July 2005 Federal Election Commission Volume 31, Number 7

Table of Contents

(continued on page 2)

(continued on page 3)

 Court Cases

 1 Wisconsin Right to Life v. FEC

 3 CREW v. FEC

 Reports

 1 July Reporting Reminder

 Compliance

 4 MUR 5183: Corporate 

Contributions

 Regulations

 5 Civil Penalties Adjusted for 

Inflation

 6 Announcement of Effective Date 

for Travel Rules for Certain 

Presidential Candidates

 6 Public Hearing on Proposed Rules

 7 Federal Register

8 Advisory Opinions

 Outreach

 9 Feedback Needed on Proposed 

Conference for Nonconnected 

Committees

 9 FEC to Hold State Outreach 

Workshops in July and August

 10 Campaign Finance Law Training 

Conferences in San Diego and San 

Antonio

11 Index

Court Cases Reports

Wisconsin Right to Life v. 

FEC

On May 9, 2005, a three-judge 

panel of the U.S. District Court for 

the District of Columbia dismissed 

this case, with prejudice, for the 

same reasons given in the court’s 

August 17, 2004, decision to deny 

the plaintiff’s request for a preliminary injunction. In that decision, the 

court found that the Supreme Court’s 

reasoning in McConnell v. FEC, 

124 S. Ct. 619 (2003), precluded 

the “as applied” challenge to the 

Bipartisan Campaign Reform Act 

(BCRA) presented by the plaintiff. 

The plaintiff’s suit had asked the 

court to find the BCRA’s prohibition 

on the use of corporate funds to pay 

for electioneering communications 

unconstitutional as applied to certain 

grass-roots lobbying activities. See 

the September 2004 Record, page 1.

The plaintiff appealed this decision to the Supreme Court on May 

23, 2005. 

U.S. District Court for the District 

of Columbia, 04-1260.

 —Amy Kort

July Reporting Reminder

The following reports are due in 

July:1

• All principal campaign committees 

of House and Senate candidates 

must file a quarterly report by July 

15. The report covers financial activity from April 1 (or the day after 

the closing date of the last report) 

through June 30. 

• Principal campaign committees 

of Presidential candidates must 

file a report by July 15, if they are 

quarterly filers (the report covers financial activity from April 1 

through June 30), or by July 20, if 

they are monthly filers (the report 

covers activity for the month of 

June).

• National party committees, political action committees (PACs) 

following a monthly filing schedule 

and state, district and local party 

1

 Note that committees that file special 

election reports in connection with the 

August 2, 2005, Special General Election in Ohio may not be required to file 

their July Quarterly or 2005 mid-year 

report, as appropriate. See the June 

2005 Record, page 14, for additional 

information, including filing dates for 

candidates and committees involved in 

the Ohio special elections.
Federal Election Commission RECORD July 2005

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)

Scott E. Thomas, Chairman

Michael E. Toner, Vice Chairman

David M. Mason, Commissioner

Danny L. McDonald, 

 Commissioner

Bradley A. Smith, Commissioner

Ellen L. Weintraub, 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

Meredith Trimble, Associate 

 Editor

http://www.fec.gov

Reports

(continued from page 1)

committees that engage in reportable federal election activity must 

file a monthly report by July 20. 

This report covers activity for the 

month of June. 

• All other filers must submit a midyear report by July 31, covering 

financial activity from January 1 

(or the day after the closing date 

of the last report) through June 30. 

Note that July 31 falls on a weekend. Reporting deadlines are not 

extended for non-working days. 

Reports sent via first class mail or 

courier must be received by the 

Commission before close of business on Friday, July 29. 

Principal Campaign Committees 

Must File FEC Form 3Z-1

Principal campaign committees of 

candidates running in 2006 must file 

FEC Form 3Z-1 as part of their 2005 

July Quarterly and Year-End reports. 

11 CFR 104.19. The information 

provided on Form 3Z-1 allows 

opposing candidates to compute 

their “gross receipts advantage,” 

which is used to determine whether 

a candidate is entitled to increased 

contribution and coordinated party 

expenditure limits under the “Millionaires’ Amendment.” 2 U.S.C. 

§§441a(i) and 441a-1. Form 3Z-1 is 

included in the FEC Form 3 package, and need only be filed with the 

July 15 quarterly report and year-end 

report for the year preceding the 

general election for the office the 

candidate seeks. 

New Reporting Forms and 

Electronic Filing Software

In February 2005, the Commission updated its electronic filing 

format to Version 5.2.0.1. FECFile 

Version 5.2, supported by the new 

format, is available for download 

from the FEC web site at http://

www.fec.gov/elecfil/updatelist.

html. Committees using commercial 

software should contact their vendors for more information about this 

software release. Only reports filed 

in the new format will be accepted.

PACs and party committees that 

file on paper reporting forms must 

use the FEC’s revised Form 3X, 

which contains updated H schedules that conform to the revised 

allocation rules for PACs that took 

effect on January 1, 2005. (See the 

December 2004 Record, page 1.) 

This version of the form is available 

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

fec.gov/info/forms.shtml. Filers 

will receive a copy with their report 

notices.

Filing Electronically

Under the Commission’s mandatory electronic filing regulations, 

individuals and organizations2

who receive contributions or make 

expenditures in excess of $50,000 

in a calendar year—or expect to do 

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

Electronic filers who instead file on 

paper or submit an electronic report 

that does not pass the Commission’s 

validation program will be considered nonfilers and may be subject 

to enforcement action, including 

administrative fines. 11 CFR 104.18.

Senate committees and other 

committees that file with the Secretary of the Senate are not subject to 

the mandatory electronic filing rules, 

but may file an unofficial electronic 

copy of their reports with the Commission in order to speed disclosure.

Timely Filing for Paper Filers

Reports sent by registered or certified mail or “overnight mail” must 

be postmarked by the filing date. If 

using overnight mail, the delivery 

service must receive the report by 

the mailing date. “Overnight mail” 

includes Priority or Express Mail 

having a delivery confirmation, or an 

overnight delivery service with an 

online tracking system. A committee 

sending its reports by certified mail 

should keep its mailing receipt with 

the postmark as proof of filing. The 

U.S. Postal service does not keep 

complete records of items sent by 

certified mail. A committee sending 

its reports by registered, Express 

or Priority mail, or by an overnight 

delivery service, should also keep a 

receipt as proof that the report was 

transmitted. 

Reports sent by any other 

means—including first class mail 

2

 The regulation covers individuals and 

organizations required to file reports 

with the Commission, including any person making an independent expenditure. 

Disbursements made by individuals or 

unregistered entities for electioneering 

communications do not count toward 

the $50,000 threshold for mandatory 

electronic filing. 11 CFR 104.18(a).
July 2005 Federal Election Commission RECORD 

3

(continued on page 4)

and courier—must be received by 

the FEC before it closes its doors 

on the filing deadline. 2 U.S.C. 

434(a)(5) and 11 CFR 104.5(e).

For those filers who are not 

required to file their reports electronically, paper forms are available 

on the FEC’s web site (http://www.

fec.gov/info/forms.shtml) and from 

FEC Faxline, the agency’s automated fax system (202/501-3413).

Filing Frequency for PACs

PACs may file on either a semiannual or a monthly basis in non-election years. Committees wishing to 

change their filing frequency must 

notify the Commission in writing when filing a report under the 

committee’s current schedule. Electronic filers must file this request 

electronically. A committee may 

change its filing frequency only once 

per calendar year. 11 CFR 104.5(c).

Filing Frequency for Party 

Committees

A state, district or local party 

committee that filed monthly in 2004 

due to its federal election activity 

must notify the Commission in writing if it wishes to file semiannually 

in 2005. 11 CFR 104.5(b)(2). Electronic filers must file this request 

electronically.

Additional Information

For more reporting information 

on 2005 reporting dates:

• See the reporting tables in the 

January 2005 Record;

• Call and request the reporting 

tables from the FEC at 800/424-

9530 or 202/694-1100;

• Fax the reporting tables to yourself 

using the FEC’s Faxline (202/501-

3413, document 586); or

• Visit the FEC’s web page at http://

www.fec.gov/info/report_dates.

shtml to view the reporting tables 

online.

 —Amy Kort

Court Cases

(continued from page 1)

Citizens for Responsibility 

and Ethics in Washington v. 

FEC

On May 16, 2005, the U.S. 

District Court for the District of 

Columbia granted the FEC’s motion 

for summary judgment in this case, 

and denied the plaintiff’s motion for 

summary judgment, finding that the 

FEC’s interpretation of the confidentiality provision of the Federal 

Election Campaign Act (FECA) is 

reasonable.

Background

On July 12, 2004, Citizens 

for Responsibility and Ethics in 

Washington (CREW), a nonprofit 

501(c)(3) corporation, asked the 

FEC to provide it with an 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 FECA. 

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 Freedom of Information Act 

(FOIA) request, arguing that the 

“confidentiality provision” does not 

apply to the Westar report. The FEC 

denied the appeal. The plaintiff filed 

a court complaint on September 30, 

2004.

Court Decision

In court, the plaintiff argued that 

the Westar report does not fall under 

the FECA’s confidentiality provision because that provision does not 

apply to matters in their pre-investigatory stage. The FEC argued, to the 

contrary, that the provision applies to 

all information in its open enforcement files.

The standard for judicial review 

of an agency’s construction of a statute it administers 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 Congress has not spoken 

explicitly to the question at hand, 

then court must ask a second question—whether the agency’s rules are 

based on a permissible reading of 

the statute. If the agency’s interpretation is reasonable, then the court 

must defer to that interpretation. 

In this case, the court found that 

the Act’s confidentiality provision 

does not speak to the precise issue at 

hand because it can support both the 

Campaign 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 (www.fec.gov).

 If you would like to place an 

order for paper copies of the 

Campaign Guides, please call the 

Information Division at 800/424-

9530.
Federal Election Commission RECORD July 2005

4

plaintiff’s and the defendant’s interpretations. Under the second step of 

Chevron review, the court found that 

the FEC’s interpretation of the provision is reasonable because it “satisfies the heightened privacy concerns 

of the FECA confidentiality provision and minimizes the adverse 

consequences of public knowledge 

of that ignominious pre-investigatory status.” 

The plaintiff had also taken issue with the FEC’s unwillingness, 

in response to their FOIA request, 

to acknowledge whether it had the 

Westar report at all. The FEC countered that acknowledging possession 

of the report would in itself reveal 

confidential information. The court 

concluded that the FEC acted appropriately and in the best interests 

of the confidentiality provision.

The court granted the FEC’s 

request for summary judgment and 

denied the plaintiff’s request for 

summary judgment. See the November 2004 Record, page 5. CREW 

subsequently filed a motion for reconsideration of the court’s decision.

U.S. District Court for the District 

of Columbia, 04-1672 (RMU).

 —Amy Kort

Court Cases

(continued from page 3)

Compliance

MUR 5183: Corporate 

Contributions

The Commission has entered into 

two separate conciliation agreements, one with the Reverend Jesse 

L. Jackson, Sr., the Rainbow/PUSH 

Coalition, Inc., (Rainbow) and 

Citizenship Education Fund, Inc., 

(CEF), and another with the Democratic National Committee (DNC). 

In the agreements, the respondents 

admit to violating the Federal 

Election Campaign Act’s (the Act) 

prohibition on corporate contributions. These conciliation agreements 

prohibit future misconduct by the 

respondents and require $200,000 

in civil penalties, which are equally 

divided between the DNC and the 

other group of respondents.

Background

The Act prohibits corporations from making contributions 

or expenditures from their general 

treasury funds in connection with 

any election of any candidate for 

federal office. In addition, the law 

prohibits any officer or director of 

any corporation from consenting to 

any expenditure or contribution by 

the corporation. 2 U.S.C. §441b. 

An extension of credit is considered 

a contribution unless the credit is 

extended in the ordinary course of 

business and the terms are substantially similar to extensions of credit 

to nonpolitical debtors that are of 

similar risk and size of obligation.1

With limited exceptions not applicable here, the prohibition on 

corporate contributions also extends 

to non-profit corporations such as 

Rainbow and CEF.

In September 2000, Reverend 

Jackson, founder of Rainbow and 

CEF, and other Rainbow representatives (collectively, the Jackson 

respondents) reached an agreement 

with officials from the DNC that 

various Democratic Party committees would provide funds to the 

Jackson respondents to offset the 

costs of a speaking tour that would 

benefit Democratic candidates. 

The speaking tour involved over 

120 events between September and 

November 2000, over 80 percent 

of which were described as “DNC/

Coordinated Campaign” events on 

Reverend Jackson’s itineraries. Most 

of the events, according to the itineraries, included the appearance of 

Democratic Senate or Congressional 

candidates. A DNC employee was 

detailed to work out of Rainbow’s 

offices in Chicago as the tour coordinator. The trip coordinator briefed 

Democratic Party officials concerning the tour.

Rainbow’s ledgers and vendor 

invoices show that Reverend Jackson’s travel between September and 

November 2000 cost approximately 

$750,000. Although a portion of 

this travel related to other Rainbow 

activities, the majority of travel was 

election-related. Invoices for these 

expenses, including charter air, 

lodging, meal and communication 

expenses, were billed directly to 

Rainbow, CEF and a political action 

committee also founded by Reverend Jackson. Rainbow and CEF paid 

the majority of these expenses.

To fulfill the DNC’s agreement 

to fund up to $450,000 of Reverend 

Jackson’s election-related travel that 

would benefit federal candidates, the 

DNC arranged to pay $250,000 to 

Rainbow and to have the Democratic 

Congressional Campaign Committee 

and the Democratic Senatorial Campaign Committee each pay $100,000 

to either Rainbow or CEF. However, 

while the respondents contend that 

the payments were intended to be 

made before the expenses were 

incurred, the payments were in fact 

made after Rainbow and CEF incurred expenses for the partisan getout-the-vote and voter registration 

campaign. Indeed, as of election day, 

November 7, 2000, Rainbow still 

had an outstanding advance to the 

DNC of approximately $350,000, 

and full payment was not made by 

the DNC until December 6, 2000. 

Conciliation Agreements

Reverend Jackson, Rainbow and 

CEF admitted in their conciliation 

agreement to making corporate 

contributions to the DNC in the form 

of prohibited corporate advances. 

1

 A corporation may extend credit to 

a candidate or political committee in 

its capacity as a commercial vendor. 

A commercial vendor is any person 

who provides goods or services to a 

candidate or political committee whose 

usual and normal business involves the 

sale, rental, lease or provision of those 

goods or services. 11 CFR 116.1(c) and 

116.3(b)-(c).
July 2005 Federal Election Commission RECORD 

5

(continued on page 6)

These respondents agreed to pay a 

$100,000 civil penalty and to cease 

and desist from further such violations of the Act. 

In the DNC’s conciliation agreement, the DNC and its treasurer, 

Andrew Tobias, admitted to violating the Act’s prohibition on corporate contributions by receiving 

contributions from Rainbow and 

CEF. The respondents agreed to pay 

a $100,000 civil penalty and to cease 

and desist from further violations of 

2 U.S.C. §441b. 

In addition, both the Jackson respondents and the DNC respondents 

agreed to revise the handbooks and 

guidance on compliance with election law used by their employees, 

contractors and volunteers to emphasize that incorporated non-profit 

organizations may not advance funds 

to perform partisan get-out-the-vote 

and voter registration activities that 

are coordinated with any federal 

political committees. The regular 

training provided to staff for the 

2006 and 2008 elections will include 

instructions on avoiding such violations of the law.

Additional Information

For additional information on this 

case, please visit the Commission’s 

Public Records Office or consult 

the Enforcement Query System on 

the FEC’s web site and enter case 

number 5183.

 —Amy Kort

Regulations

Civil Penalties Adjusted for 

Inflation

On June 9, 2005, the Commission adopted final rules that apply 

cost-of-living adjustments to the 

maximum amount of civil penalties that can be assessed for certain 

violations of the Federal Election 

Campaign Act, the Presidential 

Election Campaign Fund Act and the 

Presidential Primary Matching Payment Account Act. The Federal Civil 

Penalties Inflation Adjustment Act of 

1990 (Inflation Adjustment Act), as 

amended by the Debt Collection Improvement Act of 1996, requires that 

at least once every four years the 

FEC and other executive agencies 

adjust for inflation the top amount of 

their current civil penalties.

The Inflation Adjustment Act 

provides that the adjustment is 

determined according to the increase 

in the Consumer Price Index (CPI) 

since the last year that the penalties were adjusted. The adjusted 

amounts are then rounded in accordance with the Inflation Adjustment 

Act’s rounding rules. 28 U.S.C. 

§2641 nt (5)(a). The Commission 

last examined its civil penalty rules 

under the Inflation Adjustment Act 

in January 2002, but no adjustments 

were required after the application 

of the rounding formula. The current 

adjustments to the penalty amounts 

took effect on June 15, 2005, when 

the final rules were published in the 

Federal Register, and only apply to 

violations that occur after this effective date.

Violations that Are Not Knowing 

and Willful

Since 1997, the maximum civil 

penalty for a violation that is not 

knowing and willful has been the 

greater of $5,500 or an amount 

equal to any contribution or expenditure involved in the violation. 11 

CFR 111.24(a)(1). Under the 2005 

adjustment, the $5,500 civil penalty 

amount is increased to $6,500.

Knowing and Willful 

Contributions Made in the Name 

of Another

The Bipartisan Campaign Reform 

Act of 2002 raised the maximum 

civil penalty amount for knowing 

and willful violations of the prohibition on contributions made in 

the name of another to an amount 

that does not exceed the greater 

of $50,000 or 1,000 percent of 

PACronyms, Other 

PAC Publications 

Available

 The Commission annually 

publishes an alphabetical listing 

of acronyms, abbreviations and 

common names of 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.

 This index is helpful in 

identifying PACs that are not 

readily identified in their reports 

and statements on file with the 

FEC.

 To order a free copy of 

PACronyms, call the FEC’s 

Disclosure Division at 800/424-

9530 or 202/694-1120.

 PACronyms is also available 

on diskette for $1 and can be 

accessed free on the FEC web site 

at www.fec.gov.

 Other PAC indexes, described 

below, may be ordered from the 

Disclosure Division. Prepayment 

is required.

• 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 sponsoring PACs 

showing the name of the PAC 

and its identification number 

($7.50).

 The Disclosure Division can 

also conduct database research to 

locate federal political committees 

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.
Federal Election Commission RECORD July 2005

6

Regulations

(continued from page 5)

Announcement of Effective 

Date for Travel Rules 

for Certain Presidential 

Candidates

The Commission has published 

the effective date for amendments 

to the candidate travel rules at 11 

CFR 9004.6 and 9004.7, which address payment for travel by publicly 

funded Presidential candidates in the 

general election. Changes to these 

two regulations were part of a rulemaking that amended a number of 

rules on candidate travel. The final 

rules were published in the Federal 

Register on December 15, 2003, 

(68 FR 69583) and the majority of 

the rules took effect on January 14, 

2004. Under the Presidential Campaign Fund Act, however, changes to 

11 CFR 9004.6 and 9004.7 cannot 

be promulgated until the rules have 

been before Congress for 30 legislative days. The final rules stated that 

the effective date for these regulations would be published in a future 

notice in the Federal Register. The 

effective date was April 2, 2004, but 

publication of this date was inadvertently delayed until June 9, 2005. 

Public Hearing on Proposed 

Rules

On May 17, 2005, the Commission held a public hearing to receive 

testimony on proposed rules regarding:

• Federal candidate and officeholder 

solicitation at state, district and local party committee fundraisers; 

• The definition of “agent” for the 

Commission’s coordinated and 

independent expenditure rules and 

nonfederal funds regulations; and

• Payroll deductions for contributions to trade association separate 

segregated funds (SSFs).

Ten witnesses, representing election law practitioners, campaign 

the amount involved in the violation. 2 U.S.C. §437g(a)(5)(B) and 

(6)(C); 11 CFR 111.24(a)(2)(ii). 

Because this penalty amount was 

last changed in 2002, the adjustment 

reflects the CPI increase since that 

year. After applying the rounding 

rules, the Commission increased 

the maximum penalty amount for 

these violations to $55,000 (or 1,000 

percent of the amount involved in 

the violation).

Violations of Confidentiality

Any Commission member or 

employee, or any other person, who 

makes public any notification or 

investigation under 2 U.S.C. §437g 

without the written consent of the 

person receiving the notification, 

or the person with respect to whom 

such investigation is made, is subject 

to a fine. Since 1997, the maximum 

penalty for such a violation has been 

$2,200 or, if the violation is knowing and willful, $5,500. 11 CFR 

111.24(b). Under the 2005 inflation adjustment, the $2,200 penalty 

amount remains unchanged after the 

application of the rounding rules, 

but the knowing and willful penalty 

amount is increased to $6,500.

Penalty Schedule for 48-Hour 

Notices

Principal campaign committees 

are required to report, within 48-

hours of receipt, any contributions 

of $1,000 or more that are received 

after the 20th day, but more than 48 

hours, before any election. 2 U.S.C. 

§434(a)(6). Under the Commission’s 

administrative fines regulations, the 

Commission assesses civil penalties for violations of this reporting 

requirement based on a schedule of 

penalties that the Commission adopted in 2000. Under this schedule, 

the civil penalty amount for each 

notice not filed timely was $100 

plus 10 percent of the amount of the 

contribution not timely reported. The 

penalty is also increased for prior 

violations. 11 CFR 111.44. Under 

the 2005 inflation adjustment, the 

new base civil penalty amount is 

$110.

Other Penalty Amounts

The Commission also examined 

the maximum civil penalties at 11 

CFR 111.24(a)(2)(i) for “knowing and willful” violations and the 

schedule of penalties for reporting violations at 11 CFR 111.43. 

However, under the rounding rules, 

no changes were appropriate at this 

time for these civil penalty amounts.

Additional Information

The final rule and its Explanation 

and Justification were published in 

the June 15, 2005, Federal Register 

(70 FR 34633) and are available on 

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

gov/law/law_rulemakings.shtml.

 —Amy Kort

The Commission notes that the 

2003 publication of the final rules, 

in combination with the inadvertent delay in the publication of this 

effective date notice, may have 

caused some confusion about which 

regulations were applicable to publicly funded Presidential candidates 

during the 2004 general election. 

In light of these circumstances, the 

Commission intends to exercise its 

discretion by not pursuing potential 

violations of the travel reimbursement rules in 11 CFR 9004.6(b)(2) 

and 9004.7(b)(5) and (8) that occurred between April 2, 2004, and 

June 9, 2005, so long as the reimbursement for campaign travel was 

provided in accordance with either 

the old rules or the revised rules. 

In addition, for travel reimbursements that occurred during the 2004 

general election cycle, calculations 

based on either the pre- or post-revision rules will be permissible in the 

context of audits or repayment of 

public funds under 26 U.S.C. §9007.

The Effective Date Notice was 

published in the June 9, 2005, 

Federal Register (70 FR 33689) and 

is available on the FEC web site at 

http://www.fec.gov/law/law_rulemakings.shtml.

 —Amy Kort
July 2005 Federal Election Commission RECORD 

7

constitute a solicitation by a federal 

candidate or officeholder at such 

an event and expressed their view 

that steps could be taken to ensure 

that candidates solicited only funds 

that were within the Act’s limits and 

source prohibitions at such events.

William McGinley, representing 

the National Republican Senatorial 

Committee, Thomas Josefiak, representing the Republican National 

Committee, and Robert Bauer, from 

Perkins Coie LLP, urged the Commission not to revise the current 

rule permitting federal candidates 

and officeholders to speak at state 

party fundraising events without 

restriction or regulation. They voiced 

strong support for revising the Explanation and Justification, instead 

arguing that the BCRA’s requirements do not compel the Commission to change the regulation. Mr. 

McGinley and Mr. Josefiak warned 

of a chilling effect on candidates’ 

speech if they were not allowed 

by the regulation to speak without 

restriction at such fundraisers. Mr. 

Bauer argued that a candidate’s appearance at a fundraiser is a solicitation in itself, and, thus, there is no 

logic in a reading of the statute that 

says the federal candidate or officeholder can appear at a fundraiser but 

cannot solicit funds.

Agent Definition

The Commission has requested 

comments on proposed revisions to 

the definitions of “agent” used in its 

rules on coordinated and independent expenditures and its regulations 

regarding nonfederal funds. These 

definitions currently provide that an 

agent is “any person who has actual 

authority, either express or implied” 

to perform certain, specified actions, 

but do not include persons acting 

only with apparent authority. The 

Commission proposed revising its 

regulations at 11 CFR 109.3 and 

300.2(b) to conform to the Shays

decision, which held that the Commission had not provided adequate 

explanation of its decision to exclude “persons acting only with apparent authority” and, therefore, had 

not satisfied the reasoned analysis 

requirement of the APA. 

Mr. Noble, Mr. Ryan and Mr. 

Simon all supported the addition of 

apparent authority to the definition 

of agent for these rules, arguing that 

this change both represents the most 

sensible reading of the statute and 

is consistent with the Commission’s 

actions in past enforcement matters 

where individuals with apparent authority were treated as agents. However, Karl Sandstrom, representing 

the Association of State Democratic 

Chairs, argued that adding apparent 

authority to the definition of agent in 

these rules risks capturing the activities of volunteer fundraisers who 

may be acting without the express 

knowledge of the candidate and who 

may raise money for a number of 

candidates, both federal and nonfederal. Mr. Sandstrom argued that the 

definition of agent should not extend 

to individuals that candidates are not 

in a position to control.

Payroll Deduction

The Commission has proposed 

amendments to its rules regarding 

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 2005-15

Travel on Behalf of Candidates 

and Political Committees, 

Announcement of Effective Date 

(70 FR 33689, June 9, 2005)

Notice 2005-16

Inflation Adjustments for Civil 

Monetary Penalties, Final Rules 

(70 FR 34633, June 15, 2005)

reform groups, party committees, 

unions and trade associations testified before the Commission.

Solicitation at Party Fundraisers

Under the Federal Election 

Campaign Act (the Act), federal 

candidates, officeholders and their 

agents may not solicit, receive, 

direct, transfer or spend nonfederal 

funds in connection with federal or 

nonfederal elections except under 

limited circumstances. See 2 U.S.C. 

§441i(e); 11 CFR part 300, subpart 

D. However, the Act permits them to 

speak or be featured guests at state, 

district and local party fundraisers, where nonfederal funds may be 

raised. See 2 U.S.C. §441i(e)(3). 

Currently, Commission regulations permit federal candidates 

and officeholders to speak at such 

fundraisers “without restriction or 

regulation.” See 11 CFR 300.64. 

However, in Shays v. FEC the court 

found that, although this regulation 

was a permissible interpretation of 

the statute, the Commission’s Explanation and Justification for the regulation had not satisfied the “reasoned 

analysis” requirement of the Administrative Procedure Act (APA). The 

court remanded the regulation to the 

Commission for further action consistent with its opinion. In response, 

the Commission approved a Notice 

of Proposed Rulemaking (NPRM) 

seeking comments on proposals 

either to revise the Explanation and 

Justification for this rule or to revise 

the rule itself. 

At the hearing, Larry Noble, from 

the Center for Responsive Politics, 

Donald Simon, from Democracy 21, 

and Paul Ryan, from the Campaign 

Legal Center, testified that the Commission’s existing regulation is inconsistent with the framework of the 

Bipartisan Campaign Reform Act of 

2002 (BCRA) and urged the Commission to revise the rule to prohibit 

federal candidates and officeholders 

from soliciting nonfederal funds at 

state party committee fundraisers. 

These witnesses fielded Commissioners’ questions about what might 

(continued on page 8)
Federal Election Commission RECORD July 2005

8

Advisory

Opinions

AO 2005-5

Federal Candidate/

Officeholder’s Use of Funds 

from Nonfederal Exploratory 

Committee

U.S. Representative Ray LaHood, 

a federal candidate and officeholder 

who is also exploring a gubernatorial 

candidacy, may use funds remaining in his gubernatorial exploratory 

committee’s account to make donations in connection with nonfederal 

elections because the funds in this 

account were raised in accordance 

with the Federal Election Campaign 

Act’s (the Act) contribution limits 

and source prohibitions. See 11 CFR 

300.62. Representative LaHood’s exploratory committee funds may also 

be refunded to donors and donated 

to charitable organizations that do 

not engage in election activity.

Background

Under the Act, federal candidates 

and officeholders, their agents and 

any entities directly or indirectly 

established, financed, maintained or 

controlled by a federal candidate/officeholder can only solicit, receive, 

direct, transfer, spend or disburse 

contributions to the SSF of a trade 

association by the restricted class 

of the trade association’s corporate 

members. Currently, Commission 

regulations prohibit a trade association’s corporate members from using 

a payroll deduction or check-off 

system for employee contributions 

to the trade association’s SSF. See 

11 CFR 114.8(e)(3). 

The proposed rules would permit 

a corporate member of a trade association to provide incidental services 

to collect and forward contributions 

from its restricted class employees to 

the trade association’s SSF, including a payroll deduction or check-off 

system, upon written request from 

the trade association. Under the proposed rules, a corporate member that 

provides such services would be required to provide the same services 

for contributions to the SSF of any 

labor organization that represents 

employees of the corporation, upon 

written request from the labor organization and at a cost not to exceed 

the actual expenses incurred.

Witnesses at the hearing supported the proposed rule to allow 

trade association corporate members 

to provide payroll deduction for contributions to the trade association’s 

PAC. Diane Casey-Landry, from 

America’s Community Bankers, 

and Pamela Whitted, from National 

Stone, Sand and Gravel Association, 

testified that the proposal would 

allow more individuals to participate in the political process. Ms. 

Casey-Landry suggested that payroll 

deductions are a preferred method of 

payment because they allow individuals to manage payments over 

time and that automated payments 

of all kinds have become prevalent. 

Laurence Gold, from the American 

Federation of Labor and Congress of 

Industrial Organizations, agreed that 

the statute does not preclude such 

payroll deductions. However, Mr. 

Gold asked that the proposed rule be 

amended to include the subsidiarRegulations

(continued from page 7)

ies and affiliates of the corporation 

in the provision providing payroll 

deduction services to labor organizations. Mr. Gold argued that this revision would better track the language 

of the statute. Ms. Casey-Landry 

disagreed, stating that the proposed 

rule strikes the correct balance.

Additional Information

The Notices of Proposed Rulemaking, public comments submitted 

in response to these proposals and a 

transcript of the hearing are available 

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

fec.gov/law/law_rulemakings.shtml.

 —Amy Kort 

Enforcement Query 

System Available on 

FEC Web Site

 The FEC’s web site offers 

an Enforcement Query System 

(EQS), a search tool that allows 

users to find and examine public 

documents regarding closed 

Commission enforcement matters. 

Using current scanning, optical 

character recognition and text 

search technologies, the system 

permits intuitive and flexible 

searches of case documents and 

other materials. 

 Currently, the EQS contains 

complete public case files for 

all MURs closed since January 

1, 2001. Users of the system 

can search for specific words 

or phrases from the text of all 

public case documents. They 

can also identify single matters 

under review (MURs) or groups 

of cases by searching additional 

identifying information about 

cases prepared as part of the Case 

Management System. Included 

among these criteria are case 

names and numbers, complainants 

and respondents, timeframes, 

dispositions, legal issues and 

penalty amounts. 

 The system offers additional 

case information and navigation 

tools, including:

• A Case Summary section 

that includes the name of a 

respondent committee treasurer 

and any prior committee 

treasurer; and

• An On-Line Tutorial to help 

users to utilize the system’s 

search capabilities more fully.

 The Enforcement Query 

System may be accessed on the 

Commission’s web site at www.

fec.gov.
July 2005 Federal Election Commission RECORD 

9

Advisory Opinion Requests

AOR 2005-7

Application of media exemption 

to local newspaper and magazine 

owned by federal candidate; campaign’s purchase of ad space in these 

publications (Andy Mayberry and 

Andy Mayberry for Congress, May 

26, 2005)

AOR 2005-8

Permissibility of national bank’s 

donations to state candidate’s legal 

defense fund (California State Senator Mike Machado, June 14, 2005)

Outreach

Feedback Needed on 

Proposed Conference for 

Nonconnected Committees

The FEC is considering hosting a 

one-day seminar in Washington, DC, 

on November 16, 2005, to address 

the concerns of nonconnected committees (i.e., PACs not sponsored by 

a corporation, union or trade association). Discussion topics for this 

conference would include fundraising, reporting and communications, 

and workshops would address recent 

changes to the campaign finance law, 

such as allocation and solicitation 

rules for PACs.

To help us gauge interest and effectively plan this seminar, we need 

your feedback. If you would be interested in attending, please send an 

email to Conferences@fec.gov. Be 

sure to include your name, the name 

of your PAC, mailing address, fax 

and phone numbers, and also tell us 

what type of nonconnected commitFEC to Hold State Outreach 

Workshops in July and 

August

As part of the FEC’s State Outreach Program, Public Affairs Specialists conduct informal meetings 

in different cities across the country 

to brief PACs, party committees and 

candidate committees on areas of 

the law specific to their needs. This 

summer, FEC staff will hold workshops in the following cities:

• Savannah, GA, July 26-27 (note 

that there is a waiting list for some 

portions of this program);

funds in connection with a nonfederal election if those funds are consistent with the limits and prohibitions 

of the Act and also comply with 

state law. The Act provides a limited 

exception from this requirement for 

federal candidates and officeholders 

who are also state or local candidates and are raising and spending 

funds solely in connection with their 

own nonfederal campaigns. 2 U.S.C. 

§§441i(e)(1)(B) and 441i(e)(2); 11 

CFR 300.62 and 300.63. 

Analysis

Representative LaHood, who is 

considering a candidacy for Governor of Illinois, has established an 

exploratory campaign committee, 

Ray LaHood for Illinois (the Committee). Although not required under 

the Act, all funds raised by and for 

the Committee have been in amounts 

and from sources that are in compliance with the Act’s limits and 

prohibitions. 

If Representative LaHood decides 

not to announce a gubernatorial 

candidacy, he may use the funds 

remaining in the Committee’s account for donations to state and local 

candidates and to the nonfederal 

accounts of party organizations, so 

long as the donations are consistent 

with state law. Because the Committee’s funds are in compliance with 

the Act’s limits and prohibitions, donations in connection with nonfederal elections would be permissible. 

For the same reason, Representative 

LaHood may also use those funds 

to make refunds to donors, provided 

that such refunds are consistent with 

state law. 

Finally, Representative LaHood 

may use the Committee’s funds to 

make donations to charitable groups 

organized under section 501(c)(3) 

of the Internal Revenue Code that 

do not conduct election activity, so 

long as the donations are consistent 

with state law. Donations to section 

501(c)(3) organizations that conduct 

no election activity of any kind do 

not involve the transfer or spending 

of funds in connection with a federal 

or nonfederal election and, thus, 

are not subject to the restrictions on 

federal candidates/officeholders. See 

AO 2003-32.

Date Issued: June 10, 2005; 

Length: 5 pages.

 —Amy Kort

tee you represent (e.g., partnership, 

unincorporated business, leadership PAC, unincorporated group of 

citizens, etc.). 

 —Amy Kort

FEC Accepts Credit 

Cards

 The Federal Election 

Commission accepts American 

Express, Diners Club and 

Discover Cards, in addition to 

Visa 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 10)
Federal Election Commission RECORD July 2005

10

Upcoming 2005

Conferences 

Conference for Campaigns, 

Parties and Corporate/Labor/

Trade PACs

September 14-15, 2005

Hyatt Regency Islandia

San Diego, CA

Conference for Campaigns, 

Parties and Corporate/Labor/

Trade PACs

October 25-26, 2005

Crowne Plaza Hotel 

San Antonio Riverwalk

San Antonio, TX

Campaign Finance Law 

Training Conferences in San 

Diego and San Antonio

In September and October the 

Commission will hold conferences 

for House and Senate campaigns, 

political party committees and 

corporations, labor organizations, 

trade associations, membership 

• Denver, CO, August 10-11; and

• Portland, OR, August 23-24.

Registration for these programs is 

free. Visit the FEC web site at www.

fec.gov/info/outreach.shtml#state

for additional information, including workshop schedules for each 

program. For additional information about this outreach program, or 

to register for one of the sessions, 

call the FEC’s Information Division at 1-800/424-9530 (or locally, 

202/694-1100) or send an email to 

Conferences@fec.gov with your 

contact information (name, organization, phone number, fax number 

and email address). Please identify 

the particular city in which you wish 

to attend a session.

 —Amy Kort

organizations and their respective 

PACs. The conferences will consist 

of a series of workshops conducted 

by Commissioners and experienced 

FEC staff who will explain how the 

federal campaign finance law applies 

to each of these groups. Workshops 

will specifically address recent 

changes to the campaign finance law 

and will focus on fundraising and reporting rules. A representative from 

the IRS will be available to answer 

election-related tax questions.

Conference in San Diego

The San Diego Conference will 

be held September 14-15 at the 

Hyatt Regency Islandia. The registration fee for this conference is 

$350, which covers the cost of the 

conference, materials and meals. A 

$10 late fee will be added to registrations received after August 17. 

The Hyatt Regency Islandia is 

located on Mission Bay, near Sea 

World, at 1441 Quivira Road, San 

Diego, CA, 92101. A room rate of 

$129 per night, single or double, is 

available to conference participants 

who make reservations on or before 

August 17. After August 17, room 

rates are based on availability. To 

make hotel reservations, visit the 

hotel’s online reservations web page 

at https://resweb.passkey.com/

Resweb.do?mode=welcome_ei_

new&eventID=19000, or call 619-

224-1234. To receive the conference 

rate, you must indicate that you are 

attending the FEC conference. 

Conference in San Antonio

The San Antonio Conference will 

be held October 25-26 at the Crowne 

Plaza Hotel San Antonio Riverwalk. 

The registration fee for this conference is $350, which covers the costs 

of the conference, materials and 

meals. A $10 late fee will be added 

to registrations received after September 30.

The Crowne Plaza Hotel is 

located at 111 Pecan Street East, 

San Antonio, TX, 78205, in San 

Antonio’s famous Riverwalk area. A 

$129 room rate, single or double, is 

Outreach

(continued from page 9)

available for conference participants 

who make reservations on or before 

September 30. To receive this special 

rate, you must mention that you are 

attending the FEC conference. After 

September 30, room rates are based 

on availability. Call 1-888-623-2800 

to make reservations.

Registration Information

Complete registration information for FEC conferences is 

available on the FEC web site at 

http://www.fec.gov/info/outreach.

shtml#conferences.

Please direct all questions about 

conference registration and fees to 

Sylvester Management Corporation 

at 1-800/246-7277. For questions 

about the conference program, call 

Back Issues of the 

Record Available on 

the Internet

 This issue of the Record and all 

other issues of the Record starting 

with January 1996 are available 

on the FEC web site as PDF files. 

Visit the FEC web site at http://

www.fec.gov/pages/record.shtml

to find monthly Record issues. 

 The web site also provides 

copies of the Annual Record Index

for each completed year of the 

Record, dating back to 1996. The 

Annual Record Index lists Record

articles for each year by topic, 

type of Commission action and, in 

the case of advisory opinions, the 

names of individuals requesting 

Commission action.

You will need Adobe® Acrobat® Reader software to view the 

publication. The FEC’s web site 

has a link that will take you to 

Adobe’s web site, where you can 

download the latest version of the 

software for free.
July 2005 Federal Election Commission RECORD 

11

The first number in each citation 

refers to the “number” (month) of 

the 2005 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

2004-40: Status of state party as 

state committee of political party, 

1:8

2004-41: Non-affiliation of SSFs, 

2:4

2004-42: LLC as connected organization for SSF, 2:7

2004-43: Discounted sale of ad time 

not a contribution, 4:6

2004-45: Accounting method for 

determining excess contributions 

under Millionaires’ Amendment, 

3:7

2005-1: Indian tribe not a federal 

contractor, 5:8

2005-2: Fundraising for nonfederal 

committees by federal officeholder 

who is nonfederal candidate, 6:7

2005-3: Affiliation of membership 

organizations, 6:8

2004-4: Reporting court-ordered 

restitution owed to campaign committee, 6:9

2005-5: Federal candidate/officeholder’s use of funds from nonfederal exploratory committee, 7:8

Compliance

Administrative fines assessed, 2:13; 

6:13

Index

tees, Notice of Proposed Rulemaking, 3:6

“Federal Election Activity” definition, Notice of Proposed Rulemaking, 6:1 

Filing by Priority Mail, Express 

Mail and overnight delivery, Notice of Proposed Rulemaking, 2:1; 

final rules, 5:4

Internet communications, Notice of 

Proposed Rulemaking, 5:1

Party committee donations to certain 

tax-exempt organizations and 

political organizations, Notice of 

Proposed Rulemaking, 1:7; final 

rules, 5:4

Payroll deductions for contributions 

to trade association SSF, Notice of 

Proposed Rulemaking, 2:2; public 

hearing scheduled, 5:5; public 

hearing, 7:6

Salaries and wages paid by state, 

district and local party committees, Notice of Proposed Rulemaking, 6:3

Travel rules for certain Presidential 

candidates, effective date, 7:6

Reports

April reporting reminder, 4:1

California special election reporting, 

2:3

Due in 2005, 1:3

Electronic filing software, FEC 

Form 3X, updated, 2:1

July reporting reminder, 7:1

Ohio special election, 6:14

ADR program update, 1:9; 2:12; 4:9; 

5:7; 6:10

MUR 5020: Corporate facilitation, 

4:6

MUR 5405: Contributions in the 

name of another and corporate 

contributions, 6:5

MUR 5428: Excessive and prohibited contributions, improper allocation and reporting violations, 6:6

MUR 5183: Corporate contributions, 

7:4

Court Cases 

_____ v. FEC

– Alliance for Democracy, 4:4

– Augusti and Augusti for Congress, 

1:12

– Citizens for Responsibility and 

Ethics in Washington (04-2145), 

2:10

– Citizens for Responsibility and 

Ethics in Washington (04-1672), 

7:3

– EMILY’s List, 3:1; 4:1

– Judicial Watch, 4:3

– Kean for Congress, 4:3

– Sykes, 6:5

– Wisconsin Right to Life, 7:1

FEC v. _____ 

– Democratic Party of New Mexico, 

6:1

Regulations

“Agent” definition for coordinated 

and independent expenditures 

and nonfederal funds regulations, 

Notice of Proposed Rulemaking, 

3:4; public hearing scheduled, 5:5; 

public hearing, 7:6

BCRA technical amendments, final 

rules, 1:6

Candidate solicitation at state, 

district and local party committee 

fundraisers, Notice of Proposed 

Rulemaking, 4:4; public hearing 

scheduled, 5:5; public hearing, 7:6

Civil penalties adjusted for inflation, 

7:5

Contributions by minors to candidates and party committees, final 

rules, 3:3

“De minimis” exemption for Disbursement of Levin funds by state, 

district and local party committhe FEC’s Information Division 

at 1-800/424-9530 (or locally at 

202/694-1100) or send an e-mail to 

Conferences@fec.gov.

Please note that the FEC suggests 

that you wait to make your hotel and 

air reservations until you have received confirmation of your conference registration.

 —Amy Kort

Need FEC Material 

in a Hurry?

 Use FEC Faxline to obtain 

FEC material fast. It operates 

24 hours a day, 7 days a week. 

Hundreds of FEC documents—

reporting forms, brochures, FEC 

regulations—can be faxed almost 

immediately.

 Use a touch tone phone to dial 

202/501-3413 and follow the 

instructions. To order a complete 

menu of Faxline documents, enter 

document number 411 at the 

prompt.
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