June 2002 Federal Election Commission Volume 28, Number 6

Table of Contents

Regulations

1 Notice of Proposed Rulemaking

on Soft Money

2 Notice of Proposed Rulemaking

on Administrative Fines

4 Petition for Rulemaking on Debates

Budget

1 Commission Amends Budget Request

3 Federal Register

Legislation

4 Legislative Recommendations

Court Cases

4 Bipartisan Campaign Reform Act

Litigation

Compliance

5 Nonfiler

Audits

5 Committee to Re-Elect Vito Fossella

6 Bradley, McCain 2000 Campaigns

6 Advisory Opinions

Election Administration

7 Voting System Standards

Information

8 IRS Relief for 527 Organizations

Publications

9 New Campaign Guide Available

9 New Disclosure Directory Available

Reports

9 Revised Independent Expenditure

Reporting Forms

Administrative Fines

10 Committees Fined for Nonfiled

and Late Reports

Outreach

11 June Labor/Member Conference

11 Public Appearance

11 Index

Compliance

Commission Amends Budget

Request

On April 23, 2002, the Commission submitted to Congress an

amended fiscal year 2003 budget

request seeking an additional

$5,366,200 and 31 full-time employees in order to fund the implementation of the Bipartisan

Campaign Reform Act of 2002. The

Commission had originally requested an FY 2003 appropriation

of $46,917,000 and 362 full-time

employees. The amended request is

for a total of $52,283,200 and 393

full-time employees.

The Commission’s estimated

costs for implementing the BCRA

include expenses for new staff and

equipment, staff training and revised

publications and forms. The Commission also anticipates spending

$750,000 to acquire space to

accommodate new staff. The

Commission has requested this

amount in an emergency FY 2002

supplemental appropriation in noyear funds. If the supplemental

appropriation is received, the FY

2003 budget request amendment

will be reduced accordingly.✦

—Amy Kort

Budget Regulations

(continued on page 2)

Notice of Proposed Rulemaking

on Soft Money

The Commission is considering

new regulations to implement the

soft money restrictions and prohibitions contained in the Bipartisan

Campaign Reform Act of 2002

(BCRA). On May 20, 2002, the

Commission published a Notice of

Proposed Rulemaking (NPRM) in

the Federal Register (67 FR 35654),

seeking comments on proposed

rules governing the use of

nonfederal funds by parties, candidate committees and officeholders.

The BCRA requires the Commission to promulgate new soft money

regulations by June 25, 2002. As a

result, the Commission has placed

this rulemaking on an expedited

schedule, and a public hearing on

the NPRM is scheduled for June 4

and 5. The final rules will be

published in the Federal Register

and summarized in the Record.

The BCRA prohibits national

party committees and federal

candidates and officeholders from

raising funds not subject to the

prohibitions, limitations and reporting requirements of the Federal

Election Campaign Act, i.e.

nonfederal funds or “soft-money.” It

also generally requires that state,
Federal Election Commission RECORD June 2002

2

Federal Election Commission

999 E Street, NW

Washington, DC 20463

800/424-9530

202/694-1100

202/501-3413 (FEC Faxline)

202/219-3336 (TDD for the

 hearing impaired)

David M. Mason, Chairman

Karl J. Sandstrom, Vice Chairman

Danny L. McDonald,

 Commissioner

Bradley A. Smith, 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

Jim Wilson, Editor

http://www.fec.gov

Regulations

(continued from page 1)

district and local party committees

fund “Federal election activity,”

including voter registration and getout-the-vote drives, either entirely

with federal funds or with a combination of federal funds and “Levin

funds” (a new category of funds that

are subject to some requirements of

the Act and the BCRA). Additionally, the BCRA addresses

fundraising by federal and

nonfederal candidates and officeholders on behalf of political party

committees, other candidates and

nonprofit organizations.

The proposed rules included in

this NPRM are based on these new

prohibitions and requirements. The

full text of the NPRM is available

on the FEC web site at http://www.

fec.gov/register.htm and from the

FEC faxline, 202/501-3413, document number 351.

Future Rulemakings

This NPRM represents the first of

a number of rulemakings that the

Commission will initiate in the coming

months in order to comply with the

BCRA. Future NPRMs will address:

• Electioneering communications

and issue ads;

• Coordinated and independent

expenditures;

• The so-called “millionaire’s

amendment,” which increases the

contribution limits for candidates

whose opponents spend large

amounts of their personal funds on

the campaign;

• Increased contribution limits; and

• Other BCRA provisions, such as those

governing contributions by minors and

foreign nationals and those affecting

reporting requirements.

The BCRA requires the Commission to promulgate these rules by

December 22, 2002.✦

–Amy Kort

Notice of Proposed Rulemaking

on Administrative Fines

Based on its experience with the

Administrative Fine program, the

Commission is proposing amendments to its administrative fines

regulations to:

• Reduce civil money penalties for

late filers and nonfilers;

• Codify its procedures for notifying

respondents of RTB findings and

final determinations; and

• Make a technical change to correct

citations to U.S. Department of

Treasury and Department of

Justice regulations governing debt

collection that have been revised

and recodified.

On April 25, 2002, the Commission published a Notice of Proposed

Rulemaking (NPRM) in the Federal

Register (67 FR 20461), seeking

comments on these proposed

amendments. The NPRM also seeks

comment on two other issues:

• Whether to exclude receipts and

disbursements that finance nonfederal activities from the current

1

 Election sensitive reports (reports filed

immediately prior to an election) are

considered nonfiled if they are not filed at

least five days before an election. Nonelection sensitive reports are considered

nonfiled if they are more than 30 days

late or not filed at all.

method for calculating civil money

penalties; and

• Whether to revise the regulations

to state that certain defenses to

reason to believe (RTB) findings

are unacceptable.

The comment period closed on

May 28, 2002.

Proposed Changes to Penalty

Schedules

Currently, the civil money

penalty schedules for late filers have

two components:

• A base amount that increases with

the level of activity reflected in a

report; and

• An additional per-day charge.

The civil money penalty schedules for nonfilers have a base

amount that increases with the level

of activity.1

 Penalties for both late

and nonfilers increase by 25 percent

for each previous violation under

the administrative fines regulations.

The Commission is concerned

that fines for committees with lower

levels of activity may be too high.

Committees with lower activity

levels are often those of candidates

who have lost an election and, thus,

lack fundraising ability. If these

committees stop filing before they

are eligible to terminate, the resulting fines, which are calculated using

the estimated level of activity from

prior reports, can be relatively high.

Such fines can create a hardship for

these committees and for their

treasurers, who are often volunteers

and are legally liable, along with the

committee, for the fines. The

Commission is also concerned that

the overall civil money penalty

schedules may result in fines that

are substantial when compared to
June 2002 Federal Election Commission RECORD

3

(continued on page 4)

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 2002-5

Notice of Proposed Rulemaking

on Administrative Fines (67 FR

20461, April 25, 2002).

Notice 2002-6

Notice of Availability of Petition

for Rulemaking on Candidate

Debates (67 FR 31164, May 9,

2002).

Notice 2002-7

Notice of Proposed Rulemaking

on Soft Money Rules (67 FR

35654, May 20, 2002).

civil penalties approved in enforcement conciliation agreements for

other types of violations of the

Federal Election Campaign Act.

The NPRM’s proposed revisions

to the penalty schedules for late and

nonfiled reports:

• Reduce either the base amount or

the per-day charge in each activity

bracket on schedules covering both

election-sensitive and non-election

sensitive reports;

• Split the existing brackets covering

activity levels between $1 and

$24,999.99 into three brackets in

order to further reduce penalties at

the lowest levels of activity; and

• Create broader brackets for activity

levels of $200,000 and above and

reduce the number of brackets for

activity levels over $600,000 from

five brackets to three. 11 CFR

111.43(a) and (b).

The Commission requests

comments on whether the proposed

reductions in penalties would still

provide an incentive for committees

to file timely reports and whether

such reductions would affect

committees’ decisions to challenge

RTB findings and proposed civil

money penalties. Also, as alternatives to reducing the penalty schedules at all activity levels, the

Commission seeks comments on

whether to reduce fines only for

lower levels of activity or whether

to reduce fines for only non-election

sensitive reports and retain the

current penalty schedule for election-sensitive reports.

Notification of Respondents

The NPRM proposes amendments to clarify the agency’s current

practice of notifying political

committees and their treasurers by

mail of Commission actions taken

under these regulations. The Commission sends RTB and final

determination notices to the political

committee’s address listed in its

most recently-filed Statement of

Organization or amendment. If a

committee and its treasurer submit a

statement designating counsel, all

subsequent notices and other

communications are sent to counsel.

Exclusion of Nonfederal Funds in

Penalty Calculations

Currently, the Commission

calculates civil money penalties by

applying the fine schedules at 11

CFR 111.43 to a political

committee’s “level of activity,”

which is defined as the total receipts

and disbursements for the reporting

period covered by a late or nonfiled

report. The current definition is

based on the statutory requirement

in 2 U.S.C. §437g(a)(4)(C) that civil

money penalties take into account

“the amount of the violation involved” since political committees

are required to disclose in their

reports all receipts and disbursements. Thus, committees that

finance nonfederal activity through

their federal accounts may incur

higher penalties. The Commission

seeks comments on whether the

activity level on which civil money

penalties are based should exclude

receipts and disbursements that

finance nonfederal activities.

Clarification of Extraordinary

Circumstances Defense

Under the administrative fines

regulations, respondents may

challenge the Commission’s RTB

finding and/or proposed civil money

penalty based, among other things,

on “the existence of extraordinary

circumstances beyond the respondents’ control that were for a

duration of at least 48 hours and

prevented them from timely filing

the report.” 11 CFR 111.35. The

regulations also currently provide

four broad examples of circumstances that will not be considered

“extraordinary circumstances.”

During the operation of the

Administrative Fine program,

respondents have raised a number of

defenses that the Commission has

determined do not constitute extraordinary circumstances. Two of

the most common defenses are:

• The unavailability of the treasurer

and committee staff, sometimes

due to the illness or death of the

treasurer, committee staff or their

relatives; and

• The inexperience of the treasurer

or committee staff resulting from

vacancies or turnover in these

positions.

The NPRM seeks comment on

whether to revise 111.35 to state

more specifically the types of

circumstances that will not be

considered acceptable defenses.

Additional Information

The full text of the NPRM is

available on the FEC web site at

http://www.fec.gov/register.htm and

from the FEC faxline, 202/501-3413.✦

—Amy Kort
Federal Election Commission RECORD June 2002

4

Court Cases Regulations(continued from page 4)

Petition for Rulemaking on

Candidate Debates

On April 10, 2002, the Commission received a Petition for

Rulemaking asking it to amend its

rules to explicitly state that a news

organization’s (or related trade

association’s) sponsorship of a

candidate debate is not an illegal

corporate contribution or expenditure in violation of the Federal

Election Campaign Act (the Act).

The Commission published a Notice

of Availability in the May 9, 2002,

Federal Register (67 FR 31164)

seeking comments on whether to

initiate a rulemaking in response to

this petition. The deadline for

comments is June 10, 2002.

Currently, the Commission’s

debate regulations at 11 CFR 110.13

state that the debate “staging

organization(s) must use preestablished objective criteria to

determine which candidates may

participate in a debate.” The

petition, submitted by several major

news organizations, asserts that any

regulation of a news organization’s

debate sponsorship is unconstitutional, contrary to the clear intent of

the U.S. Congress and irreconcilable

with other regulatory actions taken

by the Federal Election Commission

and the Federal Communications

Commission. The petitioners ask the

FEC to draft new regulations

clarifying that such sponsorship is

legal under the Act and to avoid any

further regulation of candidate

debate sponsorship by a news

organization or a trade association

of members of the press.

The full text of the notice is

available on the FEC web site at

http://www.fec.gov/register.htm and

from the FEC faxline, 202/501-

3413, document number 252. Public

comments must be submitted, in

either written or electronic form, to

Bipartisan Campaign

Reform Act Litigation

Litigation challenging the

constitutionality of provisions of the

Bipartisan Campaign Reform Act of

2002 (the BCRA) began with three

lawsuits – McConnell v. FEC, NRA

v. FEC, and Echols v. FEC. See the

May 2002 Record, pages 3-4.

New Constitutional Challenges

On April 22 and 23, 2002, four

more complaints challenging the

constitutionality of several provisions of the BCRA were filed in the

U.S. District Court for the District

of Columbia by:

• The American Federation of Labor

and Congress of Industrial Organizations (AFL-CIO) and the AFLCIO Committee on Political

Education/Political Contributions

Committee;

• The Chamber of Commerce for the

United States, the National Association of Manufacturers, the

National Association of Wholesaler-Distributors and the U.S.

Chamber PAC;

• The National Association of

Broadcasters; and

• Congressman Ron Paul, the Gun

Owners of America, Inc., the Gun

Owners of America Political

Victory Fund,

RealCampaignReform.org, Citizens United and the Citizens

United Political Victory Fund,

along with other plaintiffs.

These four complaints generally

challenge the constitutionality of the

BCRA’s ban on the use of corporate

and labor union funds to pay for

“electioneering communications,”

which include broadcast advertisements that refer to a clearly identified federal candidate and are made

within 30 days of a primary election

or 60 days of a general election. The

Rosemary C. Smith, Assistant

General Counsel. Comments may be

sent by:

• E-mail to debate02noa@fec.gov

(e-mailed comments must include

the commenter’s full name, e-mail

address and postal address);

• Fax to 202/219-3923 (send a

printed copy follow-up to ensure

legibility); or

• Overnight mail to the Federal

Election Commission, 999 E Street

NW, Washington, DC 20436.✦

—Amy Kort

Commission Sends Legislative

Recommendations to

President and Congress

On May 14, 2002, the Commission submitted 23 recommendations

to Congress and President Bush for

legislative action in the area of

campaign finance law. This year’s

proposals involve a variety of

issues, including:

• Requiring electronic filing of

reports for Senate candidates;

• Making the Commission the sole

point of entry for disclosure

reports;

• Eliminating state expenditure

limits for publicly financed

presidential primary candidates;

• Increasing registration and reporting thresholds for unauthorized

committees, local party committees and independent expenditure

filers; and

• Averting the impending shortfall in

the Presidential Public Funding

Program.

The full text of the recommendations can be accessed on the

Commission’s website, www.fec.gov, in

the “Campaign Finance Law Resources”

section, under the heading “Legal

Documents.” ✦

–Jim Wilson

Legislation
June 2002 Federal Election Commission RECORD

5

1

 In future issues of the Record, these

cases and McConnell v. FEC, NRA v.

FEC and Echols v. FEC, will be

referred to collectively as McConnell v.

FEC.

complaints also challenge BCRA

provisions that:

• Define coordination with a candidate, campaign or political party;

• Increase disclosure requirements;

or

• Distinguish between materials that

are broadcast and those that are

printed.

On May 7, 2002, four additional

groups of plaintiffs filed complaints

with the court:

• The California Democratic Party,

the California Republican Party

and the Santa Cruz County Republican Central Committee, along

with other plaintiffs;

• The Republican National Committee and its treasurer, the Republican Party of Colorado, the

Republican Party of Ohio, the

Republican Party of New Mexico

and the Dallas County (Iowa)

Republican County Central

Committee;

• Victoria Adams, Association of

Community Organizers for Reform

Now (ACORN), the Fannie Lou

Hamer Project, the U.S. Public

Interest Research Group (US

PIRG) and several state PIRGs,

along with other plaintiffs; and

• Rep. Bennie G. Thompson and

Rep. Earl F. Hilliard.

Several of these complaints

challenge the BCRA’s restrictions

and prohibitions on the use of soft

money by party committees. One

complaint challenges BCRA

provisions that increase the individual contribution limits, and one

complaint also challenges the

BCRA provision that prohibits

contributions by individuals 17

years old or younger.

Consolidation of Cases

The court has consolidated the

eleven BCRA challenges filed on or

before May 7 around McConnell v.

FEC.

1

 The court found that all of the

challenges involve common issues

of fact and that “consolidation

makes sense to the extent that

unnecessary costs and delays in the

administration of these various

actions will be avoided, thereby

vindicating the political branches’

desire to see this litigation advance

as quickly as justice permits.” See

the May 2002 Record, page 3.

Adams v. FEC, U.S. District

Court for the District of Columbia,

1:02cv00877; AFL-CIO v. FEC et

al., U.S. District Court for the

District of Columbia, 1:02cv00754;

California Democratic Party and

California Republican Party v.

FEC, U.S. District Court for the

District of Columbia, 1:02cv00875;

Chamber of Commerce of the

United States v. FEC et al., U.S.

District Court for the District of

Columbia, 1:02cv00751; National

Association of Broadcasters v. FEC

et al., U.S. District Court for the

District of Columbia, 1:02cv00753;

Republican National Committee v.

FEC, U.S. District Court for the

District of Columbia, 1:02cv00874;

Congressman Ron Paul v. FEC et

al., 1:02cv00781; and Rep. Bennie

G. Thompson v. FEC, U.S. District

Court for the District of Columbia,

1:02cv00881.✦

—Amy Kort

Compliance

Nonfiler

The Craig Axford for Congress

Committee failed to file its preconvention report for the May 18,

2002, Utah Green Party Convention.

On April 12, 2002, the Commission notified principal campaign

committees involved the Utah Green

Party Convention of their potential

filing requirements. Committees that

failed to file reports by the May 6

due date were notified on May 7

that their reports had not been

received and that their names would

be published if they did not respond

within four business days.

The Federal Election Campaign

Act requires the Commission to

publish the names of principal

campaign committees if they fail to

file 12 day pre-election reports and

the quarterly report due before the

candidate’s election. 2 U.S.C. §§

437g(b) and 438 (a)(7). The agency

may also pursue enforcement

actions against nonfilers and late

filers under the Administrative Fine

program on a case-by-case basis.✦

—Jim Wilson

Audits

Audit of the Committee to

Re-Elect Vito Fossella

On April 17, 2002, the Commission approved the final audit report

on the Committee to Re-Elect Vito

Fossella (the Committee). The

report found that the Committee

received excessive contributions

between January 1, 1999, and

December 31, 2000.

Excessive Contributions

Under the Federal Election

Campaign Act and Commission

regulations, an individual may

contribute $1,000 per election to a

federal candidate. If a campaign

receives an excessive contribution,

the treasurer may ask the contributor

to redesignate the excessive portion

to another election, or may ask the

donor if the contribution was

intended to be a joint contribution

attributable to more than one person.

11 CFR 110.1. If the treasurer does

not receive a signed written

(continued on page 6)
Federal Election Commission RECORD June 2002

6

Audits

(continued from page 5)

Audits of Bradley, McCain

2000 Campaigns

The Commission has approved the

final audit reports on the Bill Bradley

and John McCain primary election

Presidential campaigns, finding that

both committees must repay the U.S.

Treasury for a portion of the public

funds they used during the 2000

elections. The Commission made its

determinations after conducting audits

of the committees, which are required

for any authorized candidate committee

that receives federal funds under the

Presidential Primary Matching Payment

Account Act. 26 U.S.C.§ 9038 (a).

Bradley Committee

Bill Bradley’s primary committee,

Bradley for President, Inc., must

repay the U.S. Treasury $14,055,

representing matching funds that the

committee received in excess of its

entitlement. The committee has already

repaid $28,085, representing stale-dated

checks identified during the audit.

The audit also found that the

committee failed to disclose on its

FEC reports interest earned on its

investment accounts and reimbursements received from members of the

press. The committee also failed to

itemize three interest payments on

loans, amounting to $75,024. In

response to the Commission’s audit,

the committee amended its reports

to disclose this activity.

McCain Committees

Senator John McCain’s 2000

primary committee, McCain 2000,

Inc. and the McCain Compliance

Committee, Inc. must repay $99,037

to the U.S. Treasury. The bulk of the

repayment, $85,017, represents

stale-dated checks issued by

McCain 2000, Inc. The audit also

identified apparent non-qualified

campaign expenses, which included

some expenses not related to the

campaign and some lost or stolen

equipment that the committee failed

to show conscientious efforts to

safeguard. McCain 2000, Inc., did

not receive matching funds in

excess of its entitlement.

Advisory

Opinions

AO 2002-03

Status of State Party as State

Committee of Political Party

The Green Party of Ohio satisfies the

requirements for state committee status.1

The Federal Election Campaign

Act (the Act) defines a state committee as “the organization which,

by virtue of the bylaws of a political

party, is responsible for the day-today operation of such political party at

the State level, as determined by the

Commission.” 2 U.S.C. §431(15). In

order to achieve state committee

status under Commission regulations, an organization must meet

two requirements. It must have:

• Bylaws or a similar document that

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

of a party at a state level; and

• Ballot access for at least one

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

1

 The Green Party of Ohio is affiliated

with the Green Party of the United

States, which is a national committee of

a political party. See AO 2001-13.

redesignation or reattribution within

60 days of the original receipt of the

contribution, the treasurer must

refund the contribution. If a political

committee receives a written

redesignation or reattribution

statement, but does not retain it, the

redesignation or reattribution is not

effective. 11 CFR 110.1(l)(5).

During the 2000 election cycle,

the Committee received excessive

contributions totaling $15,925 from

28 individuals.1

 The Committee’s

FEC reports indicated that many of

these contributions had been

reattributed or redesignated. However, the Committee could not

produce written documentation of

contributors’ redesignations and

reattributions. The Committee

contends that it complied with the

contributors’ intentions—often

expressed in telephone conversations—but that these intentions may

not have been documented with

signed redesignation or reattribution

statements.

In response to the Commission’s

audit, the Committee made refunds

to three of the contributors. The

Committee also obtained written

resignation or reattribution statements from 20 of the contributors.

However, the contributors’ statements were all dated in February

2002, well beyond the 60-day period

for obtaining a redesignation or

reattribution. As a result, these

statements were not a viable remedy

to the Committee’s receipt of the

excessive contributions. Excessive

contributions totaling $14,500 from

25 individuals remain to be

refunded.✦

—Amy Kort

1

 Audit staff initially identified 30

contributors who had made apparent

excessive contributions. However, the

Committee later produced documentation showing that two of these contributors had not exceeded the limits.

The audit’s reconciliation of the

McCain Compliance Committee

Inc.’s FEC reports with its bank

records also identified material

misstatements of its receipts,

resulting primarily from the failure

to report $3,000 in contributions.

The committee refunded the contributions and amended its disclosure reports.

Additional Information

The two audit reports are available from the FEC’s Public Records

Office by calling 800/424-9530

(press 3) or 202/694-1120.✦

—Amy Kort
June 2002 Federal Election Commission RECORD

7

2

 In previous advisory opinions determining state committee status, the

Commission considered either the

bylaws or other governing documents

of a state party organization. AOs

2000-39 and 2000-35. In reviewing

state party affiliates of qualified

national party committees, the Commission considered a state affiliate

agreement or correspondence from the

national party that attested to the role

the state affiliate played “commensurate with the day-to-day operation of [a

political party] on a State level.” See

AOs 1999-26 and 1992-30.

3

 An individual becomes a candidate for

the purposes of the Act once he or she

receives contributions aggregating in

excess of $5,000 or makes expenditures

in excess of $5,000. 2 U.S.C. §432(e)(1)

and 11 CFR 101.1.

Advisory Opinion Request

AOR 2002-6

Qualification as state committee

of political party (Green Party of

California, April 29, 2002)✦

Commission Approves Voting

Systems Standards

On April 30, 2002, the Commission unanimously approved the

Voting Systems Standards (the

Standards) for release and publication. The Standards have two volumes:

• Volume I provides functional and

technical requirements for a

number of system types and

configurations;

• Volume II provides testing specifications for the requirements in Volume I.

Both volumes are available on the

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

pages/vssfinal/vss.html.

The Standards are intended to

ensure that election equipment

certified for purchase by participating states will be accurate, reliable

and dependable. Although the

Standards are voluntary, 38 states

have chosen to adopt them either in

whole or in part and currently use

them to design systems and procure

equipment to meet the needs of a

variety of voting populations and

election formats. The Commission

has twice released draft versions of

the Standards for public comment

and has made several revisions to

the document based on the comments received from vendors,

election officials, academics,

technical experts, special interest

advocacy groups and concerned

citizens. See the February 2002

Record, page 1.✦

—Amy Kort

Election

Administration

The Green Party of Ohio meets

both requirements. It satisfies the

first requirement because its constitution and bylaws (the Bylaws) set

out an identifiable organizational

structure with varying responsibilities. The Bylaws delineate activity

commensurate with the day-to-day

functions of a political party on the

state level and are consistent with

the state party rules of other political

organizations that the Commission

has found to satisfy this requirement

for state committee status.2

The Party satisfies the second

requirement—ballot access for a

federal candidate—in that Ralph

Nader gained ballot access as the

Party’s candidate on the Ohio ballot

in 2000. Mr. Nader meets the

requirements for becoming a federal

candidate under 2 U.S.C. §441a(d).3

Date Issued: April 11, 2002;

Length: 3 pages.✦

—Amy Kort

AO 2002-04

Name and Abbreviation of

SSF

Austin, Nichols & Co., Incorporated (the Company), which is a

subsidiary of Pernod Ricard S.A.,

may name its separate segregated

fund (SSF) “Austin, Nichols & Co.,

Incorporated/Pernod Ricard USA

Political Action Committee” and

may use a shortened version,

“Pernod Ricard USA PAC,” for

common uses, such as on checks

and letterhead.

Under the Federal Election

Campaign Act and Commission

regulations, the name of any SSF

must include the full name of its

connected organization. 2 U.S.C.

§432(e)(5) and 11 CFR 102.14(c).

The regulations also permit the use

of a clearly recognized abbreviation

or acronym, as long as the SSF uses

both the abbreviation (or acronym)

and the full name on all reports,

including the Statement of Organization, and in all disclaimer notices.

11 CFR 102.14(c).See also AOs

2000-34, 1999-20 and 1987-26.

In late 2001, the Company

adopted the trade name “Pernod

Ricard USA” and publicized the fact

that the Company would be known

by this name through press releases,

web site documents and the Dun &

Bradstreet’s Company Detail listing.

The Company also uses the name

“Pernod Ricard USA” in printed

materials and for government

licensing and authorizations.

Because the proposed name of

the SSF contains the full official

corporate name of the Company, it

is permissible. Moreover, although

“Pernod Ricard USA PAC” is not

literally an abbreviation or acronym,

it is clearly recognizable as referring

to the Company’s well-publicized

name. Thus, it gives adequate notice

to the public as to the identity and

sponsorship of the SSF and is

permissible under the regulations for

common uses, so long as the full

PAC name appears on the Statement

of Organization, reports and disclaimers.

Date Issued: April 25, 2002;

Length: 4 pages.✦

—Kate Miller
Federal Election Commission RECORD June 2002

8

Information

1

Late or incorrect Forms 8871 and

8872 filed by July 15, 2002 are also

included in the voluntary compliance

program. These forms are not required

by political organizations that file with

the FEC as political committees.

2

 For taxable years beginning before

July 1, 2000, Form 1120-POL was

required only for organizations having

over $100 in taxable income. The

Notice 2002-34 voluntary compliance

program is not available for any Form

1120-POL required to be filed under

rules in effect before July 1, 2000.

3

 Organizations with gross receipts of

less than $100,000 and assets of less

than $250,000 at the end of the year

may file a Form 990-EZ, Short Form

Return of Organizations Exempt from

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

Organization Exempt from Income Tax.

Internal Revenue Service

Announces Relief for 527

Organizations

Citing confusion over new tax

law reporting and disclosure requirements, the Internal Revenue

Service is offering political committees the opportunity to file required

forms by July 15, 2002. The IRS

said that many committees have

either failed to file or need to correct

previously filed forms, and that a

voluntary compliance program is

most likely to achieve maximum

disclosure and is in the “best interests

of sound tax administration.”

According to Notice 2002-34, the

IRS will not assert any tax, penalty,

or interest against any political

organization described in section

527 of the Internal Revenue Code

based solely upon a late or incorrect

filing of any of the following forms,

if the organization files or corrects

the forms by July 15, 2002:1

• Any Form 1120-POL, U.S. Income

Tax Return for Certain Political

Organizations, due on or before

July 15, 2002, including any

applicable extensions;

• Any Form 990, Return of Organization

Exempt from Income Tax, or Form

990-EZ, Short Form Return of

Organization Exempt from Income

Tax, due on or before July 15, 2002,

including any applicable extensions.

The program described above is

not available for any Form 1120-

POL or Form 990 that is filed or

corrected after July 15, 2002. In

addition, this program does not

apply to any Form 1120-POL

required to be filed under rules in

effect before July 1, 2000, so a

political organization remains liable

for the tax on its investment income.

Taxes, penalties and interest will be

due from the original due date if any

form is not filed or corrected by July

15, 2002. A political organization

remains liable for tax, penalties and

interest if it fails to report any

required information.

Background

Legislation enacted in 2000

imposed new tax law reporting and

disclosure requirements on political

organizations (sometimes referred to

as “section 527 organizations,” after

their tax-exempt designation under

section 527 of the Internal Revenue

Code). Federal candidate committees, political party committees, or

political action committees required

to report to the Federal Election

Commission are required to file

Form 1120-POL, an income tax

return; and Form 990 or Form 990-

EZ, an informational filing.

1. Form 1120-POL – U.S. Income

Tax Return for Certain Political

Organizations

Section 527 political organizations that either have taxable income

over $100 or $25,000 or more in

gross receipts2

 must file income tax

return Form 1120-POL. Form 1120-

POL is due by the 15th day of the

third month after the end of the

organization’s tax year.

Organizations may request a sixmonth extension of the filing

deadline by filing Form 7004,

Application for Automatic Extension

of Time to File Corporate Income

Tax Return; this extension must be

filed by the due date of Form 1120-POL.

The voluntary compliance

program described in Notice 2002-

34 is available to political organizations that have failed to file or

incorrectly filed their Form 1120-

POL, as long as the form or correction is filed by July 15, 2002.

2. Form 990 or 990-EZ – Return of

Organization Exempt from Income Tax

Tax-exempt section 527 political

organizations that have $25,000 or

more in gross receipts must also file

an exempt organization information

return (Form 990 or 990-EZ3

). This

return is due on the 15th day of the

fifth month after the end of the

fiscal year.

Organizations may request a

three-month extension, without

showing cause, by filing Form 8868,

Application for Extension of Time to

File an Exempt Organization

Return, by the due date. A second

three-month extension, with cause,

may also be requested on Form 8868.

Notice 2002-34 allows political

organizations that have failed to file

or incorrectly filed their Form 990

(or 990-EZ) to file or correct,

without tax, interest, or penalty, as

long as the form or correction is

filed by July 15, 2002.

For more information, see:

• IRS web site: www.irs.gov.

• Information on filing requirements

and download forms: www.irs.gov/

polorgs.

• Copy of Notice 2002-34 at

www.irs.gov/pub/irs-drop/n-02-

34.pdf

• IRS Toll free number: 1-877-829-

5500. This number answers

questions about tax-law filing

requirements for political committees, and is available 8:00 a.m. to

6:30 p.m. Eastern time, Monday

through Friday.✦

—Submitted by the IRS
June 2002 Federal Election Commission RECORD

9

Publications

New Campaign Guide

Available

A revised Campaign Guide for

Nonconnected Committees is now

available on the Commission’s web

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

nongui.pdf. The new guide provides

nonconnected committees with clear

explanations of the Federal Election

Campaign Act and Commission

regulations as of February 2002.

This version of the guide does not

address changes to the federal

campaign finance law that will

become effective after November 6,

2002, as part of the Bipartisan

Campaign Reform Act of 2002

(BCRA). The Commission plans to

publish a new version of the Nonconnected Guide once BCRACampaign Guides

Available

 For each type of committee, a

Campaign Guide explains, in

clear English, the complex

regulations regarding the activity

of political committees. It shows

readers, for example, how to fill

out FEC reports and illustrates

how the law applies to practical

situations.

 The FEC publishes four

Campaign Guides, each for a

different type of committee, and

we are happy to mail your

committee as many copies as you

need, free of charge. We

encourage you to view them on

our web site (go to www.fec.gov,

then click on “Campaign Finance

Law Resources” and then scroll

down to “Publications”).

 If you would like to place an

order for paper copies of the

Campaign Guides, please call

800-424-9530, press 1, then 3.

related amendments to the campaign

finance law and Commission

regulations are in place.

Given the limited shelf life for

the current edition, the Commission

does not intend to print copies for

mass distribution. Instead, the Guide

will be available for download on

the FEC web site. A limited number

of printed loose-leaf copies will also

be available for those without

Internet access. To request a printed

copy, call the Information Division

at 800/424-9530 (press 1, then 3) or

202/694-1100.✦

—Amy Kort

Disclosure Directory of

Federal and State Election

Offices Available

The Combined Federal/State

Disclosure and Election Directory

2002 is now available. This annual

publication provides information on

the national and state agencies

responsible for the disclosure of

campaign finances, lobbying,

personal finances, public financing,

candidates on ballots, election

results, spending on state initiatives

and other financial filings. It also

includes agency e-mail and Internet

addresses.

The Directory is available on the

Commission’s web site, www.fec.gov,

via the “Elections and Voting”

section. This interactive version,

periodically updated throughout the

year, provides hyperlinks to allow

viewers to directly access the home

pages of the state and federal

agencies listed. The Directory is

also available on 3.5’’ diskette.

Paper copies, which are free, may be

obtained by calling the Public

Records Office at 800/424-1120

(press 3) or 202/694-1120.✦

—Amy Kort

Reports

Revised Independent

Expenditure Reporting Forms

The Commission has revised

FEC Form 5 and Schedule E of FEC

Form 3X to conform with new

independent expenditure reporting

regulations (see the May 2002

Record, page 2). The amendments

to Schedule E and Form 5 remove

the notarization requirement of the

certification stating whether the

expenditures were “coordinated”

with any candidate, authorized

committee or agent thereof. Instead,

the filer must self-verify, under

penalty of perjury, the independence

of the expenditures reported. Since

notarization is no longer required,

the Commission will no longer

require a paper follow up of Schedule E and Form 5 for those who file

electronically. The Commission has

extended self-verification to all

reports of independent expenditures.

The forms were transmitted to

Congress on May 7, 2002. Filers

must begin using the new forms

once the revised independent

expenditure reporting regulations

become effective. The Commission

will publish the effective date in the

Federal Register as part of its notice

announcing the effective date of the

accompanying regulations. The new

forms and their instructions will

then be available on the FEC web

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

reporting.html and from the FEC’s

faxline, (call 202/501-3413).✦

—Amy Kort
Federal Election Commission RECORD June 2002

10

Committees Fined for

Nonfiled and Late Reports

The Commission recently

publicized its final action on 51 new

Administrative Fine cases, bringing

the total number of cases released to

the public to 396.

Civil money penalties for late

reports are determined by the

number of days the report was late,

the amount of financial activity

involved and any prior penalties for

violations under the administrative

fine regulations. Penalties for late

reports—and for reports filed so late

as to be considered nonfiled—are

also determined by the financial

activity for the reporting period and

any prior violations. Election

sensitive reports, which include

reports and notices filed prior to an

election (i.e., 12 Day pre-election,

October quarterly and October

monthly reports), receive higher

penalties. The committees and the

treasurers are assessed civil money

penalties when the Commission

makes its final determination.

Unpaid civil money penalties are

referred to the Department of the

Treasury for collection.

The committees listed in the chart

at right, along with their treasurers,

were assessed civil money penalties

under the administrative fine

regulations.

Administrative

Fines

Committees Fined and Penalties Assessed

 1. American Neurological Surgery PAC $275

 2. Azinger for Congress Committee $350 1

 3. Blake for Congress Committee $531 1

 4. Brad Carson for Congress Committee $1,500

 5. California Cooperative Creamery Federal PAC of

Dairy Farmers of America Inc. $218

 6. Carroll 2000 $2,700 1

 7. Columbia Energy Group Employees Political Action Fund $650

 8. Committee to Elect Joyce Marie Griggs (30 Day Post-General) $1,200 1

 9. Committee to Elect Joyce Marie Griggs (Year End 2000) $900 1

10. DeFazio for Congress $250

11. DiNizio 2000 $1,800 1

12. Eli Lilly and Company PAC $3,500

13. Friends for Jack Metcalf $250 1

14. Friends of John Conyers $1,800

15. Garza for Congress Committee $900 1, 2

16. Hartnett for Congress $325 1

17. Independent Action Inc. $900 1, 2

18. International Council of Cruise Lines PAC (ICCL-PAC) $4,050 1

19. Jane Frederick for Congress $900

20. Joe Vu for Congress Campaign Committee $900 1

21. Kathleen for Congress $350

22. Kelley for U S Senate Committee $900

23. King for Congress Campaign $900 1

24. Lehigh Valley Democratic Committee $1,800 1

25. Libertarian Party of Illinois $3,375 1

26. Marta Macias Brown for Congress $900

27. McNary for Congress Committee $8,125 1

28. Michael Coles for U.S. Senate, Inc. $250

29. Moritz for Congress $0 3

30. Newinski for Congress $900

31. Paul Williams for Congress $2,250 1

32. PECO Energy Company PAC

(Philadelphia Electric Company PAC) $1,350

33. PH&S Federal PAC $275

34. People for Royal Hart $0 3

35. Public Service Electric and Gas Company PAC (PEGPAC) $450

36. Republican Central Committee of San Luis Obispo County $900 1

37. Reynolds for Congress $500

38. Riverside County Republican Central Committee $160

39. Robinson 2000 LLC D/B/A Robinson Federal Committee $250

1 This civil money penalty has not been collected.

2Penalty reduced due to level of activity on the report.

3Penalty reduced due to a lack of activity on the report.

FECFile Help on Web

 The manual for the Commission’s FECFile 4 electronic filing

software is available on the

FEC’s web site. You can download a PDF version of the manual

at http://herndon1.sdrdc.com/

fecfile4.pdf.
June 2002 Federal Election Commission RECORD

11

Committees Fined and Penalties Assessed, cont.

40. Russ Francis for Congress $3,500 1

41. Sam Bregman for Congress $250

42. Sand for Senate 2000 $900 1

43. Schwartz 2000 Committee $250

44. Sonny Zayas for Congress Committee $650

45. Starr for Congress $650

46. Tico Perez for Congress Campaign $400

47. Troy Liggett for Congress $0 3

48. Utility Workers Union of America Political

Contributions Committee $675

49. Willie Logan for United States Senate $4,500 1

50. YOB 2000 (Y2K) $325

51. Yuba County Republican Central Committee $650

1 This civil money penalty has not been collected.

2Penalty reduced due to level of activity on the report.

3Penalty reduced due to a lack of activity on the report.

Conference for Membership

and Labor Organizations

On June 26-28, 2002, the

Commission will hold a conference

in Washington, D.C., for membership and labor organizations.

Commissioners and experienced

FEC staff will conduct a series of

interactive workshops explaining

how the requirements of the federal

election law apply to these organizations. A representative from the IRS

will be available to answer electionrelated tax questions.

The registration fee for this

conference is $375, which covers

the cost of the conference, materials

and meals. The registration deadline

(and the deadline for fully-refunded

Outreach

Public Appearance

June 24, 2002

American Society of Association

Executives

Washington, D.C.

George Smaragdis

Closed Administrative Fine case

files are available through the FEC

Press Office, at 800/424-9530 (press

2) and the Public Records Office, at

800/424-9530 (press 3).✦

—Amy Kort

registration cancellations) is June 4.

A late registration fee of $10 will be

added effective June 5.

The conference will be held at the

Loews L’Enfant Plaza Hotel, 480

L’Enfant Plaza, SW, Washington,

D.C. A room rate of $199 single or

$229 double is available for reservations made by June 4. Call 800/635-

5065 or 202/484-1000 ext. 5000 to

make reservations. In order to

receive this room rate, you must

notify the hotel that you will be

attending the FEC conference. After

June 4, room rates are based on

availability. The hotel can be easily

reached via the L’Enfant Plaza

Metro and Virginia Railway Express

stations.

Registration Information

Conference registrations will be

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

and FEC conferences have sold out

earlier this year, so please register

early. For registration information:

• Call Sylvester Management

Corporation at 800/246-7277;

The first number in each citation

refers to the “number” (month) of

the 2002 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

Alternative Disposition of 2001-15,

3:9; 2001-20, 3:9

2001-13: National committee status

of party committee, 1:11

2001-16: Extension of 70-day

window for transferring funds for

allocable expenses after suspension of party fundraising due to

national emergency, 2:1

2001-17: Reporting contributions

made via single check split

between federal and nonfederal

accounts, 3:5

2001-18: Affiliation between LLC

PAC and PACs of corporate

owners in 60-40 joint venture, 3:7

2001-19: Non-preemption of state

law prohibiting political committees bingo license, 3:8

Index

• Visit the FEC web site at

www.fec.gov/pages/

infosvc.htm#Conferences (on-line

registration requires complete

credit card information); or

• Send an e-mail to

allison@sylvestermanagement.com.✦

—Amy Kort

(continued on page 12)
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

Presorted Standard

Postage and Fees Paid

Federal Election Commission

Permit Number G-31

Printed on recycled paper

Federal Election Commission RECORD June 2002

Index

(continued from page 11)

2002-1: Coalition of minor parties

supporting candidate(s) who

together gain five percent of vote

not eligible for Presidential public

funding, 4:3

2002-2: Preemption of state law

barring lobbyist from fundraising

for Congressional candidate who

is member of Maryland General

Assembly, 4:4

2002-3: Status of State Party as

State Committee of Political

Party, 6:6

2002-4: Name and Abbreviation of

SSF, 6:7

Compliance

Administrative Fine program

extended, 1:13

Committees Fined under Administrative Fine program, 1:13; 2:7;

3:11; 5:5, 6:10

Nonfiler, 6:5

Court Cases

_____ v. FEC

– AFL-CIO, 2:3; 3:5

– Alliance for Democracy, 5:3

– Baker, 4:3

– Beaumont, 3:4

– Common Cause and Democracy

21, 2:4

– Echols, 5:3; 6:4

– Judicial Watch, Inc.,

and Peter F. Paul, 3:3

– McConnell, 5:3; 6:4

– Miles for Senate, 3:1

– NRA, 5:3

– Wertheimer, 1:12

FEC v. _____

– Specter ’96, 5:3

Regulations

Allocation of candidate travel

expenses, interpretation, 3:2

Civil penalties, no increase, 3:2

Notice of Proposed Rulemaking on

Administrative Fines, 6:2

Notice of Proposed Rulemaking on

Soft Money Rules, 6:1

Petition for Rulemaking on Candidate Debates, 6:4

Independent expenditure reporting,

final rules, 5:2

Use of Internet, public hearing, 3:1

Reports

April reporting reminder, 4:1

Independent expenditure reporting,

new forms, 6:9

IRS filing requirements, 1:11; 6:8

Reports due in 2002, 1:2

Virginia convention reporting, 5:6

48-hour notice periods for 2002

primaries, 3:10