April 2003 Federal Election Commission Volume 29, Number 4

Table of Contents

Regulations

1 Final Rules on Administrative

Fines Regulations

Reports

1 April Reporting Reminder

4 Texas Special Election Reporting

Electronic Filing

3 Electronic Filers Required to

Update Filing Software

Court Case

4 New Litigation

5 Federal Register

800 Line

5 Monthly Filing by State, District

and Local Party Committees

Engaged in Federal Election

Activity

8 Advisory Opinions

Outreach

10 Revised Schedule for Spring

Conferences

11 Public Appearances

11 Index

Compliance Regulations

Final Rules on

Administrative Fines

Regulations

On March 6, 2003, the Commission approved final rules amending

its administrative fines regulations

to:

• Reduce the civil money penalties

for political committees with less

than $50,000 in financial activity

(total receipts plus total disbursements) in a reporting period who

file reports late or not at all;

• Create two additional levels-ofactivity brackets in the civil

penalty schedules for such committees to make further distinctions

in the amount of the civil penalty

assessed; and

• Exclude certain nonfederal activity

from the level-of-activity calculation on which civil penalties for

unauthorized committees are

based.

Additionally, the amended rules

clarify how late filers and nonfilers

are notified of Commission actions

under these regulations and clarify

what will be considered “extraordinary circumstances” when reasonto-believe findings or

Reports

April Reporting Reminder

All principal campaign committees of House and Senate candidates

must now file quarterly in nonelection years as well as in election

years, and, as a result, all such

committees must file a report by

April 15. 11 CFR 105.4(a). Committees that file on a monthly basis,

including all national party committees and certain political action

committees and state, district and

local party committees, have a

report due on April 20. (See page 5

for a related article on monthly

filing for state, district and local

party committees.)

New Reporting Forms and

Software

The Commission has recently

approved new and revised reporting

forms and software that conform to

the reporting requirements of the

Bipartisan Campaign Reform Act of

2002 (BCRA). All committees,

individuals and other persons must

use the new and revised forms for

all reports. Paper copies of these

forms will be sent to registered

political committees who file on

(continued on page 2) (continued on page 3)
Federal Election Commission RECORD April 2003

2

reason-to-believe penalties are

challenged.

Civil Penalties

Based on its experience with the

Administrative Fine program, the

Commission has decided to reduce

the civil penalty schedules for

committees with levels of financial

activity below $50,000 in a late or

nonfiled report, and to make more

refined distinctions in penalties for

committees at the lowest levels of

financial activity.

Accordingly, the final rules

include new penalty schedules that

will apply to reports that are due on

or after the effective date of the

rules. Under the revised penalty

schedules, the bracket previously

covering levels of activity under

$25,000 has been divided into three

brackets. The revised penalty

schedules for late and nonfiled

reports that are not election sensitive1

 and have less than $50,000 of

financial activity in the reporting

period are as follows:

• For levels of activity of $1-

$4,999.99, the base penalty is $250

for nonfiled reports and $25 (plus

five dollars for each day late) for

late reports;

• For levels of activity of $5,000-

$9,999.99, the base penalty is $300

for nonfiled reports and $50 (plus

five dollars for each day late) for

late reports;

• For levels of activity of $10,000-

$24,999.99, the base penalty is

$500 for nonfiled reports and $100

(plus five dollars for each day late)

for late reports; and

• For levels of activity of $25,000-

$49,999.99, the base penalty is

$900 for nonfiled reports and $200

(plus 20 dollars for each day late)

for late reports. 11 CFR

111.43(b)(2)(iii).

For election sensitive reports,2

 the

revised penalty schedules for reports

with under $50,000 of financial

activity are as follows:

• For levels of activity of $1-

$4,999.99, the base penalty is $500

for nonfiled reports and $50 (plus

ten dollars for each day late) for

late reports;

• For levels of activity of $5,000-

$9,999.99, the base penalty is $600

for nonfiled reports and $100 (plus

ten dollars for each day late) for

late reports;

• For levels of activity of $10,000-

$24,999.99, the base penalty is

$900 for nonfiled reports and $150

(plus ten dollars for each day late)

for late reports; and

• For levels of activity of $25,000-

$49,999.99, the base penalty is

$1,400 for nonfiled reports and

$300 (plus 25 dollars for each day

late) for late reports. 11 CFR

111.43(b)(2)(iii).

The Commission has also revised

its method of calculating the “level

of activity” on a report, and the

“estimated level of activity” on a

report that is not filed, to exclude

certain nonfederal receipts and

disbursements for unauthorized

committees that report a nonfederal

share of allocated federal/nonfederal

activity. Thus, transfers received

from the nonfederal account(s)

(reported on Line 18a of new FEC

Form 3X) and disbursements for the

nonfederal share of operating

expenditures attributable to allocated federal/nonfederal activity

(reported on Line 21(a)(ii) of new

FEC Form 3X) will not be considered in the penalty calculation.

This regulatory change should

effectively lower penalties faced by

unauthorized committees that

allocate expenses between federal

and nonfederal accounts in accordance with 11 CFR 106.6 and 106.7,

and will result in penalties that are

more reflective of a committee’s

level of participation in federal

elections. 11 CFR

111.43(a)(2)(i)(B) and (a)(2)(ii)(B);

11 CFR 111.43(b)(2)(i) and

(b)(2)(ii).

Notification of Committees

The Commission has added new

11 CFR 111.46 to address how

respondents will be notified of

reason-to-believe findings, final

determinations and all other communications under the administrative fines regulations. The final rule

clarifies that unless a respondent has

filed a statement designating

counsel, all notifications or other

1

 These are reports that are not due to

be filed immediately before an election.

Non-election sensitive reports are

considered nonfiled if they are not filed

at all or are filed more than 30 days

late.

2 Election sensitive reports include

reports and notices filed prior to an

election, such as 12-day pre-election

reports, October quarterly and October

monthly reports. They are considered

nonfiled if they are not filed prior to

four days before an election or are not

filed at all.

Regulations

(continued from page 1)

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)

Ellen L. Weintraub, Chair

Bradley A. Smith, Vice Chairman

David M. Mason, Commissioner

Danny L. McDonald,

 Commissioner

Scott E. Thomas, Commissioner

Michael E. Toner, Commissioner

James A. Pehrkon, Staff Director

Lawrence H. Norton, General

 Counsel

Published by the Information

 Division

Greg J. Scott, Assistant Staff

 Director

Amy Kort, Editor

http://www.fec.gov
April 2003 Federal Election Commission RECORD

3

communications from the Commission or the administrative fines

Reviewing Officer will be sent to

the political committee and its

treasurer at the address listed on the

committee’s most recent FEC Form

1,Statement of Organization. If the

committee has designated counsel,

then the Commission will instead

contact that counsel unless authorized in writing to do otherwise by

the committee or its treasurer. See

11 CFR 111.23.

Challenging Alleged Violations or

Penalty Assessments

The administrative fines regulations list specific circumstances that

the Commission will consider in

determining whether to assess a

civil money penalty, including the

existence of “extraordinary circumstances” that were beyond the

respondents’ control and that lasted

for at least 48 hours, which prevent

the timely filing of the report. In the

revised rules, the Commission has

added staff “inexperience” and

“unavailability”—including that of

the treasurer—to the examples of

circumstances that are not considered “extraordinary.” 11 CFR

111.35(b)(4)(iii). The Commission

strongly encourages political

committees to name an assistant

treasurer so that their financial

activities and reporting duties will

not be disrupted in cases where the

treasurer is unavailable.

Additional Information

The final rules, and their Explanation and Justification, were

published in the March 17, 2003,

Federal Register (68 FR 12572),

and are available on the FEC web

site at http://www.fec.gov/

register.htm. These rules will take

effect on April 16, 2003, and will

cover reports due on or after this

date.✦

—Amy Kort

paper, and may also be downloaded

from the Commission’s web site at

http://www.fec.gov/reporting.html.

Instructions for filling out the new

and revised forms are also available

at this web address.1

For electronic filers, the software

formats for FECFile, the FEC’s free

reporting software, are now available and may be downloaded at

http://www.fec.gov/elecfil/

electron.html. See related article

below. Electronic filers using

commercial software should contact

their vendors to obtain the updated

format for their software. Please

note that under the Commission’s

mandatory electronic filing regulations, individuals and organizations

that receive contributions or make

expenditures in excess of $50,000 in

a calendar year—or expect to do

so—must file all reports and statements with the FEC electronically.

Electronic filers who instead file on

paper or submit an electronic report

(either by direct transmission or on

diskette) that does not pass the

Commission’s validation program

will be considered nonfilers and

may be subject to enforcement

actions, including administrative

fines.2

Senate committees and other

committees that file with the

Secretary of the Senate are not

subject to the mandatory electronic

filing rules, but may file an unofficial electronic copy of their reports

with the FEC in order to speed

disclosure. All reports, whether they

are filed with the FEC or with the

Secretary of the Senate, must be

filed using the new and revised

reporting forms and/or software.

Additional Information

For more information on 2003

reporting dates:

• See the reporting tables in the

January 2003 Record;

• Call and request the reporting

tables from the FEC at 800/424-

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

1100;

• Fax the reporting tables to yourself

using the FEC’s Faxline (202/501-

3413, document 586); or

• Visit the FEC’s web site at

www.fec.gov/pages/charts.htm to

view the reporting tables online.✦

—Amy Kort

Reports

(continued from page 1)

1 Paper filers should use the

Commission’s old reporting forms to

file amendments to reports that were

originally filed using these forms.

2 Electronic filers should use the

updated filing software to file all

amendments to reports.

Electronic

Filing

Electronic Filers Required to

Update Filing Software

The Commission’s electronic

filing software has been updated to

conform to new and revised reporting requirements under the Bipartisan Campaign Reform Act of 2002.

Committees that file electronically

should do so using either the new

Version 5 of FECFile or other

software that supports the new

format. FECFile 5 may now be

downloaded from the FEC web site

at www.fec.gov (click on the

Electronic Filing Icon). Filers who

use commercial software to file

electronically should contact their

software vendor as soon as possible

to get the latest release.✦

—Amy Kort
Federal Election Commission RECORD April 2003

4

Court Cases

New Litigation

Greenwood for Congress v. FEC

On January 22, 2003, the plaintiffs filed a complaint in the U.S.

District Court for the Eastern

District of Pennsylvania. The

complaint seeks review of a civil

money penalty assessed by the

Commission under its administrative fines regulations against

Greenwood for Congress, Inc., (the

Committee) for failing to timely file

its 2001 Year-End Report. 11 CFR

111.30-111.45.

In the complaint, the Committee

alleges that it sent an electronic

version of its 2001 Year-End Report

on a computer disk, along with a

paper copy version, to the Commission via overnight delivery on

January 29, 2002. The Year-End

Report was due on January 31,

2002. The Committee was required

to file its report electronically under

the Commission’s mandatory

electronic filing regulations. 11 CFR

104.18(a)(1). Reports that are

required to be filed electronically

but are instead submitted on paper

do not satisfy a committee’s filing

requirement. 11 CFR 104.18(a)(2).

While the Commission received a

package containing the paper

version of the report on January 30,

it subsequently informed the Committee that it had not received an

electronic version of the report. The

Committee then sent an electronic

version of the report on a 3.5 inch

floppy diskette, which the Commission received on February 8, eight

days after the filing deadline.

On June 14, 2002, the Commission found reason to believe that the

Committee and its treasurer had

violated 2 U.S.C. §434(a), which

requires the timely filing of reports

by political committees. The

Commission assessed a civil money

penalty in the amount of $3,100 in

Texas Special Election Reporting

 Texas has scheduled a special election on May 3, 2003, to fill the U.S.

House seat in the 19th Congressional district being vacated by Representative

Larry Combest. There are two possible special elections to fill this seat, but

only one may be necessary. If no candidate wins a majority of votes in the

Special General election, the top two vote-getters, regardless of party

affiliation, will participate in a Special Runoff election on a date to be set by

the Governor after May 3. If a Special Runoff is held, the Commission will

notify committees of the reporting dates for that election. Note that 48-hour

notices are required of authorized committees that receive contributions of

$1,000 or more for the Special General election between April 14 and April

30. Committees (including PACs) involved in this election must follow one of

the two reporting schedules below.1 The coordinated party expenditure limit

for this election is $36,480.

If Only the Special General Is Held, Committees Must File:

Close of Reg./Cert. Filing

Books Mail Date Date

April Quarterly —waived—

Pre-General April 13 April 18 April 21

Post-General May 23 June 2 June 2

July Quarterly June 30 July 15 July 15

If Two Elections Are Held, Committees Involved Only in the

Special General Must File:

Close of Reg./Cert. Filing

Books Mail Date Date

April Quarterly —waived—

Pre-General April 13 April 18 April 21

July Quarterly June 30 July 15 July 15

1 The Commission has issued new reporting forms and software that allow

for reporting under the Bipartisan Campaign Reform Act. All reports must

be filed using the new forms or filing software, as appropriate. Reports filed

electronically must be submitted by midnight on the filing date. A committee required to file electronically that instead files on paper reporting

forms will be considered a nonfiler. 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 and

overnight delivery) must be received by the Commission’s close of business

on the filing date.
April 2003 Federal Election Commission RECORD

5

accordance with 11 CFR 111.43.

After reviewing the Committee’s

written response and supporting

documentation to the Commission’s

reason-to-believe finding, the

Commission’s reviewing officer

recommended that the Commission

make a final determination that the

Committee had violated 2 U.S.C.

§434(a) and that the civil money

penalty assessed was appropriate.

On December 20, 2002, the Commission accepted the reviewing

officer’s recommendation and made

its final determination.

In its complaint, the Committee

asks that the court:

• Declare that the Commission’s

determination that the Committee

and its treasurer violated 2 U.S.C.

§434(a) and its assessment of a

civil money penalty of $3,100

were arbitrary, capricious, an

abuse of discretion and otherwise

not in accordance with law;

• Modify or set aside the

Commission’s determination that

the Committee violated 2 U.S.C.

§434(a) and its assessment of the

civil money penalty;

• Enjoin the Commission from

enforcing or collecting the $3,100

civil money penalty; and

• Require the Commission to pay the

plaintiffs’ legal fees and costs.

U.S. District Court for the

Eastern District of Pennsylvania,

03-307.✦

—Jim Wilson

(continued on page 6)

Federal Register

Federal Register notices are

available from the FEC’s Public

Records Office, on the FEC web

site at http://www.fec.gov/

register.htm and from the FEC

faxline, 202/501-3413.

Notice 2003-6

Administrative Fines

Regulations, final rules (68 FR

12572, March 17, 2003)

800 Line

800 Line

Monthly Filing by State,

District and Local Party

Committees Engaged in

Federal Election Activity

In recent weeks, the Commission

has received a number of questions

about how the agency’s new “soft

money” regulations—and particularly the provisions regarding

“federal election activity”—affect

state, district and local party committees’ filing requirements. While

most of these committees have

historically filed on a quarterly/

semiannual schedule, they will now

be required to file on a monthly

schedule if they are disclosing

receipts or disbursements for

“federal election activity.” 11 CFR

300.36(c)(1).

The information that follows

offers guidance to state, district and

local party committees who might

be affected by this requirement by:

1. Defining federal election activity;

2. Explaining what funds may be

used to pay for this activity; and

3. Providing specific examples of

when and how a committee must

comply with the monthly filing

requirement.

Definition of Federal Election

Activity

As used in the new “soft money”

regulations at 11 CFR part 300,

“federal election activity” (FEA)

means any of the following activities:

1. Voter registration activity during

the 120 days before a regularlyscheduled federal election and

ending on the day of that election;

2. Voter identification, generic

campaign activities1

 and get-outthe-vote activities that are

conducted in connection with an

election in which one or more

candidates for federal office

appear on the ballot (regardless

of whether state or local candidates also appear on the ballot);

3. A public communication2 that

refers to a clearly-identified

federal candidate and that

promotes, supports, attacks or

opposes any federal candidate

(This definition applies regardless of whether a nonfederal

candidate is also mentioned or

identified in the communication

and regardless of whether the

communication expressly

advocates a vote for or against a

federal candidate.); and

4. Services provided by an employee of a state, district or local

party committee who spends

more than 25 percent of his or

her compensated time during that

month on FEA or on activities in

connection with a federal election. 11 CFR 100.24(b).

The Commission has also

adopted regulations at 11 CFR

100.24(a) that define certain terms

used in the above definition of FEA:

1. “In connection with an election

in which a candidate for federal

1 “Generic campaign activity” means a

public communication that promotes or

opposes a political party and does not

promote or oppose a clearly-identified

federal or nonfederal candidate. 11

CFR 100.25.

2 A “public communication” means any

communication by means of television

(including cable and satellite), radio,

newspaper, magazine, billboard, mass

mailing, telephone bank or any other

form of general public political

advertising. Communications over the

Internet are not included in the

definition of public communication. 11

CFR 100.26.
Federal Election Commission RECORD April 2003

6

office appears on the ballot”

means:

• In an even-numbered year, the

period beginning on the day of the

earliest filing deadline for primary

election ballot access under state

law—or on January 1 in states that

do not hold primaries—and ending

on the day of the general election

or the general election runoff if a

runoff is held; or

• In an odd-numbered year, the

period beginning on the day that

the date is set for a special election

in which a federal candidate

appears on the ballot, and ending

on the day of that election.

2. “Voter registration activity”

means contacting individuals by

telephone, in person or by other

individualized means to assist

them in registering to vote. This

activity includes, but is not

limited to, printing and distributing registration and voting

information, providing individuals with voter registration forms

and assisting individuals with

completing and filing these

forms.

3. “Get-out-the-vote activity”

means contacting registered

voters by telephone, in person or

by other individualized means in

order to assist them in voting

(unless the activity is undertaken

by state or local candidates and/

or officeholders, or an organization of such candidates or

officeholders, and refers only to

one or more state or local

candidates). This activity includes, but is not limited to:

• Providing individual voters, within

72 hours of an election, with

information about when and where

polling places are open; and

• Transporting, or offering to

transport, voters to polling places.

4. “Voter Identification” means

creating or enhancing voter lists

by adding information about

voters’ likelihood of voting in a

particular election or voting for a

particular candidate (unless the

activity is undertaken by state or

local candidates and/or officeholders, or an organization of

such candidates or officeholders,

and refers only to one or more

state or local candidates).

Levin Funds

Under the new rules, a state or

local party committee must pay for

some types of FEA with federal

funds only, and may pay for other

types with an allocated mix of

federal and Levin funds or, in

limited cases, entirely with Levin

funds. Levin funds are essentially a

new type of funds, with limitations,

restrictions and reporting requirements explained in 11 CFR part

300. The restrictions on raising

Levin funds differ from those on

raising federal funds. In order to be

used by a state or local party

committee as Levin funds, a donation:

• Must be permissible under the

laws of the state in which the party

committee raising and spending

the funds is organized;

• May be solicited from some

sources that cannot contribute

under the Act (e.g., corporations,

unions and federal government

contractors) so long as the donation is not from foreign nationals

or from sources that are impermissible under state law;

• Is limited to $10,000 in a calendar

year from any person, including

any entity established, maintained,

financed or controlled by that

person (if state law limits donations to an amount less than

$10,000, then the lower limit

applies); and

• Must be raised using only federal

funds or Levin funds to pay the

direct costs of the fundraising

(including expenses for the solicitation of funds and for the planning

and administration of actual

fundraising activities and programs) if any portion of the funds

will be used for federal election

activity. 11 CFR 300.31 and

300.32(a)(4).

Each state, district and local party

committee has a separate Levin fund

donation limit, and such committees

are not considered to be affiliated

for the purposes of determining

Levin fund donation limits. Levin

funds spent by a given state or local

party committee must be raised

solely by that particular committee,

and these committees cannot raise

Levin funds through joint

fundraising efforts or accept transfers of Levin funds from other

committees. Additionally, these

committees cannot accept or use as

Levin funds any funds that come

from, or in the name of, a national

party committee, federal candidate

or federal officeholder. 11 CFR

300.31 and 300.34(b).

The Bipartisan Campaign Reform

Act and Commission regulations

also limit how a committee may

spend Levin funds for FEA. For

example, each committee may spend

only those Levin funds that it raises

for itself, and these funds can be

used only for certain types of voter

registration, voter identification,

get-out-the-vote activity and generic

campaign activity. Levin funds may

not be used to pay for any part of a

federal election activity if:

• The activity refers to a clearlyidentified federal candidate; or

• Any portion of the funds will be

used to pay for a television or

radio communication, other than a

communication that refers solely to

a clearly-identified state or local

candidate.

Moreover, it is important to note

that certain types of FEA may never

be financed with Levin funds:

• Public communications that refer

to a clearly-identified candidate;

and

• The services of employees who

devote more than 25 percent of

800 Line

(continued from page 5)
April 2003 Federal Election Commission RECORD

7

their compensated time to activities in connection with a federal

election. 11 CFR 300.32(c).

Triggering Monthly Filing

State, district and local party

committees that are federal political

committees and that have reportable

receipts and disbursements for FEA

must file their FEC reports monthly.

Otherwise, these committees would

generally file on a quarterly schedule. Under the new rules, many of

these committees may begin the

calendar year filing quarterly but be

required to switch to a monthly

schedule as they continue to raise

and spend funds for FEA. Examples

of activities that would trigger

monthly filing appear in the adjacent box.

A state, district or local party

committee whose combined federal

and Levin receipts and disbursements for FEA total less than $5,000

in a calendar year need only disclose

its federal receipts and disbursements. Once the committee’s

combined annual receipts and

disbursements for FEA total $5,000

or more, it must disclose all receipts

and disbursements, including

receipts and disbursements of Levin

funds. Receipts and disbursements

of Levin funds are disclosed on new

Schedules L, L-A and L-B, which

have been added to the revised FEC

Form 3X. Allocable FEA is disclosed on new Schedules H5 and

H6, which are also included in the

3X package.

Once a committee triggers the

monthly filing requirement, it must

file the next regularly-scheduled

monthly report and must continue to

file on the monthly schedule for the

remainder of the calendar year.

During the subsequent year, if a

committee would like to return to a

quarterly/semiannual filing schedule, it must file with the Commission a request to do so. 11 CFR

104.5(c)(3).✦

—Amy Kort

Federal Election Activity (FEA) Reporting Example

In general, if a state, district or local party committee has FEA that it is

required to disclose, it must file monthly. Consider, as an example, the

following scenario concerning the activities of the Washington County Party

Committee over a two-year period:

The Washington County Party Committee is a political committee under the

Act. During the first six months of 2003, the committee has no receipts or

disbursements for FEA—federal or Levin. Since the committee is not required

to file monthly, it opts to file quarterly during this period, and submits its first

report covering 2003 activity on July 31 (the mid-year report).

 In August 2003, the committee makes a salary payment to an employee who

spent more than 25 percent of her compensated time during July on activities

in connection with a federal election. Under FEC regulations, this payment

qualifies as one of the FEAs that must be paid solely with federal funds. As a

federal disbursement, the payment does not fall within the Levin fund

disclosure exemption for committees with less than $5,000 in receipts and

disbursements for FEA. As a result, the committee must file the September 20

monthly report, and must continue to file monthly for the balance of calendar

year 2003. In January 2004, the committee informs the Commission that it will

return to a quarterly reporting schedule.

During the first three months of 2004, the Washington County Party

Committee has no receipts or disbursements for FEA and files its first

election-year report on April 15.

 Later in April, the committee decides to conduct a series of voter

registration drives in advance of the state’s June 10 primary election. Under

FEC regulations, voter registration drives conducted within 120 days of a

federal election qualify as FEA. Typically, FEA expenses must be paid only

with federal funds or with an allocated mix of federal and Levin funds,

depending on the type of FEA. However, committees whose total receipts and

disbursements for FEA aggregate less than $5,000 for the calendar year may

pay for certain FEA, including voter registration, entirely with Levin funds.

The Washington County committee plans to keep its total FEA receipts and

disbursements well below $5,000, so it decides to raise and spend only Levin

funds to finance its voter registration drive. Since Levin funds are reportable

only after a committee crosses the $5,000 threshold, the Washington County

committee does not have any FEA to disclose, and need not file monthly.

 By the end of May, the Washington County committee is running a little

short on Levin funds, so it decides to make its May 28 voter registration

payment using an allocated mix of federal and Levin funds. The committee’s

total receipts and disbursements for FEA are still slightly below $5,000 for the

calendar year, but the committee has now financed FEA with federal funds,

the federal portion of which is reportable regardless of amount. As a result,

the committee must file monthly, beginning with the June 20 report. The

committee is still not required to disclose its Levin receipts or disbursements.

The Washington County Party Committee’s June 5 voter registration

payment pushes its total FEA receipts and disbursements over $5,000 for the

calendar year. Having crossed the $5,000 threshold, the committee’s July 20

monthly report—and every subsequent report for the year—must disclose all

receipts and disbursements for FEA, including receipts and disbursements of

Levin funds.
Federal Election Commission RECORD April 2003

8

Advisory

Opinions

AO 2002-15

Affiliation of Trade

Associations

The American Association of

Clinical Urologists (AACU) and the

American Urological Association,

Inc., (AUA) are affiliated for the

purposes of the Federal Election

Campaign Act (the Act) and, as a

result, may both act as the connected organizations of the American Association of Clinical

Urologists Political Action Committee (UROPAC). UROPAC, in turn,

may solicit the individual members

of both AACU and AUA for

contributions.

Background

AACU and AUA are both

incorporated trade associations

consisting primarily of individual

physician members who specialize

in urology. The two organizations

have overlapping members, board

members, officers and employees,

and the organizations regularly

interact. On May 28, 2002, AACU

and AUA entered into a formal

affiliation agreement setting forth

procedures for collaboration between the two groups and addressing, among other issues, the

proposed joint governance and

operation of UROPAC.

Under the Act and Commission

regulations, a corporation—including an incorporated trade association—that directly or indirectly

establishes, administers or financially supports a separate segregated

fund (SSF) is the “connected

organization” of that SSF. The

connected organization may use its

general treasury funds to pay the

administrative and solicitation costs

of the SSF without making a

contribution under the Act. 2 U.S.C.

§441b(b)(2)(C) and 11 CFR

114.1(a)(2)(iii) and 114.5(b). A

trade association that consists of

individual members and that serves

as the connected organization for an

SSF may solicit its individual

members on behalf of the SSF, as

well as the members’ families and

the executive and administrative

personnel of the trade association.

11 CFR 114.7.

Affiliation

The Act and Commission regulations provide that committees,

including SSFs, are affiliated when

they are established, financed,

maintained or controlled by the

same corporation, person or group

of persons. 2 U.S.C. §441a(a)(5)

and 11 CFR 100.5(g) and 110.3(a).

If two trade associations are affiliated, they may jointly serve as the

connected organizations for a single

SSF. See AOs 1988-14 and 1980-

18.

In a situation such as this one,

where a trade association is not

formally a subsidiary of another

entity, Commission regulations

provide for an examination of

various factors in the context of an

overall relationship to determine

whether the organizations are

affiliated. 11 CFR 100.5(g)(4)(i) and

(ii)(A)-(J), and 110.3(a)(3)(i) and

(ii)(A)-(J). These factors are also

used to determine whether a connected organization is affiliated with

another organization for the purposes of establishing the class of

persons who may be solicited for

contributions to the SSF. 11 CFR

114.5(g)(4). The relevant factors in

this case are whether a sponsoring

organization has:

• The authority or ability to direct or

participate in the governance of

another sponsoring organization

through provisions of by-laws,

contracts or other rules, or through

formal or informal practices;

• A common or overlapping membership, or common or overlapping

officers or employees, with

another sponsoring organization

that indicates a formal or ongoing

relationship between the two; and

• Any members, officers or employees who were members, officers or

employees of another sponsoring

organization that indicates a formal

or ongoing relationship between

the organizations. 11 CFR

100.5(g)(4)(ii)(B), and (D) through

(F) and 110.3(a)(3)(ii)(B), and (D)

through (F).

Given the overall relationship

between AACU and AUA, considered in the context of these affiliation factors as described below, the

two associations are affiliated for

the purposes of the Act.

Membership overlap. The overlap

in membership between AACU and

AUA is particularly significant to

the determination of affiliation in

this case. Approximately 71 percent

of the 3,935 AACU members are

also members of AUA, and all of

the individuals eligible to hold

office in the AACU are also AUA

members. Active members of

AACU who have not already joined

the AUA are formally encouraged to

do so by the AACU—a practice

which is codified in the AACU

Bylaws.

Participation in Governance. The

broad membership overlap between

the organizations is part of the

structural design that indicated each

organization’s participation in the

governance of the other. The AACU

Bylaws establish membership in the

AUA as a qualification for holding

elected office in the AACU, thus

mandating that all of its officers and

committee members belong to both

associations. Furthermore, under the

AUA Bylaws and the affiliation

agreement between the groups, a

block of three seats on the AUA’s

key Health Policy Council is

reserved for the AACU. The AACU

Bylaws also formally require an

AUA presence on the AACU’s

Government Relations Committee,

and, as noted above, there is a 100

percent membership overlap with

AACU members who are eligible to

hold office.
April 2003 Federal Election Commission RECORD

9

Overlap between current board

members. The overlapping board

membership between the AACU

and the AUA is also important. At

least one person currently serves as

a Board of Directors member for

both organizations. Six current

AACU officers and board members

serve on the UAU’s 14-member

Health Policy Council, along with

the AACU’s immediate past president and president-elect. The AACU

board is entirely controlled by

people who must also be members

of the AUA, and all of the members

of the AUA board are also AACU

members (although in this case such

membership is not an actual requirement for holding a board position).1

Additional indicators of affiliation. The two organizations participate in a number of additional

activities and practices that indicate

an ongoing commitment to joint

endeavors. For example, the fact

that AACU and AUA coordinate

their national lobbying efforts,

including employing the same

lobbyist to provide joint representation between the two associations,

indicates that the organizations have

a close, ongoing relationship as

organizations formed for the same

purpose and working together for

those purposes. Additionally, the

affiliation agreement provides for

continuing the two associations’

current practice of providing booths

and/or sponsoring lectures at the

other’s annual convention, as well

as for other forms of mutual involvement.

Consequences of Affiliation

Given the circumstances described above, AACU and AUA are

affiliated, and both may serve as the

connected organizations of

UROPAC. Thus, UROPAC, or

AACU or AUA acting on behalf of

UROPAC, may solicit contributions

from individual members, their

families and the executive and

administrative personnel of both

trade associations. 11 CFR 114.7(a)

and (c). In addition, UROPAC must

amend its FEC Form 1, Statement of

Organization, to list both AUA and

AACU as its connected organizations and incorporate the full names

of both organizations into the

official name of the SSF. 2 U.S.C.

§§433(b)(2) and (c) and 432(e)(5)

and 11 CFR 102.2(a)(1)(ii) and (2),

102.14(c), 109.11 and 110.11. See

also AOs 1997-13, 1996-49, 1992-

17, 1998-8, 1988-42 and 1988-14.

Date issued: February 19, 2003;

Length: 9 pages.✦

—Amy Kort

1 The regular participation of former

members, officers and board members

from one organization in the governance of the other also points toward

an ongoing relationship between AACU

and AUA.

1 FEC v. GOPAC, Inc., 871 F.Supp.

1466, 1470-71 (D.D.C. 1994).

(continued on page 10)

AO 2003-1

Nonconnected Committee’s

Payment of Expenses for

Trip to Meet Members of

Congress

NORPAC, a nonconnected

political action committee (PAC),

may not use its nonfederal account

to pay the entirety of expenses for a

trip to meet with Members of

Congress. The costs associated with

the trip are administrative expenses

for the PAC and thus must be paid

either from federal funds or allocated between federal and

nonfederal funds. 11 CFR 106.6.

Background

NORPAC, a nonconnected

political committee, conducts an

“annual mission” to Washington in

order to meet with members of

Congress and to discuss issues in

support of Israel. The meetings do

not include:

• Express advocacy or support of

any Member of Congress;

• The making of contributions to any

campaigns or political committees;

• Receptions or events for any

Member of Congress;

• Participation or assistance in

fundraising by any Member of

Congress; or

• Meetings with political party

officials.

The meetings may, however,

affect subsequent decisions about

candidate support by NORPAC.

Expenses for the trip generally

include bus travel, food, meeting

space rental, Congressional directories and supplies for participants,

including pens, folders and informational packets about issues to be

discussed. The participants in the

trip pay NORPAC an attendance

fee, which is intended to allow

NORPAC to recover the direct costs

of the mission. In past years

attendance fees were placed in

NORPAC’s federal account, and all

disbursements for the trip were

made from NORPAC’s federal

account. In December 2001, however, NORPAC established a

nonfederal account in addition to its

federal account.

Analysis

Because NORPAC has chosen to

organize and operate as a political

committee, it is required to report

all of its receipts and disbursements

with the FEC even if those receipts

and disbursements are not directly

in connection with a federal election.1

 Commission regulations

stipulate that nonconnected committees making disbursements in

connection with both federal and

nonfederal elections may make such

disbursements in one of two ways:

• Entirely from federally-permissible funds; or

• Allocated between federal and

nonfederal funds.

11 CFR 106.6(a) and 102.5.

If a committee elects to allocate

its disbursements for federal and
Federal Election Commission RECORD April 2003

10

Outreach

Revised Schedule for Spring

Conferences

Conference for Candidates and

Party Committees

In response to the overwhelming

demand for the FEC’s conference

for House and Senate candidates

and political party committees, held

March 12-13 in Washington, DC,

the Commission has amended its

conference schedule to allow for a

second conference for candidates

and party committees. This conference will be held May 21-22 at the

Royal Sonesta Hotel in Boston, and

will consist of a series of workshops

conducted by Commissioners and

experienced FEC staff who will

explain how the federal campaign

finance law, as amended by the

Bipartisan Campaign Reform Act of

2002, applies to House and Senate

candidates and party committees.

Workshops will specifically address

new rules for fundraising, new

restrictions on the use of nonfederal

funds or “soft money,” new requirements for communications and

revised reporting requirements. A

representative from the IRS will be

available to answer election-related

tax questions

The registration fee for the

conference is $385, which covers

the cost of the conference, materials

and meals. Registrations must be

Conference Schedule

for 2003

Conference for Corporations

and their PACs

April 29-30, 2003

Washington, DC

Conference for House and

Senate Campaigns and Political

Party Committees

May 21-22, 2003

Boston, MA

Conference for Trade

Associations, Membership and

Labor Organizations and their

PACs

June 16-17, 2003

Washington, DC

Regional Conference for House

and Senate Campaigns,

Political Party Committees and

Corporate/Labor/Trade PACs

September 9-10, 2003

Chicago, IL

Regional Conference for House

and Senate Campaigns,

Political Party Committees and

Corporate/Labor/Trade PACs

October 28-29, 2003

San Diego, CA

Advisory Opinion Requests

AOR 2003-2

Exemption from certain reporting

and disclosure provisions of the

Federal Election Campaign Act

(Socialist Workers Party (SWP),

Socialist Workers National Campaign Committee and committees

supporting SWP candidates, February 21, 2003)

AOR 2003-3

Federal candidate’s participation

in nonfederal campaigns, including

attending fundraisers for and

soliciting funds on behalf of state

and local candidates (State Senator

Bill Boling, State Delegate Bill

Janis, Chesterfield County School

Board Member Beth Davis and U.S.

Representative Eric Cantor, February 27, 2003)

AOR 2003-4

Corporate donations to a charity

to match contributions made to the

SSF by members of restricted class

(Freeport-McMoRan Copper &

Gold, Inc., February 25, 2003)✦

2 If participants are merely reimbursing

NORPAC at cost for specific earmarked

individual expenses (i.e., room deposits) such transfers are not limited as

contributions or expenditures and may

pass through the nonfederal account.

Similarly, funds advanced by NORPAC

for such specific individual expenses

need not be allocated, but may be paid

from the nonfederal account.

Advisory Opinions

(continued from page 9)

nonfederal activity, then it must

allocate the following:

• Administrative expenses including

rent, utilities, office supplies and

salaries;

• Direct fundraising costs; and

• Voter identification, voter registration, and get-out-the-vote drives

and any other activities that urge

the general public to register, vote

or support candidates of a particular party or associated with a

particular issue.

11 CFR 106.6(b)(2).

The expenses involved in the

NORPAC trip fall under the regulatory definition of “administrative

expenses” and, therefore, must be

allocated between federal and

nonfederal funds, unless NORPAC

opts to pay the expenses solely with

federal funds. See 11 CFR

106.6(b)(2)(i).

Also, the attendance fees for the

trip may be deposited either in

NORPAC’s federal or nonfederal

account. In the former case, the fees

are contributions to NORPAC, and

thus are subject to the contribution

limitations and prohibitions and

reporting requirements of the

Federal Election Campaign Act (the

Act). Donations by participants to

NORPAC’s nonfederal account are

not subject to the Act’s contribution

limitations.2

Date Issued: March 6, 2003;

Length: 7 pages.✦

—Gary Mullen
April 2003 Federal Election Commission RECORD

11

Index

Public Appearances

April 9, 2003

Robert Wood Johnson Executive

Nurses’ Seminar

Washington, DC

Robert Biersack

April 27-29, 2003

Heartland Conference/Arkansas

Ethics Commission

Little Rock, AR

Commissioner Thomas

received by April 27. A ten dollar

late fee will be assessed after that

date for late registrations. Because

demand for this conference is

exceptionally high, the FEC can

only accept conference registrations

from two attendees representing any

given organization.

The Royal Sonesta Hotel is

located at 5 Cambridge Parkway,

Cambridge, MA. A room rate of

$179 per night is available to

conference attendees who make

room reservations on or before April

27.

Conference for Corporations and

Their PACs

The FEC will hold a conference

for corporations and their PACs

April 29-30 in Washington, DC.

Commissioners and experienced

FEC staff will conduct workshops to

explain how the requirements of the

federal campaign finance law apply

to these organizations, and a representative from the IRS will be

available to answer election-related

tax questions.

The registration fee for this

conference is $385, which covers

the cost of the conference, materials

and meals. A ten dollar late fee will

be assessed for registrations received after March 28. Because

demand for this conference is

exceptionally high, the FEC can

only accept conference registrations

from two attendees representing any

given corporation or other organization.

The conference will be held at the

Loews L’Enfant Plaza Hotel, 480

L’Enfant Plaza, SW., Washington,

DC. A room rate of $189 per night

is available to conference attendees

who make room reservations on or

before March 28.

Conference for Trade

Associations, Membership

Organizations and their PACs

The conference for trade associations, membership organizations and

their PACs, originally scheduled for

May 21-22, has been rescheduled.

The FEC will hold a conference for

trade associations, membership and

labor organizations and their PACs

June 16-17 in Washington, DC.

(Please note that these conference

dates are different from those for the

previously-scheduled conference for

labor organizations.) Complete

information will be available in the

May issue of the Record.

Registration Information

Complete conference registration

information is available online.

Conference registrations will be

accepted on a first-come, firstserved basis. Attendance is limited,

and FEC conferences are selling out

quickly this year, so please register

early. For registration information:

• Call Sylvester Management

Corporation at 800/246-7277;

• Visit the FEC web site at http://

www.fec.gov/pages/

infosvc.htm#Conferences; or

• Send an e-mail to

toni@sylvestermanagement.com.✦

—Amy Kort

The first number in each citation

refers to the “number” (month) of

the 2003 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

2002-12: Disaffiliation of corporations and their PACs, 2:8

2002-14: National party

committee’s lease of mailing list

and sale of advertising space and

trademark license, 3:5

2002-15: Affiliation of trade associations, 4:8

2003-1: Nonconnected committee’s

allocation of administrative

expenses, 4:9

Compliance

Cases resolved under Alternative

Dispute Resolution program,

2:11; 3:3

Committees fined under Administrative Fine program, 1:25; 2:13;

3:4

MUR 5187: Corporate reimbursements of contributions, 1:22

MUR 5208: Facilitation of contributions by national bank, 2:1

Court Cases

_____ v. FEC

– Cunningham, 1:19

– Freedom’s Heritage Forum, 2:8

– Greenwood for Congress, 4:4

– Hawaii Right to Life, Inc., 1:20

– Lovely, 3:4

FEC v. _____

– Beaumont, 1:20

– Fulani, 2:8

– Toledano, 1:20

Regulations

Administrative fines, final rules, 4:1

BCRA reporting, final rules, 1:14

BCRA technical amendments, 2:6

(continued on page 12)
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Printed on recycled paper

Federal Election Commission RECORD April 2003

Index

(continued from page 11)

Biennial limit, clarification, 2:1

Brokerage loans and lines of credit,

effective date, 2:4

Contribution limits increase, 1:6

Contribution limitations and prohibitions; delay of effective date

and correction, 2:6

Coordinated and independent

expenditures, final rules, 1:10

Disclaimers, fraudulent solicitation,

civil penalties and personal use of

campaign funds, final rules, 1:8

Leadership PACs, Notice of Proposed Rulemaking, 2:4

Millionaires’ Amendment, interim

final rules, 2:2

Reports

April reporting reminder, 4:1

Draft forms and e-filing formats

available for public comment, 1:2

New forms available, 3:1

Reports due in 2003, 1:3

Statements of Candidacy and

Statements of Organization for

authorized committees require

new information, 3:2

Texas special election reporting, 4:4