C. 1988) (related case noting 'The 

importance of respect for the Rule of Law . . . requires that courts be vigilant to ensure that in the 

process 'prior policies and standards are being deliberately changed, not casually ignored.'"). 

25 Sandstrorn et a/. Statement at 4. 

Commissioners have an obligation to seek ccsnpliance with the statute passed by Congress. 2 

U.S.C. 3 437c(b)(l). The D.C. Circuit has stated. '[AJdministrative agencies. . . cannot resolve 

constitutional issues.' American Coalition for Competitive Trade v. Clinton, 128 F.3d 761. 766 n. 6 

(D.C. Cir. 1997). See also, Gilbert v. National Transportation Safetv Board. 80 F.3d 364. 366-67 

(9" Cir. 1996) ('challenges to the constitutionality of a statute or a regulation promulgated by an 

agency are beyond the power or the jurisdiction of an agency'). 

6 
statute through a clarifying regulation." It is altogether different to opine that a 

mere shorthand reference used to paraphrase the statute is unconstitutional." 

That said, we believe it important to note a fundamental flaw in our 

colleagues' 'judicial detour.' Their reliance on Supreme Court analysis of 

independent spending provisions is simply inapposite. In the area of 

coordinated expenditures, there is no basis for applying the "express advocacy" 

standard created in Bucklef' and FEC v. Massachusetts Citizens for Life3' 

where independent disbursements were at issue. Indeed, Buckley could not 

have been clearer that its "express advocacy" test did not apply to coordinated 

expenditures. When analyzing former 18 U.S.C. Q 608(e), the independent 

expenditure limit struck down by the Court, the per curiam opinion noted: 

The parties defending 5 608(e)(l) contend that it is necessary to prevent 

would-be contributors from avoiding the contribution limitations by the 

simple expedient of paying directly for media advertisements or for 

other portions of the candidate's campaign activities. They argue that 

expenditures controlled by or coordinated with the candidate and his 

campaign might well have virtually the same value to the candidate as a 

contribution and would pose similar dangers of abuse. Yet such 

controlled or coordinated expenditures are treated as contributions 

rather than expenditures under the Act. [footnote omitted] Section 

27 The D.C. Circuit has noted that the advisory opinion process provides an opportunity 'to reduce 

uncertainty or narrow the statute's reach' and that 'the susceptibility of the [Federal Election 

Campaign Act] to challenge on the grounds of vagueness has consequently been reduced.' 

Martin Tractor Co. v. FEC. 627 F.2d 375, 386 (D.C. Cir.), cert. denied, 449 U.S. 954 (i980). 

*I This would apply, as well, to our colleagues' constitutional analysis of other phrases used at one 

time or another by the Commission to explain the application of the underlying statutes, such as 

whether the communication would 'tend to diminish support for one candidate and gamer support 

for another candidate.' Sandstrom el a/. Statement at 4, n. 12. discussing Advisory Opinion 1984- 

15. 

("designed to urge the public to elect a certain candidate or party') is but 'charming' and of little 

'practical use' because it dates back to the days of a '57 Chevy. Sandstrom et a/. Statement at 

5. n. 13. That might explain why the old case of Marburv v. Madison, 5 U.S. 137, 178 (1803) (It is 

for Article 111 judges to consider constitutional disputes and 'say what the law is.-), is of little value 

to them. More importantly. because the phrasing used in &W is so close to the current language 

of the statute governing coordinated expenditures ('for the purpose of influencing any election for 

Federal office'). we hope our colleagues are not suggesting the latter is unwnstitutionally vague. 

In Bucklev v. Valeo. 424 US. l(1976). the Court made crystal clear that it viewed the phrase "for 

the purpose of influencing' in the context of coordinated expenditures to be free of constitutional 

vagueness concerns ('We construed [the term 'contribution' which relies on a 'for the purpose of 

influencing' test] to include . . . expenditures placed in cooperation with or with the consent of a 

candidate. . . . So defined, 'contributions' have a sufficiently close relationship to the goals of the 

Act. for they are connected with a candidate or his campaign.'). 424 U.S. at 78, referring back to 

n. 24 at 23. 

w479 US. 238, 249-50 (7986) (hereinafter'=). 

We are baffled by our colleagues' suggestion that the Supreme Court's phrase in !J@J 

424 U.S. at 4244,7642. 

7 
608(b)'s contribution ceilings . . . prevent atternfits to circumvent the Act 

through prearranged or coordinated expenditures amounting to disguised 

contributions. By contrast, 5 SO8(e)('l) limits expenditures for express 

advocacy of candidates made totally independently of the candidate 

and his campaign." 

Similarly, in a, the Court made clear that its "express advocacy" construction 

need only apply to the provision in 2 U.S.C. 3 441b "that directly regulates 

independent spending."= 

111. 

We can only hope our colleagues' statement does not get misconstreed 

by the regulated community and the courts. We note with interest. for exanple, 

that one business day after our colleagues' statement was circulated at the 

Commission, counsel for the defendant in FEC v. Christian Coalitionm filed a 

pleading suggesting its relevance to the issue in that case: whether a 

corporation made in-kind contributions or independent expenditures prohibited 

under 2 U.S.C. fj 441 b. In fact, no allegation in that case involves a claim that 

depends on the phrase "electioneering message."y 

'' 424 US. at 46,47. See also Buckley at 78-80 (defining Coordinated expenditures as 

'contributions' and defining nontoordinated 'expenditures' covered by former 2 U.S.C. 5 4We) 

to reach only communications containing 'express advocacy'). 

479 US. at 249. 

No. 96-1781 (D.D.C., filed 1996). 

Interestingly. the Commission passed a regulation in 1995 that implements 2 U.S.C. 441 b as it 

relates to certain voter guides. St uses the phrase 'electioneering message." Specifically, for 

voter guides prepared with the candidates' cooperation and participation. the regulation specifies 

that such guides 'shall not score or rate the candidates' responses in such way as to convey an 

electioneering message.' 11 C.F.R. 5 114,4(~)(5)(ii)(E). As it postdates the activities at issue in 

FEC v. Christian Coalition, a, it should not enter the debate there. but that has not stopped 

the defendant's counsel. For activities properly subject to this regulation, we can only ponder 

what out colleagues will say. 

8 
The confusion generated by Our colleagues is regrettable. While the 

Commission's efforts to apply the in-kmd contribution and coordinated 

expenditure provisions in the statute must focus, as always, on the words of the 

statute, surely a great deal of energy now will be expended on what to make of 

the banning of the innocuous 'electioneering message" phrase. The answer is, 

"not much." Sadly, a lot of explaining will be required to get there. 

9 

Danny L. %lcDonald. eommissioner