November 2004 Federal Election Commission Volume 30, Number 11

Table of Contents

 1 Advisory Opinions

 Court Cases 

 1 Shays and Meehan v. FEC

 3 LaRouche’s Committee for a New 

Bretton Woods v. FEC

 3 John Hagelin v. FEC

 3 New Litigation

 Regulations

 9 Final Rules and Reporting Form 

for Inaugural Committees

 Alternative Dispute Resolution

 9 ADR Program Update

 Administrative Fines

 12 Committees Fined for Late and 

Nonfiled Reports

 Publications

 13 Updated List of Federal PACs

 Public Funding

 13 Commission Certifies Matching 

Funds for Presidential Candidates

 13 Federal Register

14 Index

Court Cases

(continued on page 5) (continued on page 2)

Shays and Meehan v. FEC

On September 18, 2004, the U.S. 

District Court for the District of 

Columbia granted in part and denied 

in part the plaintiffs’ motion for 

summary judgment in this case. The 

court remanded to the FEC a number 

of FEC regulations implementing 

certain provisions of the Bipartisan Campaign Reform Act of 2002 

(BCRA), requiring the Commission 

to reconsider these rules and/or the 

way in which the rules were promulgated. The court also granted in part 

and denied in part the Commission’s 

request for summary judgment, 

upholding four of the challenged 

regulations. 

The Commission filed a Notice of Appeal of this decision on 

September 28, 2004, and plaintiffs 

cross-appealed on October 13, 2004. 

The court denied the Commission’s 

motion for a stay pending appeal 

on October 19, 2004, but confirmed 

that the Commission’s regulations 

remain in effect.

Background

The BCRA required the Commission to promulgate rules implementing its soft-money provisions within 

90 days of the BCRA’s enactment, 

and to promulgate rules implementing other BCRA provisions within 

Advisory

Opinions

AO 2004-27

Use of Campaign Funds for 

Unpaid Salary of Former 

Employees

Quayle 2000 Inc. (the Committee) 

may not use its remaining campaign 

funds to pay salary to campaign employees who agreed to work without 

salaries in 1999. Because the Committee initially treated the unpaid 

service as volunteer work and has 

never reported the unpaid amounts 

as debt, it cannot now consider the 

funds to be a permissible use of 

campaign funds. 2 U.S.C. §439a(a).

Background

During the 2000 campaign, two 

Committee employees agreed to 

work without salaries from March 

1 to March 31, 1999, when the 

Committee was low on funds. Each 

employee signed a “Statement of 

Volunteer Services.” See 11 CFR 

116.6. The Committee currently 

has funds with which to pay these 

former employees the salary they 

would have received during this 
Federal Election Commission RECORD November 2004

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)

Bradley A. Smith, Chairman

Ellen L. Weintraub, Vice Chair

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

270 days. President Bush signed the 

BCRA into law on March 27, 2002, 

and the Commission completed 

its rulemaking process within the 

required timeframes. 

On October 8, 2002, Representatives Christopher Shays and Martin 

Meehan filed a complaint charging 

that many of these regulations “contravene the language” of the statute 

and “will frustrate the purpose and 

intent of the BCRA by allowing 

soft money to continue to flow into 

federal elections and into the federal 

political process.” The plaintiffs 

asked the court to invalidate these 

regulations, alleging that they are 

contrary to the statutory instructions 

provided by Congress. See the December 2002 Record, page 13.

Court Decision

The standard for judicial review 

in a case such as this, where one 

party alleges that an agency’s actions 

are contrary to the statute, is called 

Chevron review, after the Supreme 

Court’s decision in Chevron, U.S.A., 

Inc. v. Natural Resources Defense 

Council, 467 U.S. 837 (1984). In 

Chevron review, the court asks first 

whether Congress has spoken to the 

precise issue at hand. If so, then the 

agency’s interpretation of the statute 

must implement Congress’s unambiguous intent. If, however, Congress has not spoken explicitly to 

the question at hand, the court must 

consider whether the agency’s rules 

are based on a permissible reading 

of the statute. 

In this case, the plaintiffs also 

claimed that in some instances the 

FEC failed to engage in a reasoned 

analysis when it promulgated the 

regulations, or failed to follow 

proper procedures regarding public 

notice and comment. Under the Administrative Procedure Act, regulations that are promulgated without 

a reasoned analysis may be found 

“arbitrary and capricious” and may 

be set aside by a reviewing court. 5 

U.S.C. §706(2)(A).

The court found that the challenged portions of four regulations 

passed Chevron review and were 

consistent with requirements of the 

Administrative Procedure Act:

• The safe harbor at 11 CFR 

300.2(c)(3) that provides that an 

entity will not be considered to be 

directly or indirectly established, 

maintained or controlled by another entity based solely on activities 

that occurred before November 6, 

2002;

• The rules at 11 CFR 300.32(a)(4) 

providing for the payment of Levin 

fund fundraising costs;

• The rules at 11 CFR 300.30(c)(3), 

which describe permissible accounting procedures for keeping 

nonfederal and Levin funds in a 

single account; and

• The definition of “State committee,” “district committee” and “local committee” at 11 CFR 100.14.

The court, however, found that 

portions of other challenged regulations either failed to pass Chevron

review or violated the Administrative 

Procedure Act. These included:

• The coordinated communications 

content test regulations at 11 CFR 

109.21(c), including the provision 

excluding Internet communications 

from the coordinated communication rules at 11 CFR 109.21(c)(iv);

• The definition of “agent” under the 

coordination rules at 11 CFR 109.3 

and the nonfederal funds rules at 

11 CFR 300.2(b);

• The definitions of “solicit” and 

“direct” at 11 CFR 300.2(m) and 

300.2(n);

• The safe harbor for federal candidates’ and officeholders’ activities 

at state party fundraisers at 11 CFR 

300.64(b);

• The definitions (for the purposes of 

defining “federal election activity”) of voter registration activity, 

get-out-the-vote activity, voter 

identification and generic campaign 

activity at 11 CFR 100.24(a)(2)-

(a)(4) and 100.25;

• The requirements for paying the 

salaries and wages of state party 

committee employees who spend 

less than 25 percent of their 

compensated time on activities in 

connection with a federal election 

(11 CFR 300.33(c)(2);

• The exemption allowing certain 

federal election activity expenses 

that are under $5,000 in the aggregate to be paid entirely with Levin 

funds (11 CFR 300.32(c)(4);

• The exemption for section 

501(c)(3) organizations from the 

electioneering communications 

rules at 11 CFR 100.29(c)(6); and

• The requirement at 11 CFR 

100.29(b)(3)(i) that electioneering 

communications must be distributed for a fee.

The court denied the plaintiffs’ 

request to enjoin the Commission 

from enforcing these regulations 

and to require the Commission to 

commence proceedings to promulgate new regulations within 15 days 

Court Cases

(continued from page 1)
November 2004 Federal Election Commission RECORD 

3

(continued on page 4)

of the court’s decision. Instead, the 

court remanded the case to the Commission for further action consistent 

with the court’s opinion.

U.S. District Court for the District 

of Columbia, CV02-1984.

 —Amy Kort

John Hagelin, et al. v. FEC

On October 6, 2004, the U.S. 

District Court for the District of Columbia granted the FEC’s motion to 

stay its decision in this case, pending appeal. On August 12, 2004, 

the court had granted in part and 

denied in part the motion for summary judgment brought against the 

FEC by John Hagelin, Ralph Nader, 

Patrick Buchanan, Howard Phillips, 

LaRouche’s Committee for a 

New Bretton Woods v. FEC

On July 29, 2004, the U.S. Court 

of Appeals for the District of Columbia granted the FEC’s motion to 

dismiss this case. The plaintiff had 

asked the court to review the FEC’s 

determination requiring it to repay 

to the U.S. Treasury a portion of the 

Presidential primary matching funds 

it received for the 2000 Presidential 

election. However, the court found 

that it lacked jurisdiction because the 

plaintiff was concurrently seeking an 

administrative reconsideration from 

the Commission, and the plaintiff 

could not seek judicial review until 

the rehearing was concluded. See the 

June 2004 Record, page 7.

 —Amy Kort

Jim Sykes v. FEC, et al.

On September 9, 2004, the U.S. 

District Court for the District of 

Columbia granted the FEC’s motion 

to dismiss and also granted all other 

defendants’ requests for dismissal 

“to the extent that other defendants’ motions to dismiss join in 

Defendant’s FEC’s motion....” The 

plaintiff filed a Notice of Appeal on 

October 13, 2004.

Background

On February 24, 2004, Jim 

Sykes, the Green Party’s nominee 

in Alaska’s November 2 Senate 

election, filed a complaint asking 

the court to find unconstitutional 

unspecified provisions of the Federal 

Election Campaign Act (the Act) that 

allow non-Alaska residents to make 

contributions to a Senate candidate 

in Alaska’s 2004 general election, 

either personally or through political committees. The plaintiff alleged 

that these non-resident contributions 

unconstitutionally burdened his First 

and Fifth Amendment rights to associate politically, both as a candidate 

and a voter, with other Alaska voters. 

Court Decision

In order to have standing to bring 

suit in federal court, a plaintiff must 

meet a three-part test. The plaintiff 

must:

• Demonstrate an “injury in fact” 

that is concrete, distinct and palpable;

• Establish a causal connection 

between the injury and the conduct 

described in the suit, such that the 

injury is “fairly traceable” to the 

action of the defendants and not 

the result of some third party that is 

not before the court; and

• Show the “substantial likelihood” 

that the requested relief will remedy the alleged injury in fact.

The court found that the plaintiff 

was unable to establish any of these 

three requirements for standing. 

Having found that the plaintiff 

did not have standing in this case, 

the court did not reach the issue of 

whether the case was also frivolous. 

The court granted the FEC’s motion 

to dismiss the case in its entirety 

and found that there was no need to 

convene a three-judge panel or to 

certify the plaintiff’s questions to the 

appeals court. 

See the April 2004 Record, page 

12.

U.S. District Court for the District 

of Columbia, 1:04CV00293.

 —Amy Kort

Winona LaDuke, the Green Party of 

the United States and the Constitution Party. It also granted in part and 

denied in part the FEC’s cross-motion for summary judgment. The 

plaintiffs charged that the FEC 

erroneously dismissed their administrative complaint, which asserted 

that the Commission on Presidential 

Debates (CPD) was partisan and 

therefore could not lawfully sponsor 

Presidential debates. See also Hagelin et al. v FEC in the August 2004 

Record, page 9, and the October 

2004 Record, page 3.

U.S. District Court for the District 

of Columbia, 1:04-cv-731.

 —Amy Kort

New Litigation

Shays and Meehan v. FEC 

On September 14, 2004, U.S. 

Representatives Christopher Shays 

and Martin Meehan filed a complaint 

in the U.S. District Court for the 

District of Columbia. The complaint 

challenges the Commission’s alleged 

“failure . . . to promulgate legally 

sufficient regulations to define the 

term ‘political committee,’” particularly as that term is applied to 

so-called 527 organizations. The 

plaintiffs ask the court to require the 

Commission to promulgate regulations, on an expedited basis, defining 

“political committee” and defining 

when a 527 organization becomes a 

political committee. 

Definition of “political committee.” The Federal Election Campaign 

Act (the Act) defines a “political 

committee” as “any club, committee, 

association or other group of persons” that receives contributions or 

makes expenditures aggregating in 

excess of $1,000 during a calendar 

year. 2 U.S.C. §431(4); see also 11 

CFR 100.5(a). Political committees 

must register and report with the 

FEC and are limited in the sources 

and amounts of contributions they 

may make and receive. 2 U.S.C. 
Federal Election Commission RECORD November 2004

4

Court Cases

(continued from page 3)

Bush-Cheney ’04 v. FEC

On September 17, 2004, BushCheney ’04 filed a complaint in the 

U.S. District Court for the District 

of Columbia. The complaint challenges the FEC’s alleged failure to 

issue regulations interpreting the 

phrase “for the purpose of influencing a federal election” which 

appears in the statutory definitions 

of “contribution” and “expenditure.” 2 U.S.C. §431(8)(A)(i) and 

431(9)(A)(i). The plaintiff asks 

the court to require the Commission to commence proceedings to 

promulgate such regulations and, 

by extension, to address whether 

certain so-called 527 organizations 

are “political committees” under the 

Act.

Background. The Federal Election Campaign Act (the Act) 

defines a “political committee” as 

“any club, committee, association 

or other group of persons” that 

receives contributions or makes 

expenditures aggregating in excess 

of $1,000 during a calendar year. 

2 U.S.C. §431(4); see also 11 CFR 

100.5(a). Under the Act, political 

committees must register and report 

with the FEC and are limited in the 

sources and amounts of contributions they may make and receive. 2 

U.S.C. §§433, 434, 441a(a)(1)-(2), 

441b(a) and 441f.

The Act defines “contribution” 

and “expenditure” in terms of funds 

raised or spent “for the purpose of 

influencing any election for federal office.” 11 CFR 100.52(a) and 

100.111(a). 

Court Complaint. The plaintiff 

alleges that in McConnell v FEC the 

Supreme Court expanded the Act’s 

“for the purpose of influencing” 

standard reach beyond “express 

advocacy.” According to the plaintiff, the Commission has failed to 

respond to the Court’s decision by 

adopting any regulations or taking 

any other action in advisory opinions or enforcement matters setting 

forth clear standards for when entities organized under section 527 of 

§§433, 434, 441a(a)(1)-(2), 441b(a) 

and 441f.

In Buckley v Valeo, 424 U.S. 1, 

79 (1976), the Supreme Court stated 

that the term “political committee” only encompasses “organizations that are under the control of a 

candidate or the major purpose of 

which is the nomination or election 

of a candidate.” The definition of 

“political committee” set forth in the 

Commission’s regulations repeats 

the statutory language described 

above and does not refer to the 

Court’s “major purpose” standard.

Definition of “527 organizations.” 

The tax code at section 527 provides 

tax exempt treatment for certain 

income received by a “political organization.” A “political organization” 

is defined as a “party, committee, 

association, fund, or other organization (whether or not incorporated) 

organized and operated primarily for 

the purpose of directly or indirectly 

accepting contributions or making 

expenditures, or both, for an exempt 

function.” 26 U.S.C. §527(e)(1). An 

“exempt function” means the “function of influencing or attempting to 

influence the selection, nomination, 

or appointment of any individual to 

any Federal, State, or local public 

office or office in a political organization, or the election of Presidential 

or Vice Presidential electors . . .” 26 

U.S.C. §527(e)(2). 

FEC Rulemaking. On March 11, 

2004, the Commission published 

a Notice of Proposed Rulemaking 

suggesting revisions to the definition of political committee and other 

changes to the regulations, including 

proposals to address when 527 organizations meet the “major purpose” 

requirement.1 On August 19, 2004, 

the Commission approved final rules 

resulting from this Notice of Proposed Rulemaking, but, according 

to the plaintiffs, the Commission did 

not promulgate new rules addressing 

the “major purpose” of an organization or further clarifying when a 527 

organization is a “political committee” under the Act.

Court Complaint. The plaintiffs 

allege that the Commission’s failure 

to issue new rules defining “political committee” leaves in place “a 

legally inadequate rule that fails to 

properly implement the law, and 

under which multiple section 527 

groups are currently spending tens 

of millions of dollars of soft money 

plainly for the purpose, and with 

the effect, of influencing the 2004 

presidential and congressional elections.” The plaintiffs ask the court to 

find that the Commission’s decision 

not to promulgate regulations requiring 527 organizations to register 

as political committees when their 

major purpose is to influence federal 

elections and they raise or spend 

more than $1,000 to do so is:

• Arbitrary, capricious, an abuse of 

discretion and otherwise not in accordance with law;

• Contrary to the Act, as construed 

by the Supreme Court, and invalid 

because it constitutes agency action 

unlawfully withheld; and

• Invalid insofar as the Commission, 

by initiating a rulemaking, acknowledged the need to revisit the 

definition of “political committee,” 

but failed to state its reasons for not 

addressing the “major purpose” test 

or the status of 527 organizations.

The plaintiffs ask the court to 

require the Commission to begin an 

expedited rulemaking to promulgate 

appropriate regulations to define 

“political committee” and to define 

when a 527 organization must register and file as a political committee.

U.S. District Court for the District 

of Columbia, 1:04CV01597.

 —Amy Kort

1

 See “Notice of Proposed Rulemaking 

on Political Committee Status,” 69 FR 

11736 (March 11, 2004).
November 2004 Federal Election Commission RECORD 

5

(continued on page 6)

the tax code are required to register 

as political committees.1

The plaintiff alleges that the 

Commission failed to address 

this issue through the rulemaking 

process. On March 11, 2004, the 

Commission published a Notice of 

Proposed Rulemaking suggesting 

revisions to the definition of political committee and other changes to 

the regulations, including proposals 

to address when 527 organizations 

become political committees under 

the Act. The plaintiff contends that 

the Commission subsequently concluded this rulemaking, on August 

19, by “promulgating rules on two 

collateral matters” while it “refused 

to issue any rule addressing the 

central question that had prompted 

the rulemaking in the first place: the 

definition of a political committee 

and the requirement for Section 527 

groups to register as political committees.”

The plaintiff alleges that the 

Commission’s failure to issue 

rules addressing the activities of 

527 organizations is arbitrary and 

capricious, an abuse of discretion 

and not in accordance with law. The 

plaintiff asks the court to:

• Declare that the Commission’s failure to issue appropriate regulations 

implementing the statutory phrase 

“for the purpose of influencing a 

federal election” constitutes agency 

action unlawfully withheld and an 

abuse of the FEC’s discretion; and

• Issue an order requiring the FEC to 

promulgate, on an expedited basis, 

regulations implementing this 

statutory phrase and, by extension, 

1 Entities organized under 26 U.S.C. 

527 are considered “political organizations,” defined generally as a 

party, committee or association that is 

organized and operated primarily for 

the purpose of influencing the selection, nomination or appointment of any 

individual to any federal, state or local 

public office, or office in a political 

organization. 26 U.S.C. §527(e)(1) and 

(e)(2). 

Citizens for Responsibility and 

Ethics in Washington v. FEC

On September 30, 2004, Citizens for Responsibility and Ethics 

in Washington (CREW) asked the 

U.S. District Court for the District of 

Columbia to find the FEC in violation of the Freedom of Information 

Act (FOIA) and to require the FEC 

to immediately respond to CREW’s 

FOIA request by releasing all responsive documents.

Background. On July 12, 2004, 

CREW, a nonprofit 501(c)(3) corporation, asked the FEC to provide it 

with a investigative report prepared 

by counsel for Westar Energy Company (Westar) regarding possible 

campaign finance violations by the 

company. CREW believed the report 

had been voluntarily forwarded by 

Westar to the FEC.

The FEC denied CREW’s request 

for information, citing the “confidentiality provision” of the Federal 

Election Campaign Act (the Act). 

Under this provision, any “notification or investigation made under this 

section shall not be made public by 

the Commission without the written consent of the person receiving 

such notification or the person with 

respect to whom such investigation 

is made.” 2 U.S.C. §437g(a)(12)(A).

CREW appealed the FEC’s denial 

of its FOIA request, arguing that the 

“confidentiality provision” does not 

apply to the Westar report. 

Court complaint CREW alleges 

that the statutory time limit for the 

FEC to respond to its FOIA appeal has run out and that CREW 

has exhausted its available administrative remedies. See 5 U.S.C. 

§522(a)(6)(C). CREW requests that 

the court find the FEC in violation of 

FOIA. CREW asks the court to order 

the FEC immediately to release all 

Advisory Opinions

(continued from page 1)

1

 In 1999, the Committee received 

matching funds under the Primary 

Matching Payment Account Act. In 

2002, the Commission approved an 

audit report finding that no repayment 

of federal matching funds was required. 

After the audit, the Committee had campaign funds remaining in its account. 

However, because the Committee’s 

account no longer contains federal 

matching funds and the Committee does 

not owe a repayment, the analysis below 

focuses only on the Federal Election 

Campaign Act. See 11 CFR 9038.2.

period had they not agreed to forgo 

salary payments.1 

Analysis

Treatment of unpaid employee 

services. Under Commission regulations, when a political committee does not pay an employee for 

services rendered to the committee, 

the unpaid amount may be treated 

as either a debt owed by the political committee to the employee, or as 

volunteer services if the employee 

signs a written statement agreeing to 

be considered a volunteer. 11 CFR 

116.6(a). If the service is considered 

a debt, the Committee must initially 

disclose the debt in a timely manner, 

and must continuously report that 

debt until the debt is extinguished. 2 

U.S.C. §434(b)(8); 11 CFR 104.3(d) 

and 104.11(a) and (b); see also AOs 

1997-21, 1991-9 and 1977-58. In 

this case, the two employees agreed 

to treat their employment as volunteer services, and the Committee has 

never reported the amounts as debt.

Permissible uses of campaign 

funds. The Federal Election Campaign Act (the Act) provides four 

categories of permissible uses of a 

candidate’s campaign funds: 

to address which organizations are 

political committees under the Act.

U.S. District Court for the District 

of Columbia , No. 1:04CV01612.

 —Amy Kort

appropriate records in response to 

the FOIA request.

U.S. District Court for the District 

of Columbia, 1:04CV01672.

 —Amy Kort
Federal Election Commission RECORD November 2004

6

1. Otherwise authorized expenditures 

in connection with the candidate’s 

federal campaign; 

2. Ordinary and necessary expenses 

incurred as a federal officeholder; 

3. Contributions to charitable organizations described in 26 U.S.C. 

§170(c); and 

4. Unlimited transfers to national, 

state or local political party committees. 

2 U.S.C. §439a(a); 11 CFR 113.2.2 

In no case may campaign funds 

be converted to “personal use” by 

any person. 2 U.S.C. §439a(b)(1); 

11 CFR 113.2. Commission regulations define “personal use” as “any 

use of funds in a campaign account 

of a present or former candidate to 

fulfill a commitment, obligation or 

expense of any person that would 

exist irrespective of the candidate’s 

campaign or duties as a Federal 

officeholder.” 11 CFR 113.1(g); 2 

U.S.C. §439a(b)(2).

Because the Committee has never 

reported the unpaid amounts of these 

employees’ salaries as debts, there 

are no debts or obligations that could 

give rise to an authorized expenditure under the first permissible use 

of funds listed above.3

 Any payment now for services that had been 

considered volunteer services since 

1999 would not be an authorized 

expenditure of the Committee. 2 

U.S.C. §439a(a)(1). The payment for 

volunteer services also does not fit 

Advisory Opinions

(continued from page 5)

3

 In addition, allowing the Committee 

to pay these amounts in 2004 would 

mean that, contrary to the volunteer 

services arrangements, unreported debts 

or obligations did exist. Because these 

amounts were neither initially disclosed 

nor continuously reported, permitting 

payment would result in reporting violations by the Committee.

1

 In its AO request, the Board stated that 

it did not wish to prohibit corporate donations to state party nonfederal office 

building funds.

AO 2004-29

Federal Candidate’s 

Support of Ballot Initiative 

Committees

Representative Todd Akin, a 

member of Congress and candidate for reelection, may support or 

oppose ballot initiatives using his 

campaign funds, and may reference 

the initiatives in solicitations for 

his principal campaign committee 

(PCC). Representative Akin may 

also appear in ads focusing on ballot 

initiatives if the ads are paid for by 

his PCC, by the initiative committees with permissible funds and 

within permissible contribution limits or by a combination thereof. Finally, Representative Akin may use 

contributions received by his PCC 

to make donations to state and local 

candidates who support his positions 

on specific ballot initiatives.

Background

In Missouri, citizens may use the 

ballot initiative process to change 

state laws and the state constitution. Representative Akin would 

like to support some ballot initiative 

committees. He was not involved in 

AO 2004-28

Disclosure of Donations 

to State Party Committee 

Nonfederal Office Building 

Fund

The Iowa Ethics and Campaign 

Disclosure Board (the Board) may 

require Iowa state party committees 

to disclose donors to the committees’ nonfederal office building 

funds. The Federal Election Campaign Act (the Act) and Commission 

regulations now specifically allow 

a state to require the disclosure of 

donors to such funds. 2 U.S.C. §453 

and 11 CFR 300.35.

Background

 The Board administers the 

campaign finance laws in Iowa with 

regard to state and local elections. 

Both the Iowa Democratic and 

Republican parties have nonfederal 

office building funds. In AO 1998-8, 

the Commission concluded that the 

Act and Commission regulations 

preempted the Iowa state law that 

had sought to prohibit corporate 

donations to state party committee 

nonfederal office building funds. 

However, the Commission did not 

directly address the issue of whether 

federal law would also prohibit Iowa 

from requiring disclosure of building 

fund donations. In its request for AO 

1998-8, the Iowa Democratic Party 

acknowledged the state’s ability to 

regulate such disclosure under AO’s 

1997-14 and 1991-5.

Analysis

 In the Bipartisan Campaign 

Reform Act of 2002, Congress 

amended the Act to provide that a 

state party may, subject to state law, 

use exclusively nonfederal funds for 

2

 In the Bipartisan Campaign Reform 

Act of 2002, Congress removed “any 

other lawful purpose” from the list of 

permissible uses of campaign funds in 

section 439a. 

with any of the other three permissible uses of campaign funds. Thus, 

the Committee may not use its campaign funds to make the payments to 

these former employees.

Date Issued: September 9, 2004; 

Length: 4 pages. 

 —Amy Kort

the purchase or construction of its 

office building. 2 U.S.C. §453. Consistent with this amendment to the 

Act, Commission regulations provide that if a state party committee 

uses nonfederal funds to purchase 

or construct its office building, then 

the sources, uses and disclosure of 

those funds are subject to state law 

(so long as funds are not donated by 

foreign nationals). 11 CFR 300.35(a) 

and (b)(1). Thus, Iowa may require 

its state party committees to disclose 

donors to nonfederal office building 

funds.1

Date Issued: September 9, 2004; 

Length: 3 pages.

 —Amy Kort
November 2004 Federal Election Commission RECORD 

7

establishing any of the ballot initiative committees. None of the ballot 

initiative committees are political 

committees under the Federal Election Campaign Act and Commission 

regulations.

Analysis

Donations to ballot initiative 

committees from the PCC. Representative Akin may use contributions 

accepted by the PCC to make donations to a ballot initiative committee. The Act lists four categories of 

permissible uses of contributions 

received by a federal candidate: 

1. Otherwise authorized expenditures 

in connection with the candidate’s 

campaign; 

2. Ordinary and necessary expenses 

incurred in connection with duties 

as a federal office holder;

3. Contributions to organizations 

described in 26 U.S.C. §170(c); 

and 

4. Unlimited transfers to national, 

state or local party committees. 

 2 U.S.C. §439a and 11 CFR 

113.2(a), (b) and (c). 

Donations from the PCC to the 

ballot initiative committees are 

permissible because they will be in 

connection with his campaign for 

reelection.

Referencing ballot initiative 

donations in PCC solicitations. 

Representative Akin may note in a 

solicitation for his PCC that funds 

received may be donated to ballot 

initiative committees that support 

his positions. The contributions 

received in response to such solicitations must be treated like any 

other contributions to the PCC and 

thus must comply with the amount 

limitations, source prohibitions and 

reporting requirements of the Act.

Representative Akin’s appearance 

in ads paid for by ballot initiative 

committees. Representative Akin 

may appear in newspaper, radio 

or television ads disseminated in 

his district before the November 

2 election that focus on the ballot 

initiatives. Because the ads meet 

the three-pronged test defining a 

coordinated communication at 11 

CFR 109.21 (the source of payment 

prong, the conduct standard and the 

content standard) and because the 

costs of the ads will likely exceed 

the contribution limits (and the 

ballot initiative committees’ funds 

may be from prohibited sources) ,the 

PCC must reimburse the sponsor of 

the ad for the attributable portion 

of the cost of the communication 

to avoid receiving an in-kind contribution, or an excessive or prohibited contribution.1

 See 2 U.S.C. 

§441a(a). Amounts that the PCC 

donates to the sponsor organizations 

may be treated as payment for the 

ads if the PCC specifically indicates 

that purpose for the donation.

Representative Akin’s appearance in advertisements paid for by 

the PCC. Payments made by the 

PCC for ballot initiative ads featuring Representative Akin (referenced 

as either a Member of Congress or 

a candidate) are permissible uses 

of campaign funds under 2 U.S.C. 

§439a(a), as discussed above. The 

ads must include all appropriate 

disclaimers. See 11 CFR 110.11.

Donations from the PCC to state 

and local candidates. Representative Akin may also use contributions received by his PCC to make 

donations to candidates for state 

and local office who support his 

positions on ballot initiatives. Such 

donations will be in connection with 

the Representative’s reelection campaign and therefore are permissible 

as “otherwise authorized expenditures in connection with the campaign for Federal office.” 2 U.S.C. 

§439a(a)(1).

Date Issued: September 30, 2004; 

Length: 8 pages.

 —Meredith Trimble

1

 See Advisory Opinion 2004-1, which 

discusses a permissible allocation and 

attribution formula under 11 CFR 

106.1(a). (continued on page 8)

AO 2004-32

SSF May Solicit Affiliated 

LLC

Spirit Airlines, Inc. PAC (Spirit 

PAC), the separate segregated 

fund (SSF) of Spirit Airlines Inc. 

(Spirit), may solicit the directors 

and senior employees of Oaktree 

Capital Management LLC (Oaktree), 

provided that those persons qualify 

as members of Oaktree’s restricted 

class, because Spirit and Oaktree are 

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

ii(A)-(J). 

Background

Oaktree is a limited liability 

company that provides investment 

management for various “Oaktree funds,” which are “diversified 

private equity vehicles.” Through 

two existing Oaktree funds and three 

Oaktree managed holding companies, created specifically for investment in Spirit, Oaktree has invested 

$125 million in Spirit. Oaktree has 

the ability to “direct or participate 

in the governance of Spirit,” it may 

select Spirit’s board of directors and 

it has a significant presence on that 

board

Analysis

The Federal Election Campaign 

Act (the Act) permits a corporation 

or its SSF to solicit its restricted 

class and the restricted class of the 

corporation’s subsidiaries, branches, 

divisions and affiliates and their 

families. 2 USC §441b(b)(4)(A)(i); 

11 CFR 114.5(g)(1). The Commission has long held that affiliates 

may include entities other than 

corporations, including limited liability companies. See AOs 2001-

18, 1999-28 and 1982-18. The 

Commission considers an entity that 

owns a majority interest of another 

organization to be affiliated per 

se with that other organization. 11 

CFR 100.5(g)(2). In the absence of 

per se affiliation, the Commission 

may determine, on a case-by-case 

basis, whether an organization is an 
Federal Election Commission RECORD November 2004

8

Advisory Opinions

(continued from page 7)

affiliate of a corporation based on an 

examination of the relevant circumstantial factors found at 11 CFR 

100.5(g)(4)(i) and (ii)(A)-(J).

One affiliation factor considers 

whether an organization “owns a 

controlling interest in the voting 

stock” of another organization. 11 

CFR 100.5(g)(4)(ii)(A); AO 1989-

17. Although Oaktree does not 

directly own a controlling interest in 

Spirit, Oaktree controls 51 percent 

of the voting stock of Spirit through 

the two Oaktree funds and three 

Oaktree-managed holding companies. In the context of the overall 

relationship, the Commission concludes that Oaktree’s control of 51 

percent of the voting stock of Spirit 

is strong evidence of affiliation.

Another affiliation factor considers whether one organization has 

the authority or ability to direct or 

to participate in the governance of 

another sponsoring organization 

through provisions of constitutions, bylaws, contracts or other 

rules, or through formal or informal 

practices or procedures. 11 CFR 

100.5(g)(4)(ii)(B). Oaktree has 

appointed four of the seven directors of Spirit; two of these directors 

are Oaktree principals. In addition, 

Spirit’s bylaws state that its directors are elected annually by holders 

of voting stock and such elections 

are “determined by a plurality of the 

votes cast.” Thus, Oaktree also has 

the ability to control the selection of 

all seven directors.

Considering these affiliation 

factors in the context of the overall relationship between Spirit and 

Oaktree, the Commission concludes 

that Spirit and Oaktree are affiliated for the purposes of the Act and 

Commission regulations. Therefore, 

Spirit PAC may solicit contributions from the directors and senior 

employees of Oaktree provided that 

those persons qualify as members of 

Oaktree’s restricted class. 11 CFR 

114.1(c) and 114.1(c)(1)(i). If any 

AO 2004-36

Reporting In-Kind 

Contribution of Office Space

Risley for Congress (the Committee) must report as an in-kind 

contribution one-fifth of the normal 

rental value of donated office space 

that it shares with four other candidate committees. 

Background

An individual contributor has 

donated office space to the Committee and four other candidates. The 

office space is shared equally by all 

five committees. However, the committees do not share telephone lines, 

staff, campaign resources or information, and they do not intermingle 

funds. The usual and normal charge 

for the rental property is $2,000 per 

month.

Analysis

The provision of goods or services to a federal campaign at no charge 

or at less than the usual and normal 

charge is considered an in-kind contribution. 11 CFR 100.52(d)(1). In 

this case, the donation of the free use 

of office space is an in-kind contribution to each of the five campaigns 

AO 2004-35

Presidential Campaigns 

May Use GELAC Funds for 

Recount Expenses

Kerry-Edwards 2004, Inc. (KerryEdwards), the authorized committee 

of Presidential and Vice-Presidential 

candidates Senators John Kerry and 

John Edwards, may use its general election legal and compliance 

(GELAC) fund to pay legal expenses, staff pay and office expenses 

that might result from a recount of 

the November 2, 2004, Presidential 

election.

Background

Publicly funded Presidential 

candidates may not raise or spend 

funds for their campaigns outside 

of the public funding grant, which 

is $74.62 million dollars for the 

2004 election. However, the campaigns may accept contributions to 

a GELAC fund, which may only be 

used to pay for certain expenses. 

See 11 CFR 9003.3(a)(2). Contributions to a GELAC fund must 

comply with the amount limitations 

and source prohibitions of Federal 

Election Campaign Act. See 11 CFR 

9003.3(a)(1)(i). 

Analysis

Although Commission regulations governing GELAC funds do 

not specifically address recount 

expenses, the regulations do provide 

that GELAC funds may be used for 

certain legal and accounting compliance expenses and winding down 

expenses, which are described as 

of these Oaktree senior employees 

do not qualify as members of its 

restricted class, Spirit PAC may 

still solicit such persons as part of a 

permissible twice-yearly solicitation 

of all employees of Spirit and its affiliates. 2 U.S.C. §441b(b)(4)(B) and 

11 CFR 114.5(a) and 114.6. See also 

AOs 1994-7 and 1990-25.

Date Issued: September 30, 2004; 

Length: 5 pages

 —Amy Pike

expenses “associated with the termination of the candidate’s general 

election campaign.” See 11 CFR 

9003.3(a)(2)(i)(A), 9003.3(a)(2)(i)(I) 

and 9004.11(a). Legal expenses 

and fees, fees for payment of staff 

and administrative overhead and 

office equipment expenses that 

result from a recount generally fit 

within these permissible GELAC 

fund uses. Thus, Kerry-Edwards 

may use GELAC funds to pay the 

expenses. See 11 CFR 9003.3(a)(2). 

All receipts and disbursements from 

the GELAC account, including 

those related to a recount, must be 

reported to the FEC in a separate 

report. 11 CFR 9003.3(a)(3)(ii) and 

9006.1(b)(2). 

Date Issued: September 30, 2004; 

Length: 3 pages.

 —Amy Kort
November 2004 Federal Election Commission RECORD 

9

(continued on page 10)

using the space. The value of the 

in-kind contribution to the Committee is its proportionate share of 

the usual and normal rental value of 

the property for each month that the 

Committee uses it. Consequently, 

the contributor is giving $400 to the 

Committee on each rental due date.1

For reporting purposes, it is as 

though the contributor is giving the 

Committee money to pay for the 

office space. As a result, the Committee must report the receipt of this 

in-kind contribution as both a “contribution” and an “expenditure.” 11 

CFR 100.111(e) and 104.13(a)(2). 

The Committee must also itemize all contributions from a single 

individual that aggregate in excess 

of $200 per election cycle. Thus, the 

Committee must report and itemize 

the in-kind contribution of office 

space in the report covering the 

dates on which the contribution was 

received (in other words, the rental 

due dates), along with the electionto-date totals for this contributor. In 

the same report, the Committee must 

also report the contribution amount 

as an expenditure for rental of the 

space. 11 CFR 104.13(a)(2).

Date Issued: October 7, 2004; 

Length: 4 pages.

 —Amy Kort

1

 This contribution is subject to the 

Act’s contribution limits of $2,000 per 

candidate, per election, and it must be 

aggregated with any other contributions 

that contributor has made for the same 

election. 2 U.S.C. §441a(a)(1)(A) and 

11 CFR 110.1(a) and (b)(1).

Advisory Opinion Requests

AOR 2004-37

Brochure made by federal 

candidate’s authorized committee or 

leadership PAC expressly advocating 

election of other federal candidates; 

reimbursements by those candidates. 

20-day expedited decision (Representative Maxine Waters, Citizens 

for Waters and People Helping 

People, October 8, 2004)

Regulations

Final Rules and Reporting 

Form for Inaugural 

Committees

On September 30, 2004, the 

Commission approved final regulations and a new disclosure form to 

implement provisions of the Bipartisan Campaign Reform Act of 2002 

(BCRA) governing Presidential 

inaugural committees. 

The new rules require inaugural 

committees to:

• Register with the FEC by letter 

within 15 days after appointment 

by the President-elect;

• Report, within 90 days after the 

inauguration, all accepted (i.e., 

deposited) donations that aggregate 

$200 or more from a donor; 

• Report any refunds of reported 

donations;

• File supplements to disclose any 

reportable donations accepted or 

refunds made after the initial filing;

• Retain records for three years; and 

• Reject donations from foreign 

nationals.

The new rules, and their accompanying Explanation and Justification were published in the October 

6, 2004, Federal Register (69 FR 

59775). The rules will take effect 

on November 5, 2004. The Federal 

Register notice containing the final 

rules is available on the FEC web 

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

law_rulemakings.shtml. In addition, 

Alternative 

Dispute 

Resolution

ADR Program Update

The Commission recently resolved fifteen additional cases under 

the Alternative Dispute Resolution 

(ADR) program. The respondents, 

the alleged violations of the Federal 

Election Campaign Act (the Act) and 

the final disposition of the cases are 

listed below. 

1. The Commission reached 

agreement with Friends of John 

Conyers and M. Mickey Williams, 

its treasurer, regarding the committee’s failure to report receipts and 

disbursements and failure to accurately report election-cycle-to-date 

and beginning cash-on-hand figures. 

The respondents acknowledged 

that a violation of the Act inadvertently occurred due to a change in 

staff and interface problems between 

old and new filing software, and they 

agreed to pay a $7,500 civil penalty. 

In an effort to avoid similar errors in 

the future, the respondents agree to:

• Appoint a staff member to be the 

FEC compliance officer; 

• Develop an FEC compliance manual for staff use; 

• Attend an FEC seminar within 12 

months of the effective date of this 

agreement;

• Work with staff from the Reports 

Analysis Division to ensure that 

reporting requirements are being 

met; and

AOR 2004-38

Candidate’s raising and spending of funds for recount expenses 

(George Nethercutt and the Nethercutt for Senate Committee, October 

13, 2004)

AOR 2004-39

State party committee’s raising 

and spending of nonfederal funds for 

recount expenses (Washington State 

Republican Party, October 13, 2004)

the new FEC Form 13 “Report of 

Donations Accepted for Inaugural 

Committee(s)” will be available on 

the web at http://www.fec.gov/info/

forms.shtml. 

 —Dorothy Yeager
Federal Election Commission RECORD November 2004

10

• Correct and file all relevant reports 

within 90 days of the effective date 

of this agreement. (ADR 146*)

2. The Commission reached 

agreement with Friends of David 

Worley and Gregg Brasher, its treasurer, regarding excessive contributions resulting from the acceptance 

of contributions designated for 2002 

General or Runoff elections, in 

which the candidate did not participate. The respondents acknowledged 

that an inadvertent violation of the 

Act occurred, and, upon learning of 

the time constraints for refunding, 

redesignating or reattributing excessive contributions, they refunded 

$11,500. The respondents agreed to 

pay a $1,000 civil penalty, and, in an 

effort to avoid similar errors in the 

future, agreed to refund the remaining $100,950 in excessive contributions. The respondents also agreed 

to file amended reports reflecting the 

refunds and to work with FEC staff 

to terminate the committee within 90 

days. (ADR 149*) 

3. The Commission reached 

agreement with Citizens Committee 

for Gilman for Congress and Murray 

M. Rosen, its treasurer, regarding 

excessive contributions resulting 

from the acceptance of contributions 

designated for the 2002 General 

election, in which the candidate did 

not participate.

The respondents agreed to pay a 

$25,000 civil penalty. They contend 

that they had disclosed information regarding redesignations of 

contributions, provided copies of 

refund checks, refunded all remaining campaign funds and amended 

their reports appropriately. They 

noted that the committee had closed 

its offices and had no funds in its 

accounts with which to make further 

refunds. In order to resolve this 

matter and enable the respondents to 

Alternative Dispute 

Resolution

(continued from page 9)

conclude the activities of the committee, they agree to work with the 

FEC’s Reports Analysis Division to 

amend and conclude the committee’s 

reporting obligation and to subsequently file for termination. (ADR 

150*) 

4. The Commission reached 

agreement with Richard Pombo for 

Congress and Randall Pombo, its 

treasurer, regarding the failure to accurately report receipts (the committee’s amended report revealed an 

84 percent increase in unreported 

receipts). The respondents agreed to 

pay a $2,500 civil penalty and, in an 

effort to resolve these matters and 

avoid similar errors in the future, 

they agreed to work with staff of the 

Reports Analysis Division to amend 

their previously filed July 2003 

Quarterly report and to resolve all 

outstanding issues concerning this 

report. In addition, they will designate one staff member to be responsible for FEC compliance and select 

at least one individual representing 

the committee to attend an FEC 

seminar on reporting requirements 

within 12 months of the effective 

date of this agreement. (ADR 153*) 

5. The Commission reached 

agreement with NARAL Pro-Choice 

America PAC and John Botts, its 

treasurer, regarding the committee’s 

failure to file 24-hour reports for 

independent expenditures. The 

respondents agreed to pay a $2,000 

civil penalty. (ADR 158*) 

6. The Commission reached 

agreement with John Sullivan for 

Congress, Gregory Colpitts, its 

treasurer, and John Sullivan regarding failure to accurately report debts. 

The respondents acknowledge that 

inadvertent reporting violations may 

have occurred when the committee 

was converting to new compliance 

software. In an effort to avoid similar errors in the future, the respondents agreed to work with Reports 

Analysis Division staff to ensure 

compliance with reporting requirements, including filing amended reports as necessary. The respondents 

will also designate an FEC compliance officer from the committee 

staff or employ an accounting firm 

to ensure future compliance with the 

Act, and they will designate committee staff to attend an FEC-sponsored 

seminar within 12 months. (ADR 

163/ MUR 5368) 

7. The Commission reached 

agreement with Superior Savings Bank of New England, N. 

A., regarding contributions from 

a national bank. The respondent 

acknowledged making the contributions; however, it contends that the 

error was due to the mistaken belief 

that the bank was governed by New 

York state regulations rather than the 

Act. The respondent agreed to pay 

a $1,000 civil penalty. In order to 

resolve this matter and avoid similar errors in the future, it will adopt 

and distribute within 30 days of the 

effective date of this agreement a 

corporate policy advising bank officers and directors that it is illegal for 

any national bank to make a contribution or expenditure in connection 

with any election to any political 

office or for any officer or director of a national bank to consent to 

such a contribution or expenditure. 

The respondent will also appoint an 

appropriate bank officer to attend a 

FEC-sponsored seminar within 12 

months of the effective date of this 

agreement. (ADR 148/ Pre-MUR 

414) 

8. The Commission reached 

agreement with Conservative 

Leadership PAC and David Fenner, 

its treasurer, regarding the committee’s failure to provide contributor 

information, adequately report the 

purpose of disbursements and amend 

its Statement of Organization timely. 

The respondents acknowledge 

that violations of the Act occurred 

due to difficulties with the vendor 

with whom they contracted for 

reporting software and compliance. Respondents were unable to 

file amended reports because the 

required information regarding “best 

efforts” and other matters was lost or 

destroyed. The respondents agreed 

to pay a $2,000 civil penalty and, 

* Cases marked with an asterisk were 

internally generated within the FEC.
November 2004 Federal Election Commission RECORD 

11

in an effort to avoid similar errors 

in the future, agreed to designate 

a staff member to attend an FEC 

seminar within 12 months of the 

effective date of this agreement. The 

respondents will work with Reports 

Analysis Division staff to determine 

how to adequately supplement the 

reports and file an amended Statement of Organization with a current 

mailing address. (ADR 156*) 

9. The Commission reached 

agreement with Sonoma National 

Bank regarding contributions from 

a national bank. The respondent 

acknowledged purchasing tickets 

to an award dinner; however, it 

contends that it was unaware that 

the prohibition on national banks 

contributing to election campaigns 

would be applied to the purchase 

of such tickets. The respondents 

agreed to pay a $500 civil penalty. 

In order to resolve this matter and 

avoid similar issues in the future, it 

also agreed to adopt and distribute 

within 30 days of the effective date 

of this agreement a corporate policy 

advising bank officers and directors 

that it is illegal for any national bank 

to make a contribution or expenditure in connection with any election 

to any political office or for any 

officer or director of a national bank 

to consent to such a contribution or 

expenditure. The respondent will 

incorporate this policy statement 

into its Standards of Conduct Policy. 

(ADR 160/ Pre-MUR 418*)

10. The Commission reached 

agreement with Citizens for Anderson and Marilyn Anderson, its 

treasurer, regarding the committee’s 

failure to file a Statement of Organization timely and its filing of an 

incomplete Statement of Organization. The respondents acknowledged 

filing an incomplete Statement of 

Organization and stated that they 

were unaware of the problem with 

their reports until the complaint was 

forwarded to them. They subsequently corrected and filed on January 30, 2004, an amended report. 

They acknowledged their violations 

of the Act and agreed to work with 

the Reports Analysis Division to 

ensure that all reports filed with 

the Commission are accurate and 

complete. They will file for termination and accept an admonishment for 

the numerous errors contained in the 

Statement of Organization they filed. 

(ADR 166/ MUR 5407) 

11. The Commission reached 

agreement with Risley for Congress 

and Jan Risley, its treasurer, regarding the committee’s failure to file 

disclosure reports, omitted disclaimer statements, failure to report 

receipts and disbursements and 

failure to file a 48-hour report. The 

respondents acknowledged violating the Act when they failed to file 

the Pre-Primary report and 48-hour 

report on time. They agreed to pay 

a $200 civil penalty and, in order to 

resolve this matter and avoid similar 

errors in the future, agreed to work 

with the Reports Analysis Division 

to ensure the Committee’s reports 

are correct and in compliance with 

the regulations. (ADR 170/ MUR 

5436) 

12. The Commission reached 

agreement with the Democratic 

Party of Arkansas and Marcus 

Vaden, its treasurer, regarding the 

use of prohibited funds. The respondents acknowledge that a violation 

of the Act occurred and agreed to 

pay a $1,000 civil penalty. Moreover, they demonstrated that all but 

thirty-four of the filing fee assessments in question, which were paid 

by nonfederal candidates from their 

personal accounts and deposited in 

the respondents’ federal account, 

were reimbursed by the candidates’ 

committees with funds that were not 

prohibited under the Act. The total 

of those 34 filing fees, $34,019, was 

transferred to the respondents’ nonfederal account and amended reports 

were filed with the Commission. The 

respondents, in an effort to avoid 

similar errors in the future, agreed 

to attend an FEC Seminar within 

12 months and to develop and use 

a ballot access form to ensure that 

the ballot access fees are accurately 

identified. (ADR 175*) 

13. The Commission closed the 

file involving Ciro D. Rodriguez 

for Congress and Juan J. Amaro, 

treasurer, regarding disclaimers. 

The ADR Office recommended the 

case be closed, and the Commission 

agreed to close the file. (ADR 180/ 

MUR 5417)

14. The Commission closed 

the file involving the Republican 

Liberty Caucus of Texas (RLC TX) 

and its treasurer, Don Zimmerman, 

Wes Riddle for Congress Campaign 

and its treasurer, J. Anthony Van 

Slyke, and the Republican Liberty 

Caucus PAC and its treasurer, Alan 

H. Cousin, regarding disclaimers. 

The ADR Office recommended the 

case be closed, and the Commission 

agreed to close the file. (ADR 181/ 

MUR 5423) 

15. The Commission closed the 

file involving the Missouri Republican State Committee (MSRC) and 

Harvey Tettlebaum, its treasurer, 

concerning web site content, findFEC Accepts Credit 

Cards

 The Federal Election 

Commission now accepts 

American Express, Diners Club 

and Discover Cards in addition 

to Via and MasterCard. While 

most FEC materials are available 

free of charge, some campaign 

finance reports and statements, 

statistical compilations, indexes 

and directories require payment.

 Walk-in visitors and those 

placing requests by telephone may 

use any of the above-listed credit 

cards, cash or checks. Individuals 

and organizations may also place 

funds on deposit with the office 

to purchase these items. Since prepayment is required, using a credit 

card or funds placed on deposit 

can speed the process and delivery 

of orders. For further information, 

contact the Public Records Office 

at 800/424-9530 or 202/694-1120.

(continued on page 12)
Federal Election Commission RECORD November 2004

12

Administrative 

Fines

Committees Fined for 

Nonfiled and Late Reports

The Commission recently publicized its final action on 39 new 

Administrative Fine cases, bringing 

the total number of cases released to 

the public to 1,012, with $1,368,827 

in fines collected by the FEC during 

the four years that the program has 

been in place.

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 fines 

regulations. Penalties for nonfiled 

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. 

Penalties for 48-hour notices that are 

filed late or not at all are determined 

by the amount of the contribution(s) 

not timely reported and any prior 

violations.

The committee and the treasurer 

are assessed civil money penalties 

when the Commission makes its 

final determination. Unpaid civil 

penalties are referred to the Department of the Treasury for collection.

 

 1. Allegiance Telecom Inc. PAC $500 

 2. Brock Hill Campaign $340 

 3. Clay Cox for Congress $01

 4. Colleen for Congress $9001

 5. Committee to Elect Bill Kirby $01

 6. Composition Roofers Local Union #30 

 Political Action & Education Fund $1,8002

 7. Congressional Black Caucus PAC (CBC-PAC) $6,750 

 8. Daniel Webster for U.S. Senate $5,200 

 9. Ed Bryant for Congress $700 

10. Friends of Bob Graham Committee $1,850 

11. Friends of Byron Dorgan ____3 

12. Friends of Ferris $1,100 

13. Friends of Giuliani Exploratory Committee $2,1004

14. Friends of Kent Conrad Year End 2002 ____3

15. Friends of Kent Conrad April Quarterly 2003 ____3

16. Friends of Ron Packard $110 

17. Gary Nolan for President $380 

18. General Aviation Manufacturers Association PAC 

 (GAMAPAC) $340 

19. Human Rights Campaign PAC $1,850 

20. Idaho Republican Party $135 

21. International Longshore and Warehouse 

 Union—Political Action Fund $1,900 

22. Jeff Ballenger for Congress April Quarterly 2003 $01

23. Jeff Ballenger for Congress July Quarterly 2003 $01

24. Jim Moore for the United States Senate $1754

25. John Breaux Committee ____3

26. Lincoln Club of San Diego County $1,875 

27. Mark Boles for Congress $1,400 

28. Massachusetts Green Party Federal Fund 

 (NKA Green-Rainbow Party Federal Fund) $8505

29. McCarthy for Congress Committee $900 

30. McDermott, Will & Emery LLP PAC $780 

31. Nethercutt for Senate $9,600 

1

 This civil money penalty was reduced due to the level of activity on the 

report.

2

 This civil money penalty has not been collected.

3

 This case was dismissed. Misinformation received by the committee from the 

U.S. Postal Service led to report being filed late with the office of the Secretary of Senate.

4 This civil money penalty was reduced after being recalculated for a change 

in the number of days the report was late.

5 The civil money penalty was initially calculated with as though the committee had one prior violation. However, the penalty was reduced after being 

recalculated with a prior-violation factor of zero.

Committees Fined for and Penalties Assessed

Alternative Dispute 

Resolution

(continued from page 11)

ing that the alleged activity was 

not within the FEC’s jurisdiction. 

The ADR Office recommended the 

case be closed, and the Commission 

agreed to close the file. (ADR 183/ 

MUR 5450)

 —Amy Kort
November 2004 Federal Election Commission RECORD 

13

Commission Certifies 

Matching Funds for 

Presidential Candidates

On September 30, 2004, the 

Commission certified $102,321.33 

in federal matching funds to Presidential candidate Ralph Nader. The 

U.S. Treasury Department made the 

payment on October 1, 2004. This 

certification raises to $27,923,226.54 

the total amount of federal funds 

certified thus far to eight Presidential 

candidates under the Matching Payment Account Act.

Presidential Matching Payment 

Account

Under the Presidential Primary 

Matching Payment Account Act, the 

federal government will match up to 

$250 of an individual’s total contributions to an eligible Presidential 

primary candidate. A candidate must 

establish eligibility to receive matching payments by raising in excess of 

$5,000 in each of at least 20 states 

Public Funding

Committees Fined for and Penalties Assessed, 

cont.

32. Owner-Operator Independent Drivers 

 Association Inc. PAC (AKA OOIDA-PAC) $720 

33. Perkins for Senate $3,200 

34. Regence BluePAC $140 

35. Republicans for Phil Bradley $1,3501

36. Skinner for Senate 2004 $500 

37. Stace Williams for U.S. Congress April Quarterly 2004 $01

38. Stace Williams for U.S. Congress Year End 2003 $5,6252

39. Sutton for Congress $01

1

 This civil money penalty was reduced due to the level of activity on the 

report.

2

 This civil money penalty has not been collected.

Publications

Updated List of Federal 

PACs 

The Commission has published 

the 2004 edition of PACronyms, a 

list of the acronyms, abbreviations 

and common names of federal political action committees (PACs). 

For each PAC listed, the index 

provides the full name of the PAC, 

its city, state, FEC identification 

number and, if not identifiable from 

the full name, its connected, sponsoring or affiliated organization. 

The index is helpful in identifying 

PACs that are not readily identified 

in their reports and statements on file 

with the FEC.

PACronyms is posted on the 

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

gov. Links to the document can be 

found by clicking the “Library” tab 

at the bottom of the home page. Two 

versions are available. One allows 

users to download and sort the date 

according to their preference: full 

committee name, city, state or FEC 

ID number.

To order a free paper copy of 

PACronyms, call the FEC’s Public 

Records Office at 800/424-9530 or 

202/694-1120. PACronyms is also 

available on diskette for $1. 

Other PAC indexes, described below, may be ordered from the Public 

Records Office. 

• An alphabetical list of all registered 

PACs showing each PAC’s identification number, address, treasurer and connected organization 

($13.25).

• A list of registered PACs arranged 

by state, providing the same information as above ($13.25).

• An alphabetical list of organizations that sponsor PACs, showing 

the PAC’s name and identification 

number ($7.50).

The Public Records Office can 

also conduct database research to 

locate federal political committees 

The committees listed in the 

charts at left and above, along with 

their treasurers, were assessed civil 

money penalties under the administrative fines regulations. 

Closed Administrative Fine case 

files are available through the FEC 

Press Office and Public Records Office at 800/424-9530.

 —Amy Kort

when only part of the committee 

name is known. Call the telephone 

numbers above for assistance or visit 

the Public Records Office in Washington at 999 E St., NW.

 —Amy Kort

(continued on page 14)

Federal Register 

Federal Register notices are 

available from the FEC’s Public 

Records Office, on the web site 

at http://www.fec.gov/law/law_

rulemakings.shtml and from the 

FEC faxline, 202/501-3413.

Notice 2004-13

Presidential Inaugural Committee 

Reporting and Prohibition on 

Accepting Donations from 

Foreign Nationals; Final Rules 

and Transmittal to Congress (69 

FR 59775, October 6, 2004)
Federal Election Commission RECORD November 2004

14

Index

The first number in each citation 

refers to the “number” (month) of 

the 2004 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

2003-28: Nonconnected PAC 

established by limited liability 

company composed entirely of 

corporations may become an SSF 

with the limited liability company 

as its connected organization, 1:20

2003-29: Transfer of funds from a 

nonfederal PAC to a federal PAC 

of an incorporated membership 

organization, 1:21

2003-30: Retiring campaign debt 

and repaying candidate loans, 2:1

2003-31: Candidate’s loans to 

campaign apply to Millionaires’ 

Amendment threshold, 2:2

2003-32: Federal candidate’s use 

of surplus funds from nonfederal 

campaign account, 2:4

2003-33: Charitable matching plan 

with prizes for donors, 2:5

2003-34: Reality television show to 

simulate Presidential campaign, 

2:6

2003-35: Presidential candidate may 

withdraw from matching payment 

program, 2:7

2003-36: Fundraising by federal 

candidate/officeholder for section 

527 organization, 2:8

2003-37: Nonconnected PAC’s use 

of nonfederal funds for campaign 

activities, 4;4

2003-38: Funds raised and spent 

by federal candidate on behalf of 

redistricting committee to defray 

legal expenses incurred in redistricting litigation, 3:14

2003-39: Charitable matching plan 

conducted by collecting agent of 

trade association, 3:10

(i.e., over $100,000). Although an 

individual may contribute up to 

$2,000 to a primary candidate, only 

a maximum of $250 per individual 

applies toward the $5,000 threshold in each state. Candidates who 

receive matching payments must 

agree to limit their committee’s 

spending, limit their personal spending for the campaign to $50,000 and 

submit to an audit by the Commission. 26 U.S.C. §§9033(a) and (b) 

and 9035; 11 CFR 9033.1, 9033.2, 

9035.1(a)(2) and 9035.2(a)(1).

Matching Funds for 2004 Presidential Primary Candidates: 

September Certification

Candidate Certification Cumulative 

September 2004 Certifications

Wesley K. Clark (D)1 $0 $7,615,360.39

John R. Edwards (D)2 $0 $6,624,940.44

Richard A. Gephardt (D)3 $0 $4,104,319.82

Dennis J. Kucinich (D)4 $0 $2,955,962.59

Lyndon H. LaRouche, Jr. (D)5 $0 $1,456,019.13

Joseph Lieberman (D)6 $0 $4,267,796.85

Ralph Nader (I)7 $102,321.33 $798,827.32

Alfred C. Sharpton (D) $0 $100,000.008

1 General Clark publicly withdrew from the Presidential race on February 11, 2004.

2 Senator Edwards publicly withdrew from the Presidential race on March 3, 2004.

3 Congressman Gephardt publicly withdrew from the Presidential race on January 2, 

2004.

4 Congressman Kucinich became ineligible to receive matching funds on March 4, 

2004.

5 Mr. LaRouche became ineligible to receive matching funds on March 4, 2004.

6 Senator Lieberman publicly withdrew from the Presidential race on February 3, 

2004.

7 Ralph Nader became ineligible to receive matching funds on September 2, 2004.

8

 On May 10, 2004, the Commission determined that Reverend Sharpton must repay 

this amount to the U.S. Treasury for matching funds he received in excess of his entitlement. See the July 2004 Record, page 8.

Public Funding

(continued from page 13)

Candidates may submit requests 

for matching funds once each 

month. The Commission will certify 

an amount to be paid by the U.S. 

Treasury the following month. 26 

CFR 702.9037-2. Only contributions 

from individuals in amounts of $250 

or less are matchable. 

The chart below lists the amount 

most recently certified to each 

eligible candidate who has elected 

to participate in the matching fund 

program, along with the cumulative 

amount that each candidate has been 

certified to date. 

 —Amy Kort
November 2004 Federal Election Commission RECORD 

15

2003-40: Reporting independent 

expenditures and aggregation for 

various elections, 3:11

2004-1: Endorsement ads result in 

contribution if coordinated communications; “stand-by-your-ad” 

disclaimer for ad authorized by 

two candidates, 3:12

2004-2: Contributions from testamentary trusts, 4:8

2004-3: Conversion of authorized 

committee to multicandidate committee, 5:5

2004-4: Abbreviated name of trade 

association SSF, 5:7

2004-6: Web-based meeting services 

to candidates and political committees, 5:7

2004-7: MTV’s mock Presidential 

election qualifies for press exemption—no contribution or electioneering communication results, 5:8

2004-8: Severance pay awarded to 

employee who resigns to run for 

Congress, 6:4

2004-9: State committee status, 5:10

2004-10: “Stand by your ad” disclaimer for radio ads, 6:5

2004-12: Regional party organization established by several state 

party committees, 8:4

2004-14: Federal candidate’s appearance in public service announcements not solicitation, coordinated 

communication or electioneering 

communication, 8:6

2004-15: Film ads showing federal 

candidates are electioneering communications, 8:8

2004-17: Federal candidate’s compensation for part-time employment, 8:8

2004-18: Campaign committee’s 

purchase of candidate’s book at 

discounted price, 9:4

2004-19: Earmarked contributions 

made via commercial web site, 

10:4

2004-20: Connecticut party convention considered an election, 9:5

2004-22: Unlimited transfers to state 

party committee, 9:6

2004-23: SSF’s solicitation of subsidiaries’ restricted classes, 10:5

2004-24: Use of contributor information by commercial software 

company, 10:6

2004:25: Senator/national party officer may donate personal funds 

to voter registration organizations 

that undertake federal election 

activity, 10:7

2004-26: Foreign national’s participation in activities of political 

committees, 10:8

2004-27: Use of campaign funds for 

unpaid salary of former employees, 11:1

2004-28: Disclosure of donations to 

state party committee nonfederal 

office building fund, 11:6

2004-29: Federal candidate’s support 

of ballot initiative committees, 

11:6

2004-30: Documentary and broadcast ads do not qualify for media 

exception from definition of electioneering communication, 10:9

2004-31: Ads for business with same 

name as federal candidate not 

electioneering communications, 

10:11

2004-32: SSF may solicit affiliated 

LLC, 11:7

2004-33: Corporate-sponsored ads 

as electioneering communications 

and coordinated communications, 

10:12

2004-35: Presidential campaigns 

may use GELAC funds for recount expenses, 11:8

2004-36: Reporting in-kind contribution of office space shared by 

five candidates, 11:8

Compliance

ADR program cases, 1:25; 4:15; 7:9; 

8:11; 11:9

Administrative Fine program cases, 

1:24; 4:14; 6:9; 9:9; 11:12

Enforcement Query System available on web site, disclosure policy 

for closed enforcement matters 

and press release policy for closed 

MURs; “enforcement profile” 

examined, 1:6; EQS update, 7:10

MUR 4818/4933: Contributions in 

the name of another and excessive 

contributions, 8:1

MUR 4919: Fraudulent misrepresentation of opponent’s party through 

mailings and phone banks, 6:2

MUR 4953: Party misuse of nonfederal funds for allocable expense, 

6:3

MUR 5197: Donations from Congressionally chartered corporations, 4:13

MUR 5199: Campaign committee’s 

failure to report recount activities, 

6:4

MUR 5229: Collecting agent’s failure to transfer contributions, 1:7

MUR 5279: Partnership contributions made without prior agreement of partners to whom contributions were attributed, 8:3

MUR 5328: Excessive contributions 

to and from affiliated leadership 

PACs, 5:1

MUR 5357: Corporation’s reimbursement of contributions, 2:1

MUR 5447: State party committee’s 

financial discrepancies and failure 

to pay allocable expenses from 

federal account, 10:17

Naming of treasurers in enforcement 

matters, proposed statement of 

policy, 3:4

Nonfilers, 3:16; 4:13, 6:7; 7:5; 8:13; 

9:4; 10:7

Court Cases 

_____ v. FEC

– Akins, 4:10

– Alliance for Democracy, 3:8; 10:4

– Bush-Cheney ’04, Inc. (I), 10:4

– Bush-Cheney ’04, Inc. (II), 11:4

– Citizens for Responsibility and 

Ethics in Washington, 11:5

– Cooksey, 8:11

– Cox for Senate, 3:4

– Hagelin, 4:11; 8:9; 10:3; 11:3

– Kean for Congress, 3:7

– Lovely, 5:12

– McConnell, 1:1

– LaRouche’s Committee for a New 

Bretton Woods, 6:7; 9:3; 11:3

– O’Hara, 6:6; 8:11

– Wilkinson, 4:9

– Wisconsin Right to Life, Inc., 9:1; 

10:1

(continued on page 16)
FEDERAL ELECTION COMMISSION

999 E Street, NW

Washington, DC 20463

Official Business

Penalty for Private Use, $300

PRESORTED STANDARD

U.S. POSTAGE

PAID

FEDERAL ELECTION COMMISSION

Federal Election Commission RECORD November 2004

– Shays and Meehan (I), 11:1

– Shays and Meehan (II), 11:3

– Sykes, 4:12; 11:3

FEC v. _____ 

– California Democratic Party, 4:9; 

8:10

– Dear for Congress, 8:10

– Friends of Lane Evans, 3:9

– Malenick, 5:13

– Reform Party of the USA, 9:3

Regulations

Administrative Fine program extension, final rule, 3:1

Contributions by minors, Notice of 

Proposed Rulemaking, 5:3

Electioneering communications, 

FCC database, 3:3

Electioneering Communication 

Exemption, Petition for Rulemaking, 9:4

Index

(continued from page 15)

Federal election activity periods, 3:1

Inaugural committees, Notice of 

Proposed Rulemaking, 5:1; final 

rules, 11:9

Leadership PACs, final rules, 1: 18

Overnight delivery service, safe harbor for timely filing of reports, 3:1

Party committee coordinated and 

independent expenditures, Notice 

of Proposed Rulemaking, 8:1

“Political committee” definition, 

definition of “independent expenditure,” allocation ratio for 

nonconnected PACs, Notice 

of Proposed Rulemaking, 4:1; 

Public hearing, 5:3; extension of 

Commission’s consideration, 6:1; 

Rules approved, 9:1

Public access to materials from 

closed enforcement matters, Petition for Rulemaking, 3:4

Public financing of Presidential 

candidates and nominating conventions, correction and effective 

date, 1:19

Travel on behalf of candidates and 

political committees, final rules, 

1:19

Reports

Due in 2004, 1:9

April reminder, 4:1

Convention reporting for Connecticut and Virginia, 5:10

July reminder, 7:1

Kentucky special election reporting, 

1:9

North Carolina special election 

reporting, 7:9

October reporting reminder, 10:1