Federal 

Election 

Commission 

Annual Report 1991 

Federal Election Commission 

Washington, DC 20463 
Commissioners 

Joan D. Aikens, Chairman 

Scott E. Thomas, Vice Chairman 

Lee Ann Elliott, Commissioner 

Danny L. McDonald, Commissioner 

John Warren McGarry, Commissioner 

Trevor Potter, Commissioner 

Ex Officio Commissioners 

Walter J. Stewart, Secretary of the Senate 

Donnald K. Anderson, Clerk of the House 

Statutory Officers 

John C. Surina, Staff Director 

Lawrence M. Noble, General Counsel 

Lynne A. McFarland, Inspector General 

The Annual Report 1991 was written and published by 

the Commission's Information Services Division. 
FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 204&3 

June 1, 1992 

The President of the United States 

The United States Senate 

The United States House of Representatives 

Dear Sirs: 

We are pleased to submit for your information the 17th 

annual report of the Federal Election Commission, as 

required by the Federal Election CampaignAct of 1971, as 

amended. The Annual Report 1991 describes the activities 

performed by the Commission in carrying out its duties under 

the Act. The report also outlines the legislative 

recommendations the Commission adopted and transmitted to 

the Congress for consideration in March 1992. We are 

hopeful that you will find this annual report a useful 

summary of the Commission's efforts to implement the Federal 

Election Campaign Act. 

Respectfully, 

Joan D. Aikens 

Chairman 
Table of Contents 

Introduction 1 

Chapter 1 

Presidential Public Funding 3 

Shortfall 3 

Certification of Matching Funds 7 

Certification of Convention Funds 7 

Audits and Repayments 7 

Anticipating the '92 Elections 10 

Chapter 2 

Administration of the Law 11 

Public Disclosure 11 

Regulations 11 

Advisory Opinions 12 

Assistance and Outreach 12 

Review of Reports 13 

Enforcement 13 

Clearinghouse on Election Administration 14 

Chapter 3 

Legallssues 17 

Corporate Communications 17 

"Soft Money" Issues 18 

Grandfathered Members' Use of Campaign Funds 20 

Sale and Use Restriction 20 

Fundraising Techniques 21 

Excessive Earmarked Contributions 22 

Pffi~~~ ~ 

Bank Loans 24 

Chapter 4 

Campaign Finance Statistics 27 

Chapter 5 

The Commission 35 

Commissioners 35 

International Delegations 35 

Ethics 35 

Personnel and Labor Relations 35 

Inspector General 36 

The FEC's Budget 36 

Chapter 6 

Legislative Recommendations 39 

Legislative Action on Past Recommendations 39 

Public Financing 39 

Contributions and Expenditures 43 

Litigation 46 

Compliance 47 

Disclaimers 49 

Public Disclosure 51 

Registration and Reporting 53 

Agency Funding 56 

Miscellaneous. 57 

Appendices 

1 . Biographies of Commissioners and Officers 59 

2. Chronology of Events, 1991 63 

3. FEC Organization Chart 67 

4. FEC Offices 69 

5. Statistics on Commission Operations 73 

6. 1991 Federal Register Notices 77 
1 Introduction 

Throughout 1991, the Commission prepared for the 

1992 elections. Activity focused on the Presidential 

elections, where a possible shortfall in public funding 

was projected for the 1992 and/or 1996 election cycle. 

As the agency responsible for administering the 

Presidential Election Campaign Fund, the Commission monitored Fund receipts and estimated 1992 

disbursements to gauge the likelihood and timing of 

any shortfall. The Commission also amended its 

Presidential certification regulations to comport with 

Treasury rules for disbursing funds in the event of a 

shortfall. In addition, the Commission launched an 

education program to inform the public about the $1 

tax checkoff that finances the public funding system. 

Even during this nonelection year, the Commission 

monitored campaign finance activity related to seven 

special elections for the House and Senate. The 

Commission adopted several new regulations, 

including new bank loan rules. It concluded a 

rulemaking on foreign nationals and provided training 

to committees affected by the new "soft money" rules. 

The agency also continued to carry out its other 

administrative and enforcement responsibilities. 

These activities, and others, are described in the 

succeeding chapters. 
Chapter 3 1 

Presidential Public Funding 

Public funding has been part of our Presidential 

election system since 1976. Using the single dollars 

checked off on income tax returns, the federal government provides grants to the Presidential nominees for 

their general election campaigns and to the major 

parties for their Presidential nominating conventions. 

Additionally, matching funds are given to qualified 

Presidential primary candidates. But by 1996, the 

funds available for Presidential public funding will be 

in short supply. The Federal Election Commission, the 

agency responsible for administering and enforcing 

the public funding program, projects a deficit of $75-

100 million in the Presidential Election Campaign 

Fund (the Fund) for the 1996 campaign, unless 

Congress intervenes.1 

Shortfall 

Since 1988, the Commission has predicted a shortfall 

in the Presidential Election Campaign Fund. Initially, 

Commission staff projected a deficit for 1996. Then, in 

early 1990, the Commission warned that the Fund 

balance might not be sufficient to cover all 1992 

primary matching fund payments. The situation 

changed, however, by the end of 1991. Submissions 

in December and January by eight Presidential 

candidates were considerably smaller than had been 

expected. In addition, the rate of inflation (which 

governs the size of the pay outs) was well below 

expectations; and tax checkoff receipts (which fund 

the program) declined much less than had been 

anticipated.2 Consequently, the FEC announced at a 

press conference on January 3, 1992, that a shortfall 

in 1992 was unlikely. Nevertheless, the agency 

continued to project a substantial deficit for 1996. 

A funding shortfall..:._at some point-is inevitable 

because payments from the Fund are indexed to 

inflation, but the $1 tax checkoff that finances the 

system is not. Therefore, as the consumer price index 

increases, the Fund needs more and more taxpayers 

to designate dollars in order to keep pace with the 

increasing payments to qualified committees. Internal 

Revenue Service (IRS) statistics, however, indicate 

that citizen participation has declined. After peaking at 

28 percent in 1980, the percentage of tax forms on 

which the taxpayer checked yes has fallen to approximately 20 percent, where it has remained over the 

last couple of years. 

Public Education Program 

In an effort to better understand the public's view of 

the tax checkoff, the Commission obtained further 

statistical information from the IRS and conducted 

focus groups around the country.3 While some focus 

group participants criticized the public funding program and others supported it, many did not know why 

the tax checkoff was implemented or how it works. 

Most participants, however, said they would like to 

know more. Noting that the creation of an informed 

populace might not alter existing patterns of participation in the checkoff, the focus group report nevertheless recommended that the FEC conduct a public 

education program to address three key points: 

• The purpose of the Presidential public funding 

program; 

• How much money is collected and spent on the 

program; and 

• How the public funds are allocated and spent. 

On March 5, 1991, the Commission launched a 

nationwide public information program to implement 

these recommendations. The multimedia education 

program featured television and radio public service 

announcements in English and Spanish, a flyer, a 

brochure and an op-ed piece and media appearances 

by Chairman John Warren McGarry. The media 

announcements, which aired during the height of the 

tax-filing season, urged taxpayers to make "an 

informed choice" when deciding whether to designate 

1See finance committee chairman Scott Thomas's 

testimony before the House Subcommittee on Elections, 

February 26, 1992. 

2The FEC's estimates had been based on an expectation 

that checkoff dollars would decline by $2 million in 1991. In 

fact, they declined by approximately $140,000-from 

$32,462,979 in 1990 to $32,322,336 in 1991. 3See Annual Report 1990, p. 3. 
4 

Presidential Campaign Fund: - Actual Funds Available t 

Money Available and Spent* - Actual Disbursements* 

Projected Funds Available 

Projected Disbursements Millions of Dollars 

250 

200 

150 

100 

50 

0 

1980 1984 1988 1992 1996 

Actual Actual Actual Projected Projected 

1976 

Actual 

* The Commission used the following assumptions and estimates in making its projections: (1) a 3.5 percent inflation rate 

for calendar years 1992-1995; (2) estimated 1992 election cycle payouts to primary candidates based on submissions made 

through March 1992; (3) estimated 1996 election cycle payouts to primary candidates based on 1988 figures adjusted for 

inflation; (4) in 1996, no incumbent candidate (wide-open field); (5) in 1992 and 1996, no payouts to independent or third party 

candidates or conventions. 

t "Actual Funds Available" means the balance at the end of the year before the Presidential election year plus election year 

checkoff receipts. *"Actual Disbursements" means disbursements from the Fund during the Presidential election year. 
5 

Income Tax Checkoff Dollars by Year 

1973·1992* 

Millions of Dollars 

45~----------------------------------------------------------------

40~---------------------------

35~-------------

301-------

251------

201------

151------

101----~-

51------

* Data provided by U.S. Department of Treasury. Figures for 1973 through 1976 are not verified. 

t Estimate. 
6 

one dollar of their taxes for the Presidential public 

funding program. These messages, combined with 

television, radio and print news coverage, reached a 

potential audience of more than 92 million. 

At year's end, the Commission was preparing to 

continue the education program for the 1992 tax 

season. 

Legislative Action 

Even with the education program, however, the 

Commission recognized that a 1996 shortfall was 

Jnf:lviti:ible unless legislative action were taken. On 

March 6, 1991, Chairman McGarry and Vice Chairman Joan D. Aikens delivered that message in 

testimony before the Senate Committee on Rules and 

Administration. Later that month, the Commission 

submitted legislative recommendations to Congress 

and the President suggesting possible solutions to the 

shortfall.4 Chairman McGarry returned to Capitol Hill 

in May to testify before the House Subcommittee on 

Elections. 

Congress responded by introducing a number of 

bills to address the potential shortfall. Among them 

were House and Senate proposals that would increase the checkoff amount, and index it to inflation. 

Another House bill would abolish the Presidential 

Election Campaign Fund entirely. When Congress 

adjourned for the year, however, none of these bills 

had been passed into law. 

Regulatory Action 

If the Fund is insufficient to cover all entitlements, 

current law requires the U.S. Department of Treasury 

to allocate remaining funds, giving first priority to the 

conventions, second priority to the general election 

and third priority to the primaries. 

On May 10, 1991 , the Treasury Department 

published new regulations describing the method it 

would use to disburse funds. Under the new rules, 

which apply regardless of whether a shortfall actually 

occurs, the projected amount needed for the conventions and the general election is to be set aside by 

January 1 of the Presidential election year. The 

remaining amount in the Fund-and additional 

monthly deposits of checkoff dollars-are then to be 

used for matching payments to primary candidates. 

If the amount of matching funds certified by the 

Commission in one month exceeds the total dollars in 

the Primary Account as of the last day of the previous 

month-the amount paid to each candidate will be 

reduced.5 The difference between the amount certified andJhe amount actually paid .to the candidate will 

be carried over to the next month and added to any 

amounts certified to the candidate during that month.6 

The new Treasury rules also provide that matching 

fund payments be made once a month rather than 

twice a month, as was done in the past? 

On July 18, 1991, the Commission adopted conforming regulations to govern submissions and 

certifications. Candidates are to make matching fund 

submissions only once a month, instead of twice a 

month, and the Commission will certify matching fund 

payments on a fixed day each month, instead of 

within 5 days of receiving a matching fund submission. 

4See Annual Report 1990, p. 37. 

5The candidate would receive a payment equal to the 

amount certified to the candidate during that month multiplied by the following fraction: 

amount in primary account on last day of month 

total certified that month, for all candidates 

6The Commission had proposed a "partial set-aside" 

alternative to Treasury's approach. The Commission's plan 

(submitted to Treasury as oral and written testimony by 

Chairman McGarry) would have factored into the equation 

anticipated 1992 receipts to pay for the general election, 

thus affording more funds for the early primary campaigns. 

This proposal was incorporated into two House bills, H.R. 

2533 and H.R. 3644. 

7Previous rules permitted two submissions and two 

resubmissions each month, with corresponding payments 

made twice a month. 
7 

Certification of Matching Funds 

Under the Primary Matching Fund Act, candidates 

may submit documentation to establish their eligibility 

for matching funds the year before the primaries are 

held. In 1991, the Commission declared 8 candidates 

eligible. 

To be eligible to receive matching funds, a candidate must first raise in excess of $5,000 in each of 20 

States (i.e., over $100,000 in contributions). Only 

contributions from individuals apply toward this 

threshOtd. Although an individual may contribute up to 

$1 ,000 to a candidate, only a maximum of $250 

counts as a matchable contribution, applicable to the 

$5,000 threshold. To be eligible for matching funds, 

the candidate must also submit a letter of agreements 

and certifications in which the candidate agrees to 

comply with the provisions of the Federal Election 

Campaign Act and the Primary Matching Fund Act 

including the limits set on campaign spending. 

Once certified eligible, candidates may submit 

additional matching fund requests for Commission 

review. The Audit staff evaluates the submissions to 

see if the requests contain proper documentation. 

By year's end, Edmund G. Brown, Jr., George 

Bush, Bill Clinton, Lenora Fulani, Tom Harkin, Bob 

Kerrey, Paul Tsongas and Douglas Wilder had 

become eligible for matching funds. The Commission 

certified a total of $6.4 million to these 8 eligible 

candidates. 

On December 19, 1991, the Commission made an 

initial determination that Lyndon H. LaRouche was 

ineligible to receive primary matching funds, based on 

a pattern of fraudulent fundraising and election law 

violations by previous LaRouche campaigns. The 

Commission also noted that Mr. LaRouche was a 

currently imprisoned felon and would therefore not 

qualify for the ballot in most states. The LaRouche 

committee will have an opportunity to respond before 

the Commission makes a final determination. 

Because, under the election law, candidates may 

not receive actual payment from the U.S. Treasury 

until after the election year begins, the eligible candidates received their initial payments in January 1992. 

The table below lists the eligible candidates and 

the total amount of matching funds certified to each 

during 1991. 

Candidate Amount 

Certified in 

1991 

Edmund G. Brown, Jr. $ 234,926 

George Bush 2,629,365 

Bill Clinton 579,364 

Lenora Fulani 624,497 

Tom Harkin 1,075,188 

Bob Kerrey 574,596 

Paul Tsongas 456,534 

Douglas Wilder 198,315 

Certification of Convention Funds 

Under the public funding law, national party committees may become eligible to receive public funds to 

help pay the official costs of their presidential nominating conventions. Eligible committees receive $4 

million plus an adjustment for inflation, provided they 

agree to certain requirements, including the filing of 

periodic disclosure reports and detailed audits. 

In 1991, the Commission certified that the 1992 

Democratic National Convention Committee and the 

Committee on Arrangements for the 1992 Republican 

National Convention were eligible to receive $10.6 

million each in public funds. The Department of 

Treasury made the payments and will make an 

additional cost-of-living payment in 1992. 

Audits and Repayments 

The Audit Process 

The Commission is required by law to audit all Presidential candidates and convention committees 

receiving federal funds to ensure that the funds are 

not misused and that committees have maintained 

proper records and filed accurate reports. Continuing 
8 

to process the audits of 1988 Presidential committees, the agency released eight final audits in 1991. 

At the conclusion of a fieldwork audit, FEC auditors 

hold an exit conference to discuss preliminary findings 

with the committee. Later, these findings are incorporated into an interim audit report. Interim reports are 

reviewed by the Office of General Counsel and 

approved by the Commission before being sent to the 

committee treasurer. The committee may dispute the 

findings contained in the interim audit report. 

The Commission considers audit reports in open 

meetings and then releases the approved final audit 

reports to the public. The final report may include an 

initial determination by the Commission that the 

committee repay public funds.8 Certain matters noted 

during the audit may be referred to the Office of 

General Counsel for enforcement. 

Repayment Process 

A repayment is required when the Commission 

determines that a primary or general election committee: 

• Received public funds in excess of the amount to 

which it was entitled; or 

• Incurred nonqualified campaign expenses by 

spending in excess of the limits, by using public 

funds for expenses not related to the campaign 

or by insufficiently documenting the expenditure 

of public funds. 

Additionally, a general election candidate would be 

required to make repayments if the committee had 

received interest on the investment of payments from 

the Fund. Primary campaigns would also be required 

to make repayments if they had surplus funds remaining on the date of ineligibility. 

If a committee wishes to dispute the Commission's 

initial repayment determination, the committee may 

submit legal and factual materials to support its view. 

The committee may also request an oral presentation 

before the Commission. Both the Gephardt and Kemp 

campaigns made such a presentation in 1991 (see 

below). 

The basis for the Commission's final repayment 

determination is set forth in a statement of reasons 

prepared by the Office of General Counsel. A committee that disputes the initial repayment determination 

must nevertheless repay the amount specified in the 

final determination within the payment deadline 

unless the committee obtains a stay from the Commission pending an appeal of its decision. 

1988 Presidential Audits9 

The paragraphs below summarize findings relating to 

repayment determinations contained in the final audit 

reports released in 1991.10 Matters not related to 

repayments are not included. 

• Dole for President. On April 11, 1991, the 

Commission released the final audit report on the 

Dole for President Committee. Senator Dole 

received $7.618 million in primary matching funds 

for his 1988 Presidential campaign. Based on the 

results of the audit, the Commission made an 

initial determination that the Committee repay a 

total of $245,534 to the U.S. Treasury. The 

repayment amount included: 

• A $170,044 repayment for exceeding the 

Iowa and New Hampshire expenditure limits; 

• A $3,757 repayment for undocumented 

expenditures by affiliated delegate committees; and 

8The Commission may issue addenda to final audit 

reports based on follow-up fieldwork. 

9Audit reports are available to the public at the FEC. 

Reports on the following 1988 committees were released in 

previous years: duPont, Babbitt, Haig, Gore, RNC Convention, Fulani, DNC Convention, Hart, Quayle for Vice 

President, Bentsen for Vice President, LaRouche, Louisiana 

Host Committee, The Atlanta 88 Committee. (See Annual 

Report 1989 and Annual Report 1990.) 

10These repayment figures may be revised by the 

Commission in 1992. 
9 

• A $71,733 repayment representing the total 

of stale-dated Committee checks that were 

never cashed by the payees. 

• Gephardt for President. On May 23, 1991, the 

Commission released the final audit report on the 

Gephardt for President Committee, Inc. Congressman Gephardt received $3.396 million in 

primary matching funds. The Commission made 

an initial determination that the Committee repay 

a total of $126,383 to the U.S. Treasury for 

exceeding the Iowa expenditure limit. 

The campaign made an oral presentation 

before the Commission on November 11, 1991, 

contesting the results of the audit. 

• Jack Kemp for President. On July 25, 1991, the 

Commission made an initial determination that 

the Jack Kemp for President committee repay 

$187,069 in federal matching funds. The Committee had received $5.985 million in primary 

matching funds for Mr. Kemp's 1988 Presidential 

primary campaign. The repayment amount 

included a $60,259 repayment for exceeding the 

Iowa and New Hampshire expenditure limits. 

The remainder of the repayment-$126,811-

was the total of Committee checks that were 

never cashed by the payees. 

The campaign contested the audit results at 

an oral presentation before the Commission on 

December 10, 1991, and submitted additional 

materials that relate to the amount of the repayment. 

• Paul Simon for President Committee. On 

August 29, 1991, the Commission released the 

final audit report on the Paul Simon for President 

Committee. The Commission made an initial 

determination that the committee repay $430,465 

in federal matching funds. The Simon Committee 

had received $3.774 million in federal matching 

funds. The repayment amount included: 

• $367,906 for exceeding the Iowa and New 

Hampshire spending limits; 

• $53,014 for nonqualified expenses; and 

• $9,545 for matching funds received for 

unmatchable contributions and for committee checks that were never cashed by the 

payees. 

The campaign asked to make an oral presentation as part of its response to the audit report. 

• Bush/Quayle (General Election). On October 3, 

1991, the Commission made an initial determination that the Bush/Quayle Compliance Committee 

repay $126,510 in federal matching funds. The 

repayment amount included: 

• $95,909 for profit from press travel; 

• $30,101 for nonqualified campaign expenses;and 

• $500 for an outstanding committee check. 

The campaign asked to make an oral presentation as part of its response to the audit report. 

• Dukakis for President Committee. On October 

10, 1991 , the Commission released the final 

audit report on the Dukakis for President Committee, the primary election committee. The 

Commission made several initial repayment 

determinations that amounted to an overall 

repayment of $492,164. The repayment amount 

included: 

• $99,490 for exceeding the Iowa and New 

Hampshire ~pending limits; 

• $314,640, representing matching funds to 

which the candidate was not entitled; 

• $35,634, the pro rata portion of $120,146 in 

surplus funds that remained after the 

committee had paid its debts; and 

• $42,400, the total of stale-dated committee 

checks that were never cashed. 
10 

The Dukakis Committee had made a partial 

repayment of $485,000 to the U.S. Treasury on 

April 1, 1991, leaving $7,164 as yet unpaid. 

• Dukakis/Bentsen for President Committee 

and Compliance Committee (General Elec· 

tion). On October 31, 1991, the Commission 

released the final audit report on the Dukakis/ 

Bentsen Committee and the campaign's legal 

and compliance fund. The report contained one 

repayment determination: $334,683 repayable as 

interest earned on public funds minus taxes. The 

Committee had made the repayment on February 

14, 1991, satisfying the obligation. 

Anticipating the '92 Presidential 

ElectionS11 

Regulations: Primary and General Election 

Candidates 

On July 18, 1991, the Commission approved final 

revisions to the rules governing the public funding of 

Presidential primary and general election candidates.12 

The revised rules simplify the process of allocating 

expenses to the state spending limits, a requirement 

for primary candidates receiving matching funds. In 

past elections, these spending limits have proven 

difficult to audit and enforce. The first two primary 

states, Iowa and New Hampshire, have relatively low 

spending limits, but have been important electoral 

tests for Presidential campaigns. As a result, campaigns have often devised complex schemes to 

reduce amounts allocated to the Iowa and New 

Hampshire limits. The Commission, in turn, has had to 

devote considerable resources to determine whether 

campaigns exceeded state limits and to enforce any 

violations discovered.13 

Under the new rules, expenses are allocable only if 

they fall within one of the five specific categories. By 

contrast, the previous rules required allocation of all 

expenses unless an expense was covered by a 

specific exemption. The rules also permit primary 

committees to treat up to 50 percent of their allocable 

expenditures for a particular state as exempt 

fundraising costs and thus exclude them from the 

state spending limit. 

Guide for Matching Fund Submissions 

On August 15, 1991, the Commission approved the 

1992 edition of the Guideline for Presentation in Good 

Order, a manual for Presidential primary candidates 

eligible to receive federal matching funds.14 The 

Guideline describes the format and documentation 

requirements for matching fund requests. Also 

explained are the procedures campaigns must follow 

when submitting matching fund requests and the 

FEC's procedures for certifying the amount of matching funds payable to the campaign by the U$. 

Treasury. 

11 ln addition to the regulations and guidelines discussed 

here, the Commission prescribed new rules governing 

submissions of computer tapes. These rules became 

effective October 3, 1990, and were summarized in Annual 

Report 1990. On March 28, 1991, the Commission decided 

to suspend a rulemaking on Presidential nominating 

conventions until after the 1992 conventions. (See 56 FA 

14319 and 55 FA 34267.) 

12See 56 FA 35898. 

13The Commission has submitted legislative recommendations asking Congress to reconsider the state spending 

limits. (See p. ) 

140n January 31, 1992, the Commission approved the 

1992 edition of the Financial Control and Compliance 

Manual for Presidential Primary Candidates Receiving 

Public Financing, another manual designed to assist 

matching fund recipients. 
Chapter 2 11 

Administration of the Law 

The Federal Election Commission has sole authority 

over the administration and civil enforcement of the 

provisions of the Federal Election Campaign Act and 

Presidential public financing statutes. This chapter 

summarizes the agency's efforts to fulfill this statutorily mandated mission in 1991. 

Public Disclosure 

Public Records 

A key componentottheFEC's mission is the disclosure of campaign finance data. All campaign reports 

filed by federal committees are available for inspection in the agency's Public Records Office within 48 

hours of receipt. Reporters, committees and other 

interested persons visit the office to scrutinize these 

reports and the computer printouts, curious about the 

sources of funds and spending patterns or looking for 

possible errors and violations of the law. 

Public Records staff offer personalized assistance 

to visitors, helping them locate the documents and 

research tools they need. Using the office's research 

space and copying equipment, visitors have access to 

numerous materials, including: reports and statements filed by the regulated community; standard 

computer indexes, updated daily; FEC Reports on 

Financial Activity, the final statistical studies of an 

election cycle; advisory opinions; enforcement files 

(closed MURs); audit reports; and Commission 

meeting agenda documents. Requests for materials 

are also handled over the phone. Callers ordering 

documents on a regular basis set up running accounts, a convenient way to pay the fees for copying 

and computer services. 

Data Processing 

The Commission continued to enhance its computer 

capabilities in 1991 , expanding public access to online campaign finance information. More data was 

coded and made available to the public faster than 

ever before. 

The Direct Access Program {DAP), which permits 

subscribers to review disclosure information on their 

own computers, continued to gain acceptance. 

Subscribers increased from 225 to 349. 

For those who did not subscribe to DAP, the FEC's 

state access program provided on-line access to 

campaign finance data. The general public could 

request printouts of FEC indexes in 24 state offices 

around the country. 

The Commission purchased eleven lap-top computers for its attorneys and auditors to use while 

traveling. The agency also began construction to 

enlarge its computer room. 

Press Office 

During 1991, the Press Office briefed the media on a 

variety of election-related topics-from campaign 

finance reports to Commission rulemakings. With the 

1992 Presidential campaign approaching, the press 

office also responded to numerous media inquiries 

about the solvency of the Presidential Election 

Campaign Fund and the Commission's plans for 

addressing a possible funding shortfall. {See 

Chapter 1.) 

The Press Officer is also the Commission's Freedom of Information Officer, and in that capacity he 

responded to a record number of FOIA requests in 

1991. Requests for computer tapes and access to the 

Commission's Direct Access Program are among the 

items processed under the Freedom of Information 

Act. 

Regulations 

FEC regulations explain the statute's requirements in 

detail. The Commission revises its rules to give 

increased guidance to committees. In 1991 , the 

Commission adopted new regulations regarding: 

• bank loans (see Ch. 3);1 

• public funding of Presidential primary and general 

election candidates {see Ch. 1); 

• joint fundraising {adopted as part of the public 

funding rules); 

1The bank loan rules were expected to become effective in 

1992. 
12 

• redesignations and reattributions (adopted as 

part of the public funding rules); 

• honoraria (superseded by subsequent legislation; 

see Ethics in Government Act of 1978 and 

Legislative Branch Appropriations Act, Public 

Law 1 02-90); and 

• personal use of excess campaign funds by 

grandfathered Members,of Congress (see Ch. 3). 

The Commission also responded to three petitions 

for rulemaking, two concerning "soft money" and a 

third regarding corporate airplanes. The Commission 

published a notice of proposed rulemaking for one of 

the "soft money" petitions and requested comments 

on the other. With regard to the third petition, the 

Commission decided not to change its reimbursement 

rules for use of corporate airplanes. 

On June 13, 1991, the Commission voted 4-2 not 

to adopt a proposed rule that would have treated a 

domestic corporation as a foreign national if the 

corporation's foreign ownership exceeded 50 percent. 

The Commission then unanimously voted to close the 

rulemaking. 

Advisory Opinions 

The Commission issued 35 advisory opinions in 1991 . 

These opinions, which respond to formal requests 

from anyone involved in activity subject to federal 

election law, clarify the law for the requester and 

anyone else in the same situation as the requester. In 

addition, requests for advisory opinions sometimes 

bring to light areas of the law that need further clarification, leading eventually to revised regulations. 

Selected advisory opinions issued in 1991 are 

discussed in Chapter 3, Legal Issues. 

Assistance and Outreach 

Telephone Assistance 

The Commission has developed a strong outreach 

program to help those who must comply with the 

campaign finance law. The heart of the program is the 

toll-free information line (800-424-9530). Public affairs 

specialists answer thousands of questions on the tollfree and local lines each year, often researching 

relevant advisory opinions and litigation for callers. 

Reporting Assistance 

Reports analysts are well trained and are knowledgeable about the complexities of reporting and related 

compliance matters. A committee with a reporting 

problem or question is encouraged to call the Commission and speak directly to the analyst assigned to 

review the committee's reports. (See also Review of 

Reports, below.) 

The FEC goes to great lengths to inform committees about upcoming reporting dates and reporting 

rules. The agency sends each committee treasurer a 

reminder of upcoming deadlines three weeks before 

the due date of a report. The FEC's monthly newsletter, the Record, also publishes reporting schedules 

and requirements. 

Publications 

The Record, published monthly, is key to staying 

abreast of Commission decisions and activity. In 

addition to detailing the reporting requirements, it 

briefs readers on new advisory opinions, regulations 

and litigation. All treasurers automatically receive the 

Record, but anyone may order a free subscription. 

In 1991 the agency updated the Explanation and 

Justification (E&J) for Commission regulations, 

created a brochure to explain the $1 tax checkoff that 

funds the Presidential Election Campaign Fund and 

published a compilation of Selected Court Case 

Abstracts pertaining to the federal election law. 

Further, the agency produces and distributes free 

publications and video tapes that explain the law. 

Conferences and Visits 

The agency sponsors conferences each year, where 

Commissioners and staff conduct a variety of technical workshops on the law. At the 1991 conferences, 

held in Washington, Boston and Chicago, Internal 

Revenue Service staff were also available to answer 

questions on tax-related issues. The Commission 

videotaped a number of the workshops and made the 

tapes available to the public. 
13 

In another outreach effort, public affairs specialists 

traveled to three cities to brief staff of political action 

committees, party committees and candidate committees on the requirements of the law. Specialists spent 

two days in each city-Raleigh, Salt Lake City and 

Baton Rouge-answering questions and reviewing 

areas of the law specific to the needs of the participants. 

Commissioners and FEC staff also conducted 

special training sessions for state party committees 

. on the new allocation regulations that went into effect 

on January 1, 1991. Staff traveled to New York, 

Boston, Denver, Des Moines, Austin and Columbus. 

Later in the year, the Commission held meetings in 

San Francisco, Atlanta and Minneapolis to get feedback from committees affected by the new rules.2 

Review of Reports 

Reports analysts are required to examine each report 

for accuracy and compliance with the regulations and 

statute. When necessary, an analyst will send a letter 

(called a request for additional information or RFAI) to 

a committee that has an apparent reporting problem. 

A complete and speedy response to this letter will 

often help a committee avoid an enforcement action 

by the Commission. 

As a result of newly prescribed regulations in 1990 

and 1991, reports analysts began reviewing two new 

reporting forms. The first form was FEC Form 8, 

which is used by committees to disclose debt settlement plans.3 Analysts reviewed each plan to ensure it 

was accurate and complete. If it was not, an RFAI 

was sent to the committee to obtain further information. Once all required information was received, the 

plan was forwarded to the Office of General Counsel, 

which reviewed the plan to ensure that it complied 

with the Act and regulations. The plan was then 

forwarded to the Commission for its consideration 

along with the staff recommendations for the disposition of the debt settlement plan. The Commission 

received 79 debt settlement plans during the year. 

The second set of forms reviewed by the analysts 

were actually new schedules for the revised FEC 

Form 3X, Schedules H1 - H4.4 These schedules are 

used by committees to report the allocation of expenses between federal and nonfederal accounts of 

the same committee. Numerous Schedules H1-H4 

were reviewed during the year. The review enabled 

the analysts to educate committees on the proper 

methods for reporting allocation information in order 

for them to be in compliance with the new regulations. 

To this end, analysts contacted, by RFAI and/or by 

telephone, most committees that disclosed allocated 

expenses. 

Enforcement 

The Enforcement Process 

The Commission is alerted to possible violations of 

the law through its own internal monitoring procedures, through externally generated complaints and 

by referrals from other law enforcement officials. 

Potential violations become Matters Under Review 

(MURs) and are assigned case numbers. 

All phases of the enforcement process remain 

confidential until a case is closed and put on the 

public record. Respondents are given a reasonable 

opportunity to demonstrate that no action should be 

taken against them. If the Commission decides there 

is "reason to believe" a violation of the law has 

occurred, it investigates the matter. The Commission 

may also issue orders and subpoenas that require 

individuals to answer questions or produce documents. When necessary, the agency may ask a 

federal district court to enforce FEC orders and 

subpoenas. If the Commission believes there is 

sufficient evidence to show "probable cause to 

2The allocation rules are discussed in Ch. 3, Legal 

Issues. 

3The debt settlement rules went into effect October 3, 

1990. For a summary of these regulations, see Annual 

Report 1990. 

4The allocation rules went into effect January 1 , 1991. 

The regulations were summarized in Annual Report 1990 

and are also discussed in Ch. 3, Legal Issues. 
14 

believe" the respondent violated the law, the agency 

must try to resolve the matter through a conciliation 

agreement. If conciliation fails, the agency may file 

suit against the respondent in a federal district court. 

The accompanying table shows the Commission's 

caseload of MURs from 1985 through 1991. 

Enforcement Authority 

The Commission's enforcement authority was upheld 

in two 1991 court cases. In FEC v. Populist Party, the 

U.S. Court of Appeals for the District of Columbia 

giarited theFEC's motion for surru1lary reversal ora. 

district court order that had imposed a date by which 

the Commission had to conclude its investigation of 

the Populist Party. The appeals court said the district 

court had exceeded its jurisdiction by setting such a 

deadline in a proceeding to enforce a subpoena 

issued by the Commission.5 

In FEC v. Mann for Congress Committee, the U.S. 

District Court for the District of Columbia granted the 

FEC's motion for default judgment against a 

candidate's committee and its treasurer for violating 

the terms of a conciliation agreement.6 The court 

ordered defendants to comply with the agreement's 

terms within 1 0 days and to pay the FEC an additional 

$5,000 civil penalty for violating the agreement. The 

court also permanently enjoined defendants from 

future violations of the conciliation agreement. 

Clearinghouse on Election 

Administration 

The Commission's National Clearinghouse on Election Administration serves as a central exchange for 

research and information on the administration of 

federal elections. This section covers 1991 Clearinghouse activities. 

Advisory Panel 

The Clearinghouse Advisory Panel, which is composed of election officials from around the country, 

held its annual meeting in San Francisco on December 15-17. The meeting included discussions on the 

Voting Rights Act, election case law, effective press 

relations, contested elections, political patronage, 

innovations in election administration, the Justice 

Department's pre-clearance role in redistricting and 

the impact of the Americans with Disabilities Act on 

polling place accessibility. 

Publications 

Polling Place Accessibility in the 1990 General 

Elections. This is the third progress report issued 

Caseloads of MURs 

1985 1986 1987 1988 1989 1990 1991 

Pending at Beginning of Year 172 137 143 171 220 201 237 

Opened During Year 257 191 261 236 218 195 257 

Closed During Year 292 185 233 187 237 159 296 

Pending at End of Year 137 143 171 220 201 237 198 

5No. 90-229 and 90-7169. 

6No. 90-2419(LFO). 
15 

under the Voting Accessibility for the Elderly and 

Handicapped Act of 1984. Under that Act, the FEC 

must issue two more reports covering the 1992 and 

1996 elections. The FEC is responsible for conducting 

surveys on accessibility and compiling the results; it 

has no jurisdiction over polling places. 

Federal Election Law 91. This publication summarizes 

selected federal provisions on registration and voting, 

providing federal government sources where readers 

can obtain further information. 

··· E1ecttan~oirectory. This directory contains an updated 

list of names and addresses of state election officials 

responsible for canceling prior voter registrations. 

The Clearinghouse also finalized contracts for a 

series of publications on recent technological and 

administrative innovations in election offices. Topics 

to be addressed include "motor voter" registration 

programs, signature digitization technology and the 

Post Office's National Change of Address (NCOA) 

program. 
Chapter 17 3 

Legal Issues 

The Federal Election Commission promulgates 

regulations that explain the requirements of the 

Federal Election Campaign Act (the Act) and issues 

advisory opinions that apply these provisions to 

specific situations. The Commission also has primary 

jurisdiction over the civil enforcement of the Act. 1 This 

chapter summarizes some of the key campaign 

finance issues addressed by the Commission in 1991 

through its regulations, advisory opinions and enforcement actions. 

Corporate Communications 

The Federal Election Campaign Act (the Act) and 

Commission regulations prohibit corporations from 

making contributions or expenditures in connection 

with federal elections. 2 U.S.C. §441 b. But the Act 

and the regulations do, as an exception to this prohibition, permit corporations to pay for some partisan 

and nonpartisan election-related communications, 

subject to certain restrictions. Some of these restrictions, contained in Commission regulations, have 

been challenged in recent years. One such challenge 

was successful in 1991 . In Faucher and Maine Right 

to Life Committee v. FEC, courts invalidated one of 

the provisions-an FEC regulation on corporate voter 

guides, 11 CFR 114.4(b)(5)(i)-because the court 

held that the regulation applied "issue advocacy" as a 

factor for determining whether a voter guide constituted a prohibited expenditure.2 

Apart from the court challenge, the Commission 

addressed other aspects of the corporate communication regulations in several 1991 advisory opinions. 

Express Advocacy 

Faucher and Maine Right to Life Committee v. 

FEC. In its March 21, 1991, decision the U.S. Court of 

Appeals for the First Circuit affirmed the district court's 

invalidation of the Commission's voter guide regulations. The regulations had permitted a corporation to 

publish voter guides for distribution to the general 

public so long as certain criteria for nonpartisanship 

were met. Among those criteria was a requirement 

that the voter guide not advocate a particular stance 

on the issues the candidates were asked to address. 

The district court had ruled that "[t]his approach 

ignores the clear language of FEC v. Massachusetts 

Citizens for Life [MCFL] that issue advocacy by a 

corporation cannotbe constitutionally prohibited and 

that only express advocacy ...is constitutionally within 

the statute's prohibition." 

The "express advocacy" standard was first employed in the landmark Supreme Court case Buckley 

v. Valeo. The Court defined express advocacy as 

"communications that in express terms advocate the 

election or defeat of a clearly identified candidate for 

federal office," including "communications containing 

express words of advocacy of election or defeat, such 

as 'vote for,' 'elect,' 'support,' 'cast your ballot for,' 

'Smith for Congress,' 'vote against,' 'defeat,' [or] 

'reject."' The appeals court, citing Buckley, concluded: 

"The Supreme Court, recognizing that such broad 

language as found in section 441 b(a) creates the 

potential for first amendment violations, sought to 

avoid future conflict by explicitly limiting the statute's 

prohibition to 'express advocacy."' 

On October 7, 1991, the U.S. Supreme Court 

denied the FEC's petition for the Court to review the 

appeals court's decision. 

FEC v. National Organization for Women (NOW). 

As a result of the Supreme Court's refusal to review 

the Faucher decision, the Commission filed a motion 

to dismiss its appeal in FEC v. NOW. 3 The court of 

appeals granted the motion on October 11, 1991. Like 

the lower courts in the Faucher case, the district court 

in NOW also relied on the Supreme Court's "express 

1See Chapter 2, Administration of the Law. 

2Faucher v. FEC, 743 F. Supp. 64 (D.Me. 1990), aff'd, 

928 F.2d 468 (1st Cir. 1991), cert. denied, 495 U.S. __ 

(October 7, 1991 ). 

3FEC v. NOW, 713 F. Supp. 428 (D.D.C. 1989), appeal 

dismissed, No. 89-5230 (D.C. Cir. Oct. 11, 1991 ). 
18 

advocacy" standard. The NOWcourt ruled that the 

prohibition on corporate expenditures did not apply to 

a series of letters sent as part of a NOW membership 

drive because the material did not contain "express 

advocacy." 

Voter Education and Registration 

FEC regulations permit corporations to finance 

nonpartisan voter education messages and voter 

drives so long as certain criteria are satisfied. 

In AO 1991-17, the Commission applied the criteria 

to a proposed nonpartisan videotape featuring Members of Congress. The Commission determined that 

the nonprofit, tax exempt Committee for Citizen 

Awareness, Inc. (CCA), with the financial support of 

other corporations, could produce and distribute the 

tapes to the public. In addition to making references 

to the federal election process, each tape described a 

pending issue before Congress, explained the 

Member's committee assignments and invited constituents to call his or her office. The video also 

explained how Congress works. 

Since the videos did not name any candidate or 

refer to any political party, and their election message 

was limited to urging the public to register and vote, 

they satisfied the nonpartisan voter message regulations at 11 CFR 114.4(b)(2). 

The videos also satisfied the requirements for 

nonpartisan voter drives. 11 CFR 114.4(c)(1) and (2). 

They were cosponsored and conducted by a 

nonpartisan, nonprofit tax exempt organization and 

were offered without regard to a voter's political 

preference. 

Trade Association Communications 

Under FEC rules, when a trade association directs 

partisan communications to incorporated members 

the association may send the communications only to 

the official representatives of the members. 11 CFR 

114.3. 

In AO 1991-24, the Commission concluded that the 

Credit Union National Association (CUNA) could send 

the official representatives of its incorporated members (state trade associations) partisan communications that asked them, in turn, to pass on the communications to the representatives of their member 

corporations (credit unions). 

"Soft Money" Issues 

Through a series of five 1991 advisory opinions the 

Commission clarified the application of its new "soft 

money" regulations. The Commission also responded 

to an allocation rulemaking petition submitted by the 

Association of State Democratic Chairs (ASDC) and a 

petition on a related issue, submitted by Congressman William Thomas. 

Background: Regulations on Allocation 

The regulations, which became effective January 1, 

require political committees that maintain separate 

bank accounts for federal and nonfederal activity to 

allocate shared expenses between the two accounts 

according to set formulas. By requiring this allocation 

of shared federal/nonfederal expenses, the Commission hoped to provide a mechanism ensuring that 

committees would not use nonfederal"soft money" to 

subsidize federal election activities. 

Advisory Opinions on Allocation 

In Advisory Opinions 1991-6, 1991-15, 1991-25, 

1991-27 and 1991-35, the Commission applied these 

rules to a variety of special situations. 

In several opinions, the Commission required 

committees to adjust their allocation formulas to more 

accurately reflect the federal/nonfederal composition 

of their activities. In AOs 1991-6 and 1991-25, the 

California Democratic Party (COP) and the Pennsylvania Democratic and Republican State Party Committees, respectively, were required to increase the 

federal percentage of certain shared costs to account 

for special elections for the Senate. The committees 

were also permitted to augment their nonfederal 

percentages to reflect certain local elections that were 

not contemplated by the prescribed allocation formulas. For example, in 1991-25, the Commission al-
19 

lowed committees to increase the nonfederal share 

because local elections were held in a nonfederal 

election year. In 1991-6, as another example, the 

Commission increased the nonfederal share because 

a court ruling permitted COP to endorse "nonpartisan" 

local candidates. (This ruling was ultimately vacated 

by the Supreme Court, however, prompting the 

Commission to revoke the nonfederal increase. AO 

1991-27. See Geary v. Renne, 111 S.Ct. at 2336.) 

In other AOs, the Commission responded to 

questions about procedural aspects of the regula-

····························......... tions. The rules require committees to make all 

payments for shared expenses from their federal 

account. As an exception to the rule banning transfers 

from a nonfederal account to the federal account, the 

nonfederal account may transfer its portion of a 

shared expense to the federal account if the transfer 

occurs within a 40-day window-beginning ten days 

before the payment date and ending thirty days after 

that date. Only transfers that represent the nonfederal 

portion of a shared expense and that are made within 

the 40-day window are permissible. In 1991-15, 

however, the Commission permitted the Georgia 

Democratic Party to transfer nonfederal funds to its 

federal account outside this 40-day window because 

the committee had inadvertently miscalculated its 

allocation percentages, resulting in an overpayment 

by the federal account. The one-time transfer, though 

not directly linked to a shared expense, enabled the 

committee to correct an error and more accurately 

reflect the actual federal/nonfederal ratio. 

A separate segregated fund (SSF)-a committee 

established by a corporation or labor organizationmust allocate its shared administrative and 

fundraising expenses only when the committee itself 

pays for these expenses. Applying this provision in 

AO 1991-35, the Commission said that the California 

Farm Bureau Federation PAC (Farm PAC) would not 

be required to allocate, even if the nonfederal account 

paid a portion of its own expenses. Under Farm 

PAC's plan, its connected organization (the California 

Farm Bureau Federation) would pay the SSF's 

administrative and fundraising costs (as permitted 

under 11 CFR 114.1(b)), but would be reimbursed by 

the committee's nonfederal account for some of the 

costs attributable to that account. Since expenses 

would not be "shared" between the committee's 

federal and nonfederal accounts, Farm PAC would 

not have to follow the procedures described in the 

allocation rules. 

ASDC Rulemaking Petition on Allocation 

On March 26, 1991 , the ASDC submitted a 

rulemaking petition asking the Commission to consider changing some ofthe allocation formulas and 

payment procedures set forth in the new regulations. 

After receiving comments on a Notice of Availability, 

the Commission published a Notice of Proposed 

Rulemaking in November that suggested: 

• Allowing state and local party committees to add 

1 additional point for nonfederal candidates when 

they calculate the ballot composition ratio used to 

allocate their shared administrative and generic 

voter drive expenses;4 

• Allowing state and local party committees to 

include another point for nonfederal candidates if 

any partisan local candidates are expected on 

the ballot during the two-year Congressional 

election cycle; 

• Expanding the 40-day transfer window to 70 days 

(1 0 days before to 60 days after the payment 

date); and 

• Allowing committees 60 days after a fundraising 

activity to recalculate the federal/nonfederal ratio 

and to make corresponding transfers between 

their federal and nonfederal accounts. 

4 Under the ballot composition method, costs are 

allocated according to the ratio of federal offices to total 

federal and nonfederal offices expected on the ballot in the 

next general election in the state or geographic area. The 

ratio is determined by the number of categories of offices on 

the ballot, with a specified number of offices (or points) that 

may be counted in each category. 11 CFR 1 06.5(d)(1 ). 
20 

The notice also requested comments on the 

reporting requirements associated with the allocation 

regulations.5 

By year's end, the Commission had received 20 

comments, the majority of which supported the 

Commission's proposed rule changes. 

Rulemaking Petition on Transfers from Nonfederal 

Committees to Federal Committees 

On December 5, 1991, Congressman William Thomas 

submitted a rulemaking petition asking the Commission to revise its regulations governing transfers of 

funds from nonfederal to federal campaign committees. Under current regulations, a nonfederal candidate committee may transfer funds that are permissible under the Act to a federal campaign committee. 

No "soft money" may be included in the transfer. 11 

CFR 11 0.3(c)(6). 

The petition asserts that these regulations are 

ineffective because they permit state candidates to 

spend "soft money" to raise the funds that are ultimately transferred to federal campaigns for use in 

federal elections. Accordingly, the petition seeks a 

revised rule that would permit funds to be transferred 

only if permissible funds were used to raise them. 

The Commission responded to the petition by 

publishing a Notice of Availability in the Federal 

Register seeking comments on the Congressman's 

proposal.6 

Grandfathered Members' Use of 

Campaign Funds 

Although the Federal Election Campaign Act generally prohibits candidates from using campaign funds 

for personal use, it has long contained a "grandfather 

clause" permitting certain members of Congress to 

convert excess campaign funds to personal use. 2 

U.S.C. §439a. The Ethics Reform Act of 1989 

amended this provision. 

Under amended section 439a, no Member of 

Congress who serves in the 103d or a later Congress 

may convert excess campaign funds to personal use, 

as of the first day of such service.? Grandfathered 

Members (those in office on January 8, 1980), who 

formerly could convert unlimited amounts of excess 

funds to personal use, may now convert only ''the 

amount equal to the [campaign's] unobligated balance 

on hand" as of November 30, 1989. The Commission 

addr~~~~d this situation by promulgating new regulations that define "the unobligated balance on hand," 

thus helping grandfathered Members determine how 

much they can convert to personal use under the 

amended statute. There is no time limit for 

grandfathered Members who do not serve in the 103d 

or a later Congress who want to convert their 

unobligated balance to personal use. The only 

limitation is one of amount. 

The new regulations were based on AO 1990-26, 

which set forth two methods for calculating the 

"balance." Under the first method, the campaign of a 

"qualified" (i.e., grandfathered) Member simply 

determines its cash on hand, minus outstanding 

debts, as of November 30, 1989. The second method 

permits the campaign to include noncash campaign 

assets and committee receivables in its November 30, 

1989, balance, but additional reporting is required. 

The new regulations also clarify that the long-standing 

prohibition on personal use of excess campaign funds 

applies to noncash assets as well. 

Sale and Use Restriction 

Under the Federal Election Campaign Act, itemized 

information on individual contributors listed on FEC 

reports may not be sold or used for the purpose of 

5The Notice appeared in the Federal Register on 

November 14, 1991. See 56 Fed. Reg. 57864. 

6See 56 Fed. Reg. 66866. 

7Grandfathered Members of the 102d Congress who 

intend to serve in the 1 03d Congress should consult House 

or Senate rules (as appropriate) regarding personal use of 

campaign funds. 
21 

soliciting contributions or for commercial purposes. 

2 U.S.C. §438(a)(4). This restriction is designed to 

protect individuals who have contributed to committees. In 1991 , through both an advisory opinion and 

court cases stemming from compliance action, the 

Commission enforced this provision. 

FEC v. Working Names, Inc. 

In February, Working Names, Inc. settled two sale 

and use suits brought against them by the FEC by 

agreeing to pay a $15,000 penalty.8 The agreement 

was incorporated into a district court order declaring 

that Working Names knowingly and willfully violated 

the sale and use provision. 

State Copy of FEC Report 

On June 18, 1991, the Commission issued AO 1991-

16, ruling that contributor information taken from a 

copy of an FEC report, filed to satisfy an Indiana state 

reporting requirement, could not be used for a commercial purpose. 

The requester, an individual, had intended to 

publish and sell a campaign finance database on 

Indiana candidates and political committees, including 

the names, cities and states of individual contributors 

obtained from copies of federal reports that committees had submitted to comply with state law. The 

Commission said the protection afforded individual 

contributors would be meaningless if it depended on 

where the reports required by the Act were filed. 

FEC v. Political Contributions Data, Inc. 

On August 21, 1991, the U.S. Court of Appeals for the 

Second Circuit, revers.ing a district court decision, 

ruled that Political Contributions Data, Inc. did not 

violate the sale and use provision by selling, for profit, 

individual contributor information copied from FEC 

reports.9 

Under 11 CFR 1 04.15(c), the use of information 

copied from FEC reports "in newspapers, magazines, 

books or other similar communications is permissible 

as long as the principal purpose of such communications is not to communicate any contributor 

information...for the purpose of soliciting contributions 

or for other commercial purposes." [emphasis added] 

The court found that PCD's contributor lists qualified as "other similar communications" and that PCD's 

sale of FEC information did not violate the commercial 

purposes prohibition. The court said, "The absence 

from PCD's reports of mailing addresses and phone 

numbers, as well as the caveat on each page against 

solicitation and commercial use, make it virtually 

certain that these reports will be used for informative 

purposes (similar to newspapers, magazines, and 

books...), not for commercial purposes (similar to 

soliciting contributions or selling cars)." 

Pending Cases 

Another sale and use case, FEC v. Legi-Tech, Inc., 

was pending in D.C. district court at year's end, 

awaiting the outcome of a D.C. court of appeals case, 

FEC v. International Funding, 'Inc. That case raised 

constitutional challenges to the sale and use provision. 

Fundraising Techniques 

As political committees search for ways to expand 

their fundraising base, the Commission has been 

called upon to determine the permissibility of new 

fundraising methods under the Federal Election 

Campaign Act (the Act). In 1991, telephone and credit 

card fundraising were again the subject of advisory 

opinions. 

Telephone 900-lines 

This technology permits a caller to dial a committee's 

900 number and hear a message and/or register an 

opinion. The cost of the call is a contribution from the 

caller to the committee. Typically, the committee 

contracts with a telephone service bureau that provides access to 900-line services, including services 

provided by the bureau. This service bureau then 8No. 90-1009-GAG and 87-2467-GAG. 

9No. 91-6084. 
22 

works with the telephone company and its local 

carriers to get the service on-line and to provide for 

caller billing. 

While political committees bear ultimate responsibility for complying with the election law, the Commission has set forth, in past advisory opinions, two 

principal requirements for companies providing 900-

line service: 

• The company must provide services at the usual 

and normal charge in order to avoid prohibited 

corporate contributions to the committee; and 

• The company must take certain measures to 

identify contributions and prevent prohibited and 

excessive contributions. 

The Commission applied and clarified these 

requirements in several 1991 advisory opinions. In 

AO 1991-2, for example, the Commission permitted 

MCI Telecommunications Corporation (MCI)-a 

telephone company-to forward proceeds of 900-line 

calls to a service bureau, even though the funds might 

not have been raised in compliance with FEC regulations. As a common carrier telephone company, MCI 

had limited obligations and was not responsible for 

ensuring that the funds were in compliance with the 

law; that obligation rested with the campaign and the 

service bureau. 

In AO 1991-20, the Commission required Call 

Interactive-a service bureau-to take steps to 

ensure that the contributions received by the political 

committee complied with FEC regulations requiring 

that contributors be identified, and that the company 

did not impermissibly advance corporate funds to the 

committee. The Commission did reiterate, however, 

that it is ultimately the political committee's responsibility to comply with the election law. 

In AO 1991-26, the Commission approved Versatel 

Corporation's proposal to provide its billing and 

contribution screening services to telephone companies and/or service bureaus that would, in turn, 

contract with political committees. The company 

would identify all contributors and would separate 

contributions of questionable legality. 

Credit Cards 

The Commission has long permitted political committees to accept contributions via credit card. 10 In AO 

1991-1, however, the Deloitte &Touche PAC presented the Commission with a unique situation where 

several months might intervene between an 

individual's authorization of a credit card contribution 

and the date of the actual charge to the contributor's 

account. Normally, a credit card contribution is 

received when the committee receives the donor's 

authorization to charge it to his or her account. Under 

this deferred payment system, however, the date the 

contribution was made by the contributor-and 

received by the committee-was the date the committee transmitted to the credit card company documentation authorizing the credit to the committee's account and the charge to the cardholder's account. 

Until that point the contributor had the right to revoke 

the authorization and had not relinquished control 

over the contribution. 

Excessive Earmarked Contributions 

Contributions made in connection with federal elections are subject to the limitations of 2 U.S.C §441 a. 

During 1991, the U.S. District Court for the District of 

Columbia settled a long-standing case involving a 

violation of these limits, which resulted from earmarked contributions. 

FEC v. National Republican Senatorial Committee 

On April 9, 1991, the U.S. District Court for the District 

of Columbia ruled that the National Republican 

Senatorial Committee (NRSC) and its treasurer made 

$2.3 million in excessive contributions by exercising 

"direction or control" over earmarked contributions. 11 

10See, for example, AOs 1978-68 and 1990-4. 

11 No. 90-2055-GAG. 
23 

Background.12 In its suit, the Commission alleged 

that NRSC had made $2.3 million in excessive 

contributions to 12 Senate candidates in violation of 

2 U.S.C. §441a(h). These contributions were the 

result of a series of direct mail solicitations in which 

NRSC asked contributors to write checks to benefit 

1986 Republican Senate candidates in four states. 

None of the 12 candidates involved in the Senate 

races was named in the letters. Recipients were 

asked to write checks payable to NRSC or different 

accounts controlled by NRSC. The solicitation letter 

said that the amount an individual contributed would 

be divided equally among the four campaigns mentioned in the letter. 

The Commission alleged that the contributions 

counted against NRSC's limits for the 12 candidates 

because the committee exercised "direction or 

control" over the choice of the recipient candidates. 

The Commission's rules at 11 CFR 11 0.6(d) provide 

that, if an entity acts as a conduit for earmarked 

contributions, the contributions count against the 

conduit's contribution limits (as well as the original 

contributor's) if the conduit exercises "any direction or 

control" over the choice of the recipient candidate. 

The Commission also alleged that, by failing to 

report the contributions paid to the 12 candidates as 

contributions from NRSC, the committee violated the 

reporting requirements of 2 U.S.C. §434(b) and 

11 CFR 11 0.6(d)(2). (The contributions were reported 

by NRSC and the candidates' committees as contributions from the individual donors.) 

District Court Decision. The court declared that 

NRSC exercised "direction or control" over the choice 

of the recipient candidates "because NRSC devised 

the solicitation; matched subgroups of the twelve 

candidates with groups of donors; presented donors 

with a pre-selected division of contributions among 

pre-selected candidates; did not identify the candidates by name; requested checks payable to NRSC 

and associated entities and not to the individual 

campaign committees; failed to inform donors, as 

required by law, thatthe individual campaign committees had authorized and helped pay for the mailings; 

and merged and confused the general needs of the 

Republican Party with the needs of the individual 

Senate candidates." 

Penalty. The Commission asked the court to impose 

a civil penalty of $4.6 million. However, because the 

record did not suggest that NRSC had intentionally 

violated the law, the court imposed a $24,000 penalty 

and enjoined NRSC from similar future violations. The 

NRSC has appealed this decision. 

Preemption 

Potential conflicts between .the Federal Election 

Campaign Act (the Act) and state campaign finance 

laws were considered in two 1991 advisory opinions. 

The Act and FEC regulations "supersede and preempt provisions of State law with respect to election 

to Federal office." 2 U.S.C. §453. The advisory 

opinions, AOs 1991-5 and 1991-22, cited legislative 

history as evidence that Congress intended the Act to 

"occupy the field" of federal campaign financing. In 

both opinions, the Commission decided that federal 

law preempted state provisions to the extent that they 

encroached upon the areas of federal campaign 

activity. 

Tennessee: Building Fund Donations 

Under an exemption in the Act, a donation to a 

national or state political party to defray the cost of 

constructing or purchasing a party office facility is not 

a contribution or an expenditure. 2 U.S.C. 

§431 (8)(B)(viii). In AO 1991-5, the Commission 

concluded that, because Congress specifically 

decided not to place restrictions in an area which it 

could restrict as federal activity, the Act would preempt any Tennessee law prohibiting corporate 

donations to a building fund. 

12This suit emanated from another suit, Common Cause 

v. FEC, in which the court ordered the FEC to reopen an 

administrative complaint (MUR 2282) that Common Cause 

had filed against NRSC. For a summary of that court case 

and MUR, which provide further background to this case, 

see Annual Report 1990. 
24 

By contrast, a Tennessee law that requires state 

party committees to report building fund receipts and 

disbursements would not be preempted. The Commission concluded that such a disclosure requirement 

would not encroach upon an area occupied by the 

Act. 

Minnesota: Public Funding and Limits 

The Minnesota Congressional Campaign Reform Act 

authorizes the payment of state public funds to 

Congressional candidates who qualify for the general 

election ballot in Minnesota. In order to qualify for the 

funding, candidates are required to abide by stateenforced spending limits. 

Based on legislative history stating that, "Federal 

law occupies the field with respect to...limitations on 

campaign expenditures, the sources of campaign 

funds used in Federal races, the conduct of Federal 

campaigns, ..."13 the Commission found that the Act 

preempts both the provision of state funds and the 

enforcement of expenditure limits. Although the 

provision of state funds might not have been preempted alone, it was inextricably linked to the expenditure limits, which were clearly preempted. 

Bank Loans 

The Federal Election Campaign Act (the Act) and 

Commission regulations prohibit corporations, including banks, from making contributions or expenditures 

in connection with a federal election. 2 U.S.C. 

§441b(a) and (b). As an exception to this rule, a bank 

may loan money to a federal committee provided 

certain conditions are met. Among them is a requirement that the loan "is made on a basis which assures 

repayment." In 1991, the Commission sent to Congress new regulations to clarify this standard. 14 

Background 

The rule changes adopted by the Commission concluded a regulatory process that began in 1986 as 

part of a rulemaking on public financing. But the 

issues involved date back to the 1979 amendments to 

the Act. At that time, Congress set forth criteria used 

to determine when a loan is made in the ordinary 

course of business and, therefore, is not a contribution from the lending institution. The loan must: 

• bear the usual and customary interest rate of the 

lending institution; 

• be subject to a due date or amortization schedule; and 

• be made on a basis which assures repayment.15 

The last of these criteria has been the subject of a 

number of enforcement cases (MURs) and advisory 

opinions (AOs).16 In these MURs and AOs, the 

Commission has considered whether certain types of 

collateral or other "risk reducing features" were 

sufficient to "assure repayment." The newly promulgated bank loan rules codify some of the 

Commission's findings. 

New Rules 

Under the new regulations at 11 CFR 1 00.7(b)(11) 

and 1 00.8(b)(12), a loan, by definition, is made on a 

basis which assures repayment if it is obtained under 

either of two authorized methods or a combination of 

the two. 

(1) A loan may be obtained using traditional types 

of collateral and/or secondary sources of repayment 

(i.e., guarantees and endorsements). The fair market 

value of the collateral on the date of the loan must 

equal or exceed the amount of the loan and any 

senior liens. Moreover, the candidate or political 

committee receiving the loan must document that the 

lending institution has taken steps to legally protect its 

interest in the collateral, in the event that the borrower 

defaults on the loan. 

(2) A loan may be obtained using future receipts as 

collateral, such as anticipated contributions, interest 

income and public financing payments. The loan may 

not exceed a reasonable estimate of anticipated 

13H.R. Rep. No. 93-1438, 93d Gong., 2dSess. 69 (1974). 

14The rules were expected to become effeCtive in 1992. 

1s2 U.S.C. §431 (8)(B)(vii). 

16See, for example, MURs 216/239, 382, 1098, 1195, 

1689,2062 and AO 1980-108. 
25 

receipts based on documentation provided by the 

borrower candidate or committee to the lender (e.g., 

cash flow charts, financial plans). The borrower must 

also provide the lender with a written agreement that 

pledges future funds as collateral and that requires 

the committee to deposit pledged funds in a separate 

account used to meet repayment requirements. In the 

case of public financing payments, the candidate or 

committee must authorize the U.S. Secretary of the 

Treasury to deposit the payments directly into the 

account. 

When a loan does not meet the above criteria to 

assure repayment, the Commission will consider the 

totality of the circumstances in determining whether 

the loan was made on a basis which assures repayment. 

The Commission has developed new reporting 

schedules C-1 and C-P-1, which document that a loan 

complies with the requirements described above. 
Arizona 2nd 

OEdPastor* 

R E. Connor 

Illinois 15th 

D Gerald Bradley 

R Thomas Ewing* 

Massachusetts 1st 

D John Olver* 

R Steven Pierce . 

Pennsylvania 2nd 

D Lucien Blackwell* 

R Nadine Smith-Bulford 

Texas 3rd 

R Samuel Johnson* 

R Thomas Pauken 

Virginia 7th 

D Kay Slaughter 

R George Allen* 

Pennsylvania Senate 

D Harris Wofford* 

R Richard Thornburgh 

*Winner 

$3,000,000 $4,000,000 $5,000,000 

27 Chapter 4 

Campaign Finance 

Statistics 

Contributions and Party Expenditures 

for 1991 Special Elections - Individual Contributions 

- PACs 

- Party Contributions 

Candidate Contributions 

Party Expenditures 
28 

National Party Committees: Activity of - Republican Nonfederal and Building Fund Accounts* Democrat

in 1991 

Millions of Dollars· 

20 

15 

10 

5 

0 

Receipts Disbursements Cash on Handt 

* Graphs show the aggregate activity of the three national committees of each major party: the national party committee, 

the Senatorial campaign committee and the Congressional campaign committee. 

t The National Republican Congressional Committee's cash-on-hand total was not available. 
29 

PAC Growth, 1975-91* D 

e 

Corporate 

Nonconnected 

• 

6, 

Trade/Membership/Health 

Labor 

• Othert 

Number 

of PACs 

2000 ~---------------------------------------------------------------

* For the years 1974 through 1976, numbers are not available for Nonconnected PACs, Trade/Membership/Health PACs 

and PACs in the "Other" category. 

t "Other" category includes PACs formed by corporations without capital stock and PACs formed by incorporated 

cooperatives. 
Receipts of House Candidates I Election Year 

for Each Year of Election Cycle* - Nonelection Year 

Millions of Dollars 

120 

100 

80 

60 

40 

20 

0 

86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 

Democrats Republicans Democrats Republicans Democrats Republicans 

Incumbents Challengers Open Seat Candidatest 

30 

* An election cycle consists of the year before a regularly scheduled election (nonelection year) and the year of the election 

(election year). Only 1991 data are shown for the 1992 cycle. 

t Includes candidates running in special elections to fill vacant seats. 
31 

Receipts of 1992 Senate Candidates - 1987-88 

- 1989-90 

Millions - 1991 of Dollars 

25 ~--------------------------------------------------------------

5 

0 

Democrats Republicans Democrats Republicans Democrats Republicans 

(19) (13) (24) (30) (7) (9) 

Incumbents Challengers Open Seat Candidates 
32 

1991 National Party Activity - Opening Cash 

- Receipts 

- Disbursements 

Closing Cash 

Debts 

Millions of Dollars 

35 ~----------------------------------------------------------------

5 

0 

Democrat Republican Democrat Republican Democrat Republican 

National Committees Senatorial Campaign Congressional Campaign 

Committees Committees 
33 

Nonelection Year Receipts of - Democrat 

Party Committees Republican 

Millions of Dollars 

50 ~----------------------------------------------------------------

30 

20 

10 

0 

1981 1983 1985 1987 1989 1991 1981 1983 1985 1987 1989 1991 1981 1983 1985 1987 1989 1991 

National Committees Senatorial Campaign Congressional Campaign 

Committees Committees 
PAC Campaign Finance Activity 

for Each Year of Election Cycle* 

Election Year 

- Nonelection Year 

Receipts 

Millions of Dollars 

120 

100 

80 

60 

40 

20 

0 86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 

Corporate Labor Nonconnected Trade/Member· Othert 

ship/Health 

Contributions to Candidates 

Millions of Dollars 

60 

40 

20 

0 

86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 86 88 90 92 

Corporate Labor Nonconnected Trade/Member- Othert 

ship/Health 

34 

* An election cycle consists of the year before a regularly scheduled election (nonelection year) and the year of the election 

(election year). 

t "Other" category consists of PACs formed by corporations without capital stock and PACs formed by incorporated 

cooperatives. 
Chapter 35 5 

The Commission 

Commissioners 

Commission officers during 1991 were Chairman 

John Warren McGarry and Vice Chairman Joan D. 

Aikens. In December 1991 , the Commission elected 

the 1992 officers: Chairman Joan D. Aikens and Vice 

Chairman Scott Thomas. 

On November 22, 1991, the Senate confirmed 

President Bush's appointment of Trevor Potter, and 

reappointment of Commissioner Scott Thomas to sixyear terms as FEC Commissioners. Mr. Potter 

replaced Thomas J. Josefiak, whose term expired in 

April 1991. Commissioner Thomas was first appointed 

in 1986. 

Biographies of the Commissioners, the Staff 

Director, General Counsel and Inspector General 

appear in Appendix 1 . 

International Delegations 

In 1991 , the Federal Election Commission continued 

to work with foreign nations, sharing information and 

experience concerning electoral systems. More than 

500 journalists, party leaders and election officials 

from 80 countries visited the agency, seeking information on the American election process and the 

Commission's role in that process.1 

Ethics 

During 1991, the FEC's ethics staff monitored an 

ongoing rulemaking conducted by the Office of 

Government Ethics to establish government-wide 

standards of conduct for federal employees. The staff 

commented on the proposed rules and briefed 

Commission staff on some of the more controversial 

provisions. The staff is currently planning for the 

implementation of the final rules, which is expected in 

1992. 

The FEC's General Counsel, who serves as 

Designated Agency Ethics Official, also directed his 

staff to continue its ethics training sessions for new 

employees. These sessions briefed new staff members on the the Ethics Reform Act of 1989, the Hatch 

Act and the FEC Standards of Conduct. The ethics 

staff published an intra-agency newsletter to further 

advise the staff on conflict of interest matters and 

participated in the agency's supervisor training 

sessions. 

In addition, the ethics staff implemented interim 

rules, prescribed by the General Services Administration, on travel by government personnel. The ethics 

staff also carried out the Commission's responsibilities 

with respect to personal financial disclosure reports 

filed by Presidential candidates. 

Personnel &Labor Relations 

Personnel 

With technical assistance from the Data Systems 

Development Division, the Personnel Office developed an automated processing system. The new 

system permits offices to request and process personnel actions electronically, saving time, reducing 

paperwork and streamlining tracking and 

recordkeeping. The personnel office also completed 

preliminary work on a questionnaire to be used for 

exit interviews. This project will provide FEC management with useful information regarding departing staff 

perceptions about the FEC as an employer. The office 

also developed a formal supervisory training program 

in cooperation with the Equal Employment Opportunity office. Regular sessions are now held twice a 

year. 

Labor-Management Relations 

The FEC and Chapter 204 of the National Treasury 

Employees Union entered into negotiations pursuant 

to a midterm reopener in the collective bargaining 

agreement. At year's end, the process was continuing. 

Equal Employment Opportunity Program 

The EEO officer manages the EEO Program, which 

includes the Federal Women's Program and special 

emphasis programs for minorities. The officer also 1The visits were sponsored by the United States Information Agency (USIA). 
36 

files annual statistical reports on discrimination and 

the Commission's workforce with the Equal Employment Opportunity Commission and status reports on 

the Disabled Veterans Affirmative Action Plan with the 

Office of Personnel and Management. 

In 1991 the Office of Equal Employment Opportunity Programs (OEEOP) made recommendations on 

recruitment, participated in the Commission's orientation program and assisted the Personnel Office in 

sponsoring the Commission's comprehensive inhouse training course for supervisors. The OEEOP 

also published a bimonthly newsletter, EEO Focus, for 

Commission staff, provided counseling for those with 

equal employment concerns and sponsored agencywide workshops on sexual harassment prevention. 

Recruitment 

Two recruiting programs continued in 1991 . One 

consisted primarily of on-campus/consortia recruiting 

by the Office of General Counsel. The other program 

gave the Audit Division access to applications received by the General Accounting Office. Both 

programs produced increasing numbers of wellqualified candidates for positions at the Commission. 

The Commission also developed targeted minority 

recruiting plans for use in 1992, focusing on specific 

historically-minority colleges, universities and other 

sources. 

Inspector General 

In keeping with its statutorily mandated functiondetecting waste, fraud and abuse-the Office of the 

Inspector General (OIG) audited several facets of 

Commission operations in 1991 , including the 

agency's: 

• internal control and accountability over property 

and equipment; and 

• program for collection of civil penalties. 

While no serious deficiencies were discovered, the 

OIG did offer several recommendations to improve 

Commission operations.2 

The OIG also participated in the supervisory 

training sessions conducted by the Personnel Office, 

and began participating in the new employee orientation tours to familiarize new staff with the duties and 

responsibilities of the OIG. 

The FEC's Budget 

Fiscal Year 1991 

The final appropriation for FY 1991 was $17.150 

million, the full amount requested. The Commission 

was forced to make cuts, however, of $88,000 in 

nonpersonnel expenses and $439,500 in personnel 

costs to cover larger-than-anticipated pay increases 

for executives and staff. The personnel savings was 

achieved through a lapse of about 1 0 positions, 

reducing the 1991 staffing level from 266 full time 

equivalent (FTE) positions, as originally expected, to 

254.5 FTE. The nonpersonnel reductions included 

cuts in training, equipment purchases and contracts. 

Fiscal Year 1992 

The final appropriation for FY 1992 was $18.808 

million and 266 FTE, which represented the full 

amount requested. That amount was reduced by 

$13,000, however, as part of a $15.8 million government-wide travel reduction. The Commission also 

planned to reduce non-personnel spending to offset 

higher personnel costs resulting from career ladder 

promotions and position reclassifications. Minor 

spending cuts were expected for training, publications 

and printing. 

A comparison of the allocation of budget resources 

for FYs 1991 and 1992 appears in the table and 

graphs below. 

2See FEC Office of Inspector General, Semiannual 

Report to Congress, April 1, 1991 - September 30, 1991. 
37 

Functional Allocation of Budget 

FY 1991 FY 1992 

Personnel $12,234,204 $13,644,646 

Travel 208,787 227,500 

Motor Pool 5,600 7,000 

Commercial Space 20,210 24,300 

GSA Space 1,756,782 1,922,529 

Equipment Rental 304,315 310,000 

Equipment Purchase 413,253 245,000 

Printing 288,288 364,000 

Support Contracts 710,718 811,825 

Administrative Expenses 143,722 163,700 

Supplies and Materials 218,323 209,000 

Publications 167,746 201,500 

Telephone/Telegraph 267,258 274,000 

Postage 117,040 150,000 

Training 77,862 91,000 

GSA Services, Other 207,392 117,500 

Transit Subsidy 0 31,500 

Sequester 223 13,000 

Total $17,141,723 $18,808,000 
Allocation of Staff1" 

*Commissioners 

Staff Director 

Office of General Counsel 

Administration 

Audit 

Clearinghouse 

Data Systems Development 

Information Services 

Public Disclosure 

Reports Analysis 

0 5 10 

Percent 

15 20 25 30 

Divisional Allocation Fiscal Year 1991 

Allocation of Budget 

*Commissioners 

Staff Director 

Office of General Counsel 

Administration 

Audit 

Clearinghouse 

Data Systems Development 

Information Services 

Public Disclosure 

Reports Analysis 

Transit Subsidy 

Sequester 

- Fiscal Year 1992 

Percent 

30 

38 

* Includes Inspector General's Office and Representational Fund. 

t The Commission averaged 253 full-time equivalent positions (FTE) in FY 1991 and projected 266 FTE for FY 1992. 
Chapter 39 6 

Legislative 

Recommendations 

Legislative Action on Past 

Recommendations 

Campaign finance reform legislation saw a lot of 

activity during the first session of the 102d Congress 

as it did during the 101 st. By the end of the first 

session, over 69 bills had been introduced that would 

change, in some fashion, the way congressional 

campaigns are currently financed. Both the United 

States Senate and the House of Representatives 

passed their own versions of a reform bill, S. 3 and 

H.R. 3750 respectively. Both of these bills, though not 

enacted into law at this writing, contain several of the 

Commission's technical legislative recommendations. 1 

For example, both the Senate and House bills contain 

the Commission's recommendation that Congress 

prohibit any person from fraudulently soliciting contributions. (See page 50.) 

These two bills, as well as other proposals introduced during the 102d Congress, contain other 

discrete legislative recommendations that have been 

propounded by the Commission, such as those 

dealing with the allocation and disclosure of 

nonfederal funds ("soft money"), random audits, 

injunctions in enforcement cases, disclaimer notices, 

fundraising projects operated by unauthorized committees, Commission as sole point of entry for disclosure documents, campaign cycle reporting, monthly 

reporting for congressional candidates, and the 

budget reimbursement fund. 

One House proposal contains the Commission's 

recommendations concerning the funding/payout 

imbalance in the Presidential Public Funding Program 

and the state-by-state limits on expenditures by 

publicly financed Presidential primary candidates. The 

Commission has recommended the repeal of these 

limits in order to eliminate burdensome requirements 

that have been difficult for campaigns to follow and for 

the Commission to monitor. (See page 42.) 

The following recommendations are offered in 1992 

to further the goal of efficiently administering and 

enforcing the campaign finance laws. Parenthetical 

references to 1992 indicate new recommendations or 

newly revised recommendations. Three recommendations are new and seven recommendations have 

been revised this year. 

Public Financing 

Presidential Election Campaign Fund (revised 

1992) 

Section: 26 U.S.C. §6096 

Recommendation: Congress should be aware that a 

shortfall of between $75 and $100 million in the 

Presidential Election Campaign Fund is certain in 

1996. If Congress wishes to preserve the Presidential 

public funding system, a legislative remedy is essential. 

Explanation: Although the Fund will not experience a 

shortfall this Presidential year,2 the Commission has 

informed Congress that a serious public funding 

shortage is virtually assured in 1996. One of the 

reasons for this is a structural flaw in the checkoff 

program. The payout to candidates and parties (for 

their conventions) is indexed to inflation, but the dollar 

checkoff is not. Spending limits are increased each 

~lection cycle to reflect the change in the cost-of-living 

mdex. In 1974, the statutory spending limit for the 

general election was established at $20 million. This 

year, each party nominee will receive over $55 million, 

representing a 280 percent increase over the 1974 

1A House and Senate Conference is anticipated in Spring 

of 1992. 

2The Commission's projection that a shortfall would occur 

in 1992 did not materialize because the assumptions on 

which that projection was based changed. First, matching 

fund requests were considerably smaller than had been 

expected, based on the experience of previous years. 

Second, total checkoff receipts deposited into the Fund in 

1991 declined much less than had been anticipated. The 

FEC had expected a decline of $2 million. In fact, the 

checkoff dollars to the Fund declined by approximately 

$140,000. Third, the inflation rate was lower than had been 

expected, which decreased the expected demand on the 

Fund. 
40 

amount. Thus, as the consumer price index increases, the Fund needs more and more checkoff 

dollars to make the appropriate payments to qualified 

candidates and parties. Internal Revenue Service 

statistics, however, indicate that citizen participation in 

the checkoff program has actually declined. After 

peaking at 28 percent in 1980, the percentage of tax 

forms on which the taxpayer checked yes has fallen 

to approximately 20 percent, where it has remained 

the last couple of years. 

Without a legislative remedy, the FEC predicts that 

the shortfall in 1996 will be a serious problem. The 

Commission projects a shortfall of between $75 and 

$1 00 million by 1996. Candidates could qualify for 

more than twice the amount of available checkoff 

dollars. As a result, there might not be any public 

money available for the primary election campaigns in 

1996. 

Enforcement of Nonwillful Violations (revised 

1992) 

Section: 26 U.S.C. §§9012, 9042 

Recommendation: Congress should consider amending the Presidential Election Campaign Fund Act and 

the Presidential Primary Matching Payment Account 

Act to clarify that the Commission has authority for 

civil enforcement of nonwillful violations (as well as 

willful violations) of the public funding provisions. 

Explanation: Section 9012 of the Presidential Election 

Campaign Fund Act and section 9042 of the Presidential Primary Matching Payment Account Act 

provide only for "criminal penalties" for knowing and 

willful violations of the spending and contribution 

provisions and the failure of publicly funded candidates to furnish all records requested by the Commission. The lack of a specific reference to nonwillful 

violations of these provisions has raised questions 

regarding the Commission's ability to enforce these 

provisions through the civil enforcement process. 

In some limited areas, the Commission has invoked other statutes and other provisions in Title 26 

to carry out its civil enforcement of the public funding 

provisions. It has relied, for example, on 2 U.S.C. 

§441 a(b) to enforce the Presidential spending limits. 

Similarly, the Commission has used the candidate 

agreement and certification processes provided in 26 

U.S.C. §§9003 and 9033 to enforce the spending 

limits, the ban on private contributions and the requirement to furnish records. Congress may wish to 

consider revising the public financing statutes to 

provide explicit authority for civil enforcement of these 

provisions. 

Past Compliance with Law as Eligibility Factor for 

Public Financing (revised 1992) 

Section: 26 U.S.C. §§9003, 9033 

Recommendation: Congress should amend the 

eligibility requirements for publicly funded Presidential 

candidates to make clear that candidates who have 

been convicted of a willful violation of the laws related 

to the public funding process will not be eligible for 

public funding. 

Explanation: Neither of the Presidential public financing statutes expressly restricts eligibility for funding 

because of a candidate's prior violations of law, no 

matter how severe. And yet public confidence in the 

integrity of the public financing system would risk 

serious erosion if the U.S. Government were to 

provide public funds to candidates who had been 

convicted of felonies related to the public funding 

process. Congress should therefore amend the 

eligibility requirements to ensure that such candidates 

do not receive public financing for their Presidential 

campaigns. The amendments should make clear that 

a candidate would be ineligible for public funds if he 

or she had been convicted of fraud with respect to 

raising funds for a campaign that was publicly 

financed, or if he or she had failed to make repayments in connection with a past publicly funded 

campaign or had willfully disregarded the statute or 

regulations. 
41 

Eligibility Threshold for Public Financing (revised 

1992) 

Section: 26 U.S.C. §§9003, 9033 

Recommendation: Congress should raise the eligibility threshold for publicly funded Presidential candidates. 

Explanation: The Federal Election Commission has 

administered the public funding provisions in four 

Presidential elections, and is in the midst of doing so 

for the fifth time. The statute provides for a cost-ofliving adjustment (COLA) of the overall primary 

spending limitation, which has increased by 280 

percent over the statutory limit established in 1974. 

There is, however, no corresponding adjustment to 

the threshold requirement. It remains exactly the 

same as it was in 1974. An adjustment to the threshold requirement would ensure that funds continue to 

be given only to candidates who demonstrate broad 

national support. To reach this higher threshold, 

Congress could increase the number of states in 

which the candidate had to raise the qualifying 

amount of matchable contributions; and/or increase 

the total amount of qualifying matchable contributions 

that had to be raised in each of the states. 

Contributions to Presidential Nominees Who 

Receive Public funds in the General Election 

Section: 26 U.S.C. §9003 

Recommendation: Congress may wish to clarify that 

the public financing statutes prohibit the making and 

acceptance of contributions (either direct or in-kind) to 

Presidential candidates who receive public funds in 

the general election. 

Explanation: The Presidential Election Campaign 

Fund Act prohibits a publicly financed general election 

candidate from accepting private contributions to 

defray qualified campaign expenses. 26 U.S.C. 

§9003(b)(2). The Act does not, however, contain a 

parallel prohibition against the making of these 

contributions. Congress should consider adding a 

section to 2 U.S.C. §441 a to clarify that individuals 

and committees are prohibited from making these 

contributions. 

Fundraising Limitation for Publicly 

Financed Presidential Primary Campaigns 

Section: 2 U.S.C. §§431 (9)(A)(vi) and 441 a 

Recommendation: The Commission recommends that 

the separate fundraising limitation provided to publicly 

financed Presidential primary campaigns be combined 

with the overall limit. Thus, instead of a candidate's 

having a $10 million (plus COLAS) limit for campaign 

expenditures and a $2 million (plus COLA) limit for 

fundraising (20 percent of overall limit), each candidate would have one $12 million (plus COLA) limit for 

all campaign expenditures. 

Explanation: Campaigns that have sufficient funds to 

spend up to the overall limit usually allocate some of 

their expenditures to the fundraising category. These 

campaigns come close to spending the maximum 

permitted under both their overall limit and their 

special fundraising limit. Hence, by combining the two 

limits, Congress would not substantially alter spending amounts or patterns. For those campaigns which 

do not spend up to the overall expenditure limit, the 

separate fundraising limit is meaningless. Many 

smaller campaigns do not even bother to use it, 

except in one or two states where the expenditure 

limit is low, e.g., Iowa and New Hampshire. Assuming 

that the state limitations are eliminated or appropriately adjusted, this recommendation would have little 

impact on the election process. 

The advantages of the recommendation, however, 

are substantial. They include a reduction in account3Spending limits are increased by the cost-of-living 

adjustment (COLA), which the Department of Labor 

calculates annually. 
42 

ing burdens and a simplification in reporting requirements for campaigns, and a reduction in the 

Commission's auditing task. For example, the 

Commission would no longer have to ensure compliance with the 28-day rule, i.e., the rule prohibiting 

committees from allocating expenditures as exempt 

fundraising expenditures within 28 days of the primary 

held within the state where the expenditure was 

made. 

State Expenditure Limits for Publicly 

Financed Presidential Primary Campaigns 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

the state-by-state limitations on expenditures for 

publicly financed Presidential primary candidates be 

eliminated. 

Explanation: The Commission has now administered 

the public funding program in four Presidential elections. Based on our experience, we believe that the 

limitations could be removed with no material impact 

on the process. 

Our experience has shown that the limitations have 

little impact on campaign spending in a given state, 

with the exception of Iowa and New Hampshire. In 

most other states, campaigns are unable or do not 

wish to expend an amount equal to the limitation. In 

effect, then, the administration of the entire program 

results in limiting disbursements in these two primaries alone. 

If the limitations were removed, the level of disbursements in these states would obviously increase. 

With an increasing number of primaries vying for a 

campaign's limited resources, however, it would not 

be possible to spend very large amounts in these 

early primaries and still have adequate funds available for the later primaries. Thus, the overall national 

limit would serve as a constraint on state spending, 

even in the early primaries. At the same time, candidates would have broader discretion in the running of 

their campaigns. 

Our experience has also shown that the limitations 

have been only partially successful in limiting expenditures in the early primary states. The use of the 

fundraising limitation, the compliance cost exemption, 

the volunteer service provisions, the unreimbursed 

personal travel expense provisions, the use of a 

personal residence in volunteer activity exemption, 

and a complex series of allocation schemes have 

developed into an art which when skillfully practiced 

can partially circumvent the state limitations. 

In addition, experience has shown that one of the 

Congressional concerns motivating the adoption of 

state expenditure limits is no longer an issue. Congress adopted th~ l:>t~te limits, in part, as a way of 

discouraging candidates from relying heavily on the 

outcome of big state primaries. The concern was that 

candidates might wish to spend heavily in such states 

as a way of securing their party's nomination. In fact, 

however, under the public funding system, this has 

not proven to be an issue. Rather than spending 

heavily in large states, candidates have spent large 

amounts in the early primaries, for example, in Iowa 

and New Hampshire. 

Finally, the allocation of expenditures to the states 

has proven a significant accounting burden for 

campaigns and an equally difficult audit and enforcement task for the Commission. 

Given our experience to date, we believe that this 

change to the Act would be of substantial benefit to all 

parties concerned. 

Deposit of Repayments 

Section: 26 U.S.C. §9007(d) 

Recommendation: Congress should revise the law to 

state that: All payments received by the Secretary of 

the Treasury under subsection (b) shall be deposited 

by him or her in the Presidential Election Campaign 

Fund established by section 9006(a). 

Explanation: This change would allow the Fund to 

recapture monies repaid by convention-related 

committees of national major and minor parties, as 

well as by general election grant recipients. Currently 

the Fund recaptures only repayments made by 

primary matching fund recipients. 
43 

Contributions and Expenditures 

Application of $25,000 Annual Limit (1992) 

Section: 2 U.S.C. §441 a(a)(3) 

Recommendation: Congress should consider modifying the provision that limits individual contributions to 

$25,000 per calendar year so that an individual's 

contributions count against his or her annual limit for 

the year in which they are made. 

Explanation: Section 441a(a)(3) now provides that a 

contribution to a candidate made in a nonelection 

year counts against the individual donor's limit for the 

year in which the candidate's election is held. This 

provision has lead to some confusion among contributors. For example, a contributor wishing to support 

Candidate Smith in an election year contributes to her 

in November of the year before the election. The 

contributor assumes that the contribution counts 

against his limit for the year in which he contributed. 

Unaware that the contribution actually counts against 

the year in which Candidate Smith's election is held, 

the contributor makes other contributions during the 

election year and inadvertently exceeds his $25,000 

limit. By requiring contributions to count against the 

limit of the calendar year in which the donor contributes, confusion would be eliminated and fewer 

contributors would inadvertently violate the law. The 

change would offer the added advantage of enabling 

the Commission to better monitor the annual limit. 

Through the use of our data base, we could more 

easily monitor contributions made by one individual 

regardless of whether they were given to retire the 

debt of a candidate's previous campaign, to support 

an upcoming election (two, four or six years in the 

future) or to support a PAC or party committee. Such 

an amendment would not alter the per-candidate, perelection limits. Nor would it affect the total amount that 

any individual could contribute in connection with 

federal elections. ' 

Honorarium (1992) 

Section: 2 U.S.C. §431 (8)(B)(xiv) 

Recommendation: Congress should make a technical 

amendment, deleting 2 U.S.C. §431 (8)(B)(xiv), now 

contained in a list of definitions of what is not a 

contribution. 

Explanation: The 1976 amendments to the Federal 

Election Campaign Act gave the Commission jurisdiction over the acceptance of honoraria by all federal 

officeholders and employees. 2 U.S.C. §441i.ln 1991, 

the Legislative Branch Appropriations Act repealed 

section 441 i. As a result, the Commission has no 

jurisdiction over honorarium transactions taking place 

after August 14, 1991, the effective date of the law. 

To establish consistency within the Act, Congress 

should make a technical change to section 

431 (8)(B)(xiv) to delete the reference to honorarium 

as defined in former section 441 i. This would delete 

honorarium from the list of definitions of what is not a 

contribution. 

Independent Expenditures by Principal 

Campaign Committees 

Section: 2 U.S.C. §432(e)(3) 

Recommendation: Congress should consider amending the definition of principal campaign committee to 

clarify whether these committees may make independent expenditures on behalf of other principal campaign 

committees. 

Explanation: A principal campaign committee is 

defined as an authorized committee which has not 

supported more than one federal candidate. It is not 

clear, however, whether the term "support" is intended 

to include both contributions and independent expenditures or whether it refers to contributions alone. The 

same section states that the term "support" does not 

include a contribution by any authorized committee to 

another authorized committee of $1,000 or less (2 · 

U.S.C. §432(e)(3)(B)), but it is silent on the question 

of independent expenditures. The current language 
44 

does not clearly indicate whether authorized committees can make independent expenditures on behalf of 

other committees, or whether Congress intended to 

preclude authorized committees from making independent expenditures. 

Contributions and Expenditures to Influence 

Federal and Nonfederal Elections 

Section: 2 U.S.C. §§441 and 434 

Recommendation: Congress may wish to consider 

whether new legislation is needed to monitor political 

committees that engage in activities that influence 

both federal and nonfederal elections. 

Explanation: The law requires that all funds spent to 

influence federal elections come from sources that 

are permissible under the limitations and prohibitions 

of the Act. Problems arise with the application of this 

provision when committees engage in activities that 

support both federal and nonfederal candidates. In 

this regard, the Commission has recently promulgated 

new rules on allocating disbursements between 

federal and nonfederal election activity. These rules, 

which went into effect on January 1, 1991 , also added 

new disclosure requirements for allocated activities. 

The District Court for the District of Columbia, in 

Common Cause v. FEC, confirmed the Commission's 

long-standing view that allocation is the appropriate 

way to reconcile its mandate (to monitor excessive 

and prohibited funds) and the limits on its jurisdiction 

(to regulate money influencing federal elections but 

not state or local). Notwithstanding the Commission's 

regulatory efforts, public attention continues to be 

focused on the perceived impact of so-called "soft 

money" on federal elections. In light of this public 

concern, Congress may wish to reevaluate the 

Commission's role in regulating political committees 

that support both federal and nonfederal candidates. 

Nonprofit Corporations (revised 1992) 

Section: 2 U.S.C. §441b 

Recommendation: In light of the decision of the U.S. 

Supreme Court in Federal Election Commission v. 

Massachusetts Citizens for Life, Inc. (MCFL), Congress may wish to amend the provision prohibiting 

corporate and labor spending in connection with 

federal elections in order to incorporate in the statute 

the text of the Court's decision. 

Explanation: In the Court's decision of December 15, 

1986, the Court held that the Act's prohibition on 

corporate political expenditures was unconstitutional 

as applied to independent expenditures made by a 

narrowly defined type of nonprofit corporation. Since 

that time, the Commission has published an Advance 

Notice of Proposed Rulemaking and has conducted 

hearings on whether regulatory changes are needed 

as a result of the Court's decision. The Commission 

also sought a second round of public comment 

following the Court's related decision in Austin v. 

Michigan Chamber of Commerce, 494 U.S. 652 

(1990). Congress may wish to consider whether 

statutory changes are required as well. 

The Court found that certain nonprofit corporations 

were not subject to the independent expenditure 

prohibitions of 2 U.S.C. §441 b. The Court determined, 

however, that these nonprofit corporations had to 

disclose some aspect of their financial activity-in 

particular, independent expenditures exceeding $250 

and identification of persons who contribute over $200 

to help fund these expenditures. The Court further 

ruled that spending for political activity could, at some 

point, become the major purpose of the corporation, 

and the organization would then become a political 

committee. 

Certification of Voting Age Population Figures 

and Cost-of-Living Adjustment 

Section: 2 U.S.C. §§441a(c) and (e) 

Recommendation: Congress should consider removing the requirement that the Secretary of Commerce 

certify to the Commission the voting age population of 

each Congressional district. At the same time, Congress should establish a deadline of February 15 for 

supplying the Commission with the remaining information concerning the voting age population for the 

nation as a whole and for each state. In addition, the 
45 

same deadline should apply to the Secretary of Labor, 

who is required under the Act to provide the Commission with figures on the annual adjustment to the costof-living index. 

Explanation: In order for the Commission to compute 

the coordinated party expenditure limits and the stateby-state expenditure limits for Presidential candidates, 

the Secretary of Commerce certifies the voting age 

population of the United States and of each state. 2 

U.S.C. §441 a(e). The certification for each Congr~ssional district, also required under this provision, is 

not needed. 

In addition, under 2 U.S.C. §441a(c), the Secretary 

of Labor is required to certify the annual adjustment in 

the cost-of-living index. In both instances, the timely 

receipt of these figures would enable the Commission 

to inform political committees of their spending limits 

early in the campaign cycle. Under present circumstances, where no deadline exists, the Commission 

has sometimes been unable to release the spending 

limit figures before June. 

Election Period Limitations 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

limits on contributions to candidates be placed on an 

election-cycle basis, rather than the current perelection basis. 

Explanation: The contribution limitations affecting 

contributions to candidates are structured on a "perelection" basis, thus necessitating dual bookkeeping 

or the adoption of some other method to distinguish 

between primary and general election contributions. 

The Act could be simplified by changing the contribution limitations from a "per-election" basis to an 

"election-cycle" basis. Thus, multicandidate committees could give up to $1 0,000 and all other persons 

could give up to $2,000 to an authorized committee at 

any point during the election cycle. 

Application of Contribution Limitations 

to Family Members 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

Congress examine the application of the contribution 

limitations to immediate family members. 

Explanation: Under the current posture of the law, a 

family member is limited to contributing $1 ,000 per 

election to a candidate. This limitation applies to 

spouses and parents, as well as other immediate 

family members. (SeeS. Cont. Rep. No. 93-1237, 

93rd Cong., 2nd Sess., 58 (1974) and Buckley v. 

Valeo, 424 U.S. 1, 51 (footnote 57)(1976).) This 

limitation has caused the Commission substantial 

problems in attempting to implement and enforce the 

contribution limitations. 4 

Problems have arisen in enforcing the limitations 

where a candidate uses assets belonging to a parent. 

In some cases, a parent has made a substantial gift to 

his or her candidate-child while cautioning the candidate that this may well decrease the amount which 

the candidate would otherwise inherit upon the death 

of the parent. 

Problems have also occurred in situations where 

the candidate uses assets held jointly with a spouse. 

When the candidate uses more than one-half of the 

value of the asset held commonly with the spouse (for 

example, offering property as collateral for a loan), the 

amount over one-half represents a contribution from 

the spouse. If that amount exceeds $1,000, it becomes an excessive contribution from the spouse. 

The Commission recommends that Congress 

consider the difficulties arising from application of the 

contribution limitations to immediate family members. 

4While the Commission has attempted through regulations to present an equitable solution to some of these 

problems {see 48 Fed. Reg. 19019 {April27, 1983) as 

prescribed by the Commission on July 1, 1983), statutory 

resolution is required in this area. 
46 

Acceptance of Cash Contributions 

Section: 2 U.S.C. §441g 

Recommendation: Congress may wish to modify the 

statute to make the treatment of 2 U.S.C. §441 g, 

concerning cash contributions, consistent with other 

provisions of the Act. As currently drafted, 2 U.S.C. 

§441 g prohibits only the making of cash contributions 

which, in the aggregate, exceed $100 per candidate, 

per election. It does not address the issue of accept· 

ing cash contributions. Moreover, the current statutory language does not plainly prohibit cash contribu- tkins in excess of$1 00 to political committees other 

than authorized committees of a candidate. 

Explanation: Currently this provision focuses only on 

persons making the cash contributions. However, 

these cases generally come to light when a committee has accepted these funds. Yet the Commission 

has no recourse with respect to the committee in such 

cases. This can be a problem, particularly where 

primary matching funds are received on the basis of 

such contributions. 

While the Commission, in its regulations at 11 CFR 

11 0.4(c)(2), has included a provision requiring a 

committee receiving such a cash contribution to 

promptly return the excess over $100, the statute 

does not explicitly make acceptance of these cash 

contributions a violation. The other sections of the Act 

dealing with prohibited contributions (i.e., Sections 

441 b on corporate and labor union contributions, 441 c 

on contributions by government contractors, 441 e on 

contributions by foreign nationals, and 441 f on 

contributions in the name of another) all prohibit both 

the making and accepting of such contributions. 

Secondly, the statutory text seems to suggest that 

the prohibition contained in §441 g applies only to 

those contributions given to candidate committees. 

This language is at apparent odds with the 

Commission's understanding of the Congressional 

purpose to prohibit any cash contributions which 

exceed $1 00 in federal elections. 

Litigation 

Independent Authority of FEC in All 

Court Proceedings 

Section: 2 U.S.C. §437c(f)(4) 

Recommendation: Congress has granted the Commission authority to conduct its own litigation independent of the Department of Justice. This independence 

is an important component of the statutory structure 

designed to ensure nonpartisan administration and 

enforcement of ~h~ (;('lmpaign financing statutes. Two 

clarifications would help solidify that structure: 

1. Congress should amend the Act to specify that 

local counsel rules (requiring district court litigants to 

be represented by counsel located within the district) 

cannot be applied to the Commission. 

2. Congress should give the Commission explicit 

authorization to appear as an amicus curiae in cases 

that affect the administration of the Act, but do not 

arise under it. 

Explanation: With regard to the first of these recommendations, most district courts have rules requiring 

that all litigants be represented by counsel located 

within the district. The Commission, which conducts 

all of its litigation nationwide from its offices in Washington, D.C., is unable to comply with those rules 

without compromising its independence by engaging 

the local United States Attorney to assist in representing it in courts outside of Washington, D.C. Although 

most judges have been willing to waive applying 

these local counsel rules to the Commission, some 

have insisted that the Commission obtain local 

representation. An amendment to the statute specifying that such local counsel rules cannot be applied to 

the Commission would eliminate this problem. 

Concerning the second recommendation, the 

FECA explicitly authorizes the Commission "appear in 
47 

and defend against any action instituted under this 

Act," 2 U.S.C. §437c(f)(4), and to "initiate ... defend . 

.. or appeal any civil action ... to enforce the provisions of this Act and chapter 95 and chapter 96 of title 

26," 2 U.S.C. §437d(a)(6). These provisions do not 

explicitly cover instances in which the Commission 

appears as an amicus curiae in cases that affect the 

administration of the Act, but do not arise under it. A 

clarification of the Commission's role as an amicus 

curiae would remove any questions concerning the 

Commission's authority to represent itself in this 

capacity. 

Compliance 

Protection for Those Who File 

Complaint or Give Testimony 

Section: 2 U.S.C. §437g 

Recommendation: The Act should be amended to 

make it unlawful to improperly discriminate against 

employees or union members solely for filing charges 

or giving testimony under the statute. 

Explanation: The Act requires that the identity of 

anyone filing a complaint with the Commission be 

provided to the respondent. In many cases, this may 

put complainants at risk of reprisals from the respondent, particularly if an employee or union member files 

a complaint against his or her employer or union. This 

risk may well deter many people from filing complaints, particularly under section 441 b. See, e.g., 

NLRB v. Robbins Tire & Rubber Company, 437 U.S. 

214, 240 (1978); Brennan v. Engineered Products, 

Inc., 506 F.2d 299, 302 (8th Cir. 1974); Texas Industries, Inc. v. NLRB, 336 F.2d 128, 134 (5th Cir. 1964). 

In other statutes relating to the employment relationship, Congress has made it unlawful to discriminate 

against employees for filing charges or giving testimony under the statute. See, e.g., 29 U.S.C. 

§158(a)(4) (National Labor Relations Act); 29 U.S.C. 

§215(3) (Fair Labor Standards Act); 42 U.S.C. 

§2000e-3(a) (Equal Employment Opportunities Act). 

Congress should consider including a similar provision in the FECA. 

Random Audits 

Section: 2 U.S.C. §438(b) 

Recommendation: Congress should consider legislation that would permit the Commission to randomly 

audit political committees in an effort to promote 

voluntary compliance with the election law and ensure 

public confidence in the election process. 

Explanation: In 1979, Congress amended the FECA 

to eliminate the Commission's explicit authority to 

conduct random audits. The Commission is concerned that this change has weakened its ability to 

deter abuse of the election law. Random audits can 

be an effective tool for promoting voluntary compliance with the Act and, at the same time, reassuring 

the public that committees are complying with the law. 

Random audits performed by IRS offer a good model. 

As a result of random tax audits, most taxpayers try to 

file accurate returns on time. Tax audits have also 

helped create the public perception that tax laws are 

enforced. 

There are many ways to select committees for a 

random audit. One way would be to randomly select 

committees from a pool of all types of political committees identified by certain threshold criteria such as the 

amount of campaign receipts and, in the case of 

candidate committees, the percentage of votes won. 

With this approach, audits might be conducted in 

many states throughout the country. 

Another approach would be to randomly select 

several Congressional districts and audit all political 

committees in those districts, for a given election 

cycle. This system might result in concentrating audits 

in fewer geographical areas. 

Regardless of how random selections were made, 

it would be essential to include all types of political 

committees-PACs, party committees and candidate 

committees-and to ensure an impartial, evenhanded 

selection process. 
48 

Modifying "Reason to Believe" Finding 

Section: 2 U.S.C. §437g 

Recommendation: Congress should consider modifying the language pertaining to "reason to believe," 

contained in 2 U.S.C. §437g, in order to reduce the 

confusion sometimes experienced by respondents, 

the press and the public. One possible approach 

would be to change the statutory language from "the 

Commission finds reason to believe a violation of the 

Act has occurred" to "the Commission finds reason to 

believe a violation of the Act may have occurred." Or 

Congress may wish to use some other less invidious 

language. 

Explanation: Under the present statute, the Commission is required to make a finding that there is "reason 

to believe a violation has occurred" before it may 

investigate. Only then may the Commission request 

specific information from a respondent to determine 

whether, in fact, a violation has occurred. The statutory phrase "reason to believe" is misleading and 

does a disservice to both the Commission and the 

respondent. It implies that the Commission has 

evaluated the evidence and concluded that the 

respondent has violated the Act. In fact, however, a 

"reason to believe" finding simply means that the 

Commission believes a violation may have occurred if 

the facts as described in the complaint are true. An 

investigation permits the Commission to evaluate the 

validity of the facts as alleged. 

If the problem is, in part, one of semantics, it would 

be helpful to substitute words that sound less accusatory and that more accurately reflect what, in fact, the 

Commission is doing at this early phase of enforcement. 

In order to avoid perpetuating the erroneous 

conclusion that the Commission believes a respondent has violated the law every time it finds "reason to 

believe," the statute should be amended. 

Seeking Injunctions in Enforcement Cases 

Section: 2 U.S.C. §437g(a)(1) 

Recommendation:5 Congress should amend the 

enforcement procedures set forth in the statute so as 

to empower the Commission to promptly initiate a civil 

suit for injunctive relief in order to preserve the status 

quo when there is clear and convincing evidence that 

a substantial violation of the Act is about to occur. 

Under criteria expressly stated, the Commission 

should be authorized to initiate such civil action in a 

5Commissioner Elliott filed the following dissent: 

The Act presently enables the Commission to seek 

injunctive relief after the administrative process has been 

completed and this is more than sufficient. (See 2 U.S.C. 

§437g(a)(6)(A).) 

I am unaware of any complaint filed with the Commission 

which, in my opinion, would meet the four standards set 

forth in the legislative recommendation. Assuming a case 

was submitted which met these standards, I believe it would 

be inappropriate for the Commission to seek injunctive relief 

prior to a probable cause finding. 

First, the very ability of the Commission to seek an 

injunction, especially during the "heat of the campaign," 

opens the door to allegations of an arbitrary and politically 

motivated enforcement action by the Commission. The 

Commission's decision to seek an injunction in one case 

while refusing to do so in another could easily be seen by 

candidates and respondents as politicizing the enforcement 

process. 

Second, the Commission might easily be flooded with 

requests for injunctive relief for issues such as failure to file 

an October quarterly or a 12-day pre-general report. 

Although the Commission would have the discretion to deny 

all these requests for injunctive relief, in making that 

decision the Commission would bear the administrative 

burden of an immediate review of the tactual issues. 

Third, although the courts would be the final arbiter as to 

whether or not to grant an injunction, the mere decision by 

the Commission to seek an injunction during the final weeks 

of a campaign would cause a diversion of time and money 

and adverse publicity for a candidate during the most 

important period of the campaign. 

For these reasons, I disagree with the recommendation 

to expand the power of the Commission to seek injunctive 

relief except as presently provided tor in the Act. 
49 

United States district court without awaiting expiration 

of the 15-day period for responding to a complaint or 

the other administrative steps enumerated in the 

statute. The person against whom the Commission 

brought the action would enjoy the procedural protections afforded by the courts. 

Explanation: On certain occasions in the heat of the 

campaign period, the Commission has been provided 

with information indicating that a violation of the Act is 

about to occur (or be repeated) and yet, because of 

the administrative steps set forth in the statute, has 

been unable to act swiftly and effectively in order to 

prevent the violation from occurring. In some instances the evidence of a violation has been clear-cut 

and the potential for an impact on a campaign or 

campaigns has been substantial. The Commission 

has felt constrained from seeking immediate judicial 

action by the requirements of the statute which 

mandate that a person be given 15 days to respond to 

a complaint, that a General Counsel's brief be issued, 

that there be an opportunity to respond to such brief, 

and that conciliation be attempted before court action 

may be initiated. The courts have indicated that the 

Commission has little if any discretion to deviate from 

the administrative procedures of the statute. In re 

Carter-Mondale Reelection Committee, Inc., 642 F.2d 

538 (D.C. Cir. 1980); Common Cause v. Schmitt, 512 

F. Supp. 489 (D.D.C. 1980), aff'd by an equally 

divided court, 455 U.S. 129 (1982); Durkin for U.S. 

Senate v. FEC, 2 Fed. Elec. Camp. Fin. Guide (CCH) 

para. 9147 (D.N.H. 1980). The Commission suggests 

that the standards that should govern whether it may 

seek prompt injunctive relief (which could be set forth 

in the statute itself) are: 

1. There is a substantial likelihood that the facts set 

forth a potential violation of the Act; 

2. Failure of the Commission to act expeditiously will 

result in irreparable harm to a party affected by 

the potential violation; 

3. Expeditious action will not result in undue harm or 

prejudice to the interests of other persons; and 

4. The public interest would be served by expeditious handling of the matter. 

Disclaimers 

Fundraising Projects Operated by Unauthorized 

Committees (revised 1992) 

Section: 2 U.S.C §432(e) 

Recommendation: When unauthorized committees 

(those not authorized by candidates) raise funds 

through special fundraising projects that name 

specific candidates, contributors are sometimes 

confused or misled, believing that they are contributing to a candidate's authorized committee when, in 

fact, they are giving to the nonauthorized committee 

that sponsors the project. To preclude this situation, 

Congress may wish to amend the statute. Several 

options are available. (1) Congress could specifically 

require that contributions solicited by an unauthorized 

committee (i.e., a committee that has not been 

authorized by a candidate as his/her campaign 

committee) be made payable to the registered name 

of the committee and that unauthorized committees 

be prohibited from accepting checks payable to any 

other name. (2) Congress could prohibit an unauthorized committee from using the name of a candidate 

in the name of any "project" or in the name of any 

other fundraising activity conducted by the committee. 

(3) Congress might combine these two solutions. 

Explanation: Unauthorized committees are not 

permitted to use the name of a federal candidate in 

their name. 2 U.S.C. §432(e)(4). Unauthorized 

committees, however, frequently feature the name of 

candidates in their fundraising projects, such as 

"Citizens for Smith." Contributors may be confused, 

believing that they are contributing to the candidate's 

authorized committee when they make checks 

payable to these project names. This confusion 

sometimes leads to requests for refunds, allegations 

of coordination and inadequate disclaimers, and 

inability to monitor contributor limits. Contributor 

awareness might be enhanced if Congress were to 

modify the statute, for example, by requiring that all 

checks intended for an unauthorized committee be 

made payable to the registered name of the unauthorized committee and prohibiting unauthorized commit-
50 

tees from accepting checks payable to these project 

names. Alternatively, Congress might consider 

amending the statute to prohibit an unauthorized 

committee from using the name of any candidate in 

the name of a "project" or other fundraising activity. 

Or, Congress might combine these two alternatives. 

Disclaimer Notices 

Section: 2 U.S.C. §441d 

Recommendation: Congress should revise the statute 

to require registered political committees to display 

the appropriate disclaimer notice (when practicable) in 

any communication issued to the general public, 

regardless of its purpose or how it is distributed. 

Explanation: Under 2 U.S.C. §441d, a disclaimer 

notice is only required when "expenditures" are made 

for two types of communications made through "public 

political advertising": (1) communications that solicit 

contributions and (2) communications that "expressly 

advocate" the election or defeat of a clearly identified 

candidate. The Commission has encountered a 

number of problems with respect to this requirement. 

First, the statutory language requiring the disclaimer notice refers specifically to "expenditures," 

suggesting that the requirement does not apply to 

disbursements that are exempt from the definition of 

"expenditure" such as "exempt activities" conducted 

by local and state party committees under, for example, 2 U.S.C. §431 (9)(B)(viii). This proposal would 

make clear that all types of communications to the 

public would carry a disclaimer. 

Second, the Commission has encountered difficulties in interpreting "public political advertising," 

particularly when volunteers have been involved with 

the preparation or distribution of the communication. 

Third, the Commission has devoted considerable 

time to determining whether a given communication in 

fact contains "express advocacy" or "solicitation" 

language. The recommendation here would erase this 

need. 

Most of these problems would be eliminated if the 

language of 2 U.S.C. §441d were simplified to require 

a registered committee to display a disclaimer notice 

whenever it communicated to the public, regardless of 

the purpose of the communication and the means of 

preparing and distributing it. The Commission would 

no longer have to examine the content of communications or the manner in which they were disseminated 

to determine whether a disclaimer was required. 

This proposal is not intended to eliminate exemptions for communications appearing in places where it 

is inconvenient or impracticable to display a disclaimer. 

Fraudulent Solicitation of Funds 

Section: 2 U.S.C. §441 h 

Recommendation: The current §441 h prohibits 

fraudulent misrepresentation such as speaking, 

writing or acting on behalf of a candidate or committee on a matter which is damaging to such candidate 

or committee. It does not, however, prohibit persons 

from fraudulently soliciting contributions. A provision 

should be added to this section prohibiting persons 

from fraudulently misrepresenting themselves as 

representatives of candidates or political parties for 

the purpose of soliciting contributions which are not 

forwarded to or used by or on behalf of the candidate 

or party. 

Explanation: The Commission has received a number 

of complaints that substantial amounts of money were 

raised fraudulently by persons or committees purporting to act on behalf of candidates. Candidates have 

complained that contributions which people believed 

were going for the benefit of the candidate were 

diverted for other purposes. Both the candidates and 

the contributors were harmed by such diversion. The 

candidates received less money because people 

desirous of contributing believed they had already 

done so, and the contributors' funds had been misused in a manner in which they did not intend. The 

Commission has been unable to take any action on 

these matters because the statute gives it no authority 

in this area. 
51 

Public Disclosure 

Commission as Sole Point of Entry for 

Disclosure Documents (revised 1992) 

Section: 2 U.S.C. §432(g) 

Recommendation: The Commission recommends that 

it be the sole point of entry for all disclosure documents filed by federal candidates and political committees. This would affect the House and Senate 

candidate committees only. Under current law, those 

committees alone flle their reports with the Clerk of 

the House and the Secretary of the Senate, respectively, who then forward microfilmed copies to the 

FEC. 

Explanation: The Commission has offered this recommendation for many years. The experience of handling the Year-End Report (filed in January 1992) 

provides an excellent illustration of why a single point 

of entry is desirable. Some 234 reports filed by 

House and Senate candidate committees were 

mistakenly filed with the Federal Election Commission 

instead of with the Clerk of the House and the Secretary of the Senate. Consequently, every day, for two 

weeks around the filing deadline, the FEC shipped 

back to the Clerk and the Secretary packages filled 

with House and Senate reports that were filed with the 

FEC in error. The result? Disclosure to the public 

was delayed, and government resources were 

wasted. 

Moreover, if the FEC received the original report, it 

could use it directly for data entry, as it now uses the 

reports filed by PACs, party committees and Presidential committees. 

We also reiterate here the statement we have 

made in previous years because it remains valid. A 

single point of entry for all disclosure documents filed 

by political committees would eliminate any confusion 

about where candidates and committees are to file 

their reports. It would assist committee treasurers by 

having one office where they would file reports, 

address correspondence and ask questions. At 

present, conflicts may arise when more than one 

office sends out materials, makes requests for additional information and answers questions relating to 

the interpretation of the law. A single point of entry 

would also reduce the costs to the federal government of maintaining three different offices, especially 

in the areas of personnel, equipment and data processing. 

The Commission has authority to prepare and 

publish lists of nonfilers. It is extremely difficult to 

ascertain who has and who has not filed when reports 

may have been filed at or are in transit between two 

different offices. Separate points of entry also make it 

difficult for the Commission to track responses to 

compliance notices. Many responses and/or amendments may not be received by the Commission in a 

timely manner, even though they were sent on time 

by the candidate or committee. The delay in transmittal between two offices sometimes leads the Commission to believe that candidates and committees are 

not in compliance. A single point of entry would 

eliminate this confusion. 

Finally, a single point of entry would enhance 

disclosure. Often the public and FEC staff have 

difficulty deciphering information from reports because 

the FEC's copy is actually a photocopy derived from a 

microfilm copy of the report. Thus, the copy used by 

the public and by the FEC staff is two generations 

removed from the original report filed with the Clerk of 

the House and the Secretary of the Senate. A single 

point of entry at the FEC would allow the public to 

view the original report and would permit the FEC 

staff to use a photocopy that is only one generation 

removed from the original report. 

The Commission notes that the report of the 

Institute of Politics of the John F. Kennedy School of 

Government at Harvard University, An Analysis of the 

Impact of the Federal Election Campaign Act, 1972-

78, prepared for the House Administration Committee, 

recommended that all reports be filed directly with the 

Commission (Committee Print, 96th Cong., 1st Sess., 

at 122 (1979). 
52 

Public Disclosure at State Level 

Section: 2 U.S.C. §439 

Recommendation: Congress should consider relieving 

both political committees (other than candidate 

committees) and state election offices of the burdens 

inherent in the current requirement that political 

committees file copies of their reports with the Secretaries of State. One way this could be accomplished is 

by providing a system whereby the Secretary of State 

(or equivalent state officer) would tie into the Federal 

Election Commission's computerized disclosure data 

base. 

Explanation: At the present time, multicandidate 

political committees are required to file copies of their 

reports (or portions thereof) with the Secretary of 

State in each of the states in which they support a 

candidate. State election offices carry a burden for 

storing and maintaining files of these reports. At the 

same time, political committees are burdened with the 

responsibility of making multiple copies of their reports 

and mailing them to the Secretaries of State. 

With advances in computer technology, it is now 

possible to facilitate disclosure at the state level 

without requiring duplicate filing. Instead, state 

election offices would tie into the FEC's computer 

data base. The local press and public could access 

reports of local political committees through a computer hookup housed in their state election offices. All 

parties would benefit: political committees would no 

longer have to file duplicate reports with state offices; 

state offices would no longer have to provide storage 

and maintain files; and the FEC could maximize the 

cost effectiveness of its existing data base and 

computer system. 

Such a system has already been tested in a pilot 

program and proven inexpensive and effective. 

Initially, we would propose that candidate committees 

and in-state party committees continue to file their 

reports both in Washington, D.C., and in their home 

states, in response to the high local demand for this 

information. Later; perhaps with improvements in 

information technology, the computerized system 

could embrace these committees as well. 

State Filing for Presidential Candidate 

Committees 

Section: 2 U.S.C. §439 

Recommendation: Congress should consider clarifying the state filing provisions for Presidential candidate committees to specify which particular parts of 

the reports filed by such committees with the FEC 

should also be filed with states in which the committees make expenditures. Consideration should be 

given to both the benefits and the costs of state 

disclosure. 

Explanation: Both states and committees have 

inquired about the specific requirements for Presidential candidate committees when filing reports with the 

states. The statute requires that a copy of the FEC 

reports shall be filed with all states in which a Presidential candidate committee makes expenditures. The 

question has arisen as to whether the full report 

should be filed with the state, or only those portions 

that disclose financial transactions in the state where 

the report is filed. 

The Commission has considered two alternative 

solutions. The first alternative is to have Presidential 

candidate committees file, with each state in which 

they have made expenditures, a copy of the entire 

report filed with the FEC. This alternative enables 

local citizens to examine complete reports filed by 

candidates campaigning in a state. It also avoids 

reporting dilemmas for candidates whose expenditures in one state might influence a primary election in 

another. 

The second alternative is to require that reports 

filed with the states contain all summary pages and 

only those receipts and disbursements schedules that 

show transactions pertaining to the state in which a 

report is filed. This alternative would reduce filing and 

storage burdens on Presidential candidate committees and states. It would also make state filing requirements for Presidential candidate committees 

similar to those for unauthorized political committees. 
53 

' 

Under this approach, any person still interested in 

obtaining copies of a full report could do so by contacting the Public Disclosure Division of the FEC. 

Registration and Reporting 

Incomplete or False Contributor Information 

(1992) 

Section: 2 U.S.C. §434 

Recommendation: Congress may wish to amend the 

Act to address the recurring problem of committees' 

inability to provide full disclosure about their contributors. First, Congress might want to adopt a provision 

that would require political committees, when they fail 

to receive required contributor information (2 U.S.C. 

§434), to send one written request for contributor 

information or make one oral contact with the contributor after the contribution is received. Second, 

Congress might want to require that the request 

include a statement that federal law requires the 

committee to disclose the information. Third, Congress might wish to amend the law to make contributors liable for submitting information known by the 

contributor to be false pursuant to a specific request 

for information by the committee. 

Explanation: Under 2 U.S.C. §434, political committees are required to publicly disclose certain information about their contributors, such as the contributor's 

name and address and name of employer. Political 

committees depend upon their contributors to provide 

truthful information for reporting to the Commission. 

In those cases where contributor information is 

inadequate, the law states that committees will be in 

compliance if they make "best efforts" to obtain the 

information, that is, make one oral or written request 

for the information. Legislative history indicates that a 

single request for the information (which can be made 

in the original solicitation) suffices. In the 

Commission's experience, however, a single request 

has been inadequate. 

In those cases where committees fail to receive 

complete information from their contributors, committees should be required to make an additional request 

after the contribution is received, either orally or in 

writing. Additionally, the request should contain a 

clear statement that federal law requires the committee to disclose the information. Congress should 

make clear that the contributor is liable for submitting 

information known by the contributor to be false 

pursuant to a specific request by the committee. 

Taken together, these measures should improve 

efforts to achieve full disclosure. 

Insolvency of Political Committees 

Section: 2 U.S.C. §433(d) 

Recommendation: The Commission requests that 

Congress clarify its intention as to whether the 

Commission has a role in the determination of insolvency and liquidation of insolvent political committees. 

2 U.S.C. §433(d) was amended in 1980 to read: 

"Nothing in this subsection may be construed to 

eliminate or limit the authority of the Commission to 

establish procedures for-(A) the determination of 

insolvency with respect to any political committee; (B) 

the orderly liquidation of an insolvent political committee, and the orderly application of its assets for the 

reduction of outstanding debts; and (C) the termination of an insolvent political committee after such 

liquidation and application of assets." The phrasing of 

this provision ("Nothing...may be construed to...limit") 

suggests that the Commission has such authority in 

some other provision of the Act, but the Act contains 

no such provision. If Congress intended the Commission to have a role in determining the insolvency of 

political committees and the liquidation of their assets, 

Congress should clarify the nature and scope of this 

authority. 

Explanation: Under 2 U.S.C. §433(d)(1 ), a political 

committee may terminate only when it certifies in 

writing that it will no longer receive any contributions 

or make any disbursements and that the committee 

has no outstanding debts or obligations. The Act's 

1979 Amendments added a provision to the law 

(2 U.S.C. §433(d)(2)) possibly permitting the 

Commission to establish procedures for determining 

insolvency with respect to political committees, as well 
54 

as the orderly liquidation and termination of insolvent 

committees. In 1980, the Commission promulgated 

the "administrative termination" regulations at 11 CFR 

102.4 after enactment of the 1979 Amendments, in 

response to 2 u:s.c. §433(d)(2). However, these 

procedures do not concern liquidation or application 

of assets of insolvent political committees. 

Prior to 1980, the Commission adopted "Debt 

Settlement Procedures" under which the Commission 

reviews proposed debt settlements in order to determine whether the settlement will result in a potential 

violation of the Act. If it does not appear that such a 

violation will occur, the Commission permits the 

committee to cease reporting that debt once the 

settlement and payment are reported. The Commission believes this authority derives from 2 U.S.C. 

§434 and from its authority to correct and prevent 

violations of the Act, but it does not appear as a grant 

of authority beyond a review of the specific debt 

settlement request, to order application of committee 

assets. 

It has been suggested that review by the Commission of the settlement of debts owed by political 

committees at less than face value may lead to the 

circumvention of the limitations on contributions 

specified by 2 U.S.C. §§441 a and 441 b. The amounts 

involved are frequently substantial, and the creditors 

are often corporate entities. Concern has also been 

expressed regarding the possibility that committees 

could incur further debts after settling some, or that a 

committee could pay off one creditor at less than the 

dollar value owed and subsequently raise additional 

funds to pay off a "friendly" creditor at full value. 

When clarifying the nature and scope of the 

Commission's authority to determine the insolvency of 

political committees, Congress should consider the 

impact on the Commission's operations. An expanded 

role in this area might increase the Commission's 

workload, thus requiring additional staff and funds. 

Waiver Authority 

Section: 2 U.S.C. §434 

Recommendation: Congress should give the Commission authority to grant general waivers or exemptions 

from the reporting requirements of the Act for classifications and categories of political committees. 

Explanation: In cases where reporting requirements 

are excessive or unnecessary, it would be helpful if 

the Commission had authority to suspend the reporting requirements of the Act. For example, the Commission has encountered several problems relating to 

the reporting requirements of authorized committees 

whose respective candidates were not on the election 

ballot. The Commission had to consider whether the 

election-year reporting requirements were fully 

applicable to candidate committees operating under 

one of the following circumstances: 

• The candidate withdraws from nomination prior to 

having his or her name placed on the ballot. 

• The candidate loses the primary and therefore is not 

on the general election ballot. 

• The candidate is unchallenged and his or her name 

does not appear on the election ballot. 

Moreover, a Presidential primary candidate who has 

triggered the $100,000 threshold but who is no longer 

actively seeking nomination should be able to reduce 

reporting from a monthly to a quarterly schedule. 

In some instances, the reporting problems reflect 

the unique features of certain state election procedures. A waiver authority would enable the Commission to respond flexibly and fairly in these situations. 

In the 1979 Amendments to the Act, Congress 

repealed 2 U.S.C. §436, which had provided the 

Commission with a limited waiver authority. There 

remains, however, a need for a waiver authority. It 

would enable the Commission to reduce needlessly 

burdensome disclosure requirements. 

Campaign-Cycle Reporting 

Section: 2 U.S.C. §434 

Recommendation: Congress should revise the law to 

require authorized candidate committees to report on 

a campaign-to-date basis, rather than a calendar year 

cycle, as is now required. 

Explanation: Under the current law, a reporter or 

researcher must compile the total figures from several 
55 

year-end reports in order to determine the true costs 

of a committee. In the case of Senate campaigns, 

which may extend over a six-year period, this change 

would be particularly helpful. 

Monthly Reporting for Congressional 

Candidates 

Section: 2 U.S.C. §434(a)(2) 

Recommendation: The principal campaign committee 

of a Congressional candidate should have the option 

of filing monthly reports in lieu of quarterly reports. 

Explanation: Political committees, other than principal 

campaign committees, may choose under the Act to 

file either monthly or quarterly reports during an 

election year. Committees choose the monthly option 

when they have a high volume of activity. Under those 

circumstances, accounting and reporting are easier 

on a monthly basis because fewer transactions have 

taken place during that time. Consequently, the 

committee's reports will be more accurate. 

Principal campaign committees can also have a 

large volume of receipts and expenditures. This is 

particularly true with Senatorial campaigns. These 

committees should be able to choose a more frequent 

filing schedule so that their reporting covers less 

activity and is easier to do. 

Monthly Reports 

Section: 2 U.S.C. §434(a)(3)(8) and (4)(8) 

Recommendation: Congress should change the 

reporting deadline for monthly filers from the twentieth 

to the fifteenth of the month. 

Explanation: Committees filing monthly reports are 

now required to file reports disclosing each month's 

activity by the twentieth day of the following month. 

Particularly in the fast-paced Presidential primary 

period, this 20-day lag does notmeet the public's 

need for timely disclosure. In light of the increased 

use of computerized recordkeeping by political 

committees, imposing a monthly filing deadline of the 

fifteenth of the month would not be unduly burdensome and would ensure timely disclosure of crucial 

financial data. 

Reporting Payments to Persons Providing 

Goods and Services 

Section: 2 U.S.C. §434(b)(5)(A), (6)(A) and (6)(8) 

Recommendation: The current statute requires 

reporting "the name and address of each...person to 

whom an expenditure in an aggregate amount or 

value in excess of $200 within the calendar year is 

made by the reporting committee to meet a candidate 

or committee operating expense, together with the 

date, amount, and purpose of such operating expenditure." Congress should clarify whether this is meant, 

in all instances, to require reporting committees to 

disclose only the payments made by the committee or 

whether, in some instances, 1) the reporting committees must require initial payees to report, to the 

committees, their payments to secondary payees, and 

2) the reporting committees, in turn, must maintain 

this information and disclose it to the public by 

amending their reports through memo entries. 

Explanation: The Commission has encountered on 

several occasions the question of just how detailed a 

committee's reporting of disbursements must be. See, 

e.g., Advisory Opinion 1983-25, 1 Fed. Election 

Camp. Fin. Guide (CCH), para. 5742 (Dec. 22, 1983) 

(Presidential candidate's committee not required to 

disclose the names, addresses, dates or amounts of 

payments made by a general media consultant 

retained by the committee); Advisory Opinion 1984-8, 

1 Fed. Election Camp. Fin. Guide (CCH), para. 5756 

(Apr. 20, 1984) (House candidate's committee only 

required to itemize payments made to the candidate 

for travel and subsistence, not the payments made by 

the candidate to the actual providers of services); 

Financial Control and Compliance Manual for General 

Election Candidates Receiving Public Financing, 

Federal Election Commission, pp. IV 39-44 (1984) 

(distinguishing committee advances or reimbursements to campaign staff for travel and subsistence 

from other advances or reimbursements to such staff 

and requiring itemization of payments made by 
56 

campaign staff only as to the latter). Congressional 

intent in the area is not expressly stated, and the 

Commission believes that statutory clarification would 

be beneficial. In the area of Presidential public 

financing, where the Commission is responsible for 

monitoring whether candidate disbursements are for 

qualified campaign expenses (see 26 U.S.C. ' 

§§9004(c) and 9038(b)(2)), guidance would be 

particularly useful. 

Verifying Multicandidate Committee Status 

Section: 2 U.S.C. §§438(a)(6)(C), 441 a(a)(2) and 

(a)(4) 

Recommendation: Congress should consider modifying those provisions of the Act relating to 

multicandidate committees in order to reduce the 

problems encountered by contributor committees in 

reporting their multicandidate committee status, and 

by candidate committees and the Commission in 

verifying the multicandidate committee status of 

contributor committees. In this regard, Congress 

might consider requiring political committees to notify 

the Commission once they have satisfied the three 

criteria for becoming a multicandidate committee, 

namely, once a political committee has been registered for not less than 6 months, has received contributions from more than 50 persons and has contributed to at least 5 candidates for federal office. 

Explanation: Under the current statute, political 

committees may not contribute more than $1,000 to 

each candidate, per election, until they qualify as a 

multicandidate committee, at which point they may 

contribute up to $5,000 per candidate, per election. 

To qualify for this special status, a committee must 

meet three standards: 

• Support 5 or more federal candidates; 

• Receive contributions from more than 50 contributors; and 

• Have been registered as a political committee for 

at least 6 months. 

The Commission is statutorily responsible for maintaining an index of committees that have qualified as 

multicandidate committees. The index enables 

recipient candidate committees to determine whether 

a given contributor has in fact qualified as a 

multicandidate committee and therefore is entitled to 

contribute up to the higher limit. The Commission's 

Multicandidate Index, however, is not current because 

it depends upon information filed periodically by 

political committees. Committees inform the Commission that they have qualified as multicandidate 

committees by checking the appropriate box on their 

regularly scheduled report. If, however, they qualify 

shortly after they have filed their report, several 

months may elapse before they disclose their new 

status on the next report. With semiannual reporting 

in a nonelection year, for example, a committee may 

become a multicandidate committee in August, but 

the Commission's Index will not reveal this until after 

the January 31 report has been filed, coded and 

entered into the Commission's computer. 

Because candidate committees cannot totally rely 

on the Commission's Multicandidate Index for current 

information, they sometimes ask the contributing 

committee directly whether the committee is a 

multicandidate committee. Contributing committees, 

however, are not always clear as to what it means to 

be a multicandidate committee. Some committees 

erroneously believe that they qualify as a 

multicandidate committee merely because they have 

contributed to more than one federal candidate. They 

are not aware that they must have contributed to 5 or 

more federal candidates and also have more than 

50 contributors and have been registered for at least 

6 months. 

Agency Funding 

Statutory Gift Acceptance Authority 

Section: 2 U.S.C. §437c 

Recommendation: Congress should give the Commission authority to accept funds and services from 

private sources to enable the Commission to provide 

guidance and conduct research on election administration and campaign finance issues. 
57 

Explanation: The Commission has been very restricted in the sources of private funds it may accept 

to finance topical research, studies, and joint projects 

with other entities because it does not have statutory 

gift acceptance authority. In view of the Commission's 

expanding role in this area, Congress should consider 

amending the Act to provide the Commission with 

authority to accept gifts from private sources. Permitting the Commission to obtain funding from a broader 

range of private organizations would allow the Commission to have more control in structuring and 

conducting these activities and avoid the expenditure 

of government funds for these activities. If this proposal were adopted, however, the Commission would 

not accept funds from organizations that are regulated 

by or have financial relations with the Commission. 

Budget Reimbursement Fund 

Section: 2 U.S.C. §438 

Recommendation: The Commission recommends that 

Congress establish a reimbursement account for the 

Commission so that expenses incurred in preparing 

copies of documents, publications and computer 

tapes sold to the public are recovered by the Commission. Similarly, costs awarded to the Commission in 

litigation (e.g., printing, but not civil penalties) and 

payments for Commission expenses incurred in 

responding to Freedom of Information Act requests 

should be payable to the reimbursement fund. The 

Commission should be able to use such reimbursements to cover its costs for these services, without 

fiscal year limitation, and without a reduction in the 

Commission's appropriation. 

Explanation: At the present time, copies of reports, 

microfilm, and computer tapes are sold to the public 

at the Commission's cost. However, instead of the 

funds being used to reimburse the Commission for its 

expenses in producing the materials, they are credited to the U.S. Treasury. The effect on the Commission of selling materials is thus the same as if the 

materials had been given away. The Commission 

absorbs the entire cost. In FY 1989, in return for 

services and materials it offered the public, the FEC 

collected and transferred $113,466 in miscellaneous 

receipts to the Treasury. During the first three months 

of FY 1990, $25,703 was transferred to the Treasury. 

Establishment of a reimbursement fund, into which 

fees for such materials would be paid, would permit 

this money to be applied to further dissemination of 

information. Note, however, that a reimbursement 

fund would not be applied to the distribution of FEC 

informational materials to candidates and registered 

political committees. They would continue to receive 

free publications that help them comply with the 

federal election laws. 

There should be no restriction on the use of 

reimbursed funds in a particular year to avoid the 

possibility of having funds lapse. 

Miscellaneous 

Draft Committees 

Section: 2 U.S.C. §§431 (8)(A)(i) and (9)(A)(i), 

441 a(a)(1) and 441 b(b) 

Recommendation: Congress should consider the 

following amendments to the Act in order to prevent a 

proliferation of "draft" committees and to reaffirm 

Congressional intent that draft committees are 

"political committees" subject to the Act's provisions. 

1. Bring Funds Raised and Spent for Undeclared but 

Clearly Identified Candidates Within the Act's 

Purview. Section 431 (8)(A)(i) should be amended 

to include in the definition of "contribution" funds 

contributed by persons "for the purpose of influencing a clearly identified individual to seek 

nomination for election or election to Federal 

office...." Section 431 (9)(A)(i) should be similarly 

amended to include within the definition of 

"expenditure" funds expended by persons on 

behalf of such "a clearly identified individual." 

2. Restrict Corporate and Labor Organization 

Support for Undeclared but Clearly Identified 

Candidates. Section 441 b(b) should be revised to 

expressly state that corporations, labor organizations and national banks are prohibited from 

making contributions or expenditures "for the 
58 

purpose of influencing a clearly identified individual to seek nomination for election or election..." to federal office. 

3. Limit Contributions to Draft Committees. The law 

should include explicit language stating that no 

person shall make contributions to any committee 

(including a draft committee) established to 

influence the nomination or election of a clearly 

identified individual for any federal office which, 

in the aggregate, exceed that person's contribution limit, per candidate, per election. 

Explanation: These proposed amendments were 

prompted by the decisions of the U.S. Court of 

Appeals for the District of Columbia Circuit in FEC v. 

Machinists Non-Partisan Political League and FEC v. 

Citizens for Democratic Alternatives in 1980 and the 

U.S. Court of Appeals for the Eleventh Circuit in FEC 

v. Florida for Kennedy Committee. The District of 

Columbia Circuit held that the Act, as amended in 

1979, regulated only the reporting requirements of 

draft committees. The Commission sought review of 

this decision by the Supreme Court, but the Court 

declined to hear the case. Similarly, the Eleventh 

Circuit found that "committees organized to 'draft' a 

person for federal office" are not "political committees" 

within the Commission's investigative authority. The 

Commission believes that the appeals court rulings 

create a serious imbalance in the election law and the 

political process because a nonauthorized group 

organized to support someone who has not yet 

become a candidate may operate completely outside 

the strictures of the Federal Election Campaign Act. 

However, any group organized to support someone 

who has in fact become a candidate is subject to the 

Act's registration and reporting requirements and 

contribution limitations. Therefore, the potential exists 

for funneling large aggregations of money, both 

corporate and private, into the federal electoral 

process through unlimited contributions made to 

nonauthorized draft committees that support a person 

who has not yet become a candidate. These recommendations seek to avert that possibility. 
Appendix 59 1 

Biographies of 

Commissioners and 

Officers 

Commissioners 

John Warren McGarry, Chairman 

April 30, 1995 

First appointed to the Commission in 1978, Chairman 

McGarry was reappointed in 1983 and 1989. He 

previously served as FEC Chairman in 1981 and 

1985. Before his 1978 Commission appointment, 

Chairman McGarry served as special counsel on 

elections to the House Administration Committee. He 

previously combined private law practice with service 

as chief counsel to the House Special Committee to 

Investigate Campaign Expenditures, a special committee established by Congress every election year 

through 1972. Before his work with Congress, Chairman McGarry was the Massachusetts assistant 

attorney general. 

After graduating cum laude from Holy Cross 

College, Chairman McGarry did graduate work at 

Boston University and earned a J.D. degree from 

Georgetown University Law School. 

Joan D. Aikens, Vice Chairman 

Apri130, 1995 

One of the original members of the Commission, Mrs. 

Aikens was first appointed in 1975. Following the 

reconstitution of the FEC that resulted from the 

Supreme Court's Buckley v. Valeo decision, President 

Ford reappointed her to a five-year term. In 1981, 

President Reagan named Mrs. Aikens to complete a 

term left open because of a resignation and, in 1983, 

once again reappointed her to a full six-year term. 

Most recently, Mrs. Aikens was reappointed by 

President Bush in 1989. She served as FEC Chairman in 1978 and 1986, and was elected Chairman for 

1992. 

Before her 1975 appointment, Mrs. Aikens was an 

executive with Lew Hodges Communications, a public 

relations firm in Valley Forge, Pennsylvania. She was 

also a member of the Pennsylvania Republican State 

Committee, president of the Pennsylvania Council of 

Republican Women and on the board of directors of 

the National Federation of Republican Women. A 

native of Delaware County, Pennsylvania, Mrs. 

Aikens has been active in a variety of volunteer 

organizations and is currently a member of the 

Commonwealth Board of the Medical College of 

Pennsylvania. She is also a member of the board of 

directors of Ursinus College, where she received her 

B.A. degree and an honorary Doctor of Law degree. 

Lee Ann Elliott 

April 30, 1993 

President Reagan reappointed Mrs. Elliott to her 

second term as Commissioner in 1987. She served 

as chairman in 1984 and 1990. Before her first 

appointment in 1981, Commissioner Elliott was vice 

president of a political consulting firm in Washington, 

D.C., Bishop, Bryant & Associates, Inc. She spent 

several years as associate executive director of the 

American Medical Political Action Committee, having 

previously served as assistant director. Commissioner 

Elliott was also on the board of directors of the 

American Association of Political Consultants and on 

the board of the Chicago Area Public Affairs Group, of 

which she is a past president. She was also a member of the Public Affairs Committee of the U.S. 

Chamber of Commerce. In 1979, she received the 

Award for Excellence in Serving Corporate Public 

Affairs from the National Association of Manufacturers. 

A native of St. Louis, Commissioner Elliott graduated from the University of Illinois. She also completed Northwestern University's Medical Association 

Management Executive Program and is a Certified 

Association Executive. 

Thomas J. Josefiak 

April 30, 1991 

Mr. Josefiak was appointed to the Commission in 

1985 and was the 1988 FEC Chairman. He previously 

served at the Commission as Special Deputy to the 

Secretary of the Senate. Before assuming that post in 

1981, he was legal counsel to the National Republican Congressional Committee. His past experience 

also includes positions held at the U.S. House of 

Representatives. He was minority special counsel for 

federal election law to the Committee on House 

Administration and served as legislative assistant to 

the late Congressman Silvio 0. Conte. 
60 

A native of Massachusetts, Mr. Josefiakgraduated 

from Fairfield University, Connecticut, and holds a 

J.D. degree from the Georgetown University Law 

Center. 

Mr. Josefiak served on the Commission until 

December 1991. 

Danny L. McDonald, 

April30, 1993 

Nowserving his second term as Commissioner, Mr. 

McDonald was first appointed to the Commission in 

................................. 1981andwasreappointed in 1987. Before his original 

appointment, he managed 10 regulatory divisions as 

the general administrator of the Oklahoma Corporation Commission. He had previously served as 

secretary of the Tulsa County Election Board and as 

chief clerk of the board. He was also a member of the 

Advisory Panel to the FEC s National Clearinghouse 

on Election Administration. 

A native of Sand Springs, Oklahoma, Mr. 

McDonald graduated from Oklahoma State University 

and attended the John F. Kennedy School of Government at Harvard University. He served as FEC 

Chairman in 1983 and 1989. 

Trevor Potter 

April30, 1997 

Mr. Potter was appointed to the Commission by 

President Bush in November 1991. Prior to that, he 

wasapartnerintheWashington, D.C., law firm of 

Wiley, Rein & Fielding, where he specialized in 

campaign and election law. He is currently Vice 

Chairman of the American Bar Association Committee 

on Election Law, Administrative Law section. 

Mr. Potter previously served as Assistant General 

Counsel at the Federal Communications Commission 

(1984-1985), and as a Department of Justice attorney 

(1982-1984). 

Mr. Potter is a graduate of Harvard College. He 

earned his J.D. degreeatthe University of Virginia 

School of Law, where he served as Editor-in-Chief of 

the Virginia Journal ofInternational Lawandwasa 

member of the Order of the Coif. Born in Illinois, Mr. 

Potter is a resident of Fauquier County, Virginia. 

Scott E. Thomas 

April30, 1997 

Mr. Thomas was appointed to the Commission in 

1986 and reappointed in 1991. He served as Chairman in 1987 and was elected Vice Chairman for 

1992. He previously served as executive assistant to 

former Commissioner Thomas E. Harris and succeeded him as Commissioner. Joining the FEC as a 

legal intern in 1975, Mr. Thomas eventually became 

an Assistant General Counsel for Enforcement. 

A Wyoming native, Mr. Thomas graduated from 

Stanford UniversityandholdsaJ.D.degree from 

Georgetown University Law Center. He is a member 

of the bars for the District of Columbia, the U.S. Court 

ofAppeals for the Ninth Circuit and the U.S. Supreme 

Court. 

Ex Officio Commissioners 

Donnald K. Anderson 

Mr. Anderson was appointed Clerk of the House of 

Representatives in 1987. Before his appointment, he 

was Majority Floor Manager under Speakers Carl 

Albert and Thomas P. 0 Neill, Jr. A native of California, he began his career as a page in the 86th Congress. He was appointed assistant enrolling clerk and 

clerk in the Finance Office by Representative Hale 

Boggs. Speaker John W. McCormack later appointed 

him assistant manager ofthe Democratic Cloakroom. 

Doug las Patton, attorney and Special Deputy to the 

Clerk of the House, continues to represent Mr. 

Anderson at the Commission. 

WalterJ. Stewart 

Mr. Stewart was appointed Secretary of the Senate in 

1987. He was previously employed by Son at, Inc., as 

vice president of government affairs. Before that, he 

served as Secretary for the Minority of the U.S. 

Senate and as executive director of the Senate 

Steering Committee. Other Senate offices held by Mr. 

Stewart include: counsel to the Senate Appropriations 

Committee; director of legislative affairs for the 

Majority Whip, administrative assistant to the Majority 

Leader for Senate Operations and chief of staff for 

Senatorial and Presidential delegations traveling to 
61 

China, Russia and the Middle East. A native of 

Georgia, Mr. Stewart graduated from George Washington University and received an LL.B. from American University. He is a member of the District of 

Columbia Bar. 

David G. Gartner, attorney and Special Deputy to 

the Secretary of the Senate, continues to represent 

Mr. Stewart at the Commission. 

Statutory Officers 

John C. Surina, Staff Director 

Before joining the Commission in 1983, Mr. Surina 

was assistant managing director of the Interstate 

Commerce Commission, where he was detailed to the 

Reform 88 program atthe Office of Management 

and Budget. In that role, he worked on projects to 

reform administrative management within the federal 

government. He was also an expert-consultant to the 

Office of Control and Operations, EOP-Cost of Living 

Council-Pay Board and on the technical staff of the 

Computer Sciences Corporation. During his Army 

service, Mr. Surina was executive officer of the 

Special Security Office, where he supported senior 

U.S. delegates to NATO s civil headquarters in 

Brussels. Mr. Surina served as 1991 chairman of the 

Council on Government and Ethics Laws (GOGEL). 

A native of Alexandria, Virginia, Mr. Surina holds a 

degree in Foreign Service from Georgetown University. He also attended East Carolina University and 

American University. 

Lawrence M. Noble, General Counsel 

Mr. Noble became General Counsel in 1987, after 

serving as Acting General Counsel. He joined the 

Commission in 1977, becoming the Deputy General 

Counsel in 1983. He previously served as Assistant 

General Counsel for Litigation and as a litigation 

attorney. Before his FEC service, he was an attorney 

with the Aviation Consumers Action Project. 

A native of New York, Mr. Noble holds a degree in 

Political Science from Syracuse University and a J.D. 

degree from the National Law Center at George 

Washington University. He is a member of the bars for 

the U.S. Supreme Court, the U.S. Court of Appeals 

for the D.C. Circuit and the District of Columbia. He is 

also a member of the American and District of Columbia Bar Associations. 

Lynne McFarland,lnspector General 

Ms. McFarland became the FEC s first permanent 

Inspector General in February 1990. She came to the 

Commission in 1976, first as a reports analyst and 

then as a program analyst in the Office of Planning 

and Management. 

A Maryland native, Ms. McFarland holds a sociology degree from Frostburg State College. 
Appendix 63 2 

Chronology 

of Events, 1991 

January 

1-Chairman John Warren McGarry and Vice 

Chairman Joan D. Aikens begin one-year 

terms as officers. 

-Effective date: "Soft Money" allocation rules. 

4-FEC receives focus group report on public 

awareness of dollar tax checkoff. 

11-Semiannual PAC Count released. 

14-FEC releases final audit report on 

Durenberger for U.S. Senate Volunteer 

Committee. 

22-FEC submits written comments on proposed Treasury rules on payments to 

Presidential campaigns. 

28-ln Stern v. General Electric Company, court 

of appeals rules Federal Election Campaign 

Act does not preempt state law on corporate waste. 

31-1990 year-end report due. 

February 

11-Chairman John Warren McGarry testifies at 

IRS hearing on proposed Presidential 

public funding rules. 

22-FEC releases spending figures for 1990 

Congressional elections. 

28-ln FEC v. Working Names, defendants 

agree to pay $15,000 to settle sale and use 

cases. 

March 

5-FEC holds press conference to launch 

public education program on dollar tax 

checkoff. 

6-Chairman John Warren McGarry and Vice 

Chairman Joan D. Aikens testify before 

Senate Committee on Rules and Administration on shortfall in Presidential Election 

Campaign Fund. 

-Effective date: Technical amendments to 

Honoraria rules. 

7-ln FEC v. Political Contributions Data, 

district court orders defendant to pay 

$5,000 civil penalty for sale and use violations. 

12-FEC testifies on FY 1992 budget request, 

before Committee on House 

Administration's Subcommittee on Elections. 

15-FEC releases statistics on 1989-90 party 

activity. 

21-ln Faucher and Maine Right to Life Committee, Inc. v. FEC, court of appeals finds FEC 

regulation on corporate voter guides invalid. 

-FEC testifies on FY 1992 budget request, 

before House Committee on Appropriation's 

Subcommittee on Treasury, Postal Service 

and General Government. 

-In FEC v. Mann for Congress Committee, 

district court fines defendant $5,000 for 

violating terms of conciliation agreement. 

28-FEC submits legislative recommendations 

to Congress and President. 

-FEC suspends rulemaking on Presidential 

Nominating Conventions. 

31-FEC releases statistics on 1989-90 PAC 

activity. 

April 

8-ln FEC v. Lawson, district court fines 

defendant $5,000 for making contributions 

in name of another. 

9-ln FEC v. National Republican Senatorial 

Committee, district court imposes $24,000 

civil penalty for excessive contributions. 

19-FEC conducts candidate conference in 

Washington, D.C. 

30-FEC releases final audit report on Dole for 

President Committee. 

-Massachusetts special primary election for 

vacant 1st Congressional District seat. 

May 

1-Chairman John Warren McGarry testifies on 

shortfall in Presidential Election Campaign 

Fund before House Subcommittee on 

Elections. 

2-3-FEC conducts PAC conference in Washington, D.C. 
64 

4-Texas special election for vacant 3rd 

Congressional District seat. 

1o-Treasury adopts final rules on public 

funding payments. 

14-Chairman John Warren McGarry testifies 

on accessibility of polling places before 

House Subcommittee on Elections. 

18-Texas special runoff election for vacant 3rd 

Congressional District seat. 

21-lllinois special primary election for vacant 

15th Congressional District seat. 

31-ln FEC v. Populist Party, court of appeals 

rules district court exceeded its jurisdiction 

by imposing deadlines for FEC enforcement 

actions. 

June 

1-FEC publishes Annual Report 1990. 

4-Massachusetts special general election for 

vacant 1st Congressional District seat. 

13-Foreign national rulemaking closed. 

18-FEC releases final audit report on Gephardt 

for President Committee. 

28-Commission declares 1992 Democratic 

National Convention Committee eligible to 

receive $10.6 million for its presidential 

nominating convention. 

July 

1-FEC releases semiannual PAC count. 

2-lllinois special general election for vacant 

15th Congressional District seat. 

3-FEC releases 1991 party spending limits. 

-Commission declares Committee on 

Arrangements for the 1992 Republican 

National Convention eligible to receive 

$10.6 million for its presidential nominating 

convention. 

17-FEC releases final audit report on Anna 

Eshoo for Congress committee. 

18-FEC approves final rule on Matching Fund 

Submissions and Certifications. 

-FEC approves final rules on Public Funding 

of Presidential Candidates; redesignations 

and reattributions; joint fundraising; and 

subsistence expenses. 

-FEC approves final rules on conversion of 

excess campaign funds to personal use. 

26-FEC releases statistics on 1992 Senate 

candidates. 

31-FEC releases final audit report on Jack 

Kemp for President; Kemp/Dannemeyer 

Committee and Victory '88. 

-Mid-year report due. 

August 

2-FEC comments on proposed FCC 

rulemaking on political broadcasts. 

6-FEC releases report on national party 

committees' nonfederal and building fund 

account activity. 

13-Arizona special primary election for vacant 

2nd Congressional District seat. 

14-President Bush signs law amending Ethics 

in Government Act to prohibit honoraria for 

Senate. 

15-FEC approves 1992 Guideline for Presentation in Good Order. 

19-FEC releases final audit report on Curry for 

Congress. 

21-ln FEC v. Political Contributions Data, court 

of appeals rules defendant did not violate 

sale and use restriction. 

27-FEC releases final audit report on Friends 

of Sam Beard for the U.S. Senate. 

September 

9-FEC releases final audit report on the 

Gephardt Committee. 

11-12-FEC conducts conference in Boston. 

17-FEC releases final audit report on Taylor for 

Congress Committee. 

24-Arizona special general election for 2nd 

Congressional District seat. 

October 

7-ln Faucher and Maine Right to Life Committee, Inc. v. FEC, Supreme Court denies 

FEC petition for Court review. 
65 

11-ln FEC v. National Organization for 

Women, court of appeals grants FEC 

motion to dismiss its appeal. 

30-FEC releases final audit report on Paul 

Simon for President. 

-FEC releases statistics on 1992 Presidential 

campaigns. 

31-FEC declares Lenora B. Fulani eligible to 

receive primary matching funds. 

November 

5-Pennsylvania special elections for vacant 

Senate and 2nd Congressional District 

seats. 

-Virginia special election for vacant 7th 

Congressional District seat. 

6--FEC releases final audit report on BushQuayle 88; George Bush for President, Inc./ 

Compliance Committee. 

-Gephardt committee responds to audit 

report. 

-Effective date for rules on: matching fund 

submission and certification procedures; 

public financing of Presidential primary and 

general election candidates; and use of 

excess funds. 

13-FEC announces submission and certification dates for 1992 Presidential candidates. 

14-15-FEC conducts conference in Chicago. 

2Q-FEC declares Paul E. Tsongas eligible to 

receive primary matching funds. 

22-Senate confirms appointment of Trevor 

Potter and reappointment of Scott E. 

Thomas as Commissioners. 

27-FEC declares George Bush, Bill Clinton, 

Tom Harkin, Bob Kerrey and Douglas 

Wilder eligible to receive primary matching 

funds. 

December 

2-FEC declares Edmund G. Brown, Jr., 

eligible to receive primary matching funds. 

3-FEC releases final audit report on Dukakis/ 

Bentsen for President Committee, Inc.; 

Dukakis/Bentsen General Election Legal 

and Compliance Fund. 

5-FEC declines Common Cause rulemaking 

petition on use of corporate airplanes. 

10-FEC releases final statistics on 1989-90 

election cycle. 

17-FEC releases final audit report on Dukakis 

for President Committee, Inc. 

19-Commission elects Joan D. Aikens as 1992 

Chairman and Scott E. Thomas as 1992 

Vice Chairman. 

-FEC denies Lyndon LaRouche's eligibility to 

receive primary matching funds. 

2Q-FEC sends final bank loan rules to Congress. 
The Commissioners 

John Warren McGarry, Chairman1 

Joan D. Aikens, Vice Chairman2 

Lee Ann Elliott, Commissioner 

Thomas J. Josefiak, Commissioners 

Danny L. McDonald, Commissioner 

Scott E. Thomas, Commissioner 

Walter J. Stewart, Ex Officio/Senate 

Donnald K. Anderson, Ex Officio/House 

I I 

Inspector 

General Counsel Staff Director General

I 

Deputy Staff Director 

Public Funding for Management Audit Commission Ethics and ~ - ~ Secretary Spec. Projects 

Congressional PolicY' ~ Administration Clearinghouse 1- - ~ Affairs 

Data Systems Information Equal Employment Enforcement ~ Development ~ - Services ~ Opportunity 

Planning and Public Personnel Litigation ~ Management ~ - Disclosure ~ Labor/Management 

- Reports ...... Press Office 

Analysis 

Appendix 67 3 

FEC Organization Chart 

1Joan D. Aikens was elected 1992 Chairman. 

2Scott E. Thomas was elected 1992 Vice Chairman. 

3Aithough his term expired in April 1991, Commissioner Josefiak continued to serve until succeeded by Commissioner 

Trevor Potter. 

4Policy covers regulations, advisory opinions, legal review and administrative law. 
Appendix 69 4 

FEC Offices 

This appendix briefly describes the offices within the 

Commission, located at 999 E Street, NW, Washington, D.C. 20463. The offices are listed alphabetically, 

with local telephone numbers given for offices that 

provide services to the public. Commission offices 

can also be reached toll-free on 800-424-9530 and 

locally on 202-219-3440. 

Administration 

The Administration Division is the Commission's 

"housekeeping" unit and is responsible for accounting, 

procurement and contracting, space management, 

payroll, travel and supplies. In addition, several 

support functions are centralized in the office such as 

printing, document reproduction and mail services. 

The division also handles records management, 

inventory control and building security and maintenance. 

Audit 

Many of the Audit Division's responsibilities concern 

the Presidential public funding program. The division 

evaluates the matching fund submissions of Presidential primary candidates and determines the amount of 

contributions that may be matched with federal funds. 

As required by law, the division audits all public 

funding recipients. 

In addition, the division audits those committees 

which, according to FEC determinations, have not 

met the threshold requirements for substantial compliance with the law. Audit Division resources are also 

used in the Commission's investigations of complaints. 

Clearinghouse 

The National Clearinghouse on Election Administration, located on the seventh floor, assists state and 

local election officials by responding to inquiries, 

publishing research and conducting workshops on all 

matters related to election administration. Additionally, 

the Clearinghouse answers questions from the public 

and briefs foreign delegations on the U.S. election 

process. Local phone: 219-3670. 

Commission Secretary 

The Secretary to the Commission handles all administrative matters relating to Commission meetings, 

including agenda documents, Sunshine Act notices, 

minutes and certification of Commission votes. The 

office also circulates and tracks numerous materials 

not related to meetings, and records the Commissioners' tally votes on these matters. 

Commissioners 

The six Commissioners-three Democrats and three 

Republicans-are appointed by the President and 

confirmed by the Senate. Two ex officio Commissioners, the Secretary of the Senate and the Clerk of the 

House of Representatives, are nonvoting members. 

They appoint special deputies to represent them at 

the Commission. 

The six voting Commissioners serve full time and 

are responsible for administering and enforcing the 

Federal Election Campaign Act. They generally meet 

twice a week, once in closed session to discuss 

matters that, by law, must remain confidential, and 

once in a meeting open to the public. At these meetings, they formulate policy and vote on significant 

legal and administrative matters. 

Congressional, Legislative and Intergovernmental 

Affairs 

This office serves as primary liaison with Congress 

and Executive Branch agencies. The office is responsible for keeping Members of Congress informed 

about Commission decisions and, in turn, for keeping 

the agency up to date on legislative developments. 

Data Systems Development 

This division provides computer support for the entire 

Commission. Its responsibilities are divided into two 

general areas. 

In the area of campaign finance disclosure, the 

Data Systems Development Division enters into the 

FEC data base information from all reports filed by 

political committees and other entities. The division is 

also responsible for the computer programs that sort 

and organize campaign finance data into indexes. 

These indexes permit a detailed analysis of campaign 
70 

finance activity and, additionally, provide a tool for 

monitoring contribution limitations. The division 

publishes the Reports on Financial Activityseries of 

periodic studies on campaign finance and generates 

statistics for other publications. 

The division also provides internal computer 

support for the agency s automation system (VAX) 

and for administrative functions such as management 

information, document tracking, personnel and payroll 

systems. 

Equal EmploymentOpportunity Programs (EEOP) 

The EEOP office advises the Commission on the 

prevention of discriminatory practices. The EEO 

Officer manages the Commission s Equal Employment Opportunity Program and develops plans to 

improve the Commission s equal employment opportunities. 

The office is also responsible for administering the 

discrimination complaint system; overseeing the 

Special Emphasis Program; training Commission staff 

on the EEO Program; and reporting on the status of 

the Commission s EEO program. 

General Counsel 

The General Counsel directs the agency s enforcement activities and represents and advises the 

Commission in any legal actions brought against it 

and serves as the Designated Agency Ethics Official. 

The Office of General Counsel handles all civil 

litigation, including several cases that have come 

before the Supreme Court. The office also drafts, for 

Commission consideration, advisory opinions and 

regulations as well as other legal memoranda interpreting the federal campaign finance law. 

Information Services 

In an effort to promote voluntary compliance with the 

law, the Information Services Division provides 

technical assistance to candidates, committees and 

others involved in elections. Responding to phone 

and written inquiries, members of the staff conduct 

research based on the statute, FEC regulations, 

advisory opinions and court cases. Staff also direct 

workshops on the law and produce guides, pamphlets 

and videos on how to comply with the law. Located on 

the second floor, the division is open to the public. 

Local phone: 219-3420; toll-free phone: 800-424-

9530. 

InspectorGeneral 

The FEC s Inspector General (IG) has two major 

responsibilities: to conduct internal audits and investigations to detect fraud, waste and abuse within the 

agency and to improve the economy and effectiveness of agency operations. The IG files reports 

notifying Congress of any serious problems or deficiencies in agency operations and of any corrective 

steps taken by the agency. 

Law library 

The Commission law library, part of the Office of 

General Counsel, is located on the eighth floor and is 

open to the public. The collection includes basic legal 

research tools and materials dealing with political 

campaign finance, corporate and labor political 

activity and campaign finance reform. The library staff 

prepares indexes to advisory opinions and Matters 

Under Review (MURs) as well as a Campaign Finance andFederal Election Law Bibliography, all 

available for purchase at the Public Records Office. 

Local phone: 219-3312. 

Personnel and Labor/Management Relations 

This office handles employment, position classification, training and employee benefits. It also provides 

policy guidance on awards and discipline matters and 

administers a comprehensive labor relations program 

including contract negotiations and resolution of 

disputes before third parties. 

Planning and Management 

This office develops the Commission s budget and, 

each fiscal year, prepares a management plan 

determining the allocation and use of resources 

throughout the agency. Planning and Management 

monitors adherence to the plan, providing monthly 

reports measuring the progress of each division in 

achieving the plan s objectives. 
71 

Press Office 

Staff of the Press Office are the Commission s official 

media spokespersons. In addition to publicizing 

Commission actions and releasing statistics on 

campaign finance, they respond to all questions from 

representatives of the print and broadcast media. 

Located on the first floor, the office also handles 

requests under the Freedom of Information Act. Local 

phone: 219-4155. 

Public Records 

Staff from the Public Records Office provide information on the campaign finance activities of political 

committees and candidates involved in federal 

elections. Located on the first floor, the office is a 

library facility with ample work space and a knowledgeable staff to help researchers locate documents 

and computer data. The FEC encourages the public 

to review the many resources available, including 

committee reports, computer indexes, advisory 

opinions and closed MURs. Local phone: 219-4140. 

Reports Analysis 

Reports analysts assist committee officials in complying with reporting requirements and conduct detailed 

examinations ofthe campaign finance reports filed by 

political committees. If an error, omission or prohibited 

activity (e.g., an excessive contribution) is discovered 

in the course of reviewing a report, the analyst sends 

the committee a letter which requests thatthe committee either amend its reports or provide further information concerning a particular problem. By sending 

these letters (RFAis), the Commission seeks to 

ensure full disclosure and to encourage the 

committee s voluntary compliance with the law. 

Analysts also provide frequenttelephone assistance 

to committee officials and encourage them to call the 

division with reporting questions or compliance 

problems. Local phone: 219-3580. 

Staff Director and Deputy Staff Director 

The Staff Director carries the responsibilities of 

appointing staff, with the approval ofthe Commission, 

and implementing Commission policy. The Staff 

Director oversees the Commission s public disclosure 

activities, outreach efforts, review of reports and the 

audit program, as well as the administration of the 

agency. 

The Deputy Staff Director has broad responsibility 

for assisting in this supervision, particularly in the 

areas of budget, administration and computer systems. 
Appendix 73 5 

Statistics on Commission 

Operations 

Summary of Disclosure Files 

·Total 

Filers 

Existing 

in 1991 

Filers 

Terminated 

as of 

12/31/91 

Continuing 

Filers 

as of 

12/31/91 

Number of 

Reports 

and 

Statements 

in 1991 

Gross Receipts 

in 1991 

Gross 

Expenditures 

in 1991 

Presidential Candidate 

Committees 

364 6 358 746 $25,156,086 $15,934,837 

Senate Candidate Committees 540 23 517 1,242 $1 06,521 ,936 $65,667,431 

House Candidate Committees 2,615 184 2,431 5,548 $99,315,323 $72,483,510 

Party Committees 434 26 408 1,240 $234,975,806 $211,377,183 

Delegate Committees 78 1 77 3 $0 $0 

Nonparty Committees 

Labor committees 

Corporate committees 

Membership, trade and other 

committees 

4,308 

348 

1,817 

2,143 

214 

10 

79 

125 

4,094 

338 

1,738 

2,018 

15,847 

1,611 

7,966 

6,270 

$173,925,812 

$43,314,200 

$55,241 ,993 

$75,369,619 

$140,545,610 

$33,191 ,911 

$43,047,399 

$64,306,300 

Communication Cost Filers 185 0 185 41 $0 $338,124 

Independent Expenditures by 

Persons Other Than Political 

Committees 

154 1 153 44 $0 $54,459 
74 

Divisional Statistics for Calendar Year 1991 

Total 

Reports Analysis Division 

Documents processed 36,202 

Reports reviewed 41,097 

Telephone assistance and meetings 6,914 

Requests for additional information (RFAis) 7,082 

Second RFAis 5,108 

Data coding and entry of RFAis and 

miscellaneous documents 13,762 

Compliance matters referred to Office 

of General Counsel or Audit Division 249 

Data Systems Development Division 

Documents receiving Pass I coding* 34,030 

Documents receiving Pass Ill coding* 30,843 

Documents receiving Pass I entry 34,030 

Documents Receiving Pass Ill entry 31,225 

Transactions receiving Pass Ill entry 

• In-house 106,540 

• Contract 198,084 

Public Records Office 

Campaign finance material processed 

(total pages) 677,911 

Requests for campaign finance reports 8,289 

Visitors 12,975 

Total people served 21,264 

Information telephone calls 18,599 

Computer printouts provided 75,472 

Total income (transmitted to U.S. Treasury) $73,856 

Cumulative total pages of documents 

available for review 9,885,855 

Contacts with state election offices 2,689 

Notices of failure to file with state 

election offices 482 

* Computer coding and entry of campaign finance 

information occur in two phases. In the first phase, Pass I, 

summary information is coded and entered into the computer within 48 hours of the Commission's receipt of the 

report. During the second phase, Pass Ill, itemized information is coded and entered. 

Total 

Administrative Division 

Contracting and procurement transactions 2,048 

Pieces of outgoing mail processed 78,004 

Publications prepared for print 33 

Pages of photocopying 8,050,477 

Information Services Division 

Telephone inquiries 67,325 

Information letters 87 

Distribution of FEC materials 8,094 

Prior notices (sent to inform filers 

of reporting deadlines) 15,828 

Other mailings 28,853 

Visitors 104 

Public appearances by Commissioners 

and staff 103 

State workshops 9 

Publications 29 

Press Office 

Press releases 132 

Telephone inquiries from press 13,817 

Visitors to Press Office 3,783 

Freedom of Information Act 

(FOIA) requests 318 

Fees for materials requested under FOIA 

(transmitted to U.S. Treasury) $20,073 

Clearinghouse on Election Administration 

Telephone inquiries 2,596 

Information letters 103 

Visitors 64 

State workshops 8 

Publications 3 

Project conferences 22 

Foreign briefings 64 
75 

Total 

Office of General Consel 

Advisory opinions 

Requests pending at beginning of 1991 5 

Requests received 40 

Issued 35 

Requests closed or withdrawn* 3 

Pending at end of 1991 7 

Compliance cases (MURs) 

Pending at beginning of 1991 237 

Opened 257 

Closed 296 

Pending at end of 1991 198 

Litigation 

Cases pending at beginning of 1991 49 

Cases opened 19 

Cases closed 22 

Cases pending at end of 1991 46 

Cases won 18 

Cases lost 4 

Cases voluntarily dismissed 

Cases dismissed as moot 

Law Library 

Telephone inquiries 1,798 

Visitors served 896 

Audits Completed by Audit Division, 1975·1991 

Presidential 72 

Presidential Joint Fundraising 10 

Senate 15 

House 122 

Party (National) 46 

Party (Other) 111 

Nonparty (PACs) 71 

Total 447 

* Two opinion requests were withdrawn by the requesters; and one opinion request was closed without issuance 

of an opinion. 
Appendix 77 6 

1991 Federal 

Register Notices 

1991·1 

Filing Dates for Massachusetts Special Elections (56 FR 9359, March 6, 1991) 

1991·2 

11 CFR Part 110: Honoraria; Final Rule; Technical Amendment (56 FR 9275, March 6, 1991) 

1991-3 

Filing Dates for Texas Special Election (56 FR 12732, March 27, 1991) 

1991-4 

Filing Dates for Illinois Special Elections (56 FR 12731, March 27, 1991) 

1991-5 

11 CFR Parts 107, 114 and 9008: Presidential Election Campaign Fund and Federal Financing of Presidential 

Nominating Conventions; Suspension of Rulemaking (56 FR 14319, April 9, 1991) 

1991-6 

11 CFR Parts 102 and 113: Use of Excess Funds; Notice of Proposed Rulemaking (56 FR 18777, April 24, 1991) 

1991-7 

11 CFR Parts 104 and 106: Rulemaking Petition: Association of State Democratic Chairs; Notice of Availability 

(56 FR 18780, April 24, 1991) 

1991-8 

Filing Dates for Pennsylvania Special Elections (56 FR 22719, May 16, 1991) 

1991-9 

Filing Dates for Arizona Special Elections (56 FR 23902, May 24, 1991) 

1991-10 

11 CFR Parts 9034, 9036 and 9037: Matching Fund Submission and Certification Procedures for Presidential 

Primary Candidates; Notice of Proposed Rulemaking (56 FR 29392, June 26, 1991) 

1991-11 

11 CFR Parts 100, 102, 106, 110, 116, 9001-9007, 9012 and 9031-9039: Public Financing of Presidential Primary 

and General Election Candidates; Final Rule and Transmittal to Congress (56 FR 35898, July 29, 1991) 

1991-12 

11 CFR Parts 102 and 113: Use of Excess Funds; Final Rule and Transmittal to Congress (56 FR 34124, July 25, 

1991) 

1991-13 

11 CFR Parts 9034, 9036 and 9037: Matching Fund Submission and Certification Procedures for Presidential 

Primary Candidates; Final Rule and Transmittal to Congress (56 FR 34130, July 25, 1991) 
78 

1991-14 

Filing Dates for Virginia Special Elections (56 FR 36153, July 31, 1991) 

1991·15 

Rulemaking Petition: Common Cause; Notice of Availability (56 FR 41496, August 21, 1991) 

1991-16 

Filing Dates for Pennsylvania Special Election (56 FR 51896, October 16, 1991) 

1991-17 

11 CFR Parts 9034, 9036 and 9037: Matching Fund Submission and Certification Procedures for Presidential 

Primary Candidates; Final Rule: Announcement of Effective Date (56 FR 56570, November 6, 1991) 

1991-18 

11 CFR Parts 100, 102, 106, 110, 116, 9001-9007, 9012 and 9031-9039: Public Financing of Presidential Primary 

and General Election Candidates; Final Rule: Announcement of Effective Date (56 FR 56570, November 6, 1991) 

1991-19 

11 CFR Parts 102 and 113: Use of Excess Funds; Final Rule: Announcement of Effective Date (56 FR 56570, 

November 6, 1991) 

1991-20 

Schedule of Matching Fund Submission Dates and Certification Dates for 1992 Presidential Candidates (56 FR 

57644, November 13, 1991) 

1991-21 

11 CFR Part 106: Allocation of Federal and Nonfederal Expenses; Notice of Proposed Rulemaking (56 FR 57864, 

November 14, 1991) 

1991-22 

11 CFR Part 114: Rulemaking Petition: Common Cause; Notice of Disposition (56 FR 64566, December 11, 

1991) 

1991-23 

Rulemaking Petition: Congressman Thomas; Notice of Availability (56 FR 66866, December 26, 1991) 

1991-24 

11 CFR Parts 1 00 and 1 04: Loans from Lending Institutions to Candidates and Political Committees; Final Rule 

and Transmittal to Congress (56 FR 67118, December 27, 1991)