Federal 

Election 

Commission 

Annual Report 1996 

Federal Election Commission 

Washington, DC 20463 
 

Commissioners

John Warren McGarry, Chairman

Joan D. Aikens, Vice Chairman 

Lee Ann Elliott, Commissioner 

Danny L. McDonald, Commissioner

Scott E. Thomas, Commissioner 

Statutory Officers

John C. Surina, Staff Director 

Lawrence M. Noble, General Counsel 

Lynne A. McFarland, Inspector General 

The Annual Report is prepared by: 

Louise D. Wides, Assistant Staff Director,

 Information Division 

Gregory J. Scott, Writer, Information Division 

Robert W. Biersack, Supervisory Statistician, 

Data Division 

R. Blake Lange, Chart Design, 

Administrative Division 

 

Table of Contents 

Introduction 1 

Chapter One

Keeping the Public Informed 3 

Public Disclosure 3

Educational Outreach 5

Office of Election Administration 6 

Chapter Two

Presidential Public Funding 7 

Shortfall in Fund 7

Certification of Matching Funds 8

Certification of Convention Funding 9

Certification of General Election Funds 9

Requests to Deny Funding 9

Qualified Campaign Expenses 10

Reporting by Presidential Campaigns 10

Presidential Debates 10

Repayment of Public Funds 11

Chapter Three

Interpretation and Enforcement

of the Law 13 

Regulations 13

Advisory Opinions 13

Enforcement 13

Chapter Four

Legal Issues 17 

Corporate/Labor Communications 17

Independent Expenditures by Party Committees 20

State/National Committee Status 22

Major-Purpose Test 23

Best Efforts 25

Personal Use of Campaign Funds 26

News Story Exemption 26

Application of Contribution Limits 27

Sale or Use Ban 27

Enforcement Process 28

Chapter Five

The Commission 31 

Commissioners 31

Office of Equal Employment Opportunity

and Special Programs 31

Ethics 31

Inspector General 31

Computer Upgrade 31

The FEC’s Budget 32

Chapter Six

Legislative Recommendations 35 

Chapter Seven

Campaign Finance Statistics 65 

Appendices 79 

1. Biographies of Commissioners

and Officers 79

2. Chronology of Events 81

3. FEC Organization Chart 85

4. FEC Offices 87

5. Statistics on Commission Operations 91

6. 1996 Federal Register Notices 95
Table of Charts

Chapter One

Keeping the Public Informed

Chart 1-1: 

Size of the Detailed Database 4

Chapter Two

Presidential Public Funding

Chart 2-1:

Matching Fund Certifications and Payments 8

Chapter Three

Interpretation and Enforcement of the Law

Chart 3-1:

Conciliation Agreements by Calendar Year 15

Chart 3-2:

Median Civil Penalty by Calendar Year 15

Chart 3-3:

Complaints Filed May-November of Election Year 15

Chapter Five

The Commission 

Chart 5-1:

Functional Allocation of Budget 33

Chart 5-2:

Divisional Allocation 34

Chapter Seven

Campaign Finance Statistics

Chart 7-1:

Number of PACs 1974-1996 65

Chart 7-2:

House Candidates’ Sources of Receipts 66

Chart 7-3:

Senate Candidates’ Sources of Receipts 67

Chart 7-4:

House and Senate Activity by Election Cycle 68

Chart 7-5:

PAC Contributions to Candidates 

by Party and Type of PAC 69

Chart 7-6:

PAC Contributions to House and Senate 

Candidates by Party and Candidate Status 70

Chart 7-7:

PAC Contributions to House Candidates 

by Type of PAC and Candidate Status 70

Chart 7-8:

Presidential Election Campaign Fund:

1996 Payments and Funds Available 71

Chart 7-9:

Presidential Election Campaign Fund:

1996 Balance by Month 72

Chart 7-10:

Revenue and Payments from the

Presidential Election Campaign Fund 72

Chart 7-11:

Receipts of Presidential Primary

Campaigns by Source 73

Chart 7-12:

Individual Contributions to Presidential Primary Campaigns by Size of Contribution 74

Chart 7-13:

Presidential Spending by 1996

General Election Campaigns 75

Chart 7-14:

1996 General Election: Funding Sources 75

Chart 7-15:

Party Federal and Nonfederal Receipts 76

Chart 7-16:

Sources of Party Receipts 77

Chart 7-17:

Party Federal and Nonfederal Disbursements 78
1 

Introduction

During 1996, the Federal Election Commission

encountered a number of challenges in its effort to 

administer and enforce the federal election laws. 

Against a backdrop of unprecedented campaign

activity, Congress budgeted less money for the FEC 

than the agency had requested, the President left

vacant one seat on the Commission and the courts 

rejected several FEC regulations and challenged

the application of other provisions. The smaller 

budget required staffing reductions, curtailed the

Commission’s enforcement capacity and delayed the 

review of campaign finance reports. The vacant seat 

on the Commission meant that a near-unanimous 

decision (4 out of 5 votes) was required for every

agency action. The court decisions led to increased 

election-related spending by corporations and unions,

and—for the first time—permitted party committees to

make unlimited independent expenditures.

The workings of the Presidential Election

Campaign Fund presented yet another challenge to

the agency. For the first time in the program’s 20-

year history, a temporary funding shortfall resulted 

in partial payments to primary election candidates.

The shortfall affected payments during the first five 

months of the year; subsequent tax checkoff receipts 

and repayments from previous elections closed the

gap. In another first for the public funding program,

Reform Party nominee Ross Perot qualified for a

$29 million general election grant, based on his vote

percentage in the 1992 Presidential election.

Despite these challenges, the Commission

successfully administered the election law. The 

agency streamlined many operations by completing,

in 1996, the conversion from a terminal-based 

computer system to a PC-based system. Further, the 

Commission was ready at year’s end to implement 

a new voluntary electronic filing program mandated

by Congress. The Commission also improved its 

customer service by doubling the capacity of its

automated flashfax system, expanding its digital

imaging system for viewing reports filed by House

candidates, PACs and party committees and by 

launching its own home page on the worldwide

web. Both the flashfax system and the web site

offered customers direct access to a wealth of FEC 

information, including campaign finance data on 

candidates and committees, publications and press

releases. Underlying all these endeavors was the

agency’s ongoing audit and enforcement program. 

The FEC completed audits on 24 committees and

brought 204 enforcement matters to conclusion.

The material that follows details the Commission’s 

1996 activities. 
3 

Chapter One

Keeping the Public Informed 

Since its inception, the Commission has disclosed

campaign finance data and provided information on

the election law to both the general public and the

regulated community. Doing so helps to create an 

educated electorate, and it promotes compliance with

the campaign finance law. 

Both the public disclosure program and the agency’s educational outreach efforts promote compliance. Public scrutiny of campaign finance records

encourages the regulated community to comply with

the law, while educational outreach to the regulated 

community helps promote compliance by fostering

understanding of the law. The Commission’s public 

disclosure and educational outreach programs are

described below.

Public Disclosure 

Disclosing the sources and amounts of funds spent

on federal campaign activity continued to be the

centerpiece of the Commission’s work during 1996.

This process is complex, as it involves receiving the

reports filed by committees, reviewing them, entering 

the data into the FEC’s computer database and making the reports and database available to the public.

Changes in filing requirements, increased use of

computer technology, and greater staff efficiency enhanced the Commission’s disclosure program during 

the year.

Kent C. Cooper, the FEC’s Assistant Staff Director 

for Disclosure, received the 1996 Council on Governmental Ethics Laws (COGEL) Award for Distinguished 

Achievement. The award honored his work in creating and directing the FEC’s Public Disclosure Office, 

which is considered a model for other agencies implementing public disclosure mandates.

Point of Entry, Data Imaging and Electronic Filing

On April 15, 1996, as a result of a 1995 legislative 

change, House candidates began filing campaign

finance reports directly with the FEC, rather than with

the Clerk of the House. The change in point of entry 

improved both the timeliness and quality of the Commission’s public disclosure process. Under the old 

system, the Commission had received copies of the

reports filed with the Clerk. Under the new system, 

House candidate committees filed the original report

with the Commission. As a result, reports were available sooner to the public and were easier to read.

The new point of entry also allowed the Commission to expand its digital imaging program. Now, the 

public can access digitized copies of the actual reports filed by House candidates, PACs and party committees. (Senate candidates continue to file with the

Secretary of the Senate, so their reports are not available on the digital imaging system.) The Commission 

has installed 13 imaging stations in its Public Disclosure Division, and—thanks to a newly installed highspeed communications link—three viewing stations

in the office of the Clerk of the House. Soon, digital

imaging will also be available to state filing offices that

wish to participate.

The Commission also took steps during 1996 to

implement an electronic filing system that will allow

committees to file reports via computer disk or other

electronic format on a voluntary basis. The Commission adopted interim rules defining the format and

verification requirements for filings, and hired a contractor to develop and operate the system. (For details 

on the interim rules, consult the November 1996 issue 

of the FEC newsletter, the Record.) That system went 

into operation January 2, 1997.

In addition to these high-tech advances, the Commission’s Disclosure Division added a night shift to 

speed the processing of reports, and extended its

public-access hours during the weeks preceding the

November election. The Disclosure office also began 

accepting Visa and Mastercard as payment for FEC 

materials in 1996. While most materials are available free of charge, some are sold, including financial

statistical reports, candidate indexes and PAC directories. Since the FEC cannot fill an order until it has 

received payment, credit card customers received

items 4 to 5 days sooner than those paying by check.

Credit cards also reduced the costs and paperwork

associated with check processing, enabling FEC staff 

to better serve walk-in visitors.

Review of Reports

The Commission’s Reports Analysis Division also 

contributes to the agency’s disclosure program. Analysts review all reports to ensure that the public record 
4 Chapter One

provides a full and accurate portrayal of campaign

finance activity. If an analyst finds that a report contains errors or suggests violations of the law, he/she 

sends the reporting committee a request for additional 

information. The committee treasurer can then make 

additions or corrections to the report. Apparent violations, however, may lead to an enforcement action.

Campaign finance activity increased during 1996

due to the Presidential and Congressional elections.

As the number and length of reports increased, so did

reports analysts’ workload. To handle its burgeoning 

workload, reports analysis staff utilized the Commission’s electronic imaging system to view reports at 

their own desks and used refined computer programming tools that helped them identify possible compliance problems more quickly. 

Processing Campaign Finance Data

The Commission codes and enters information 

from campaign finance reports into the agency’s disclosure database, which contains data from 1977 to 

the present.

Information is coded so that committees are identified consistently throughout the database. Consistency is crucial to maintaining records of which committees received contributions from individuals and which 

PACs made contributions to a specific candidate. For 

example, if a PAC’s report states that it made a contribution to the Smith for Congress committee with a

Washington address, staff must determine which candidate committee, among those with the same name,

the report referred to.

Despite the increased workload, data staff improved the timeliness of its data entry and coding. In

the past, it took up to 45 days to enter, code and disseminate all of the detailed information from reports.

During 1996, staff completed that process within 30 

days.

CHART 1-1 

Size of the Detailed Database 

Election Cycle No. of Detailed Entries* 

1986 526,000

1987 262,000

1988 698,000

1989 308,000† 

1990 767,000

1991 444,000‡ 

1992 1,400,000 

1993 472,000

1994 1,364,000

1995 570,000

1996 1,887,160

* Numbers are cumulative for each two-year election cycle.

† The entry threshold for individual contributions was dropped from

$500 to $200 in 1989.

‡

 Nonfederal account data was first entered in 1991.

Public Access to Campaign Data

The Commission opened a new avenue of public

access to campaign finance data with the February

14 launch of its home page on the World Wide Web. 

Visitors to www.fec.gov could peruse a variety of statistical summaries and download data to their own 

computers via the Commission’s FTP site. The FEC 

home page attracted more than 2 million hits during

its first ten months of operation.

The Commission’s disclosure database, which 

contains millions of transactions, enabled researchers 

to select information in a flexible way. For example, 

the database can instantly produce a profile of a committee’s financial activity for each election cycle. As 

another example, researchers can customize their

searches for information on contributions by using a

variety of elements (e.g., donor’s name, recipient’s 

name, date, amount or geographic location).

During 1996, visitors to the Public Records Office

used computer terminals to access the disclosure database and more than 25 different campaign finance 

indices that organize the data in different ways. Those 

outside Washington, DC, could order such information 

using the Commission’s toll-free number.

Visitors could also inspect images of committee 

reports on the electronic imaging system installed on

the personal computers in the Public Records Office. 
Keeping the Public Informed 5

Reports filed by House and Presidential candidates,

party committees and PACs were available for viewing.

The Public Records Office continued to make 

available microfilmed copies of all campaign finance

reports, paper copies of reports from 1996 Congressional candidates and Commission documents such 

as press releases, audit reports, closed enforcement

cases (MURs) and agenda documents.

The FEC also continued to offer on-line computer 

access to the disclosure database to 1,241 subscribers to the eleven-year-old Direct Access Program 

(DAP) for a small fee. Subscribers included journalists, political scientists, campaign workers and other

interested citizens. DAP saved time and money for the 

Commission because providing information on line is

more efficient than processing phone orders for data.

During 1996, the Commission’s State Access Program 

gave 31 state election offices free access to the database. In return, state offices helped the Commission

track candidate committees that had failed to file copies of their FEC reports with the appropriate state, as

required under federal law.

Educational Outreach 

Despite budget cuts in 1996, the Commission continued to educate committees about the law’s requirements, thereby helping them avoid violations.

Home Page (www.fec.gov)

For the first time, the Commission used the World 

Wide Web for educational outreach. In addition to the 

statistical data described above, visitors could access 

brochures on a variety of topics, read agency press

releases, look up reporting dates and download reporting forms, copies of the Record newsletter and the 

Campaign Guides for PACs, parties and candidates. 

The Record was placed on the Commission’s home 

page the same day that copy was sent to the printer. 

This meant that the public could access the newsletter

a full week before the printed copy was available.

Telephone Assistance 

A committee’s first contact with the Commission 

is often a telephone call to the agency’s toll-free information hotline. In answering questions about the

law, staff will research relevant advisory opinions and 

litigation, as needed. Callers receive, at no charge,

FEC documents, publications and forms. In 1996, the

Information Division responded to 34,152 callers with

compliance questions.

Flashfax 

When committees need a publication or other

document—including informational brochures, texts 

of regulations, reporting forms, and texts of advisory

opinions—they can call the agency’s automated 

“Flashfax” system at any time and quickly receive

the information by fax. Use of this free service grew

rapidly in 1996 as 7,729 callers sought information

and received 12,206 documents. In response to the

high demand, the Commission doubled the system’s 

capacity in 1996.

Reporting Assistance

During 1996, reports analysts, assigned to review

committee reports, were also available to answer

complex reporting and compliance-related questions

from committees calling on the toll-free line.

The Commission continued to encourage timely

compliance with the law by mailing committees reminders of upcoming reporting deadlines three weeks

before the due dates. The Record, the Commission’s 

newsletter, and the FEC’s web site also listed reporting schedules and requirements.

Assistance to Presidential Campaigns

FEC auditors assigned to Presidential committees

helped them understand the requirements of the public funding law. In 1996, the Commission published 

new primary and general election compliance manuals for these committees.

Conferences 

The Commission conducted a regional conference

in Chicago to help the regulated community prepare

for the 1996 elections. Conference participants attended workshops for candidate committees, party

committees and corporate and labor PACs and their 

sponsoring organizations. 
6 Chapter One

The agency also hosted two Washington, DC 

conferences. These conferences were tailored to 

meet the needs of specific audiences. The first was 

geared toward membership organizations and trade

associations, and the second was designed for candidate committees.1

For the second consecutive year, budget constraints prevented the agency from continuing its

informal outreach program whereby one or two staff 

members met with candidates, parties and PACs in 

different cities. 

Tours and Visits 

Visitors to the FEC during 1996, including 37 student groups and 67 foreign delegations, listened to

presentations about the campaign finance law and,

in some cases, toured the agency’s Public Records 

office. 

Media Assistance 

The Commission’s Press Office continued to field 

questions from the press and navigate reporters

through the FEC’s vast pool of information. Press 

Office staff answered 23,459 calls from media representatives and prepared 139 news releases. These

releases alerted reporters to new campaign finance

data, illustrating the statistics in tables and graphs.

Publications 

During 1996, the Commission published several

documents to help committees, the press and the

general public understand the law and find information about campaign finance.

In August, the Commission published a brand 

new edition of its Campaign Guide for Political Party

Committees. The guide offers a clear explanation of 

the laws applicable to party committees and demonstrates how to fill out reports.

The Combined Federal/State Disclosure Directory

1996 directs researchers to federal and state offices 

that provide information on campaign finance, candidates’ personal finances, lobbying, corporate registration and election results. The 1996 directory was 

available both in print and on computer disks formatted for popular hardware and software.

The Commission also published a new edition of 

Pacronyms, an alphabetical list of acronyms, abbreviations, common names and locations of federal PACs. 

The publication lists PACs’ connected, sponsoring or 

affiliated organizations and helps researchers identify

PACs and locate their reports.

Office of Election Administration

In 1996, the Office of Election Administration 

(OEA)—formerly the Clearinghouse on Election Administration—continued to help states implement and

refine various provisions of the National Voter Registration Act of 1993 (NVRA)—the “Motor Voter Law.” 

OEA also provided the National Voter Registration 

Form to organizations conducting voter registration

drives on both the local and national level.

Typical of a Presidential election year, staff answered numerous questions from the public on voting

and registration, voting equipment and methods, the

Presidential election process and the U.S. political

system. OEA staff spoke about the American political 

process to foreign political figures, election officials,

journalists and others from the many emerging democracies in Eastern Europe and Africa.

In addition, the OEA released several publications 

this year, including updates to Campaign Finance Law

and Federal Election Law and the first edition of the 

FEC Journal of Election Administration since 1989. 

The OEA added three new titles to its Innovations 

in Election Administration series. The new volumes 

focused on simplifying election forms and language,

recruiting poll workers and ensuring the accessibility

of the election process to the disabled.

Finally, OEA staff worked with the Commission, 

the Staff Director and the International Foundation for 

Election Systems (IFES) to organize the third Trilateral Meeting of federal election officials from Canada,

Mexico and the United States, held in Washington, 

DC, in May.

1 The Commission had already conducted a conference

for corporations and labor organizations in December 1995.
7 

Chapter Two

Presidential Public Funding 

The 1996 election marked the twentieth anniversary of the Presidential public funding program. Since

1976, the program has provided nearly $900 million to

qualified Presidential candidates for their primary and

general election campaigns and to parties for their

Presidential nominating conventions. The program is 

funded by the $3 tax checkoff, and administered by 

the Federal Election Commission. The Commission 

certifies payments to qualified candidates and committees; the U.S. Treasury makes those payments. 

Shortfall in Fund 

A long-predicted shortfall in the Presidential Election Campaign Fund resulted in partial matching fund

payments to Presidential primary candidates during

the first five months of 1996.

The Fund’s overall balance in January 1996 was 

$146.9 million—enough to cover the $37.4 million in 

first-round matching fund certifications to the 10 candidates participating in the program at that time. However, the U.S. Treasury required that $124 million be 

set aside to cover the grants to general election candidates and the payments to party nominating conventions, leaving only $22.4 million available for matching

funds at the start of 1996. As a result, the participating candidates received a pro rata amount—roughly

60 cents on the dollar—in January. Partial payments

continued through May, with the U.S. Treasury adding unscheduled payouts to lessen the impact of the

shortfall. The partial payments were:

• February 2: $198,013 in matching funds to 10 certified Presidential candidates, representing less than

1 percent of each candidate’s unpaid entitlement as 

of that day.

• February 13: $550,538 in matching funds to 10 certified Presidential candidates, representing 3 percent

of each candidate’s unpaid entitlement as of that 

day.

• March 15: $7,072,308 in matching funds to 11 certified Presidential candidates, representing 35 percent

of each candidate’s unpaid entitlement as of that 

day. 

Tax checkoff receipts and repayments from past 

Presidential campaigns totaled $16,459,323 for the

month of March, exceeding the payout demand of

$16,043,920 by a little more than $400,000. As a 

result, certified candidates received their full entitlements on April 15, including amounts that had been 

owed to them from previous matching fund certifications. Another temporary shortfall occurred on May 1 

when the Commission certified $4,613,827 for payment before the April deposits had been made. The 

April deposits closed the gap, and all certified candidates received their full entitlements on May 15.

Three principal factors led to the shortfall:

• Treasury regulations require that funds be set-aside 

for convention and general election funding;

• The number of candidates and the amount of early

1996 primary fundraising were unprecedented ($37

million in entitlements for January 1996 compared

with $6 million for January 1992); and

• The taxpayer checkoff increase from $1 to $3 did not 

take effect until 1994. 

During the shortfall period, one candidate requested an advisory opinion (AO) on how his campaign

could remedy the cash-flow problem. In AO 1996-4, 

the Commission determined that Lyndon LaRouche’s 

campaign could:

• Pledge future matching funds to obtain a bridge loan

from a qualified lending institution, and repay the

loan by instructing the Treasury to disburse the committee’s matching funds directly to the lender;

• Assure repayment of the loan with delayed matching

funds—even if Mr. LaRouche lost eligibility—by obtaining the loan while still eligible for matching funds;

and 

• Transfer money as a loan from Mr. LaRouche’s 1992 

Presidential campaign to his 1996 campaign.

Since payments from the Presidential fund are

indexed to inflation but the tax checkoff that finances 

the program is not, a future shortfall is inevitable. With

participation in the checkoff declining from a high of 

28.7 percent on 1980 tax returns to 13 percent on

1995 returns, that shortfall could come as soon as the 

election in 2000. 
8 Chapter Two

Certification of Matching Funds

To qualify for primary matching funds, Presidential 

candidates must submit copies of contributor checks

and other documentation showing that they raised

more than $5,000 in matchable contributions in each 

of at least 20 states (i.e., over $100,000). The FEC reviews this threshold submission to determine whether 

the candidate has met the eligibility requirements. The 

candidate must also agree to comply with the law in

a letter of agreement and certification. Once candidates satisfy these criteria, the Commission declares

them eligible to receive matching federal dollars for

a portion of the contributions they raise. The federal 

government will match up to $250 per contributor, but 

only contributions from individuals qualify for matching.

Presidential candidates may establish their eligibility during the year before the election (i.e., in 1995 for

the 1996 primaries) and, once eligible, may submit

additional contributions for matching funds (called

matching fund submissions) on specified dates.

In AO 1996-7, Harry Browne, a candidate for the 

Libertarian party’s 1996 Presidential nomination, 

asked the Commission if he could be certified as being eligible to receive matching funds without actually

accepting the money. The Commission determined it 

could not certify Mr. Browne as eligible because he 

would not have signed the required candidate agreements or agreed to the post-election audits.

Chart 2-1 lists the 1996 Presidential primary candidates who qualified for matching funds and the total

amount of matching funds certified and paid to each.

CD ROM Technology

Before certifying matching funds, the Commission

reviews each submission to verify that the contributions qualify for matching funds and are properly

documented. (The agency uses a statistical sampling

technique to select contributions for review.) In 1996, 

CD ROM technology accelerated the review process

for matching fund requests submitted on CD ROM

disks by the Clinton, Dole and Buchanan campaigns.

The disks contained images of the contribution checks 

submitted for matching funds and the other required

documents. 

CHART 2-1 

Matching Fund Certifications

and Payments

Candidate

Amount 

Amount Certified

(millions of dollars) Paid

Lamar Alexander (R) * 4.6 4.6 

Pat Buchanan (R) 11.0 11.0

Bill Clinton (D) 13.4 13.4

Bob Dole (R) 13.5 13.5

Phil Gramm (R) * 7.4 7.4 

John Hagelin (NLP) 

† .5 .5

Alan Keyes (R) 1.7 1.7 

Lyndon LaRouche (D) .6 .6 

Richard Lugar (R) * 2.7 2.7 

Arlen Specter (R) ** 1.0 1.0 

Pete Wilson (R) ‡ 1.7 1.7 

* Senator Gramm, Senator Lugar and Governor Alexander withdrew from the race in February 1996.

†

 Natural Law Party.

** Senator Specter withdrew from the race in November

1995. 

‡

 Governor Wilson withdrew from the race in September

1995.

For the FEC, receiving submissions on CD ROMs

saved time. The time savings largely resulted from 

faster searches for particular contribution checks. A

manual search through approximately 40,000 checks

included in a typical monthly submission—some 20

boxes—could take several minutes. Using CD ROMs,

staff could access an image of a check in 3 seconds.

While submitting matching fund information on CD

ROM is voluntary, it is expected to become more popular with campaigns in future Presidential elections.

The technology will vastly decrease the amount of

paper needed in the submission and review process.

During the 1992 election cycle, the FEC accumulated

5 tons of paper records in processing $42 million in

matching funds. 
Presidential Public Funding 9 

Certification of Convention Funding

Under the public funding law, national party committees of major parties may become eligible to

receive public funds to 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. A party receiving public funding for the convention may not spend more than the public funding

grant, although host cities and committees may provide certain facilities and expend additional funds.

In 1995, the Commission certified the Democratic 

and Republican convention committees as being

eligible initially to receive $12.024 million each in

public funds. The Department of Treasury made the 

payments in July 1995, and in 1996 the Department

made an additional cost-of-living payment ($340,000),

bringing to $12,364,000 the total amount certified to

each convention committee. 

Certification of General Election 

Funds 

The Presidential nominee of each major party may

become eligible for a public grant of $20 million (plus

a cost-of-living adjustment (COLA)) for the general

election campaign. Minor and new party candidates

may qualify for partial general election funding based

on their party’s electoral performance. Minor party 

candidates (nominees of parties whose Presidential

candidates received between 5 and 25 percent of the

vote in the preceding election) may receive public

funds based on the ratio of their party’s vote in the 

preceding Presidential election to the average vote for

the major party candidates in that election. New party

candidates may receive public funds after the election if they receive 5 percent or more of the vote. The 

amount is based on the ratio of the new party candidate’s vote to the average vote for the two major party 

candidates in the election. 

In 1996—for the first time in the 20-year history of

public funding—a non-major party Presidential candidate qualified for general election funding before

the election. The Commission certified Reform Party 

nominee Ross Perot as being eligible for roughly $29

million on August 22.

The Commission had addressed Mr. Perot’s potential eligibility in AO 1996-22. In that opinion, the 

Commission concluded that, if Mr. Perot became the 

Reform Party’s Presidential nominee, he would be 

eligible for pre-election public funding because he had

received 19 percent of the popular vote in 1992.

Questions on whether a Reform Party nominee

other than Mr. Perot would have been eligible for 

pre-election public funding and whether the Reform

Party could have received public funds for its convention were left unanswered. Those questions hinged 

on whether the Reform Party qualified as a minor 

party. Additionally, for convention funding, the Reform 

Party would have had to demonstrate that it qualified as a national party committee under 26 U.S.C. 

§9008. Since, at the time AO 1996-22 was issued, the 

Reform Party had not been formed, the questions of

whether it qualified as a minor party or as a national

committee were hypothetical, and the Commission

deemed it premature to address them. 

Requests to Deny Funding

During 1996, the Commission denied requests to

stop matching fund payments to the Clinton and Dole

Presidential campaigns, and to withhold the Perot

campaign’s general election funding.

In June, the Democratic National Committee requested that the agency suspend matching fund

payments to Dole for President, Inc., alleging that the

committee had forfeited its entitlement to the funds 

because it had overspent the $37.1 million limit on

primary spending.

In July, the Dole Committee requested the suspension of matching funds to the Clinton/Gore ’96 Primary 

Committee on the grounds that the committee had

exceeded the spending limit.

In both cases, the FEC said that the allegations

were too speculative to meet the strict standard in

these cases: information demonstrating that a candidate has knowingly and substantially exceeded the

expenditure limit. 11 CFR 9033.3.

Similarly, in October, the Commission rejected a request by Herb Rosenberg, of New York, to deny gen-
10 Chapter Two

eral election funding to Mr. Perot, based on numerous 

alleged campaign irregularities, including excessive

expenditures and possible disenfranchisement of

Reform Party members. The FEC determined that the 

allegations were speculative and did not satisfy the

standard that must be met to withhold general election funds, namely, patent irregularities suggesting the 

possibility of fraud.

In all three cases, the Commission will be able 

to determine whether the allegations were accurate

when it conducts its mandatory audits of the public

funding recipients. 

Qualified Campaign Expenses

FEC regulations require publicly funded Presidential campaigns to spend campaign funds on “qualified

campaign expenses” only. 26 U.S.C. §§9033, 9038 

and 9042 and 11 CFR 9032.9(a)(2). Two 1996 advisory opinions addressed this requirement.

In AO 1995-45, the Commission determined that 

Dr. John Hagelin—a publicly funded candidate seeking the Natural Law Party’s nomination—could use 

campaign funds to pay for his ballot access efforts, 

including petition drives. Such payments were seen

as qualified campaign expenses since the process by

which a non-major party candidate gets on the general election ballot serves a purpose similar to a primary

election. Further, payments made by Dr. Hagelin to 

get his party’s name on the ballot would also be qualified campaign expenses where doing so would be

the more cost effective means of securing his ballot 

position as the party’s nominee.

Documenting qualified campaign expenses was

the focus of AO 1996-12. The Lenora B. Fulani for 

President ’96 committee asked the Commission if additional documentation would be required to demonstrate that disbursements made to vendors with whom 

the candidate had a close relationship were qualified

campaign expenses. (In its audit of Dr. Fulani’s 1992 

campaign, the Commission determined that certain

disbursements to vendors closely associated with the

Fulani campaign were not qualified campaign expenses. See page 11.)

The Commission concluded that the 1996 Fulani 

campaign’s plan to hire close associates to provide 

campaign services would not, in itself, cause the

campaign to be held to a higher standard than other

publicly funded committees. However, the campaign 

would have to abide by the same documentation

requirements for campaign expenses as all other

publicly funded committees. As such, the committee’s 

disbursements to vendors would be considered qualified campaign expenses as long as Dr. Fulani could 

demonstrate that they represented the usual and

normal charge for campaign-related services actually

rendered. 

Reporting by Presidential

Campaigns

Under 2 U.S.C. §434(a)(3)(A), Presidential candidate committees that exceed $100,000 in contributions or expenditures must file FEC reports on a

monthly basis. Another provision—2 U.S.C. §434(a)

(6)(A)—requires candidate committees to notify the

Commission, within 48 hours, of contributions of 

$1,000 or more received between the 20th day and

48 hours before any election.

In AO 1995-44, the Commission clarified that 

Presidential candidate committees filing monthly FEC

reports would not be required to file 48-hour notices

during the Presidential primary season. Since such

Presidential candidates are typically active in a number of primary elections, requiring them to abide by

these provisions would have required nearly constant

filing.

The Commission concluded that Presidential candidate committees filing monthly provided sufficient

disclosure to exempt them from the 48-hour filing

provisions during the Presidential primary season. 

Presidential Debates 

On October 4, 1996, the U.S. Court of Appeals for 

the District of Columbia Circuit upheld a lower court

ruling that dismissed lawsuits against the Federal

Election Commission (FEC) and the Commission on

Presidential Debates (CPD). The suits had been filed 

by two Presidential hopefuls who, among other things,

sought to participate in the Presidential debates. 
Presidential Public Funding 11 

Reform Party candidate Ross Perot and Natural

Law Party (NLP) nominee John Hagelin filed the suits

in U.S. District Court for the District of Columbia after 

the CPD excluded them from a list of participants for

three nationally televised debates. In September, a 

few days before filing their suits, Perot and the NLP

had filed administrative complaints with the FEC, but,

because of procedures set forth in the Federal Election Campaign Act (the FECA or the Act), resolution of 

those complaints was not possible before the debates

started in October. 

District Court Decision 

The court combined the suits for oral argument and

dismissed both cases on October 1, 1996, concluding

that it had no jurisdiction in the matter. First, as mandated by Congress, the FEC has exclusive jurisdiction

to hear complaints alleging violation of the Act, and 

the plaintiffs have no private right of action against 

the CPD. Second, the FEC has 120 days to act on an

administrative complaint before the court may become 

involved. 2 U.S.C. §437g.

The court also upheld FEC regulations at 11 CFR 

110.13(a) that allow nonprofit, nonpartisan corporations to stage debates in certain circumstances and,

under 11 CFR 114.4(f), to accept contributions from 

corporations to put on such events. 

Appeals Court Decision

The appeals court expedited the appeals and

heard the case two days after the district court handed down its ruling. The appeals court affirmed the 

lower court’s decision that it lacked jurisdiction to take 

action on the alleged violations of the Act or to order 

the FEC to resolve the complaints prior to the CPDsponsored debate on October 6.

With regard to Mr. Perot’s challenge to the debate 

regulations themselves, the appeals court observed

that the district court had not had the benefit of the 

administrative record and that the issue had not been 

fully briefed. Consequently, the appeals court vacated 

the district court’s decision upholding the regulation and remanded the claim to the district court with 

instructions to dismiss without prejudice. (Mr. Perot 

would then be free to file a new suit on the same issue.)1 

Repayment of Public Funds

Committees receiving matching funds are subject

to an FEC audit to determine whether they must repay public funds to the Treasury. Public funds must 

be repaid if, for example, the campaign incurred

nonqualified expenses, received more than its entitlement or had surplus funds remaining at the end of the

campaign.

At a February 7, 1996, public hearing, 1992 candidate Dr. Lenora B. Fulani contested the FEC’s August 

1995 initial determination that her campaign committee repay $612,557 to the U.S. Treasury. The FEC 

had based this repayment determination on its investigation into charges made by former campaign worker

Kellie Gasink in January 1994.

Ms. Gasink had alleged that during the 1992

campaign Dr. Fred Newman, Dr. Fulani’s campaign 

manager, had used a network of vendors to funnel 

campaign funds to himself. Ms. Gasink had claimed

that these vendors billed expenses to the committee

that were either inflated or fabricated. Additionally, Ms. 

Gasink had alleged that Dr. Newman embezzled campaign funds by reporting that certain individuals had

received salary payments and reimbursements when

actually they had not.

The Fulani committee disputed the repayment determination and provided additional materials to support its view. The FEC will decide what action to take 

after considering Dr. Fulani’s presentation and all the 

documentation submitted by her committee. (For additional information, consult the April 1996 issue of the 

FEC newsletter, the Record.) 

1

 On February 12, 1997, Dr. Hagelin and the Natural Law 

Party filed a petition for a writ of certiorari.
13 

Chapter Three

Interpretation and

Enforcement of the Law 

As part of its mission to administer and enforce the

Federal Election Campaign Act, the Commission promulgates regulations and issues advisory opinions to

promote voluntary compliance with the law. The regulations explain the law in detail, often incorporating

conclusions reached in previous advisory opinions.

Advisory opinions, in turn, clarify how the statute and

regulations apply to real-life situations. In 1996, for

example, several advisory opinions dealt with questions concerning the new rules on the personal use of

campaign funds.

The agency’s enforcement actions also promote 

compliance by correcting past violations and demonstrating to the regulated community that violations can

result in civil penalties and remedial action. 

Regulations 

The rulemaking process generally begins when 

the Commission votes to seek public comment on

proposed rules by publishing the rules in the Federal

Register. The agency may also invite those making

written comments to testify at a public hearing. The 

Commission considers all comments when deliberating on the final rules in open meetings. Once approved, the text of the final regulations and the explanation and justification are published in the Federal

Register and sent to the U.S. House and Senate. The 

Commission publishes a notice of effective date after 

the final rules have been before Congress for 30 legislative days. 

Rulemakings Completed in 1996

New and revised rules in the following areas became effective in 1996: 

• New regulations implementing the point-of-entry

change for reports filed by House candidates took

effect February 1 and 16.

• New and revised rules on corporate/labor communications and the use of corporate/labor facilities and

resources took effect March 13. (These rules were 

summarized in the Annual Report 1995.) 

•	Revised rules on candidate debates and news stories staged, produced or distributed by cable television organizations took effect June 21. (See page 

26.) 

• Interim rules governing the Commission’s voluntary 

electronic filing program took effect January 1, 1997. 

(See page 3.) 

Other Rulemakings in Process

In addition to completing the above rules, the Commission also: 

• Initiated a rulemaking on independent expenditures

by party committees, in light of the Supreme Court’s 

decision in Colorado Republican Federal Campaign

Committee v. FEC. (See page 20.)

• Sought comments on two aspects of its “best efforts” 

regulations: one in response to the court decision in 

Republican National Committee v. FEC; the other, to 

clarify the rule’s application to separate segregated 

funds. (See page 25.) 

Advisory Opinions 

The Commission responds to questions about how

the law applies to specific situations by issuing advisory opinions. When the Commission receives a valid

request for an advisory opinion, it generally has 60

days to respond. The Office of General Counsel prepares a draft opinion, which the Commissioners discuss and vote upon during an open meeting. A draft 

opinion must receive at least four favorable votes to

be approved.

The Commission issued 51 advisory opinions in

1996. Of that number, 5 dealt with the status of party 

committees, 13 dealt with application of personal use

rules and 3 dealt with the Act’s news story exemption. 

These and other 1996 advisory opinions are discussed in Chapter Four, “Legal Issues.”

Enforcement 

The Enforcement Process 

The Commission learns of possible violations

in three ways. The first is the agency’s monitoring 

process—potential violations are discovered through

a review of a committee’s reports or through a Commission audit. The second is the complaint process—

anyone may file a complaint, which alleges violations

and explains the basis for the allegations. The third is 
14 Chapter Three

the referral process—possible violations discovered

by other agencies are referred to the Commission.

Each of these can lead to the opening of a Matter Under Review (MUR). Internally generated cases

include those discovered through audits and reviews

of reports and those referred to the Commission by

other government agencies. Externally generated

cases spurred by a formal, written complaint receive

a MUR number once the Office of General Counsel 

determines whether the document satisfies specific

criteria for a proper complaint.

The General Counsel recommends whether there 

is “reason to believe” the respondents have committed a violation. If the Commission finds there is “reason to believe,” it sends letters of notification to the 

respondents and investigates the matter. The Commission has authority to subpoena information and

can ask a federal court to enforce a subpoena. At the 

end of an investigation, the General Counsel prepares

a brief which states the issues involved and recommends whether the Commission should find “probable

cause to believe” a violation has occurred. Respondents may file briefs supporting their positions.

If the Commission finds “probable cause to believe”

the respondents violated the law, the agency attempts 

to resolve the matter by entering into a conciliation

agreement with them. (Some MURs, however, are 

conciliated before the “probable cause” stage.) If conciliation attempts fail, the agency may file suit in district court. A MUR remains confidential until the Commission closes the case and releases the information 

to the public. 

Prioritization 

To ensure that its limited resources are devoted to 

the most significant enforcement matters, the Commission has instituted a “prioritization system” to help

manage its caseload.

Now in its third year of operation, the prioritization system has helped the Commission manage its

heavy caseload involving thousands of respondents

and complex financial transactions. The Commission 

believed it would never have enough resources to

pursue all enforcement matters, so it adopted formal

criteria to decide which cases to pursue. Among those 

criteria are: the presence of knowing and willful intent, 

the apparent impact the alleged violation had on the

electoral process, the amount of money involved, the

age and timing of the violation, and whether a particular legal area needs special attention.

In 1996, the FEC pursued cases in several enforcement areas, including: contributions by minors,

contributions in the name of another, foreign contributions and reporting violations. 

Civil Penalties 

The Commission continued to impose significant

civil penalties for serious violations of the law. In 

1996, penalties from conciliation agreements totaled

$1,229,754. 

Chart 3-1 (page 15) compares civil penalties negotiated in 1996 conciliation agreements with those of

previous years. In Chart 3-2, the median civil penalty

negotiated in 1996 is compared with the median civil

penalty of previous years. Chart 3-3 tracks the number of complaints filed during the months preceding

the last several federal elections. 
Interpretation and Enforcement of the Law

CHART 3-1 

Conciliation Agreements

by Calendar Year 

Number Thousands of Dollars 

15 

CHART 3-2 

Median Civil Penalty

by Calendar Year 

Dollars 

CHART 3-3 

Complaints Filed May-November of Election Year 
Legal Issues 17 Chapter Four

Legal Issues 

As the independent regulatory agency responsible

for administering and enforcing the Federal Election

Campaign Act (the Act), the Federal Election Commission must “[safeguard] the integrity of the electoral process without...impinging upon the rights of

individual candidates and citizens to engage in political debate.” Buckley v. Valeo. To that end, the Commission promulgates regulations explaining the Act’s 

requirements, issues advisory opinions that apply the

law to specific situations, handles civil enforcement

of the Act and defends the statute against legal challenges. This chapter examines major legal issues the 

Commission confronted during 1996. Many of those

issues touch upon the core tension between valid

governmental interests and the Constitutional freedoms of speech and association. 

Corporate/Labor Communications 

Corporations and labor organizations are prohibited from using their treasury funds to make contributions or expenditures in connection with federal

elections. 2 U.S.C. §441b. The statute and FEC regulations contain several exceptions that permit corporations and unions to form PACs and otherwise communicate their views. Several 1996 court decisions 

and FEC advisory opinions explored the parameters

of the corporate/labor prohibition and its exceptions. 

MCFL Nonprofits

In its 1986 FEC v. Massachusetts Citizens for Life 

(MCFL) decision, the Supreme Court created an

exception to §441b that exempts certain nonprofit

corporations from the prohibition on corporate independent expenditures. In response to that ruling, the

Commission prescribed new regulations, which were

successfully challenged on Constitutional grounds in

1996. 

The MCFL Court, citing First Amendment concerns, had concluded that independent expenditures

made by MCFL were not subject to the ban because 

MCFL had the following essential features:

• It was formed to promote political ideas and did not

engage in business activities;

• It did not have shareholders or other persons who

had a claim on its assets or earnings, or who had 

other disincentives to disassociate themselves from 

the organization; and

• It was not established by a business corporation or

labor union and it had a policy of not accepting donations from such entities. 

In 1995, the FEC promulgated regulations at 11 

CFR 114.10 to incorporate the MCFL decision into its 

regulatory framework. These regulations establish a 

test to determine whether a corporation qualifies for

exemption from the Act’s prohibition against corporate 

independent expenditures.

Minnesota Citizens Concerned for Life (MCCL), a

nonprofit corporation, immediately brought suit to challenge the constitutionality of these regulations. MCCL

alleged that it did not qualify to make independent

expenditures under the regulations because:

• It engaged in business activities (sold advertising

space in its newsletter, rented its membership list 

and engaged in fundraisers that were not expressly

described as requests for donations to be used for

political purposes);

• It issued affinity credit cards to its members (impermissible under 11 CFR 114.10(c)(3)(ii) because the 

credit cards created a disincentive for members to 

disassociate themselves from MCCL); and

• It accepted corporate contributions.

On April 19, 1996, the U.S. District Court for the 

District of Minnesota ruled that the FEC’s regulations 

defining and governing qualified nonprofit corporations

(11 CFR 114.10) were unconstitutional on First Amendment grounds.

The court based its ruling on a decision by the U.S.

Court of Appeals for the Eighth Circuit that addressed 

a similar Minnesota state law. In that opinion, the 

appeals court rejected the argument that the MCFL 

language served as a bright-line test for determining

which corporations were entitled to make independent

expenditures. Day v. Holahan (34 F.3d 1356 (8th Cir., 

1994)). The Day decision concluded that Minnesota’s 

regulations were too restrictive and not narrowly

tailored to serve a compelling governmental interest because they disqualified from the independentexpenditure exemption those nonprofit, membership

corporations that engaged in some business activities

and/or accepted some corporate donations, but not in

significant amounts.
18 Chapter Four

The district court in the MCCL case also found that 

the FEC’s definition of a qualified nonprofit corporation at 114.10(c) was not severable from the rest of 

114.10; consequently, the court rejected the entire 

provision.1 This decision is pending on review before

the Eighth Circuit. 

Express Advocacy

In addition to creating the nonprofit exemption, the 

MCFL decision limited the scope of the §441b prohibition based on the nature of the corporate or labor

spending. In response to this decision, the Commission prescribed a regulation defining express advocacy. And, once again, a successful challenge to that

regulation was mounted in 1996.

The Supreme Court, again citing First Amendment 

concerns, had held that the ban on corporate and

labor organization independent expenditures could

only be constitutionally applied in instances where the

money was used to expressly advocate the election

or defeat of a clearly identified candidate for federal

office. The Court’s landmark Buckley v. Valeo decision 

listed examples of phrases that constitute express

advocacy: “vote for,” “elect,” “support,” “cast your ballot for,” “vote against,” “defeat,” “reject.”

The FEC incorporated this list into its definition of

express advocacy at 11 CFR 100.22(a). Subpart (b) 

of 11 CFR 100.22 is based, inter alia, on the decision 

of the Court of Appeals for the Ninth Circuit in FEC 

v. Furgatch. The court of appeals held that language

may be said to expressly advocate a candidate’s election or defeat if, when taken in context and with limited reference to external events, it can have no other 

reasonable interpretation.

A nonprofit corporation immediately challenged the 

new definition, and the courts responded quickly. On

October 18, 1996, the U.S. Court of Appeals for the 

First Circuit summarily upheld a district court ruling

in Maine Right to Life v. FEC that subpart (b) of the 

1 A regulation that contains unconstitutional provisions 

must be stricken in its entirety unless that which remains after the unconstitutional provisions are excised is fully operative as law and the body enacting the regulation would have

enacted the constitutional provisions even in the absence of

those which are unconstitutional. 

regulatory definition exceeded the FEC’s statutory authority because it broadened the definition of express

advocacy beyond the Supreme Court’s interpretation.

The district court concluded that the Supreme

Court’s MCFL decision and a decision of the Court of 

Appeals for the First Circuit in Faucher v. FEC supported using Buckley’s list of phrases as a bright-line

test to detect express advocacy. The rigid approach

of a bright-line test, noted the court, avoided the chilling of speech that occurs when the communicator is

uncertain about whether or not his or her message

contains express advocacy. Further, the court said, 

the idea that the content of a message might become

express advocacy as an election nears adds to the

chilling effect of 11 CFR 100.22(b) on free speech. 

In its opinion, the district court had explicitly recognized the difficulty the FEC faced in crafting a regulation that effectively defines express advocacy, but 

noted that the Buckley, Faucher and MCFL decisions 

required the court to safeguard issue advocacy over

the interest of keeping corporate and labor organization money out of the electoral process. Based on

these precedents, therefore, the courts ruled that 11 

CFR 100.22(b) was invalid because it defined express

advocacy in broader terms than did the Buckley, 

MCFL and Faucher decisions. 

The appeals court also cited FEC v. Christian 

Action Network (CAN), where a district court—in a 

decision summarily affirmed this year by the Court of 

Appeals for the Fourth Circuit—ruled that CAN’s television and newspaper ads purchased with corporate

funds were not prohibited by §441b because they

contained no express advocacy. The ads, which ran 

during the weeks leading up to the 1992 Presidential

general election, assailed Bill Clinton and Al Gore for 

their alleged position on homosexual rights issues.

(For more information on the district court decision, 

see Annual Report 1995.)

On December 17, 1996, the Court of Appeals for 

the First Circuit declined to rehear Maine Right to Life 

v. FEC. 

Coordination with Candidates 

Among the statutory exceptions to §441b are provisions that permit specific types of corporate/labor

communications. Generally, corporations and unions 
Legal Issues 19 

may spend treasury funds to expressly advocate the

election or defeat of candidates when they communicate with their corporate executives and stockholders

or, in the case of a union, with their members. FEC 

regulations that took effect in 1996 flesh out this statutory provision.

In addition to clarifying that corporate and labor

communications to the general public that contain

express advocacy are considered prohibited expenditures, these regulations make clear that, generally, 

when corporations and unions coordinate their communications with specific candidates, they are making prohibited in-kind contributions to the candidates.

These regulations are based on Buckley and later 

opinions, which held that “controlled or coordinated

expenditures are treated as contributions rather than

expenditures under the Act.” The regulations, in certain instances, clarify what constitutes impermissible

coordination with candidates. For example, specific

regulations at 11 CFR 114.4(c)(4) and (5) make it illegal for a corporation or labor organization to distribute

voting records or voter guides to the general public

if, among other things, the organization consults or

coordinates with candidates concerning the content or

distribution of such materials. At 11 CFR 114.4(c)(5)

(ii), the FEC lists specific restrictions for voter guides

produced with corporate or union treasury funds for

distribution to the public, such as prohibiting a corporate or labor organization from contacting a candidate

(except through written questions to which a candidate may respond in writing) and requiring the organization to give all candidates for a particular office an

equal opportunity to respond.

Two 1996 court cases addressed these rules: Clifton v. FEC and FEC v. Christian Coalition. 

The U.S. District Court for the District of Maine in 

Clifton concluded that the FEC had based its voter 

guide regulations on too broad an interpretation of

the §441b prohibition on corporate expenditures. The 

court said that the regulations mistakenly hinge on

whether a corporation has had any contact with a candidate rather than on whether the voter guide conveys

issue advocacy on behalf of a candidate (which the

court found would be an acceptable interpretation).

In concluding that the FEC had overstepped its authority in promulgating 11 CFR 114.4(c)(4) and (5), the 

court pronounced that, “as long as the Supreme Court

holds that expenditures for issue advocacy have

broad First Amendment protection, the FEC cannot 

use the mere act of communication between a corporation and a candidate to turn a protected expenditure

for issue advocacy into an unprotected contribution to

the candidate.” 

The Commission has appealed the decision.

In the Christian Coalition case, the FEC asked 

the district court to find that the Coalition, a corporation, had made prohibited in-kind contributions and

independent expenditures on behalf of Republican

candidates during the 1990, 1992 and 1994 election

cycles (in violation of §441b) and had failed to report

the independent expenditures (in violation of 2 U.S.C.

§434(c)). Specifically, the FEC alleged that the Christian Coalition: 

• Made prohibited in-kind contributions by coordinating, cooperating or consulting with candidates when

making expenditures for voter identification drives,

get-out-the-vote drives and voter guides;

• Made prohibited in-kind contributions by coordinating 

with the National Republican Senatorial Committee

when making expenditures for voter guides distributed in several states; 

• Made a prohibited and unreported independent expenditure by expressly advocating the defeat of a

candidate at a conference; and 

• Made prohibited and unreported independent expenditures for direct mailings whose content—cover

letters and scorecards rating incumbents on their

House and Senate votes—constituted express advocacy on behalf of candidates receiving high scores

and against candidates receiving low scores.

The Commission also asked the court to enjoin the

Christian Coalition from violating §§441b and 434(c)

and to assess an appropriate civil penalty for each

violation. 

The case was pending at year’s end. 

Corporate Communications to Restricted Class

The Commission addressed another facet of corporate/labor communications in two 1996 advisory

opinions—the aforementioned exception that allows

corporations and unions to send corporate executives

and stockholders or union members (the so-called “re-
20 Chapter Four

stricted class”) communications that expressly advocate the election or defeat of a clearly identified candidate and that solicit contributions to be sent directly

to the candidate. 11 CFR 114.1(j) and 114.2(f)(4)(ii). 

The regulations make clear that such communications

may not, in any way, facilitate the making of contributions. 11 CFR 114.2(f) and 114.3. Examples of illegal 

corporate facilitation include acting as a conduit for

contributions or providing potential contributors with

stamps and envelopes addressed to political committees other than the corporation’s own PAC. Although 

the corporation may not provide addressed envelopes, it may provide contributors with the addresses

of political committees.

In AO 1996-1, the Commission concluded that the 

Association of Trial Lawyers of America (ATLA) could 

communicate its endorsement of candidates to its 

members (its restricted class) and encourage them to

support the ATLA-endorsed candidates by bestowing 

honorific designations on generous contributors.

Two characteristics of ATLA’s proposed communications were key to this determination: ATLA’s 

program did not facilitate the making of contributions

and ATLA members would not suffer adverse effects if 

they decided not to participate in the program.

Corporate coordination with candidates was also

an issue in the ATLA opinion. As part of its effort, 

ATLA planned to communicate with candidates before 

endorsing them to determine, for instance, their stand

on certain issues. The Commission said that if ATLA’s 

communication with a candidate’s campaign included 

a discussion of the candidate’s plans, projects or 

needs, ATLA’s ability to make political communications to the general public would be compromised.

Communicating with the candidate beyond what is

permitted by 11 CFR 114.3 might be considered evidence of coordination that would negate the independence of future election communications to the general public. 11 CFR 109.1(b)(4) and 114.2(c).

Coordination would also be presumed in the case

of an expenditure made by or through an ATLA member who was or had been an officer of a candidate’s 

committee, or who was or had received compensation or reimbursement from a candidate, a candidate’s committee or an agent of a committee. 11 CFR 

109.1(b)(4). Further, coordination would be presumed 

if an ATLA member who held a significant position in 

a candidate’s campaign were also either a member of 

ATLA’s executive committee, an ATLAPAC officer or 

were otherwise involved in the planning or execution

of ATLA’s or ATLAPAC’s political programs.

The Commission reached a similar conclusion 

in AO 1996-21, ruling that the Business Council of 

Alabama (BCA) could send to its individual members

and to the official representatives of its organizational

members (its restricted class) communications that

endorsed and/or opposed federal candidates or that

solicited contributions on behalf of the favored candidates. 

BCA’s proposed communications avoided facilitation problems and were otherwise consistent with the

above-described legal guidelines. BCA also had to 

ensure that contributions were made voluntarily, that 

a BCA member would not be penalized for not making contributions, and that contributions were made

by individuals from their personal funds or by another

person who was a lawful source of contributions. 

Independent Expenditures by Party

Committees 

Issues of coordination and express advocacy also

affected the activities of party committees in 1996. On 

June 26, the U.S. Supreme Court ruled that the First

Amendment precludes application of the Act’s party 

expenditure limits (2 U.S.C. §441a(d)) to independent campaign expenditures by political parties. The 

Court’s decision in FEC v. Colorado Republican Federal Campaign Committee reversed the Commission’s 

long-held view that a party could not make electoral

expenditures “independently” of its own candidates

since a party’s principal function is to elect its candidates to public office.

The Court decided not to address a constitutional 

challenge to the application of §441a(d) to coordinated expenditures by party committees. Instead, the

Court chose to “defer consideration of the broader 

issues until the lower courts have reconsidered the 

question in light of our current opinion.” The case was 

remanded to the lower courts for further proceedings

consistent with this decision. 
Legal Issues 21 

Background

At 2 U.S.C. §441a(d), the Act permits political 

party committees to make expenditures up to specified amounts “in connection with the general election

campaign of candidates for Federal office.” During

the 1986 U.S. Senate race in Colorado, the Colorado 

Republican committee assigned its entire expenditure

authority under §441a(d) to the National Republican

Senatorial Committee, but then spent $15,000 for a

radio advertisement critical of the campaign statements of then-Representative Tim Wirth, who was 

seeking the Democratic Senate nomination.

The ad was broadcast throughout the state several

months after Representative Wirth had registered as

a candidate with the FEC, but before the Colorado 

primary election. At the time the ad was aired, three 

candidates were seeking the Republican nomination.

In its campaign finance reports, the Colorado Republican committee characterized the ad as a generic

voter education expense that was not subject to the

§441a(d) limit. The FEC, however, acting in response 

to an administrative complaint, viewed the ad as a

coordinated party expenditure in connection with the

Colorado Senate election. After unsuccessful efforts 

to reach a negotiated settlement, the Commission

filed suit against the committee for violating the Act’s 

party expenditure limits and the corresponding reporting requirements.

The FEC alleged that the ad was subject to the

§441a(d) limits because it contained an “electioneering message” about a clearly identified candidate.

AOs 1984-15 and 1985-14. 

The committee argued that the ad did not contain

express advocacy and was therefore not subject to

the §441a(d) limits. Further, it counterclaimed with a 

First Amendment challenge to the constitutionality of 

the §441a(d) limits. 

Lower Court Decisions 

The U.S. District Court for the District of Colorado 

held that only communications containing express

advocacy counted towards the §441a(d) spending limits. Since, in its view, the ad did not contain express 

advocacy, it declined to address the constitutional 

question.

The U.S. Court of Appeals for the 10th Circuit 

reversed, upholding the FEC’s “electioneering message” standard as applied to the ad, as well as the

constitutionality of these spending limits. 

Supreme Court Decision

In its landmark Buckley decision, and successor 

cases, the Supreme Court distinguished between independent expenditures, which it held cannot in most

instances be constitutionally limited, and contributions

(including expenditures coordinated with candidates),

which can be limited. 

The FEC had presumed—and had codified in its

regulations—that party expenditures on behalf of candidates were “coordinated” with candidates and thus 

subject to limits. The Supreme Court disagreed, stating that there was no evidence that the anti-Wirth ad

had actually been coordinated between the committee

and the three candidates who were then seeking the

Republican Senate nomination. Rather, the ad “was 

developed by the Colorado Party independently and

not pursuant to any general or particular understanding with a candidate.” The Court also found that the 

potential for, or appearance of, corruption, which the 

Buckley Court found sufficient to justify limiting contributions, was not present to the extent that would

justify limiting such independent spending by political

parties on behalf of their candidates. Accordingly, the 

Court held that the First Amendment precluded application of the spending limit in §441a(d) to independent expenditures by party committees. Four justices

would have found the statutory limit unconstitutional

as applied to coordinated expenditures. However, 

there were not enough votes to take this step, and the

plurality opinion concluded that it was premature to

consider that issue on the record before the Court. Accordingly, the case was remanded to the lower court 

for further proceedings on that question. 

Party Response to Ruling

In light of the Court’s decision, the Democratic Senatorial Campaign Committee (DSCC) and the Democratic Congressional Campaign Committee (DCCC)

asked the FEC to revise its rules to explain how party

committees, with their traditionally close contacts with

candidates, could make independent expenditures.

The Commission initiated a rulemaking, but acknowl-
22 Chapter Four

edged that it could not revise the rules in time for the

November election. The committees also submitted 

an advisory opinion request (AOR 1996-30) on the

subject. The Commission failed to approve the General Counsel’s draft advisory opinion by the required 

four-vote majority. As a result, the Democratic committees filed a lawsuit asking the District Court for the

District of Columbia for guidance. (DSCC v. FEC) On 

October 9, 1996, the court dismissed the case citing

the FEC’s jurisdiction in the area.

Reports filed by the Republican and Democratic

national committees indicate that both made independent expenditures in connection with the 1996 elections. The Republican committees reported approximately $9.9 million in independent spending, and the

Democrats disclosed about $1.4 million. 

State/National Committee Status 

The Commission considered the status of particular

party organizations in several 1996 advisory opinions.

Three opinions addressed “state party committee”

status, and one examined the qualifications for “national party committee” status. These designations are 

important because only qualified state and national

committees may make coordinated party expenditures 

in support of their general election nominees. (See

previous section.) In addition, the Act affords national 

party committees a higher limit on contributions received and the opportunity to qualify for public funding

of their Presidential nominating conventions. 

State Party Status

Under the Act and Commission regulations, a 

“state committee” is defined as an organization which,

by virtue of the bylaws of a political party, is responsible for the day-to-day operations of the party at the

state level, as determined by the Commission.

In AO 1992-30, the Commission established two 

criteria necessary to qualify as a state committee of

a political party. First, the organization must have a 

state affiliate agreement that delineates activities that

“are commensurate with” the day-to-day operations of 

a party at a state level. Second, the state affiliate must 

gain ballot access for its Federal candidates.

The Commission applied these criteria in three 

advisory opinions issued in 1996. In AO 1995-49 the 

Commission determined that the Natural Law Party

of Texas (Texas Party) was not a state party committee of the Natural Law Party of the United States of

America (the Natural Law Party - National) because it

had not secured ballot access in the State of Texas for 

its Presidential and other federal candidates. On the 

other hand, in AOs 1996-27 and 1996-43, the Commission concluded that the Libertarian Party of Illinois

and the Green Party of New York did qualify as state 

committees because they met both of the established

requirements. 

National Committee Status 

In AO 1996-35, the Commission determined that 

the Greens/Green Party USA (G/GPUSA) did not 

conduct enough national political campaign activity to

qualify as a national party committee.

The Act defines a national party committee as the 

organization that, by virtue of a party’s bylaws, is responsible for the day-to-day operations of that party

at the national level. The Commission relies on several criteria to determine whether a political party has

demonstrated sufficient activity on the national level to

qualify. Those criteria include: 

• Nominating candidates for President and various

Congressional offices in numerous states;

• Engaging in certain activities—such as voter registration and get-out-the-vote drives—on an ongoing

basis; 

• Publicizing the party’s supporters and primary issues 

throughout the nation;

• Holding a national convention;

• Setting up a national office; and

• Establishing state affiliates.

A party cannot qualify for national committee status 

if its activity is focused only on the Presidential and

Vice Presidential election, if the activity is limited to 

one state or if the party has only a few federal candidates on a limited number of state ballots. On the 

other hand, ballot access for Presidential candidates 

is a prerequisite for any organization trying to attain

national committee status. 

In the 1996 election cycle, the G/GPUSA mounted 

a presidential campaign with Ralph Nader as its candidate, and ran eight candidates for congressional 
Legal Issues 23 

seats in five states. It also claimed 14 state affiliates, 

published a party journal, held party conventions and

maintained a website on the internet. 

Although Mr. Nader appeared on the ballot as the 

Green Party presidential nominee in 16 states, he apparently did not qualify as a candidate under the Act. 

In an effort to avoid the FEC’s registration and reporting requirements, Mr. Nader had said that he would 

campaign for the presidency without meeting the Act’s 

definition of a candidate. The Commission, therefore, 

could not consider Mr. Nader a candidate in evaluating G/GPUSA’s status as a national committee. That 

fact, combined with the party’s limited success in 

achieving ballot access for congressional candidates,

led the Commission to conclude that G/GPUSA’s 

1996 activity was insufficient to qualify it for national

committee status. 

Major-Purpose Test 

The Act defines a political committee as any group 

of persons that either receives contributions or makes

expenditures exceeding $1,000 per year for the

purpose of influencing a federal election. 2 U.S.C.

§431(4). In applying this definition, the Commission has considered an additional factor—whether a 

group’s major purpose is the nomination or election of 

candidates. 

The major-purpose test was the subject of both

litigation and an advisory opinion in 1996. 

GOPAC Case 

Through the course of an enforcement investigation (MUR), the Commission determined that GOPAC 

first qualified as a political committee in 1989 when it

raised and spent more than $1,000 for the purpose of

overturning the Democratic majority in the House of

Representatives, and as such was required to register

and file with the FEC from that point forward. GOPAC 

argued that it did not qualify as a political committee

under the Act until 1991, at which time it did register with the FEC, because before that time its major

purpose was not to influence the election of federal

candidates. 

The major-purpose test dates back to the Supreme

Court’s Buckley v. Valeo decision in which the Court 

ruled that the definition of political committee “need

only encompass organizations that are under the

control of a candidate or the major purpose of which

is the nomination or election of a candidate.” The FEC 

contended that the Buckley decision did not require

that a group provide direct support to a specific federal candidate in order for the group to be considered a

political committee under the major purpose test. Instead, the FEC argued that Buckley’s definition of “political committee” encompassed groups organized to

engage in partisan electoral politics or electoral activity, once they crossed the $1,000 statutory threshold 

of federal contributions or expenditures. Accordingly, 

the FEC argued that if GOPAC’s major purpose was 

to advocate the election of Republicans as a class of

candidates, then the purpose of its activities was by

definition campaign related. And if its expenditures, or 

the contributions it received, to influence the election 

of federal candidates exceeded $1,000, it qualified as

a political committee under the Act.

The court disagreed because it found the term

“partisan electoral politics” to be vague and therefore

to have a chilling effect on the First Amendment rights 

of issue advocacy groups. In its February 28, 1996,

opinion, the court quoted the Buckley decision: “ . . . 

the distinction between discussion of issues and candidates and advocacy of election or defeat of candidates may often dissolve in practical application.”

The court reasoned that a bright-line test was

therefore required. The court concluded that the appropriate bright line was provided by limiting the definition of political committee to groups whose major

purpose was the election of a particular federal candidate or candidates. The court said that this test drew 

two relatively clear lines: it distinguished between federal and nonfederal candidates; and it distinguished

between groups that support particular federal candidates and those that lend general party support.

The court noted that the FEC conceded that there 

was no evidence of direct GOPAC support to specific 

federal candidates in 1989 and 1990. The record 

indicated that GOPAC developed and distributed 

materials espousing a set of ideas for Republican

candidates, including federal candidates. GOPAC 

also targeted cash contributions to local and state

candidates in areas where it hoped this support might 
24 Chapter Four

indirectly influence the election of other candidates,

including federal candidates, on the Republican ticket.

GOPAC also provided assistance to Congressman 

Newt Gingrich in 1989 and 1990. Based on these

facts, the Commission concluded that GOPAC’s major 

purpose was the election of candidates. However, the 

court found it critical that GOPAC’s support appeared 

to have been limited to state and local candidates, 

to general nationwide dissemination of ideological

materials and to Congressman Gingrich in his role as

GOPAC chairman and not as a federal candidate. The 

court therefore ruled in GOPAC’s favor and dismissed 

the FEC’s complaint. The Commission deadlocked 

3-2 on the staff’s recommendation to appeal the decision. 

Akins v. FEC 

On December 6, 1996, the U.S. Court of Appeals 

for the District of Columbia Circuit, sitting en banc

(i.e., with all active judges present), ordered the Commission to reconsider its dismissal of a complaint

alleging that the American Israel Public Affairs Committee (AIPAC) had violated the Act by failing to register as a political committee. The court said the Commission should review the complaint based solely on

the Act’s definition of political committee, and not the 

major purpose test.

The ruling reversed both the district court’s decision and the initial ruling of a three-judge panel of the

court of appeals in the case. In district court, the FEC

had successfully argued that precedents in Buckley 

v. Valeo and FEC v. MCFL held that an organization

that receives contributions or makes expenditures in

excess of $1,000 becomes a political committee only

if its major purpose is influencing federal elections.

The appeals court panel affirmed the lower court ruling, but the en banc court decided to rehear the case

before all of the active judges of the D.C. Circuit.

Upon rehearing, the appeals court found that the

FEC erred in its interpretation of Buckley and MCFL 

as they relate to the definition of political committee.

The court said that both Buckley and MCFL invoked 

the major purpose test only with reference to independent expenditures. Since AIPAC’s activities involved 

coordinated expenditures (considered to be in-kind

contributions), the court concluded that the major 

purpose precedents did not apply, and that any group 

must be considered a political committee if it makes

coordinated expenditures (or any other type of contribution) exceeding $1,000 in a calendar year. 

Advisory Opinion

The major-purpose test was also central to an advisory opinion issued in 1996, which ran contrary to the

court’s later decision in Akins. In AO 1996-3, the Commission determined that the Breeden-Schmidt Foundation was not a political committee because influencing federal elections was not its major purpose.

The Foundation appeared, at first glance, to be a

“political committee” under 2 U.S.C. §431(4)(A) because its contributions to federal candidates exceeded $1,000 in a calendar year. However, the Foundation also made disbursements of significant amounts

for nonelection purposes.

In fact, except for the Foundation’s first year of 

operation (1990), when its disbursement programs

were not yet fully developed, contributions to federal,

state and local candidates constituted no more than 

10 percent of the Foundation’s total outlays for any 

one calendar year, and the total contributions for each 

of the six succeeding years remained under $5,000

per year. None of the other disbursements made by 

the Foundation was in any way related to election

campaigns.

Apart from the contributions, there was no indication that the Foundation’s disbursements were related 

to election campaigns. For example, the Foundation

did not appear to distribute materials featuring candidates or members of Congress, recruit candidates for

public office or solicit people to assist campaigns for

public office.

Best Efforts 

The Federal Election Campaign Act (the Act) 

requires political committees to report names, addresses, occupations and employers of people who

contribute more than $200 in a year to committee

coffers. When reported information on a contributor is 

incomplete, a committee will be in compliance with the 

law if it can demonstrate that “best efforts” were used 

to obtain and report the information. See 2 U.S.C. 
Legal Issues 25 

§§431(13), 432(i) and 434(b)(3)(A).

In 1994, the FEC revised its rules at 11 CFR 104.7 

to explain the minimum steps a committee had to take

in order to demonstrate best efforts. Under the rules, 

a committee had to place the following statement conspicuously on solicitation materials: “Federal law requires political committees to report the name, mailing

address, occupation and name of employer for each

individual whose contributions aggregate in excess

of $200 in a calendar year.” Committees also had to 

make a stand-alone, follow-up request for contributor

information in instances where the contributor failed to 

respond to the original request or provided incomplete

information. 

Shortly after the Commission promulgated these

rules, the Republican National Committee (RNC), National Republican Senatorial Committee (NRSC) and

the National Republican Congressional Committee

(NRCC) filed a lawsuit challenging their constitutionality. The district court upheld the rules, noting that they

“merely [provide] a ‘safe harbor’ for any committee

that is unable to obtain all of the required information”

and impose a “minimal burden” on committees given

the strong governmental interest in disclosure of contributor information. (See Annual Report 1994.) The

plaintiff committees appealed the decision.

On February 20, 1996, the U.S. Court of Appeals 

for the District of Columbia Circuit affirmed most of 

the district court’s decision,2

 finding only the particular wording of the mandatory language prescribed in

the regulation to be misleading and therefore contrary to law. The language was inaccurate, the court

said, because the Act does not require committees 

to report full contributor information for each donor;

rather, it only requires them to undertake “best efforts” 

to obtain and report it. The court found that 11 CFR 

104.7(b) had the effect of forbidding a more accurate 

paraphrasing of the law, such as: “Federal law requires us to use our best efforts to collect the information.” 

Additionally, the mandatory language was misleading, the court said, because it led readers to infer that 

federal law required contributors to disclose this information. In fact, neither the Act nor any other federal 

law requires contributors to do so.

In light of the court’s decision, the Commission 

published a Notice of Proposed Rulemaking on October 9, 1996, seeking comments on proposed revisions 

to its best efforts regulations. The revisions would 

require committees to include an accurate statement

of the law’s requirements in all solicitations. The Notice offered two examples that would satisfy the notice 

requirement and sought comment on whether it would

be preferable to require political committees to use

one or the other. The examples were:

• “Federal law requires us to use our best efforts to 

collect and report the name, mailing address, occupation and name of employer of individuals whose

contributions exceed $200 in a calendar year.”

• “To comply with Federal law, we must use best efforts to obtain, maintain, and submit the name, mailing address, occupation and name of employer of

individuals whose contributions exceed $200 per

calendar year.”

Committees could substitute their own wording for

the “best efforts” statement as long as it complied with 

federal guidelines.

Another proposed change to the regulations would

clarify that, in the event that a separate segregated

fund (SSF) had incomplete contributor information, it

would be expected to report contributor information

that its connected organization already had. 

Personal Use of Campaign Funds 

The Federal Election Campaign Act prohibits the 

use of excess campaign funds to pay for personal

expenses. 2 U.S.C. §439a. During 1996, the Commission received a number of advisory opinion requests

concerning the personal use of campaign funds, following the Commission’s promulgation of regulations 

on this matter in 1995. The Commission had revised 

its rules to clarify what is meant by “personal use” of

campaign funds. The regulations differentiate cam2

 On January 6, 1997, the Supreme Court denied a petition for certiorari submitted by the party committees. 
26 Chapter Four

paign and officeholder expenses from unlawful personal use expenses.

Under 11 CFR 113.1(g), the personal use ban applies to expenses that would exist irrespective of the

campaign or officeholder duties. The regulations list 

specific expenses that are considered per se (or automatic) personal use expenses, which cannot be defrayed with campaign funds. The rules state that the 

Commission will address payments for legal services,

meals, travel, vehicles and mixed-used expenses on

a case-by-case basis. The requests for advisory opinions fell within these areas. 

Advisory Opinions

In response to these requests, the Commission

issued numerous advisory opinions that clarified how

the personal use rules applied to specific situations:

•	A candidate could use campaign funds to pay travel 

costs, including those of his/her family and chief of

staff, to attend a Presidential nominating convention, where those persons would be participating in

campaign-related activities. AOs 1995-47; 1996-19; 

1996-20; and 1996-34.

•	An incumbent could use campaign funds to pay child

care expenses while attending a campaign event

with his wife. AO 1995-42. 

•	A campaign could purchase and distribute copies of 

the candidate’s autobiography. AO 1995-46. 

•	A campaign could transfer funds to a state party for 

construction of a library to house the candidate’s 

papers. AO 1996-9. 

•	A retiring Congressman could use campaign funds 

to move his belongings home from Washington, DC, 

or to move office furnishings and memorabilia from a

state office to DC. AOs 1996-14 and 1996-44.

• A candidate could use campaign funds for legal work 

conducted to refute press allegations adverse to his

campaign. AO 1996-24.

• Campaign funds could defray travel expenses associated with a seminar hosted by a Congresswoman

in her official capacity. AO 1996-45.

News Story Exemption 

As explained earlier in this chapter, corporations 

are prohibited from making contributions or expenditures in connection with a federal election. 2 U.S.C. 

§441b. But the FECA exempts from this prohibition 

those disbursements that are made for “any news

story, commentary, or editorial distributed through the 

facilities of any broadcasting station...unless such

facilities are owned or controlled by any political party, 

political committee, or candidate.” 2 U.S.C. §431(9)

(B)(i). Thus, a bona fide news entity is free to publish 

or broadcast candidate-related material contained in 

news stories and editorials as long as it is not owned

or controlled by a party, a political committee or a 

candidate. In 1996, the Commission promulgated new

regulations to clarify that the news story exemption

also applies to cable television organizations. (The

rules also permit cable stations to stage candidate

debates.)

In three 1996 advisory opinions, the Commission

determined that the requesting organizations were

eligible for the news story exemption, but in a fourth

opinion, the requester did not qualify.

In AO 1996-16, the Commission determined that 

the on-line, television and radio entities of Bloomberg, L.P., qualified as press entities. As such, they 

were entitled to the news story exemption at 2 U.S.C. 

§431(9)(B)(i) and could conduct their proposed Electronic Town Meetings with Presidential candidates.

Similarly, in AO 1996-41, the Commission permitted A.H. Belo Corporation, in conjunction with PBS 

affiliate stations, to produce and broadcast television

programs that featured candidates for federal and

state office.

Belo owned seven television stations in six states 

and, in conjunction with PBS affiliates in each of the

areas, proposed to feature congressional and gubernatorial candidates who were running in districts that

encompassed viewing audiences of the various stations. Belo satisfied the basic criteria for the news exemption. It was a bona fide press entity as described

in FEC regulations. None of Belo’s seven television 

stations was owned by a political party, committee or 

candidate, and all appeared to be actively involved in

local news coverage. And Belo’s proposal constituted 

valid activity as a press entity.

The Commission reached the same conclusion in 

AO 1996-48. The National Cable Satellite Corporation’s (NCSC) two cable television networks—C-
Legal Issues 27 

SPAN and C-SPAN 2—qualified for the news story 

exemption and could, as a result, air candidate biographies and campaign commercials as part of their

regular programming to cover the campaigns. The 

Commission found that NCSC qualified as a broadcaster within the meaning of the press exemption and

did not appear to be controlled by any party, political 

committee or candidate. 

In a somewhat different situation, the Commission 

determined in AO 1996-2 that Compuserve’s plan to 

provide free on-line accounts to federal candidates

would constitute an illegal corporate contribution.

While the news story exemption was not the focal

point of the Commission’s analysis, the opinion noted 

that Compuserve would not qualify as a bona fide

news entity for purposes of the news story exemption.

(Compuserve’s plan also fell outside the exemption 

for corporate discounts made in the ordinary course of

business, since that exemption does not permit corporations to provide valuable goods and services free of

charge.) 

Application of Contribution Limits 

In AOs 1996-36 and 1996-37, the Commission 

addressed questions concerning the application of

contribution limits to elections held in Congressional

districts redrawn by court order during the course of

the campaign.

On August 5, 1996, the United States District Court 

for the Southern District of Texas redrew the boundaries of 13 Congressional districts due to a previous

court decision that three of those districts were the result of racial gerrymandering. Vera v. Bush. The court 

ordered that special general elections—open to all

candidates—be held on November 5 in those districts. 

If no candidate received a majority of the votes in the

November 5 special election, a special runoff election 

would be held in that district on December 10, 1996, 

between the top two vote-getters in the November 5

election. 

In response to requests from candidates running

in the special election, the Commission identified four

separate sets of contribution limits that might apply to

a given candidate. Separate limits would apply to: (1) 

the March 12 primary; (2) a “defunct” general election

campaign that ended August 5 (the date of the court 

decision); (3) a November 5 special general election

(open to all candidates, not just March 12 primary winners); and (4) a December 10 runoff (if the candidate 

participated in a runoff). Coordinated party expenditures made on or before August 5 would not count 

against the $30,910 limit for the November 5 special

general election in each district. There would not be 

a separate coordinated party expenditure limit for the

December 10 runoff. 

Sale or Use Ban 

Under 2 U.S.C. §438(a)(4), the FEC must make

disclosure reports and other statements filed with it

available for public inspection and copying within 48

hours of receipt. The Act also requires political committees to identify each individual whose aggregate

contributions exceed $200 in a calendar year by listing their name, mailing address, occupation and employer. 2 U.S.C. §434(b)(3)(A).

The statute tries to balance the public disclosure

of campaign finance information against the need to

protect the privacy of individual contributors. To that 

end, any information pertaining to the names and 

addresses of individual contributors that is taken from 

the reports or other statements filed with the Commission may not be sold or used for the purpose of

soliciting contributions or for commercial purposes. 2

U.S.C. §438(a)(4).

D.H. Blair & Co. Inc., a New York City brokerage 

firm, agreed to pay a $100,000 civil penalty after

some of its employees used political committee contributor lists for commercial purposes. MUR 4320. The 

lists were used as a source for making “cold calls” to 

potential clients, in violation of the Act’s “sale and use 

restriction.” 

Background

Beginning in late 1994, an employee of the FEC’s 

Public Disclosure Division noticed an unusual pattern

of telephone requests from brokerage firm employees for lists of individual contributors. The Disclosure 

Division referred the matter to the Office of General 
28 Chapter Four

Counsel, and the Commission voted to conduct an 

investigation.

Prior to the Commission’s finding probable cause 

to believe the law had been violated, Blair agreed

to enter into a conciliation agreement with the Commission. In addition to paying the civil penalty, Blair 

agreed to:

• Notify all of its employees that commercial use of

contributor lists obtained from the FEC was prohibited by law and make such information part of regular

employee training;

• Post notices in offices and “cold calling” areas advising employees of the law;

• Amend its training and personnel manuals to include

a statement about the prohibitions on contributor

lists; and 

• Sanction any employee who violates the prohibition

on contributor lists. 

In an effort to educate the brokerage community, 

the Commission also approved sending informational

letters about the sale and use restriction in the Act to 

three organizations with oversight over the securities

industry—the Securities and Exchange Commission,

NASD Regulation Inc. and the New York Stock Exchange—and to four brokerage firms where employees were identified as having requested contributor

lists from the FEC’s Public Records Office.

Enforcement Process 

During 1996, the Commission faced several court

challenges pertaining to its enforcement activity. Most 

concerned the timeliness of FEC actions. 

Under 2 U.S.C. §437g(a)(8)(A), anyone who files 

a complaint with the FEC may seek court intervention

if the FEC fails to complete action on the complaint

within 120 days. On April 17, 1996, the U.S. District 

Court for the District of Columbia ruled that the FEC 

acted contrary to law when, pursuant to its enforcement priority system, it allowed nearly 600 days to

pass without taking any meaningful action on an administrative complaint filed by the Democratic Senatorial Campaign Committee (DSCC).

The court reasoned that while FEC decisions concerning whether to conduct an investigation were

entitled to judicial deference, the agency’s failure to 

consider a complaint for nearly 600 days was subject

to judicial review.

The criteria the court used to review the FEC’s 

inaction are outlined in Rose v. FEC (1984) and Telecommunications Research & Action Center v. FCC 

(1984); they are:

• The credibility of the allegation;

• The nature of the threat posed;

• The resources and information available to the agency;

• The novelty of the issues involved;

• The time it takes for the agency to make decisions;

• Whether Congress mandated a timetable for the

agency to take action on such matters as the one at

hand; 

• The nature of the matter (for instance, delayed agency action on matters affecting human health and 

welfare are less tolerable than those in the sphere of

economic regulation);

• The effect that court-ordered expedited action on the 

matter would have on agency activities of a higher or

competing priority;

• The nature and extent of the interest prejudiced by

the agency’s delay in acting on the matter; and

• The fact that the court need not “find any impropriety

lurking behind agency lassitude in order to hold that

agency action is ‘unreasonably delayed.’”

Based on its analysis of the factors listed above,

the court ruled that the FEC’s failure to consider the 

DSCC’s complaint for nearly 600 days was contrary 

to law. The court noted, however, that while this litigation was pending, the FEC had moved forward with

respect to the DSCC’s complaint. The court warned 

that should the FEC stall on this matter again, “the

need for additional judicial intervention may well be

compelling.”

In September, the DSCC sought additional judicial 

intervention, asking the court again to order the FEC

to complete the consideration of its complaint within

30 days or give the DSCC the authority to file a civil

action against the NRSC.

On November 25, 1996, the court denied the request, concluding that the FEC’s actions did not yet 
Legal Issues 29 

constitute a failure to act that was contrary to law. The 

court based its ruling, in part, on the FEC’s considerable work load, lack of resources and competing priorities. 

The court noted that the statute of limitations period

in which the Commission could file an enforcement 

suit on some of the violations alleged in the DSCC’s 

administrative complaint was coming to a close. As a 

result, the court ordered the FEC to file status reports

on its progress on the complaint every 30 days and

scheduled a March status conference for the FEC and 

the DSCC in the event that the matter had not been 

resolved by then.

In another case, a U.S. District Court in Texas dismissed Congressman Stephen E. Stockman’s claim 

that the FEC had unreasonably delayed its investigation into his 1994 campaign (MUR 3847).

The court considered several facts in reaching this

decision: 

• The FEC is not required to resolve MURs within a

statutory deadline.

• The agency’s delay in MUR 3847 did not risk human 

health and welfare. 

• The time the FEC had taken to investigate the MUR

was reasonable considering that similar MURs had

taken the agency between 3 and 4 and a half years

to resolve. 

• If the court were to force the FEC to take immediate 

action, the agency would have to divert scarce resources from matters of equal or higher priority.

• The plaintiffs provided no real evidence that the delay had caused them any injury.

• The issues presented in MUR 3847 were novel and

would likely require substantially more time to consider than issues more frequently investigated.

In granting summary judgment to the FEC, the

court said that the agency’s delay in resolving MUR 

3847 was not unreasonable. Moreover, the court said, 

“There is no evidence showing that the time spent to

investigate this matter is a product of anything other

than the excessive demands on a strapped federal

agency.”

Another enforcement-related case involved the 

60-day period in which a complainant may petition

for judicial review of an FEC decision to dismiss an

administrative complaint. 2 U.S.C. §437g(a)(8)(B). 

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

Circuit found that Absalom Jordan did not file his petition within that time frame, and remanded the case to 

district court for dismissal. Mr. Jordan did not file suit 

with the district court until 63 days after the FEC had

voted to dismiss his complaint. 
31 

Chapter Five

The Commission 

Commissioners 

During 1996, Lee Ann Elliott served as Chairman 

of the Commission, and John Warren McGarry served 

as Vice Chairman. 

One seat on the Commission remained vacant 

throughout 1996, and two other Commissioners

whose terms expired in April 1995—Joan D. Aikens 

and Vice Chairman McGarry—continued to serve. 

Under the law, Commissioners may continue to hold 

office until new appointments are made by the President and confirmed by the Senate. In the absence

of new appointments, Commissioners Aikens and 

McGarry continued to sit on the Commission. The 

vacant seat had been occupied by Trevor Potter, who 

resigned in October 1995 to return to his law firm.

On December 12, 1996, the Commission elected 

Mr. McGarry to be its 1997 Chairman and Mrs. Aikens 

to be its 1997 Vice Chairman. For biographies of the 

Commissioners and statutory officers, see Appendix 

1. 

EEO and Special Programs 

During 1996, the Office of Equal Employment Opportunity and Special Programs administered the

agency’s EEO complaint and special emphasis programs, and offered additional programs designed to 

improve employees’ professional and personal lives. 

These programs included cultural diversity training,

luncheon meetings for managerial women and support staff, guest speakers and panel discussions on 

a variety of topics, “Knowledge at Noon’ education 

sessions and a Thanksgiving food drive for needy 

employees.

In addition, the EEO Director briefed agency staff 

on the EEO complaint process and Early Intervention

Program. As a result of this informal complaint resolution program, only two formal EEO complaints were

filed during 1996.

The EEO Director also spoke and conducted EEO

training at other government agencies, and—as part

of an agreement of reciprocity—provided counseling

services to employees at the U.S. Soldiers and Airmen’s Home. 

Also, the EEO office handles the agency’s annual 

Combined Federal Campaign and U.S. Savings Bond

Drive. 

Ethics 

The ethics staff provided ethics orientation to all 

new employees and published an intraagency newsletter to further advise all staff on the standards of 

ethical conduct. Staff also administered the Commission’s public and confidential financial disclosure 

report system, which helps ensure that employees

remain impartial in the performance of their official duties. Finally, the ethics staff submitted required reports

with the Office of Government Ethics, including the

annual agency ethics report, the financial disclosure

reports filed by Presidential and Vice Presidential candidates and semiannual travel payment reports. 

Inspector General 

Under the Inspector General Act, the Commission’s 

Office of the Inspector General (OIG) is authorized to

conduct audits and investigations of FEC programs to

find waste, fraud and abuse. The OIG audited several 

facets of Commission operations in 1996, including

travel and compliance with the Freedom of Information Act (FOIA) and Government in Sunshine Act. The 

OIG also conducted an unannounced count of the 

agency’s imprest fund. 

Computer Upgrade 

During 1996, the agency completed its conversion

from network-based computer terminals to personal

computers. The project involved improving the agency’s computer infrastructure so that it had adequate 

space to store both new documents and those created on the old network. By the end of the year, every 

staff member slated to receive a PC had one.

The FEC’s Budget 
32 Chapter Five

Budget constraints hampered the Commission’s 

ability to oversee the unprecedented level of campaign activity associated with the 1996 elections. Appropriations for both the 1996 and 1997 fiscal years

were well below what the Commission had identified 

as being necessary to effectively administer and enforce the law. 

Fiscal Year 1996 

The FEC’s FY 1996 appropriation was $26.5 million, $2.5 million less than OMB had recommended 

and a nominal $800,000 above the agency’s FY 1995 

appropriation. Of the $26.5 million budgeted for the

1996 fiscal year, Congress mandated that $1.5 million 

be set aside for computer enhancements, electronic

filing and point-of-entry costs. (See Chapter 1 for details.)

In light of these constraints, the Commission instituted a partial hiring freeze and cut certain nonpersonnel expenses, such as training and outreach

programs. Staffing levels ranged from a high of 318

full time equivalents (FTE) at the beginning of the

fiscal year to a low of 288.9 FTE by the close of the

fiscal year. The cumulative FTE for the entire year

was 308.5.

Fiscal Year 1997 

The FEC’s $28.165 million FY 1997 appropriation fell $1.2 million short of the President’s proposal 

and $2.7 million shy of the Commission’s request. 

The agency had asked for $30.877 million and 331.5

FTE, which would have maintained the Commission’s “standard performance level,” avoided backlogs 

caused by surges in workload and funded the FEC’s 

ongoing computerization initiatives. The President’s 

request would have represented a “reduced performance level” of funding and 313.5 FTE. As a result of 

its actual appropriation, the Commission was forced to 

reduce its FY 1997 operations even more than what 

had been planned in either proposal.

In justifying its original budget request, the Commission had noted the explosive growth in campaign

activity over the last few election cycles. Politicalcommittee spending increased from about $1.75 

billion during the 1994 election cycle to about $2.5

billion during the 1996 election cycle, and the number

of registered committees grew from 10,974 in 1994

to 11,227 in 1996. These increases generated more 

questions for the FEC to answer, more transactions 

to process, more pages of documents to review and

more audit and enforcement matters for the FEC to 

address. 

Despite the increased use of new technology such

as the automated flashfax system, direct computer

access to the FEC database and a home page on the

Internet, the budget cuts hampered the Commission’s 

performance. Informational and educational programs

suffered staffing cuts and reductions in outreach efforts, and informational publications were cut back.

The Office of Election Administration reduced its 

research projects designed to assist state and local

election officials in the performance of their oversight

and administrative functions in federal elections. Although the Commission maintained the timeliness of

its data entry of itemized information, the review of

reports was delayed and Title 2 audits were reduced 

below desired levels. In addition, the Commission was 

forced to dismiss more enforcement cases with no 

findings in order to focus its limited resources on more

significant compliance actions; and a larger percentage of complaints remained on hold because of insufficient staff.

Budget Allocation: FYs 1996 and 1997

Budget allocation comparisons for FYs 1996 and

1997 appear in the table and charts that follow.
The Commission 33 

 

CHART 5-1 

Functional Allocation of Budget 

FY 1996 FY 1997 

Personnel $18,926,472 $19,969,500 

Travel/Transportation 162,061 231,000

Space Rental 2,551,669 2,561,000

Phones/Postage 499,583 490,500

Printing 322,836 328,000

Training/Tuition 54,950 60,000

Contracts/Services 1,215,988 846,520

Maintenance/Repairs 384,052 407,580

Software/Hardware 209,169 735,000

Federal Agency Service 298,892 282,500

Supplies 496,023 285,000

Publications 250,554 257,500

Equipment Purchases 1,103,941 1,710,900

Total $26,476,190 $28,165,000 
34 Chapter Five

CHART 5-2 

Divisional Allocation 

* The Administrative Division pays for agency-wide housekeeping expenses such as telephones, photocopies and office supplies. 
35 Chapter Six

Legislative

Recommendations 

On February 19, 1997, the Commission submitted

57 legislative recommendations to the President and

Congress in a three-part package. The first part, entitled “Legislative Recommendations to Improve the Efficiency and Effectiveness of Current Law,” contained 

23 administrative recommendations designed to ease

the burden on political committees and streamline the

administration of current law. The second part, “General Legislative Recommendations,” contained 24

recommendations concerning areas of the law which

have been problematic. In each case, the Commission described the problem and asked Congress to

consider clarification or more comprehensive reform

of the law.

Finally, the third part, “Conforming Legislative Recommendations,” contained 10 additional recommendations that seek to correct outdated or inconsistent 

portions of the law.

The complete set of recommendations follows. As 

in the past, each recommendation is followed by an

explanation of the need for and expected benefits

from the change. Parenthetical references to 1997

indicate new recommendations or recommendations 

that were revised in 1997. 

Part I 

Legislative Recommendations to

Improve Efficiency and

Effectiveness 

of Current Law 

Disclosure 

Electronic Filing Threshold (1997)

Section: 2 U.S.C. §434(a)

Recommendation: The Commission recommends that 

Congress give the FEC authority to require committees with a certain level of financial activity to file FEC

reports electronically. 

Explanation: Public Law 104-79, effective December 

28, 1995, authorized the electronic filing of disclosure

reports with the FEC. Starting January 1997, political 

committees (except for Senate campaigns) may opt to

file FEC reports electronically.

The FEC has created the electronic filing program and 

is moving towards providing software to committees

in order to assist committees that wish to file reports

electronically. To maximize the benefits of electronic 

filing, Congress should consider requiring committees

that meet a certain threshold of financial activity to file

reports electronically. The FEC would receive, process and disseminate the data from electronically filed

reports more easily and efficiently, resulting in better 

use of Commission resources. Moreover, information in the FEC’s database would be standardized for 

committees at a certain threshold, thereby enhancing

public disclosure of campaign finance information. In 

addition, committees, once participating in the electronic filing program, should find it easier to complete

and file reports.

Filing Reports Using Registered or Certified Mail

(1997)

Section: 2 U.S.C. §434(a)(2)(A)(i), (a)(4)(A)(ii) and (a)

(5)

Recommendation: The Commission recommends 

that Congress delete the option to file campaign finance reports via registered or certified mail when

the report is postmarked by a specific date. Instead, 

Congress should consider simply requiring political

committees to file their reports with the Commission

(or the Secretary of the Senate) by the due date of the 

report. 

Explanation: Section 434 of the Act permits committees to file their reports by registered or certified mail,

provided that the report is postmarked by a certain

date. (In the cases of a quarterly, monthly, semiannual or post general report, the report must be

postmarked by the due date if sent by registered or

certified mail. In the case of a pre-primary or pre-general election report, the report must be postmarked 15

days before the election.)

In the 1996 election cycle, because of the extra handling required, the Postal Service often delivered 
36 Chapter Six

reports filed via registered or certified mail to the FEC

more than a week after the report’s due date. The 

delayed delivery presented an obstacle to full public

disclosure of campaign finances immediately before

the the 1996 election. Moreover, there is little likelihood of improvement in future election cycles because of continuing staff reductions within the Postal 

Service. 

To minimize this delay in disclosure, Congress should 

eliminate the option in the law that allows committees to rely on the postmark of a registered or certified mailed report. Instead, Congress should simply

require that reports be filed with the FEC (or the

Secretary of the Senate) by the due date specified in

the law. This approach would result in more effective 

public disclosure of campaign finance information,

because reports would be available for review at an

earlier point before the election. It would also simplify

the law and eliminate confusion about the appropriate

due date for a report. 

Waiver Authority (revised 1997)

Section: 2 U.S.C. §434 

Recommendation: The Commission recommends that 

Congress give the Commission the authority to adjust

the filing requirements or to grant general waivers or

exemptions from the reporting requirements of the

Act. 

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. 

Unauthorized committees also face unnecessary reporting requirements. For example, the Act requires 

monthly filers to file Monthly reports on the 20th day of 

each month. If sent by certified mail, the report must

be postmarked by the 20th day of the month. The Act 

also requires monthly filers to file a Pre-General election report 12 days before the general election. If sent

by certified or registered mail, the Pre-General report

must be postmarked by the 15th day before the election. As a result of these specific due dates mandated 

by the law, the 1996 October Monthly report, covering 

September, was required to be postmarked October 

20. Meanwhile the 1996 Pre-General report, covering

October 1 -16, was required to be postmarked October 21, one day after the October Monthly. A waiver 

authority would enable the Commission to eliminate

the requirement to file the monthly report, as long as

the committee includes the activity in the Pre-General

Election Report and files the report on time. The same 

disclosure would be available before the election, but 

the committee would only have to file one of the two 

reports. 

In other situations, disclosure would be served if 

the Commission had the authority to adjust the filing requirements, as is currently allowed for special

elections. For example, runoff elections are often 

scheduled shortly after the primary election. In many

instances, the close of books for the runoff preelection report is the day after the primary—the same

day that candidates find out if there is to be a runoff 

and who will participate. When this occurs, the 12-day

pre-election report discloses almost no runoff activity. 

In such a situation, the Commission should have the 

authority to adjust the filing requirements to allow for

a 7-day pre-election report (as opposed to a 12-day

report), which would provide more relevant disclosure

to the public. 

Granting the Commission the authority to waive reports or adjust the reporting requirements would reduce needlessly burdensome disclosure demands. 
Legislative Recommendations 37 

Campaign-Cycle Reporting

Section: 2 U.S.C. §434 

Recommendation: The Commission recommends that 

Congress 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, authorized committees must track contributions received in two different ways. First, to comply with the law’s reporting 

requirements, the committee must track 

donations on a calendar year basis. Second, to comply with the law’s contribution limits, the committee 

must track contributors’ donations on a per-election 

basis. Simplifying the law’s reporting requirement to 

allow reporting on a campaign-to-date basis would

make the law’s recordkeeping requirements less burdensome to committees. (Likewise, the Commission

recommends that contribution limits be placed on a

campaign-cycle basis as well. See the recommendation entitled “Election Period Limitations.”)

This change would also benefit public disclosure of

campaign finance activity. Currently, contributions 

from an individual are itemized only if the individual

donates more than $200 in the aggregate during a

calendar year. Likewise, disbursements are itemized only if payments to a specific payee aggregate

in excess of $200 during a calendar year. Requiring 

itemization once contributions from an individual or 

disbursements to a payee aggregate in excess of

$200 during the campaign would capture information

of interest to the public that is currently not available.

Moreover, to determine the actual campaign finance 

activity of a committee, reporters and researchers

must compile the total figures from several year-end

reports. 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 Commission recommends that 

the principal campaign committee of a Congressional

candidate 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. 

Reporting Deadlines for Semiannual, Year-End 

and Monthly Filers

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

Recommendation: The Commission recommends that 

Congress change the reporting deadline for all semiannual, year-end and monthly filers to 15 days after

the close of books for the report. 

Explanation: Committees are often confused because 

the filing dates vary from report to report. Depending

on the type of committee and whether it is an election

year, the filing date for a report may fall on the 15th, 

20th or 31st of the month. Congress should require

that monthly, quarterly, semiannual and year-end 

reports are due 15 days after the close of books of

each report. In addition to simplifying reporting procedures, this change would provide for more timely

disclosure, particularly in an election year. In light of 
38 Chapter Six

the increased use of computerized recordkeeping by

political committees, imposing a filing deadline of the

fifteenth of the month would not be unduly burdensome. 

Commission as Sole Point of Entry

for Disclosure Documents (revised 1997)

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 Senate candidate committees 

only. Under current law, those committees alone file 

their reports with the Secretary of the Senate, who

then forwards microfilmed copies to the FEC. 

Explanation: The Commission has offered this recommendation for many years. Public Law 104-79, effective December 28, 1995, changed the point of entry

for reports filed by House candidates from the Clerk of

the House to the FEC. However, Senate candidates 

still must file their reports with the Secretary of the

Senate, who then forwards the copies on to the FEC.

A single point of entry is desirable because it would 

conserve government resources and promote public

disclosure of campaign finance information. 

For example, Senate candidates sometimes file reports mistakenly with the FEC, rather than with the

Secretary of the Senate. Consequently, the FEC must 

ship the reports back to the Senate. Disclosure to

the public is delayed and government resources are

wasted.

Public Law 104-79 also authorized the electronic filing

of disclosure reports with the FEC. Starting January

1997, political action committees, political party committees, House campaigns and Presidential campaigns all may opt to file FEC reports electronically. 

This filing option is unavailable to Senate campaigns,

though, because the point of entry for their reports is

the Secretary of the Senate. 

In addition, Public Law 104-79 eliminated the requirements for a candidate to file copies of FEC reports

with his or her State, provided that the State has 

electronic access to reports and statements filed with

the FEC. In order to eliminate the State filing requirement for Senate candidates, it would be necessary for

a State to have electronic access to reports filed with

the Secretary of the Senate, as well as to reports filed

with the Federal Election Commission. In other words, 

unless the FEC becomes the point of entry for reports

filed by Senate candidates, either the States will need

to have the technological and financial capability to

link up electronically with two different federal offices, 

or Senate candidates must continue to file copies of

their reports with the State. 

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 two

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, the Commission notes that the report of the 

Institute of Politics of the John F. Kennedy School of 
Legislative Recommendations

 

39 

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)).

Facsimile Machines

Section: 2 U.S.C. §434(b)(6)(B)(iii) and (c)(2)

Recommendation: The Commission recommends that 

Congress modify the Act to provide for the acceptance 

and admissibility of 24-hour notices of independent

expenditures via telephone facsimiles. 

Explanation: Independent expenditures that are made

between 20 days and 24 hours before an election

must be reported within 24 hours. The Act requires 

that a last-minute independent expenditure report

must include a certification, under penalty of perjury, 

stating whether the expenditure was made “in cooperation, consultation, or concert with, or at the request

or suggestion of, any candidate or any authorized

committee or agent of such committee.” This requirement appears to foreclose the option of using a facsimile machine to file the report. The next report the 

committee files, however, which covers the reporting 

period when the expenditure was made, must also

include the certification, stating the same information. Given the time constraint for filing the report, the

requirement to include the certification on the subsequent report, and the availability of modern technology that would facilitate such a filing, Congress should 

consider allowing such filings via telephonically transmitted facsimiles (“fax” machines). This could be accomplished by allowing the committee to fax a copy of

the schedule disclosing the independent expenditure

and the certification. The original schedule would be 

filed with the next report. Acceptance of such a filing 

method would facilitate timely disclosure and simplify

the process for the filer.

State Filing for Presidential

Candidate Committees 

Section: 2 U.S.C. §439 

Recommendation: The Commission recommends that 

Congress 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.

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.
40 Chapter Six

Contributions and Expenditures 

Election Period Limitations for Contributions to 

Candidates 

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 per election basis. 

Explanation: The contribution limitations affecting 

contributions to candidates are structured on a “per

election” basis, thus necessitating dual bookkeeping

or the adoption of some other method to distinguish

between primary and general election contributions.

The Commission has had to adopt several rules to

clarify which contributions are attributable to which

election and to assure that contributions are reported

and used for the proper election. Many enforcement

cases have been generated where contributors’ donations are excessive vis-a-vis a particular election, but 

not vis-a-vis the $2,000 total that could have been 

contributed for the cycle. Often this is due to donors’

failure to fully document which election was intended.

Sometimes the apparent “excessives” for a particular

election turn out to be simple reporting errors where

the wrong box was checked on the reporting form.

Yet, substantial resources must be devoted to examination of each transaction to determine which election is applicable. Further, several enforcement cases 

have been generated based on the use of general

election contributions for primary election expenses or 

vice versa. 

Most of these complications would be eliminated with

adoption of a simple “per cycle” contribution limit.

Thus, multicandidate committees could give up to

$10,000 and all other persons could give up to $2,000

to an authorized committee at any point during the

election cycle. The Commission and committees 

could get out of the business of determining whether

contributions are properly attributable to a particular

election, and the difficulty of assuring that particular

contributions are used for a particular election could

be eliminated. 

It would be advisable to clarify that if a candidate has

to participate in more than two elections (e.g., in a

post-primary runoff as well as a primary and general), 

the campaign cycle limit would be $3,000. In addition,

because at the Presidential level candidates might

opt to take public funding in the general election and

thereby be precluded from accepting contributions,

the $1,000/5,000 “per election” contribution limits

should be retained for Presidential candidates. 

A campaign cycle contribution limit may allow donors 

to target more than $1,000 toward a particular primary

or general election, but this would be tempered by the

tendency of campaigns to plan their fundraising and

manage their resources so as not to be left without

fundraising capability at a crucial time. 

Application of $25,000 Annual Limit 

Section: 2 U.S.C. §441a(a)(3) 

Recommendation: The Commission recommends 

that Congress 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 led 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 Commis-
Legislative Recommendations 41

sion 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, per election limits.

Nor would it affect the total amount that any individual 

could contribute in connection with federal elections.

Certification of Voting Age Population Figures and 

Cost-of-Living Adjustment

Section: 2 U.S.C. §441a(c) and (e) 

Recommendation: The Commission recommends that 

Congress 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 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 cost-of-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. §441a(e). The certification for each Congressional 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.

Enforcement 

Fines for Reporting Violations (1997)

Section: 2 U.S.C. §437g

Recommendation: The Commission recommends that 

Congress consider granting the Commission authority

to assess fines on a published schedule for straightforward violations relating to the reporting of receipts

and disbursements. 

Explanation: In maintaining a regulatory presence covering all aspects of the Act, even the most simple and 

straightforward strict liability disclosure violations, e.g.,

the late filing or non-filing of required reports, may be

addressed only through the existing enforcement process at 2 U.S.C. §437g. The enforcement procedures

provide a number of procedural protections, and the

Commission has no authority to impose penalties.

Instead, the Commission can only seek a conciliation

agreement, and without a settlement can only pursue 

a de novo civil action in federal court. This process

can be unnecessarily time and resource consuming

for all parties involved when applied to ministerial-type

civil violations that are routinely treated via published

fines by many other states and federal regulatory

agencies. Non-deliberate and straightforward reporting violations would not have to be treated as full

blown enforcement matters if the Commission had authority to assess fines for such violations under a published fine schedule, subject to a reasonable appeal

procedure. Congress could authorize the Commission 

to promulgate a fine schedule that would consider a

number of factors (e.g., the election sensitivity of the

report and the previous compliance record of the committee). Addition of such authority would introduce

greater certainty to the regulated community about the

consequences of noncompliance with the Act’s filing 

requirements, as well as lessen costs and lead to efficiencies for all parties, while maintaining the Commission’s emphasis on the Act’s disclosure requirements. 

The Commission would attempt to implement this on a

trial basis. 
 Chapter Six

 

 

42

Expedited Enforcement Procedures and Injunctive

Authority (1997)

Section: 2 U.S.C. §437g

Recommendation: The Commission recommends that 

Congress consider whether the Act should provide 

for expedited enforcement of complaints filed shortly

before an election, permit injunctive relief in certain

cases, and allow the Commission to adopt expedited

procedures in such instances.1 

1 Commissioner 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 recommendations. 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 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 factual 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 for the Act.

Explanation: The statute now requires that before the

Commission proceeds in a compliance matter it must

wait 15 days after notifying any potential respondent

of alleged violations in order to allow that party time

to file a response. Furthermore, the Act mandates 

extended time periods for conciliation and response to

recommendations for probable cause. Under ordinary

circumstances such provisions are advisable, but they

are detrimental to the political process when complaints are filed immediately before an election. In an 

effort to avert intentional violations that are committed 

with the knowledge that sanctions cannot be enforced

prior to the election, and to quickly resolve matters for

which Commission action is not warranted, Congress

should consider granting the Commission some discretion to deal with such situations on a timely basis.

Even when the evidence of a violation has been clear 

and the potential impact on a campaign has been

substantial, without the authority to initiate a civil suit

for injunctive relief, the Commission has been unable

to act swiftly and effectively in order to prevent a violation. The Commission has felt constrained from seeking immediate judicial action by the requirement of

the statute that conciliation be attempted before court

action is initiated, and the courts have indicated the 

Commission has little if any discretion to deviate from

the administrative procedures of the statute. Perot 

‘96 and Natural Law Party v. FEC et al., Nos. 96-

2196 and 96-2132 (D.D.C. 1996), aff’d, 97 F.3d 553, 

(D.C. Cir. 1996); RNC v. DNC and FEC, No. 96-2494 

(D.D.C. 1996); 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. Election Camp.

Fin. Guide (CCH) ¶9147 (D.N.H. 1980). 

If Congress allows for expedited handling of compliance matters, it should authorize the Commission to 

implement changes in such circumstances to expedite

its enforcement procedures. As part of this effort, 

Congress should consider whether the Commission

should be empowered to promptly initiate a civil suit

for injunctive relief in order to preserve the status

quo when there is clear and convincing evidence that 
Legislative Recommendations

 

43

a substantial violation of the Act is about to occur. 

Congress should consider whether the Commission

should be authorized to initiate such civil action in a 

United States District Court, under expressly stated

criteria, 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 brings the action

would enjoy the procedural protections afforded by 

the courts. 

The Commission suggests the following legislative

standards to govern whether it may seek prompt injunctive relief:

1. The complaint sets forth facts indicating that a potential violation of the Act is occurring or will occur;

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. 

Subpoena and Reason-to-Believe Notification

Signature Authority (1997)

Sections: 2 U.S.C. §§437d(a)(3) and 437g(a)(2)

Recommendation: The Commission recommends 

that Congress clarify these provisions to permit any

member of the Commission to sign duly-authorized

subpoenas and notifications of findings of reason-tobelieve, rather than limiting signature authority to the

Chairman and Vice Chairman. 

Explanation: Section 437d(a)(3) grants the Commission the power to issue subpoenas requiring

the attendance and testimony of witnesses and the

production of documentary evidence. This provision

specifies that subpoenas be signed by the Chairman

or Vice Chairman of the agency. In those instances 

where the Commission has duly authorized the issuance of a subpoena, but neither the Chairman nor the

Vice Chairman are available to sign, the subpoena is 

delayed. Providing for the signature of another member of the Commission would enable subpoenas to be

issued in a more timely manner. 

Likewise, §437g(a)(2) requires that the Commission,

through its Chairman or Vice Chairman, notify respondents of a finding of reason-to-believe in an enforcement matter. For the reasons listed above, it would 

be beneficial to allow other Members of the Commission to sign such notifications when neither the Chairman nor the Vice Chairman are available. 

Ensuring Independent Authority of FEC in

All Litigation

Section: 2 U.S.C. §§437c(f)(4) and 437g 

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 the campaign financing statutes. The 

Commission recommends that Congress make the

following four clarifications that would help solidify the 

statutory structure:

1. Congress should clarify that the Commission is

explicitly authorized to petition the Supreme Court for 

certiorari under Title 2, i.e., to conduct its Supreme 

Court litigation. 

2. 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. 

3. 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. 

4. Congress should require the United States Marshal’s Service to serve process, including summonses 

and complaints, on behalf of and at no expense to the

Federal Election Commission. 
44 Chapter Six

Explanation: The first recommendation states explicitly that the Commission is authorized to petition the

Supreme Court for a writ of certiorari in cases relating

to the Commission’s administration of Title 2 and to 

independently conduct its Supreme Court litigation

under that Title. The Commission explicitly has this 

authority under Title 26 and had a long-standing practice of doing so under Title 2, until the Supreme Court 

ruled that Title 2 does not grant the Commission such 

authority. See FEC v. NRA Political Victory Fund, cert. 

dismissed for want of jurisdiction, 115 S.Ct. 537 (December 6, 1994). Under this ruling, the Commission

must now obtain permission from the Solicitor General before seeking certiorari in a Title 2 case. The 

Solicitor General may decline to authorize this action

in cases where the Commission believes Supreme

Court review is advisable. Even where acting in accordance with the Commission’s recommendation to 

seek certiorari in a given case, the Solicitor General

would still control the position taken in the case and

the arguments made on behalf of the Commission.

This transfer of the Commission’s Supreme Court 

litigation authority to the Solicitor General, who is an

appointee of and subject to removal by the President,

misconstrues Congressional intent in establishing the

Commission as a bipartisan and independent civil

enforcement agency. Pertinent provisions of Title 2 

should be revised to clearly state the Commission’s 

exclusive and independent authority on all aspects of

Supreme Court litigation in all cases it has litigated in

the lower courts.

With regard to the second 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 third recommendation, the FECA explicitly authorizes the Commission to “appear in 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. 

Concerning the final recommendation, prior to its

amendment effective December 1, 1993, Rule 4(c)

(B) of the Federal Rules of Civil Procedure provided

that a summons and complaint shall be served by the

United States Marshal’s Service on behalf of the United States or an officer or agency of the United States.

Rule 4, as now amended, requires all plaintiffs, including federal government plaintiffs such as the Commission, to seek and obtain a court order directing that

service of process be effected by the United States 

Marshal’s Service. Given that the Commission must 

conduct litigation nationwide from its offices in Washington, D.C., it is burdensome and expensive for it

to enlist the aid of a private process server or, in the 

alternative, seek relief from the court, in every case

in which it is a plaintiff. Returning the task of serving 

process for the Commission to the United States Marshal’s Service would alleviate this problem and assist 

the Commission in carrying out its mission. 

Enhancement of Criminal Provisions 

Section: 2 U.S.C. §437g(a)(5)(C) and (d) 

Recommendation: The Commission recommends that 

it have the ability to refer appropriate matters to the 
Legislative Recommendations 45

Justice Department for criminal prosecution at any

stage of a Commission proceeding. 

Explanation: The Commission has noted an upsurge

of §441f contribution reimbursement schemes, that

may merit heavy criminal sanction. Although there is 

no prohibition preventing the Department of Justice

from initiating criminal FECA prosecutions on its own, 

the vehicle for the Commission to bring such matters

to the Department’s attention is found at §437g(a)(5)

(C), which provides for referral only after the Commission has found probable cause to believe that a

criminal violation of the Act has taken place.2 Thus, 

even if it is apparent at an early stage that a case

merits criminal referral, the Commission must pursue

the matter to the probable cause stage before referring it to the Department for criminal prosecution. To 

conserve the Commission’s resources, and to allow 

the Commission to bring potentially criminal FECA

violations to the Department’s attention at the earliest 

possible time, the Commission recommends that consideration be given to explicitly empower the Commission to refer apparent criminal FECA violations to the 

Department at any stage in the enforcement process. 

Random Audits 

Section: 2 U.S.C. §438(b)

Recommendation: The Commission recommends that 

Congress consider legislation that would require 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 the 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 (with the exception of

certain candidates whose popular vote fell below a

certain threshold) for a given election cycle. This system might result in concentrating audits in fewer geographical areas. 

Such audits should be subject to strict confidentiality rules. Only when the audits are completed should

they be published and publicized. Committees with no

problems should be commended. 

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. 

2The Commission has the general authority to report apparent violations to the appropriate law enforcement authority (see 2 U.S.C. §437d(a)(9)), but read together with §437g, 

§437d(a)(9) has been interpreted by the Commission to refer to violations of law unrelated to the Commission’s FECA

jurisdiction. 

Public Financing 

State Expenditure Limits for Publicly Financed

Presidential Primary Campaigns (revised 1997)

Section: 2 U.S.C. §441a 
46 Chapter Six

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 five 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, in past years, the

limitations have had little impact on campaign spending in a given state, with the exception of Iowa and

New Hampshire. In most other states, campaigns

have been unable or have not wished to expend an

amount equal to the limitation. In effect, then, the 

administration of the entire program has resulted in

limiting disbursements in these two primaries alone.

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. 

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. For all these reasons, the Commission decided to revise its state allocation regulations for the 1992 Presidential election. Many of the 

requirements, such as those requiring distinctions

between fundraising and other types of expenditures,

were eliminated. However, the rules could not undo 

the basic requirement to demonstrate the amount of

expenditures relating to a particular state. Given our

experience to date, we believe that this change to the

Act would still be of substantial benefit to all parties

concerned. 

Fundraising Limitation for Publicly Financed

Presidential Primary Campaigns

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

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 COLA3

) 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 

3Spending limits are increased by the cost-of-living adjustment (COLA), which the Department of Labor calculates

annually. 
Legislative Recommendations 47

reduction in accounting 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. 

Eligibility Threshold for Public Financing

Section: 26 U.S.C. §9033

Recommendation: The Commission recommends 

that Congress raise the eligibility threshold for publicly

funded Presidential primary candidates. 

Explanation: The Federal Election Commission has 

administered the public funding provisions in five

Presidential elections. The statute provides for a costof-living adjustment (COLA) of the overall primary

spending limitation. 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 primary candidates

who demonstrate broad national support. To reach 

this higher threshold, the Commission recommends 

increasing 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. 

Eligibility Requirements for Public Financing

Section: 26 U.S.C. §§9002, 9003, 9032 and 9033

Recommendation: The Commission recommends that 

Congress 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

or who are not eligible to serve as President 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. See LaRouche v. 

FEC, 992 F.2d 1263 (D.C. Cir. 1993) cert. denied, 114 

S. Ct. 550 (1993). In addition, Congress should make

it clear that eligibility to serve in the office sought is a

prerequisite for eligibility for public funding. 

Deposit of Repayments

Section: 26 U.S.C. §9007(d)

Recommendation: The Commission recommends that 

Congress 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

§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. 
 Chapter Six

 

48

Part II: 

General Legislative

Recommendations 

Disclosure 

Candidates and Principal Campaign Committees

Section: 2 U.S.C. §§432(e)(1) and 433(a)

Recommendation: The Commission recommends that 

Congress revise the law to require a candidate and

his or her principal campaign committee to register

simultaneously. 

Explanation: An individual becomes a candidate 

under the FECA once he or she crosses the $5,000 

threshold in raising contributions or making expenditures. The candidate has 15 days to file a statement 

designating the principal campaign committee, which

will subsequently disclose all of the campaign’s financial activity. This committee, in turn, has 10 days from

the candidate’s designation to register. This schedule 

allows 25 days to pass before the committee’s reporting requirements are triggered. Consequently, the 

financial activity that occurred prior to the registration

is not disclosed until the committee’s next upcoming 

report. This period is too long during an election year. 

For example, should a report be due 20 days after

an individual becomes a candidate, the unregistered

committee would not have to file a report on that date

and disclosure would be delayed. The next report 

might not be filed for 3 more months. By requiring simultaneous registration, the public would be assured 

of more timely disclosure of the campaign’s activity. 

PACs Created by Candidates

Section: 2 U.S.C. §441a(a)

Recommendation: The Commission recommends that 

Congress consider whether PACs created by candidates should be deemed affiliated with the candidate’s 

principal campaign committee. 

Explanation: A number of candidates for federal office, 

including incumbent officeholders, have created PACs 

in addition to their principal campaign committees.

Under current law, such PACs generally are not considered authorized committees. Therefore, they may 

accept funds from individuals up to the $5,000 limit

permitted for unauthorized committees in a calendar

year and may make contributions of up to $5,000 per

election to other federal candidates once they achieve

multicandidate status. In contrast, authorized committees may not accept more than $1,000 per election

from individuals and may not make contributions in

excess of $1,000 to other candidates. 

The existence of PACs created by candidates can 

present difficult issues for the Commission, such as

when contributions are jointly solicited with the candidate’s principal campaign committee or the resources 

of the PAC are used to permit the candidate to gain 

exposure by traveling to appearances on behalf of

other candidates. At times the operations of the two 

committees can be difficult to distinguish. 

If Congress concludes that there is an appearance

that the limits of the Act are being evaded through 

the use of PACs created by candidates, it may wish 

to consider whether such committees are affiliated 

with the candidate’s principal campaign committee. 

As such, contributions received by the committees

would be aggregated under a single contribution limit

and subjected to the limitations on contributions to

authorized committees. The same treatment would 

be accorded to contributions made by them to other

candidates. 

Require Monthly Filing for Certain Multicandidate

Committees 

Section: 2 U.S.C. §434(a)(4) 

Recommendation: The Commission recommends 

that multicandidate committees which have raised or 

spent, or which anticipate raising or spending, over

$100,000 be required to file on a monthly basis during

an election year. 

Explanation: Under current law, multicandidate com-
Legislative Recommendations 49

mittees have the option of filing quarterly or monthly

during an election year. Quarterly filers that make 

contributions or expenditures on behalf of primary or

general election candidates must also file pre-election 

reports. 

Presidential candidates who anticipate receiving

contributions or making expenditures aggregating

$100,000 or more must file on a monthly basis. Congress should consider applying this same reporting

requirement to multicandidate committees which have

raised or spent, or which anticipate raising or spending, in excess of $100,000 during an election year. 

The requirement would simplify the filing schedule,

eliminating the need to calculate the primary filing periods and dates. Filing would be standardized—once

a month. This change would also benefit disclosure; 

the public would know when a committee’s report was 

due and would be able to monitor the larger, more 

influential committees’ reports. Although the total 

number of reports filed would increase, most reports

would be smaller, making it easier for the Commission 

to enter the data into the computer and to make the

disclosure more timely. 

Reporting of Last-Minute Independent

Expenditures

Section: 2 U.S.C. §434(c)

Recommendation: The Commission recommends that 

Congress clarify when last-minute independent expenditures must be reported. 

Explanation: The statute requires that independent

expenditures aggregating $1,000 or more and made

after the 20th day, but more than 24 hours, before an 

election be reported within 24 hours after they are

made. This provision is in contrast to other reporting

provisions of the statute, which use the words “shall

be filed.” Must the report be received by the filing office within 24 hours after the independent expenditure

is made, or may it be sent certified/registered mail and 

postmarked within 24 hours of when the expenditure

is made? Should Congress decide that committees

must report the expenditure within 24 hours after it is

made, committees should be able to file via facsimile 

(fax) macine. (See Legislative Recommendation titled

“Facsimile Machines.”) Clarification by Congress

would be very helpful.

Reporting and Recordkeeping of Payments to

Persons Providing Goods and Services

Section: 2 U.S.C. §§432(c), 434(b)(5)(A), (6)(A)

and (6)(B)

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.”

The Commission recommends that Congress clarify

whether this is meant, in all instances, to require

reporting committees to disclose only the payments

made by the committee or whether additional reporting is required, in some instances, when a payment

is made to an intermediary contractor or consultant

who, in turn, acts as the committee’s agent by making 

expenditures to other payees. If Congress determines

that disclosure of secondary payees is required,

the Act should require that committees maintain the 

name, address, amount and purpose of the disbursement made to the secondary payees in their records

and disclose it to the public on their reports. Congress

should limit such disclosure to secondary payments

above a certain dollar threshold or to payments made

to independent subcontractors. 

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), ¶ 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), ¶ 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 
50 Chapter Six

by the candidate to the actual providers of services);

Financial Control and Compliance Manual for Presidential Primary Election Candidates Receiving Public

Financing, Federal Election Commission, pp. 123-130

(1992) (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 

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.

Excluding Political Committees from Protection of

the Bankruptcy Code

Section: 2 U.S.C. §433(d)

Recommendation: The Commission recommends 

that Congress clarify the distribution of authority over

insolvent political committees between the Commission’s authority to regulate insolvency and termination 

of political committees under 2 U.S.C. §433(d), on

one hand, and the authority of the bankruptcy courts,

on the other hand. 

Explanation: In 2 U.S.C. §433(d), the Commission is

given authority to establish procedures for “the determination of insolvency” of any political committee,

the “orderly liquidation of an insolvent political committee,” the “application of its assets for the reduction of outstanding debts,” and the “termination of an

insolvent political committee after such liquidation...”

However, the Bankruptcy Code, 11 U.S.C. §101 et 

seq., generally grants jurisdiction over such matters

to the bankruptcy courts, and at least one bankruptcy

court has exercised its jurisdiction under Chapter 11 

of the Bankruptcy Code to permit an ongoing political committee to compromise its debts with the intent

thereafter to resume its fundraising and contribution

and expenditure activities. In re Fund for a Conservative Majority, 100 B.R. 307 (Bankr. E.D.Va. 1989). 

Not only does the exercise of such jurisdiction by the 

bankruptcy court conflict with the evident intent in 2

U.S.C. §433(d) to empower the Commission to regulate such matters with respect to political committees,

but permitting a political committee to compromise

debts and then resume its political activities can result in corporate creditors effectively subsidizing the 

committee’s contributions and expenditures, contrary 

to the intent of 2 U.S.C. §441b(a). The Commission 

promulgated a regulation generally prohibiting ongoing political committees from compromising outstanding debts, 11 CFR 116.2(b), but the continuing potential jurisdiction of the bankruptcy courts over such

matters could undermine the Commission’s ability to 

enforce it. Accordingly, Congress may want to clarify 

the distribution of authority between the Commission

and the bankruptcy courts in this area. In addition,

Congress should specify whether political committees

are entitled to seek Chapter 11 reorganization under 

the Bankruptcy Code.

Fundraising Projects Operated by Unauthorized

Committees 

Section: 2 U.S.C §432(e)

Recommendation: The Commission recommends 

that Congress 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. 

Explanation: Unauthorized committees are not permitted to use the name of federal candidate in their 

name of in the name of a fundraising project they

sponsor unless, in the case of a fundraising project,

the name selected clearly indicates opposition to the

named candidate(s). The Commission adopted this 

latter prohibition after a rulemaking where the record

clearly established that contributors were sometimes

confused or misled into believing that they were contributing to a candidate’s authorized committee (when, 

for example, the project’s name was “Citizens for X”), 

when in fact they were giving to the nonauthorized

committee that sponsored the event. This confusion 
Legislative Recommendations 51 

sometimes led to requests for refunds, allegations of

coordination, inadequate disclaimers, and inability to

monitor contribution limits. While recent revisions to 

the Commission’s rules at 11 CFR 102.14(b)(3) have 

now reduced this possibility, the Commission believes 

that contributor awareness might be further enhanced

if Congress were to modify the statute by requiring

that all checks intended for an unauthorized committee be made payable to the registered name of the

unauthorized committee, and by prohibiting unauthorized committees from accepting checks payable to

any other name. 

Disclaimer Notices (revised 1997)

Section: 2 U.S.C. §441d 

Recommendation: The Commission recommends that 

Congress revise the FECA to require registered political committees to display the appropriate disclaimer

notice (when practicable) in any communication issued to the general public, regardless of its content

or how it is distributed. Congress should also revise

the Federal Communications Act to make it consistent 

with the FECA’s requirement that disclaimer notices 

state who paid for the communication. 

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,” possibly

leading to an interpretation 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). Believing that

Congress intended such activities to be exempt only

from the definitions of “contribution” and “expenditure,” the Commission amended its rules at 11 CFR 

110.11 to require that covered “exempt activity” communications include a statement of who paid for the

communication. However, it would be helpful if Congress were to clarify that all types of communications

to the public should 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. 

The Commission considered expanding the general

disclaimer requirements in the course of the rulemaking; however, this was not included in the final rules, 

which rather clarify the scope of some of the subordinate requirements. 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 general public would benefit by being aware of

who has paid for a particular communication. Moreover, political committees and the Commission would 

benefit because they 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. 

Fourth, Congress might want to consider adding disclaimer requirements for so-called “push poll” activity. 

This term generally refers to phone bank activities or

written surveys that seek to influence voters, such as

by providing false or misleading information about a

candidate. This practice appears to be growing. The 

Commission has considered requiring disclaimers on

push poll communications, but has declined to do so

for a number of reasons, including difficulty in defining 
52 Chapter Six

push polls and the fact that many such polls do not

appear to expressly advocate the election or defeat of

a clearly identified candidate. If Congress enacted the

general disclaimer requirement proposed above, this

would encompass push poll communications by political committees. Congress might also wish to require

disclosure by other groups engaging in this practice. 

Finally, Congress should change the sponsorship 

identification requirements found in the Federal Communications Act to make them consistent with the 

disclaimer notice requirements found in the FECA.

Under the Communications Act, federal political 

broadcasts must contain an announcement that they

were furnished to the licensee, and by whom. See

FCC and FEC Joint Public Notice, FCC 78-419 (June

19, 1978). In contrast, FECA disclaimer notices focus 

on who authorized and paid for the communication.

The Communications Act should be revised to ensure 

that the additional information required by the FECA is 

provided without confusion to licensees and political

advertisers. In addition, the FECA should be amended 

to require that the disclaimer appear at the end of all

broadcast communications. 

Fraudulent Solicitation of Funds 

Section: 2 U.S.C. §441h 

Recommendation: The current §441h 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. The Commission 

recommends that a provision 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. The contributors’ funds were used in a manner 

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. 

Draft Committees 

Section: 2 U.S.C. §§431(8)(A)(i) and (9)(A)(i), 441a(a)

(1) and 441b(b) 

Recommendation: The Commission recommends that 

Congress 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 441b(b) should be revised to expressly state

that corporations, labor organizations and national

banks are prohibited from making contributions or

expenditures “for the 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. 
Legislative Recommendations

 

 

53 

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 of 

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. 

Contributions and Expenditures 

Issue Advocacy Advertising (1997)

Sections: 2 U.S.C. §§431(8)(A)(i) and (9)(A)(i); 441d

Recommendation: The Commission recommends 

that Congress consider when “issue advocacy” advertising by corporations, labor organizations, political

parties, and other organizations is an in-kind contribution because it is coordinated with a candidate or a 

candidate’s campaign. 

Explanation: The 1996 election cycle saw an explosion in “issue advocacy” advertising. Such advertising 

explores an officeholder’s, a party’s or a candidate’s 

stand on a particular issue, but does not expressly

advocate the election or defeat of a clearly identified

candidate or party. Courts have ruled that the Act’s 

prohibition on expenditures by corporations and labor

organizations does not extend to issue advocacy that

does not contain express advocacy. See FEC v. Massachusetts Citizens for Life, 479 U.S. 238 (1986); FEC 

v. Christian Action Network, 894 F.Supp. 946 (W.D. 

Va. 1995), aff’d, 92 F.3d 1178 (4th Cir. 1996); Clifton v. 

FEC, 927 F.Supp. 493 (D.Me. 1996) and Maine Right

to Life v. FEC, 914 F. Supp. 8 (D.Me. 1996), aff’d, 98 

F.3d 1 (1st Cir. 1996). 

The Act defines the term “contribution” to include 

funds that are spent “for the purpose of influencing

an election.” Although advertisements devoted solely

to issue advocacy do not contain express advocacy, 

such advertising may benefit or harm a candidacy and

consequently influence the election process, particularly if the communication is coordinated with a candidate or his/her campaign. In a series of cases, the

Supreme Court has viewed public communications

coordinated with campaigns as in-kind contributions.

As contributions, such communications were subject

to the Act’s limitations and prohibitions, but were not 

subject to the same level of First Amendment protection as expenditures. See Buckley v. Valeo, 424 U.S. 

1 (1976); FEC v. Massachusetts Citizens for Life, 479 

U.S. 238 (1986); and Colorado Republican Federal

Campaign Committee v. FEC, 116 S.Ct. 2309 (1996).

In accordance with these rulings, Congress should

stipulate when coordination of an issue advocacy

advertisement with a candidate or campaign would

be considered an in-kind contribution. Additionally, 

Congress should state that coordination of such a

public communication with a corporation or a labor

organization would be prohibited activity. Such a prohibition would help the Commission address the public’s concern about the use of soft money— funds that 

are raised or spent outside the prohibitions of the Act 

(such as corporate or union treasury funds)—to influence federal elections. 
54 Chapter Six

Candidate’s Use of Campaign Funds (revised

1997)

Section: 2 U.S.C. §439a

Recommendation: Congress may wish to examine

whether the use of campaign funds to pay a salary to

the candidate is considered to be a “personal use” of

those funds. 

Explanation: Under §439a of the Act, excess campaign funds cannot be converted by any person to

personal use. The Commission has promulgated 

final rules on what would constitute “personal use” of

excess funds. See 11 CFR 113.1(g). It was unable, 

however, to decide whether excess campaign funds 

may be used to pay a salary to the candidate. In the

past, some have argued before the Commission that

candidate salary payments are legitimate campaign

expenditures, while others have felt that such payments constitute a personal use of excess funds

prohibited by §439a. Congressional guidance on this

issue would be helpful.

Disposition of Excess Campaign Funds

Section: 2 U.S.C. §439a 

Recommendation: In those cases where a candidate 

has largely financed his campaign with personal

funds, the Commission recommends that Congress

consider limiting the amount of excess campaign

funds that the campaign may transfer to a national,

state or local committee of any political party to

$100,000 per year. 

Explanation: Under current law, a candidate may 

transfer unlimited amounts of excess campaign funds

to a political party. This makes it possible for a candidate to contribute unlimited personal funds to his campaign, declare these funds excess and transfer them

to a political party, thus avoiding the limit on individual 

contributions to political parties. 

Distinguishing Official Travel from 

Campaign Travel

Section: 2 U.S.C. §431(9) 

Recommendation: The Commission recommends that 

Congress amend the FECA to clarify the distinctions 

between campaign travel and official travel. 

Explanation: Many candidates for federal office hold

elected or appointed positions in federal, state or local government. Frequently, it is difficult to determine 

whether their public appearances are related to their

official duties or whether they are campaign related.

A similar question may arise when federal officials 

who are not running for office make appearances that

could be considered to be related to their official duties or could be viewed as campaign appearances on

behalf of specific candidates. 

Another difficult area concerns trips in which both

official business and campaign activity take place.

There have also been questions as to how extensive

the campaign aspects of the trip must be before part

or all of the trip is considered campaign related. Congress might consider amending the statute by adding

criteria for determining when such activity is campaign

related. This would assist the committee in determining when campaign funds must be used for all or part

of a trip. This will also help Congress determine when 

official funds must be used under House or Senate 

Rules. 

Coordinated Party Expenditures

Section: 2 U.S.C. §441a(d) 

Recommendation: The Commission recommends that 

Congress clarify the number of coordinated party expenditure limits that are available to party committees

during the election cycle. 

In addition, Congress may want to clarify the distinction between coordinated party expenditures made in

connection with general elections and generic party

building activity. 

Explanation: Section 441a(d) provides that national

and state party committees may make expenditures in

connection with the general election campaigns of the

party’s nominees for House and Senate. The national 

party committees may also make such expenditures

on behalf of the party’s general election Presidential 

and Vice Presidential nominees. The Commission 
Legislative Recommendations 55 

has interpreted these provisions to permit party committees to make nearly any type of expenditure they

deem helpful to their nominees short of donating the

funds directly to the candidates. Expenditures made

under §441a(d) are subject to a special limit, separate

from contribution limits. 

The Commission has been faced several times with 

the question of whether party committees have one or

two coordinated party expenditure limits in a particular

election campaign. In particular, the issue has been 

raised in special election campaigns. Some state laws

allow the first special election either to narrow the field

of candidates, as a primary would, or to fill the vacancy if one candidate receives a majority of the popular

vote. If a second special election becomes necessary to fill the vacancy, the question has arisen as to 

whether the party committees may spend against a

second coordinated party expenditure limit since both

special elections could have filled the vacancy. In a 

parallel manner, the Commission has been faced with 

the question of whether party committees have one or

two coordinated party expenditure limits in a situation

that includes an election on a general election date

and a subsequent election, required by state law, after 

the general election. Although in the latter situation, a 

district court has concluded that only one coordinated

party expenditure limit would apply (see Democratic 

Senatorial Campaign Committee v. FEC (No. 93-

1321) (D.D.C., November 14, 1994)), broader Congressional guidance on this issue would be helpful.

Party committees may also make expenditures for

generic party-building activities, including get-out-thevote and voter registration drives. These activities are 

not directly attributable to a clearly identified candidate. In contrast to coordinated party expenditures,

these activities are not subject to limitation. 

When deciding, in advisory opinions and enforcement

matters, whether an activity is a §441a(d) expenditure

or a generic activity, the Commission has considered the timing of the expenditure, the language of

the communication, and whether it makes reference 

only to candidates seeking a particular office or to

all the party’s candidates, in general. However, the 

Commission still has difficulty determining, in certain 

situations, when a communication or other activity is

generic party building activity or a coordinated party

expenditure. Congressional guidance on this issue

would be helpful.

Volunteer Participation in Exempt Activity

Section: 2 U.S.C. §§431(8)(B)(x) and (xii); 431(9)(B)

(viii) and (ix)

Recommendation: The Commission recommends that 

Congress clarify the extent to which volunteers must

conduct or be involved in an activity in order for the

activity to qualify as an exempt party activity. 

Explanation: Under the Act, certain activities conducted by state and local party committees on behalf of

the party’s candidates are exempt from the contribution limitations if they meet specific conditions. Among 

these conditions is the requirement that the activity be

conducted by volunteers. However, the actual level 

of volunteer involvement in these activities has varied 

substantially. 

Congress may want to clarify the extent to which volunteers must be involved in an activity in order for that

activity to qualify as an exempt activity. For example, 

if volunteers are assisting with a mailing, must they

be the ones to stuff the envelopes and sort the mail 

by zip code or can a commercial vendor perform that

service? Is it sufficient involvement if the volunteers 

just stamp the envelopes or drop the bags at the post

office?

Contributions from Minors 

Section: 2 U.S.C. §441a(a)(1) 

Recommendation: The Commission recommends that 

Congress establish a presumption that contributors

below age 16 are not making contributions on their

own behalf.

Explanation: The Commission has found that contributions are sometimes given by parents in their children’s names. Congress should address this potential 

abuse by establishing a minimum age for contributors,

or otherwise provide guidelines ensuring that parents

are not making contributions in the name of another. 
56 Chapter Six

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. (See S. Conf. Rep. No. 93–1237,

93d Cong., 2d 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. 

Lines of Credit and Other Loans Obtained by

Candidates 

Section: 2 U.S.C. §431(8)(B)(vii) 

Recommendation: The Commission recommends that 

Congress provide guidance on whether candidate

committees may accept contributions which are derived from advances on a candidate’s brokerage account, credit card, or home equity line of credit, and, if

so, Congress should also clarify how such extensions

of credit should be reported. 

Explanation: The Act currently exempts from the 

definition of “contribution” loans that are obtained by

political committees in the ordinary course of business

from federally-insured lending institutions. 2 U.S.C.

§431(8)(B)(vii). Loans that do not meet the requirements of this provision are either subject to the Act’s 

contribution limitations, if received from permissible

sources, or the prohibition on corporate contributions,

as appropriate. 

Since this aspect of the law was last amended in

1979, however, a variety of financial options have become more widely available to candidates and committees. These include a candidate’s ability to obtain 

advances against the value of a brokerage account,

to draw cash advances from a candidate’s credit card, 

or to make draws against a home equity line of credit

obtained by the candidate. In many cases, the credit

approval, and therefore the check performed by the

lending institution regarding the candidate’s creditworthiness, may predate the candidate’s decision to 

seek federal office. Consequently, the extension of 

credit may not have been made in accordance with

the statutory criteria such as the requirement that a

loan be “made on a basis which assures repayment.”

In other cases, the extension of credit may be from 

an entity that is not a federally-insured lending institution. The Commission recommends that Congress 

clarify whether these alternative sources of financing 

are permissible and, if so, specify standards to ensure

that these advances are commercially reasonable

extensions of credit. 

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

problems (see Explanation and Justification, Final Rule, 48

Fed. Reg. 19019, April 27, 1983, as prescribed by the Commission on July 1, 1983), statutory resolution is required in

this area. 
Legislative Recommendations

 

57 

Enforcement 

Audits for Cause 

Section: 2 U.S.C. §438(b) 

Recommendation: The Commission recommends that 

Congress expand the time frame, from 6 months to 12

months after the election, during which the Commission can initiate an audit for cause. 

Explanation: Under current law, the Commission must 

initiate audits for cause within 6 months after the election. Because year-end disclosure does not take place 

until almost 2 months after the election, and because 

additional time is needed to computerize campaign

finance information and review reports, there is little

time to identify potential audits and complete the referral process within that 6-month window. 

Modifying Standard of “Reason to Believe”

Finding

Section: 2 U.S.C. §437g

Recommendation: The Commission recommends that 

Congress modify the language pertaining to “reason

to believe,” contained at 2 U.S.C. §437g, so as to

allow the Commission to open an investigation with

a sworn complaint, or after obtaining evidence in the

normal course of its supervisory responsibilities. Essentially, this would change the “reason to believe” 

standard to “reason to open an investigation.” 

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. 

It would therefore 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. 

Protection for Those Who File Complaints

or Give Testimony (revised 1997)

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

the Act 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 §441b. 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 retaliation for filing complaints,

Congress has made it unlawful to discriminate against

employees or other individuals 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 Opportunity Act); 42 

U.S.C. §3617 (Fair Housing Act). The Commission 

recommends that Congress consider including a similar provision in the FECA. 
58 Chapter Six

Public Financing 

Supplemental Funding for Publicly Funded

Candidates 

Section: 26 U.S.C. §§9003 and 9004

Recommendation: The Commission recommends 

that Congress consider whether to modify the general

election Presidential public funding system in instances where a nonpublicly funded candidate exceeds the

spending limit for publicly funded candidates. 

Explanation: Major party Presidential candidates

who participate in the general election public funding

process receive a grant for campaigning. In order to

receive the grant, the candidate must agree to limit

expenditures to that amount. Candidates who do not

request public funds may spend an unlimited amount

on their campaign. Congress may want to consider

whether the statute should ensure that those candidates who are bound by limits are not disadvantaged.

Miscellaneous

Funds and Services from Private Sources 

Section: 2 U.S.C. §437c 

Recommendation: The Commission recommends that 

Congress 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.

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.
Legislative Recommendations

 

59 

Part III 

Conforming Legislative 

Recommendations 

Disclosure 

Definition of Political Committee (1997)

Section: 2 U.S.C. §431(4)(A)

Recommendation: The Commission recommends 

that Congress revise the definition of political committee to incorporate “major purpose” as the test recognized by the courts. 

Explanation: Section 431(4)(A) of the Act defines 

a political committee as a group which raises or

spends in excess of $1,000 during a calendar year. 

In Buckley v. Valeo, the Supreme Court, citing First

Amendment concerns, ruled that the definition of 

political committee “need only encompass organizations that are under the control of a candidate or the 

major purpose of which is the nomination or election

of a candidate.” Subsequent court rulings have cited

the Buckley case in interpreting the statute to include

“major purpose” as the test. See FEC v. Massachusetts Citizens for Life, 479 U.S. 238 (1986) and FEC 

v. GOPAC, Inc., 917 F.Supp. 851 (D.D.C. 1996).

Recently, however, an appeals court has interpreted 

the wording of the statute narrowly, ruling that the 

$1,000 threshold is the only applicable factor in determining if an organization is a political committee. See 

Akins v. FEC, No. 92-1864(JLG) (D.D.C. 1994); aff’d, 

66 F.3d 348 (D.C. Cir. 1995, appeal vacated and reh’g

en banc granted, 74 F.3d 287 (D.C. Cir. 1996), rev’d, 

(D.C. Cir. 1996).

Congress should amend the statute to rectify the conflicting court rulings and to clarify Congressional intent

regarding the meaning of “major purpose.”

Point of Entry for Pseudonym Lists

Section: 2 U.S.C. §438(a)(4)

Recommendation: The Commission recommends that 

Congress make a technical amendment to section

438(a)(4) by deleting the reference to the Clerk of the

House.

Explanation: Section 438(a)(4) outlines the processing of disclosure documents filed under the Act. The 

section permits political committees to “salt” their disclosure reports with 10 pseudonyms in order to detect

misuse of the committee’s FEC reports and protect individual contributors who are listed on the report from

unwanted solicitations. The Act requires committees 

who “salt” their reports to file the list of pseudonyms

with the appropriate filing office. 

Public Law No. 104-79 (December 28, 1995) changed

the point of entry for House candidate reports from the 

Clerk of the House to the FEC, effective December 

31, 1995. As a result, House candidates must now file 

pseudonym lists with the FEC, rather than the Clerk

of the House. To establish consistency within the Act, 

the Commission recommends that Congress amend

section 438(a)(4) to delete the reference to the Clerk

of the House as a point of entry for the filing of pseudonym lists. 

Contributions and Expenditures 

Broader Prohibition Against Force and 

Reprisals

Section: 2 U.S.C. §441b(b)(3)(A) 

Recommendation: The Commission recommends 

that Congress revise the FECA to make it unlawful for 

a corporation, labor organization or separate segregated fund to use physical force, job discrimination,

financial reprisals or the threat thereof to obtain a

contribution or expenditure on behalf of any candidate

or political committee. 

Explanation: Current §441b(b)(3)(A) could be interpreted to narrowly apply to the making of contributions or expenditures by a separate segregated fund 
60 Chapter Six

which were obtained through the use of force, job

discrimination, financial reprisals and threats. Thus, 

Congress should clarify that corporations and labor

organizations are prohibited from using such tactics in

the solicitation of contributions for the separate segregated fund. In addition, the FEC has recently revised

its rules to clarify that it is not permissible for a corporation or a labor organization to use coercion, threats,

force or reprisal to urge any individual to contribute to 

a candidate or engage in fundraising activities. See 60 

FR 64260 (December 14, 1995). However, Congress 

should include language to cover such situations. 

Nonprofit Corporations and Express Advocacy

Section: 2 U.S.C. §441b 

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

Supreme Court in FEC v. Massachusetts Citizens for 

Life, Inc. (MCFL), the Commission recommends that 

Congress consider amending the provision prohibiting

corporate and labor spending in connection with federal elections in order to incorporate into the statute

the text of the court’s decision. Congress may also 

wish to include in the Act a definition for the term “express advocacy.” 

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. 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. The Court also indicated that the 

prohibition on corporate expenditures for communications is limited to communications expenditures containing express advocacy. 

Since the Court decision and subsequent related

decisions (e.g., Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990)), the Commission has 

concluded a rulemaking proceeding to implement

changes necessitated by the current case law. See 

60 FR 35293 (July 6, 1995). However, the Commission believes that statutory clarification would also be

beneficial.

Congress should consider whether statutory changes

are needed: (1) to exempt independent expenditures

made by certain nonprofit corporations from the statutory prohibition against corporate expenditures; (2) to

specify the reporting requirements for these nonprofit

corporations; and (3) to provide a definition of express

advocacy. 

Honorarium 

Section: 2 U.S.C. §431(8)(B)(xiv)

Recommendation: The Commission recommends that 

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. In 1991,

the Legislative Branch Appropriations Act repealed 

§441i. 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, the Commission recommends that Congress make a technical

change to §431(8)(B)(xiv) deleting the reference to

honorarium as defined in former §441i. This would 

delete honorarium from the list of definitions of what is 

not a contribution. 

Acceptance of Cash Contributions

Section: 2 U.S.C. §441g 

Recommendation: The Commission recommends that 

Congress modify the statute to make the treatment of

2 U.S.C. §441g, concerning cash contributions, consistent with other provisions of the Act. As currently 

drafted, 2 U.S.C. §441g prohibits only the making of 

cash contributions which, in the aggregate, exceed 
Legislative Recommendations 61 

$100 per candidate, per election. It does not address

the issue of accepting cash contributions. Moreover, 

the current statutory language does not plainly prohibit cash contributions in excess of $100 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 

110.4(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., §§ 441b on corporate 

and labor union contributions, 441c on contributions 

by government contractors, 441e on contributions

by foreign nationals, and 441f 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 §441g 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 $100 in

federal elections. 

Public Financing 

Applicability of Title VI to Recipients of Payments 

from the Presidential Election Campaign Fund

Section: 26 U.S.C. §§9006(b), 9008(b)(3) and 9037.

Recommendation: The Commission recommends 

that Congress clarify that committees receiving public

financing payments from the Presidential Election 

Campaign Fund are exempt from the quirements of

Title VI of the Civil Rights Act of 1964, as amended.

Explanation: This proposed amendment was prompted by the decision of the U.S. District Court for the

District of Columbia in Freedom Republicans, Inc.,

and Lugenia Gordon v. FEC, 788 F. Supp. 600 (1992), 

vacated, No. 92-5214 (D.C. Cir. January 18, 1994). 

The Freedom Republicans’ complaint asked the district court to declare that the Commission has jurisdiction to regulate the national parties’ delegate selection 

process under Title VI. It also requested the court 

to order the Commission to adopt such regulations,

direct the Republican Party to spend no more of the

funds already received for its 1992 national nominating convention, and seek refunds of moneys already

disbursed if the Republican Party did not amend its

delegate selection and apportionment process to

comply with Title VI. The district court found that the 

Commission “does have an obligation to promulgate

rules and regulations to insure the enforcement of

Title VI. The language of Title VI is necessarily broad, 

and applies on its face to the FEC as well as to both

major political parties and other recipients of federal

funds.” 788 F. Supp. at 601.

The Commission appealed this ruling on a number of

procedural and substantive grounds, including that Title VI does not apply to the political parties’ apportionment and selection of delegates to their conventions. 

However, the court of appeals overruled the district 

court decision on one of the non-substantive grounds,

leaving the door open for other lawsuits involving the

national nominating conventions or other recipients

of federal funds certified by the Commission. No. 92-

5214, slip op. at 15.

In the Commission’s opinion, First Amendment concerns and the legislative history of the public funding

campaign statutes strongly indicate that Congress did

not intend Title VI to permit the Commission to dictate 

to the political parties how to select candidates or to

regulate the campaigns of candidates for federal office. Nevertheless, the potential exists for persons

immediately prior to an election to invoke Title VI in 

the federal courts in a manner that might interfere with

the parties’ nominating process and the candidates’ 
62 Chapter Six

campaigns. The recommended clarification would 

help forestall such a possibility. 

For these reasons, Congress should consider adding the following language to the end of each public

financing provision cited above: “The acceptance of

such payments will not cause the recipient to be conducting a ‘program or activity receiving federal financial assistance’ as that term is used in Title VI of the 

Civil Rights Act of 1964, as amended.”

Enforcement of Nonwillful Violations 

Section: 26 U.S.C. §§9012 and 9042

Recommendation: The Commission recommends 

that Congress 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 §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. §441a(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. 

Contributions to Presidential Nominees Who 

Receive Public Funds in the General Election 

Section: 26 U.S.C. §9003

Recommendation: The Commission recommends 

that Congress clarify that the public financing statutes

prohibit the making and acceptance of contributions

(either direct or in-kind) to Presidential candidates

who receive full public funding 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. §441a to clarify that individuals and committees are prohibited from making these contributions. 

Miscellaneous

Ex Officio Members of Federal Election 

Commission 

Section: 2 U.S.C. §437c(a)(1)

Recommendation: The Commission recommends that 

Congress amend section 437c by removing the Secretary of the Senate, the Clerk of the House, and their

designees from the list of the members of the Federal

Election Commission. 

Explanation: In 1993, the U.S. Court of Appeals for 

the District of Columbia ruled that the ex officio membership of the Secretary of the Senate and the Clerk

of the House on the Federal Election Commission 

was unconstitutional. (FEC v. NRA Political Victory 

Fund, 6 F.3d 821 (D.C. Cir. 1993), cert. dismissed for 

want of jurisdiction, 115 S. Ct. 537 (12/6/94).) This 

decision was left in place when the Supreme Court

dismissed the FEC’s appeal on the grounds that the 

FEC lacks standing to independently bring a case

under Title 2. 

As a result of the appeals court decision, the FEC reconstituted itself as a six-member body whose mem-
Legislative Recommendations 63 

bers are appointed by the President and confirmed by

the Senate. Congress should accordingly amend the

Act to reflect the appeals court’s decision by removing 

the references to the ex officio members from section 

437c.
Chapter 7

Campaign Finance

Statistics 

CHART 7-1 

Number of PACs, 1974-1996 
66 Chapter Seven

CHART 7-2 

House Candidates’ 

Sources of Receipts:

Two-Year Election Cycle 
Campaign Finance Statistics 67

CHART 7-3 

Senate Candidates’ 

Sources of Receipts:

Two-Year Election Cycle 
68 Chapter Seven

CHART 7-4 

House and Senate Activity

by Election Cycle 
Campaign Finance Statistics 69

CHART 7-5 

PAC Contributions to Candidates 

by Party and Type of PAC 

1994 Election Cycle 1996 Election Cycle 
70 Chapter Seven

CHART 7-6 

PAC Contributions to House and Senate 

Candidates by Party and Candidate Status 

CHART 7-7 

PAC Contributions to House Candidates 

by Type of PAC and Candidate Status 

Incumbents Challengers 
Campaign Finance Statistics 71

CHART 7-8 

Presidential Election Campaign Fund:

1996 Payments and Funds Available 
72 Chapter Seven

CHART 7-9 

Presidential Election Campaign Fund

1996 Balance by Month 

CHART 7-10 

Revenue and Payments from the

Presidential Election Campaign Fund 
Campaign Finance Statistics 73

CHART 7-11 

Receipts of Presidential Primary

Campaigns by Source 
74 Chapter Seven

CHART 7-12 

Individual Contributions 

to Presidential Primary Campaigns

By Size of Contribution 
Campaign Finance Statistics 75

CHART 7-13 

Presidential Spending by 1996

General Election Campaigns 

CHART 7-14 

1996 General Election: 

Funding Sources 
76 Chapter Seven

CHART 7-15 

Party Federal and

Nonfederal Receipts 

Democratic National Committee (DNC) 

Republican National Committee (RNC) 
Campaign Finance Statistics 77

CHART 7-16 

Sources of Party Receipts 

DNC Federal Receipts by Source RNC Federal Receipts by Source 

DNC Nonfederal Receipts by Source RNC Nonfederal Receipts by Source 
78 Chapter Seven

CHART 7-17 

Party Federal and

Nonfederal Disbursements - 1996 

Democratic National Committee 

Republican National Committee 
79 

Appendix 1

Biographies of

Commissioners 

and Officers

Commissioners 

Lee Ann Elliott, Chairman 

April 30, 19991 

Commissioner Elliott was first appointed in 1981

and reappointed in 1987 and 1994. She previously

served as Chairman in 1984 and 1990. Before her 

first appointment, Commissioner Elliott was vice

president of a political consulting firm, Bishop, Bryant & Associates, Inc. From 1961 to 1979, she was 

an executive of the American Medical Political Action 

Committee. Commissioner Elliott was 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.

John Warren McGarry, Vice Chairman

April 30, 1995

First appointed to the Commission in 1978, Commissioner McGarry was reappointed in 1983 and

1989. He served as FEC Chairman in 1991, 1985 

and 1981. Before his 1978 Commission appointment,

Commissioner 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, Commissioner McGarry was the Massachusetts assistant

attorney general.

After graduating cum laude from Holy Cross College, Commissioner McGarry did graduate work at

Boston University and earned a J.D. degree from

Georgetown University Law School.

Joan D. Aikens 

April 30, 1995

One of the original members of the Commission,

Commissioner 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 Commissioner Aikens 

to complete a term left open because of a resignation

and, in 1983, once again reappointed her to a full sixyear term. Most recently, Commissioner Aikens was 

reappointed by President Bush in 1989. She served

as FEC Chairman in 1978, 1986 and 1992.

Before her 1975 appointment, Commissioner

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, Commissioner Aikens has been active in a variety of volunteer organizations and was

a member of the Commonwealth Board of the Medical College of Pennsylvania and a past President of

Executive Women in Government. She is currently a 

member of the board of directors of Ursinus College,

where she received her B.A. degree and an honorary

Doctor of Law degree.

Danny L. McDonald

April 30, 1999

Now serving his fourth term as Commissioner, Mr. 

McDonald was first appointed to the Commission in

1981 and was reappointed in 1987 and 1994. 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 1 Term expiration date. 
80 Appendices 

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.

Scott E. Thomas

April 30, 1997

Mr. Thomas was appointed to the Commission

in 1986 and reappointed in 1991. He was the 1993

Chairman, having earlier been Chairman in 1987. 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 University and holds a J.D. degree from

Georgetown University Law Center. He is a member 

of the District of Columbia and U.S. Supreme Court

bars.

Statutory Officers

John C. Surina, Staff Director

Before joining the Commission in 1983, John Surina was assistant managing director of the Interstate

Commerce Commission, where he was detailed to 

the “Reform 88” program at the 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 (COGEL).

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

Lawrence 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, Inspector General

Lynne 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 and is a

member of the Institute of Internal Auditors.
81

January

1 — Chairman Lee Ann Elliott and Vice Chairman 

John Warren McGarry begin their one-year 

terms of office.

5 — FEC releases audit report on Committee to 

Elect Michael Patrick Flanagan.

11-12— FEC holds membership/trade conference in 

Washington, DC.

23 — Commission releases 1995 year-end PAC 

count.

25 — FEC releases audit report on Jude for Congress.

31 — 1995 year-end report due.

February

9 — Regulations on public funding of Presidential 

campaign take effect.

12 — FEC releases audit report on Minnesota 

Democratic Farmer Labor Party. 

13 — Alan Keyes declared eligible for matching 

funds.

14 — FEC launches home page on World Wide 

Web.

15 — U.S. district court invalidates regulatory definition of express advocacy. (Maine Right to 

Life v. FEC)

20 — U.S. appeals court affirms most of district 

court’s decision upholding best efforts regulations. (RNC v. FEC)

28 — U.S. district court dismisses FEC v. GOPAC. 

March

8 — FEC holds candidate conference in Washington, DC.

12 — FEC releases audit report on Citizens for

Jack Metcalf.

13 — Regulations on corporate/labor communications and facilities take effect.

 — FEC releases statistics on Congressional 

candidate and national party activity during 

1995.

15 — Commission approves additional $340,000 

cost-of-living payments for national nominating conventions.

 — FEC announces 1996 Presidential spending 

limits and 441a(d) limits.

20 — Open hearing on proposed rules on the

staging of candidate debates by cable television stations. 

21 — Commission votes to seek $30.8 million FY

1997 appropriation.

April

1 — FEC publishes 1996 Combined Federal/

State Disclosure Directory.

 — FEC releases audit report on Montana State

Democratic Central Committee.

2 — FEC releases audit report on Nevada State

Democratic Party.

4 — Commission sends 50 recommendations 

for legislative change to President and Congress.

 — FEC releases statistics on 1995 PAC activity.

9 — FEC releases audit report on Bob Barr for

Congress ’94.

11-12— FEC holds regional conference in Chicago.

15 — Quarterly report due.

16 — Commissioner Scott E. Thomas testifies 

before House Appropriations Subcommittee 

on $30.87 million FY 1997 budget request.

18 — FEC releases audit report on West Virginia 

State Democratic Executive Committee.

19 — U.S. district court finds regulations on qualified nonprofit corporations unconstitutional.

(Minnesota Citizens Concerned for Life v. 

FEC)

24 — FEC releases audit report on The Friends of 

Conrad Burns.

May

1 — Office of Election Administration publishes 

Campaign Finance Law 96. 

6 — FEC releases audit report on Carol Moseley

Braun for U.S. Senate.

8 — FEC releases 15-month report on national

party finances.

17 — FEC releases audit report on United Republican Fund of Illinois.

20 — U.S. district court invalidates rules on voting

records and voter guides. (Clifton v. FEC)

Appendix 2

Chronology of Events
82 Appendices

23 — FEC releases 15-month Congressional election figures.

June 

1 — FEC issues 21st annual report.

7 — FEC releases 15-month PAC statistics.

10 — FEC releases audit report on San Bernardino County Republican Central Committee.

 — FEC releases audit report on American Hospital Association Political Action Committee.

21 — Regulations on cable television debates and

news stories take effect.

26 — Supreme Court rules political party may 

make independent expenditures. (FEC v. 

Colorado Republican Campaign Committee)

July

1 — Office of Election Administration publishes 

Federal Election Law 96. 

11 — FEC releases semiannual PAC count.

15 — Quarterly report due.

August 

1 — FEC publishes new edition of Campaign 

Guide for Political Party Committees. 

 — Office of Election Administration publishes 

Simplifying Election Forms and Materials. 

2 — U.S. appeals court upholds district court’s 

dismissal of FEC v. Christian Action Network. 

 — FEC releases audit report on Idaho Republican Party Federal Campaign Account.

 — FEC releases audit report on Abraham for 

Senate.

6 — FEC releases 18-month report on Congressional candidate activity.

7 — In response to Colorado Republicans decision, FEC deletes rule banning independent 

expenditures by parties.

 — FEC releases audit report on Republican 

Campaign Committee of New Mexico.

 — FEC releases 18-month report on party finances.

12 — FEC releases audit report on Republican 

Party of Dade County.

15 — FEC certifies $61.82 million payment of public funds to Dole/Kemp campaign.

 — FEC publishes final rules on electronic filing.

22 — FEC certifies $29.055 million payment of 

public funds to Perot/Choate campaign.

23-24 — FEC Election Administration Advisory Panel 

meets in Washington, DC.

30 — FEC certifies $61.82 million payment of public funds to Clinton/Gore campaign.

September

11 — FEC releases audit report on Democratic

State Central Committee of California-Federal. 

27 — FEC releases 18-month PAC statistics.

October

1 — FEC denies requests to suspend matching

fund payments to Clinton and Dole campaigns.

 — Office of Election Administration publishes 

Journal of Election Administration, Election 

Directory 96, Ensuring Accessibility of the 

Election Process and Recruiting Poll Workers. 

2 — FEC publishes list of Presidential candidates 

on state ballots.

4 — U.S. appeals court upholds district court’s 

dismissal of suits challenging Presidential 

debates. (Perot and Natural Law Party v. 

FEC and the Commission on Presidential 

Debates)

15 — Quarterly report due.

17 — FEC denies request to suspend public funding payments to Perot/Choate campaign.

18 — U.S. appeals court upholds district court 

decision invalidating regulatory definition 

of “express advocacy.” (Maine Right to Life 

Committee v. FEC)

24 — Pre-general election report due.

29 — FEC releases pre-general election statistics 

on political party activity.
Appendices 83

 

 

 

 

 

 

 

 

 

November

1 — FEC releases statistics on 1996 House and 

Senate campaign spending.

5 — General Election.

December

3 — FEC releases audit report on North Carolina

Democratic Victory Fund (1993).

— FEC releases audit report on North Carolina

Democratic Victory Fund (1995)

4 — FEC releases audit report on Massachusetts

Republican State Committee.

5 — Post-general election report due.

9 — FEC releases audit report on Dan Hamburg

for Congress.

10 — FEC releases audit report on Friends of

Franks.

12 — FEC elects John Warren McGarry and 

Joan D. Aikens as 1997 Chairman and Vice 

Chairman.
Appendices 85

Appendix 3 

FEC Organization Chart

General Counsel

Public Funding

Ethics and 

Special Projects

Deputy Staff Director

for Management

Data Systems

Development

Planning and

Management

Administration 

Equal Employment

Opportunity

Commission 

Secretary

Public 

Disclosure

Office of Election 

Administration 

Audit

Staff Director Inspector General

Information 

Congressional

Affairs

Personnel

Labor/Management

Policy4

Litigation

Enforcement

The Commissioners1 

Lee Ann Elliott, Chairman2

John Warren McGarry, Vice Chairman3

Joan D. Aikens, Commissioner 

Danny L. McDonald, Commissioner 

Scott E. Thomas, Commissioner 

Reports

Analysis Press Office

1

 One seat on the Commission remained vacant throughout 1996.

2 John Warren McGarry was elected 1997 Chairman.

3 Joan D. Aikens was elected 1997 Vice Chairman.

4Policy covers regulations, advisory opinions, legal review and administrative law.
Appendix 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 202-219-3420.

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, telecommunications, 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.

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.

The 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.

Local phone: 202-219-4136; toll-free 800-424-9530.

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 information into the FEC database 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 finance activity and, additionally, provide a tool 

for monitoring contribution limits. The indexes are 

available online through the Data Access Program 

(DAP), a subscriber service managed by the division.

The division also publishes the Reports on Financial

Activity series of periodic studies on campaign finance

and generates statistics for other publications.

Among its duties related to internal operations, the

division provides computer support for the agency’s 

automation systems and for administrative functions 
88 Appendices 

such as management information, document tracking,

personnel and payroll systems as well as the MUR

prioritization system.

Local phone: 202-219-3730; toll-free phone: 800-

424-9530.

Equal Employment Opportunity

(EEO) and Special Programs

The EEO Office advises the Commission on the 

prevention of discriminatory practices and manages

the agency’s EEO Program.

The office is also responsible for: developing a

Special Emphasis Program tailored to the training and

advancement needs of women, minorities, veterans, 

special populations and disabled employees; and

recommending affirmative action recruitment, hiring,

and career advancement. The office encourages the 

informal resolution of complaints during the counseling stage.

Additionally, the office develops and manages a 

variety of agency-wide special projects. These include 

the Combined Federal Campaign, the U.S. Savings

Bonds Drive, and workshops intended to improve

employees’ personal and professional lives.

General Counsel

The General Counsel directs the agency’s enforcement activities, represents and advises the Commission in any legal actions brought before it and serves 

as the Designated Agency Ethics Official. The Office 

of General Counsel handles all civil litigation, including Title 26 cases that 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

In an effort to promote voluntary compliance with 

the law, the Information Division provides technical 

assistance to candidates, committees and others 

involved in elections through the world wide web,

letters, phone conversations, publications and conferences. Responding to phone and written inquiries,

members of the staff provide information 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: 202-219-

3420; toll-free phone: 800-424-9530 (press 1 on a

touch-tone phone).

Inspector General

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 materials 

on campaign finance reform, election law and current

political activity. Visitors to the law library can use its 

computers to access the Internet. The librarian and 

legal staff also maintain computer indices of enforcement proceedings (MURs) and advisory opinions,

which may be searched in the Law Library or the Public Disclosure Division. Local phone: 202-219-3312;

toll-free: 800-424-9530.

Office of Election Administration

The Office of Election Administration (OEA), located on the second 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 OEA
Appendices 89

answers questions from the public and briefs foreign

delegations on the U.S. election process, including

voter registration and voting statistics.

Local phone: 202-219-3670; toll-free phone: 800-

424-9530 (press 4 on a touch-tone phone).

Personnel and Labor/Management

Relations 

This office provides policy guidance and operational support to managers and staff in a variety of human 

resource management areas. These include position 

classification, training, job advertising, recruitment

and employment. The office also processes personnel actions such as step increases, promotions, leave

administration, awards and discipline, performs personnel records maintenance and offers employee 

assistance program counseling. Additionally, Personnel administers the Commission’s labor-management 

relations program and a comprehensive package of

employee benefits, wellness and family-friendly programs.

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.

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: 202-219-4155; toll-free 800-424-9530.

Public Disclosure

The Public Disclosure Division processes incoming campaign finance reports from political committees and candidates involved in federal elections and 

makes their reports available to the public. Located

on the first floor, the division’s Public Records Office 

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

computer data. The FEC encourages the public to 

review the many resources available, which also include computer indexes, advisory opinions and closed

MURs. 

The division’s Processing Section receives incoming reports and processes them for formats which

can be easily retrieved. These formats include paper, 

microfilm and electronic computer images that can be

easily accessed from the library’s terminals and those 

of agency auditors.

The Public Disclosure Division also manages

Flashfax, an automated faxing service for ordering

FEC documents, forms and publications, available 24

hours a day, 7 days a week.

Local phone: 202-219-4140; toll-free phone: 800-

424-9530 (press 3 on a touch-tone phone); Flashfax:

202-501-3413.

Reports Analysis

Reports analysts assist committee officials in

complying with reporting requirements and conduct

detailed examinations of the 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

that the 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 frequent telephone assistance

to committee officials and encourage them to call

the division with reporting questions or compliance

problems. Local phone: 202-219-3580; toll-free phone

800-424-9530 (press 2 on a touch-tone phone).
90 Appendices 

Staff Director and Deputy Staff

Director

The Staff Director carries the responsibilities of 

appointing staff, with the approval of the 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.
Appendices 91 

Appendix 5

Statistics on Commission

Operations 

Summary of Disclosure Files

Total Filers 

Existing in

1996 

Filers 

Terminated 

as of 

12/31/96

Continuing

Filers as of

12/31/96

Number of

Reports and 

Statements 

in 1996 

Gross Receipts

in 1996 

Gross 

Expenditures

in 1996 

Presidential Candidate

Committees 

584 197 387 1,210 329,202,706 336,327,854

Senate Candidate Committees 921 381 540 2,798 248,306,429 280,628,524

House Candidate Committees 3,854 660 2,438 15,192 394,597,294 424,113,242

Party Committees 669 97 572 4,196 854,435,118 897,891,296

Federal Party Committees

Reported Nonfederal

581 97 484 3,699 615,628,163 641,133,265

 Party Activity 88 0 88 497 238,806,955 256,758,031

Delegate Committees 80 70 10 41 478,595 475,123

Nonparty Committees 4,528 479 4,049 31,188 250,265,328 287,759,044

Labor Committees 358 26 332 2,840 56,702,520 69,260,266

Corporate Committees 1,836 209 1,627 14,259 71,875,183 80,457,367

Membership, Trade and

Other Committees 2,334 244 2,090 14,089 121,687,625 138,041,411

Communication Cost Filers 223 0 223 116 N/A 7,033,199

Independent Expenditures by

Persons Other Than

Political Committees

371 9 362 248 N/A 521,759
92 Appendices 

Divisional Statistics for Calendar Year 1996

Total

Reports Analysis Division

Documents processed 89,538

Reports reviewed 32,246

Telephone assistance and meetings 12,244

Requests for additional information (RFAIs) 10,371

Second RFAIs 3,137

Data coding and entry of RFAIs and

 miscellaneous documents 18,807

Compliance matters referred to Office

 of General Counsel or Audit Division 30

Data Systems Development Division*

Documents receiving Pass I coding 69,369

Documents receiving Pass III coding 50,343

Documents receiving Pass I entry 74,364

Documents receiving Pass III entry 49,869

Transactions receiving Pass III entry

•In-house 169,333

•Contract 1,287,359

Public Records Office

Campaign finance material processed

 (total pages) 1,987,733

Requests for campaign finance reports 10,786

Visitors 15,770

Total people served 26,556

Information telephone calls 21,153

Computer printouts provided 72,400

Total income (transmitted to U.S. Treasury) 101,086

Cumulative total pages of documents

 available for review 14,143,048

Contacts with state election offices 2830

Notices of failure to file with state 

election offices 302

Flashfax requests 7729

 Total

Administrative Division

Contracting and procurement transactions 1,816

Publications prepared for print 46

Pages of photocopying 8,968,700

Information Division

Telephone inquiries 34,152

Information letters 731

Distribution of FEC materials 12,745

Prior notices (sent to inform filers

 of reporting deadlines) 40,309

Other mailings 118,969

Visitors 218

Public appearances by Commissioners

 and staff 218

State workshops 0

Publications 26

Press Office

News releases 139

Telephone inquiries from press 23,459

Visitors 1,842

Freedom of Information Act

 (FOIA) requests 696

Fees for materials requested under FOIA

 (transmitted to U.S. Treasury) 91,431

Office of Election Administration

Telephone inquiries 9,953

National Surveys Conducted 10

Individual Research Requests 266

Materials Distributed * 14,395

Election Presentations/Conferences 29

Foreign briefings 87

Publications 7

*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 

III, itemized information is coded and entered.

* Figure includes National Voter Registration Act materials.
Appendices 93

Total

Office of General Counsel

Advisory opinions

 Requests pending at beginning of 1996 10

 Requests received 52

 Issued 51

 Not Issued* 5

 Pending at end of 1996 6

 Compliance cases† 

 Pending at beginning of 1996 251

 Opened 314

 Closed 204

 Pending at end of 1996 361

Litigation

Cases pending at beginning of 1996 47

 Cases opened 23

 Cases closed 26

Cases pending at end of 1996 44

Cases won 18

 Cases lost 5

 Cases settled 3

Law Library

 Telephone inquiries 689

 Visitors 1361

 

 

 

Audit Reports Publicly Released

Year Title 2* Title 26† Total

1976 3 1 4

1977 6 6 12

1978 98‡ 10 108

1979 75‡ 9 84

1980 48‡ 11 59

1981 27‡ 13 40

1982 19 1 20

1983 22 0 22

1984 15 2 17

1985 4 9 13

1986 10 4 14

1987 12 4 16

1988 8 0 8

1989 2 7 9

1990 1 6 7

1991 5 8 13

1992 9 3 12

1993 10 2 12

1994 5 17 22

1995 12 0 12

1996 23 0 23

Total 414 113 527

Audits Completed by Audit Division, 1975–1996

Total 

Presidential 93

Presidential Joint Fundraising 11

Senate 22

House 146

Party (National) 46

Party (Other) 132

Nonparty (PACs) 77

Total 527 

*Audits for cause: The FEC may audit any registered political 

committee: 1) whose reports do not substantially comply with the

law; or 2) if the FEC has found reason to believe that the committee

has committed a violation. 2 U.S.C. §§438(b) and 437g(a)(2). †Title 26 audits: The Commission must give priority to these 

mandatory audits of publicly funded committees. ‡Random audits: Most of these audits were performed under 

the Commission’s random audit policy (pursuant to the former 2 

U.S.C. §438(a)(8)). The authorization for random audits was repealed by Congress in 1979.

* One advisory opinion request was withdrawn, three did not

receive the required four-vote majority for passage and one was not

issued due to litigation. †In annual reports previous to 1994, the category “compliance 

cases” included only Matters Under Review (MURs). As a result of 

the enforcement prioritization system, the category has been expanded to include internally-generated matters in which the Commission has not yet made reason to believe findings.
94 Appendices 

 

Pending

at Beginning

of Year

Opened Closed Pending

at End 

 of Year

Presidential 0 10 0 10

Presidential Joint Fundraising

Senate

0

3

0

0

0

3

0

0

House 6 0 6 0

Party (National)

Party (Other)

Nonparty (PACs)

Total

0

17

2

28

0

0

1

11

0

13

2

24

0

4

1

15

 

Status of Audits, 1996 
Appendices 95

Appendix 6

1996 Federal Register

Notices

1996-1 

Filing Dates for California Special Election, 37th District (61 FR 1933, January 24, 1996)

1996-2 

11 CFR 100, 110 and 114: Candidate Debates and 

News Stories (staged by cable television stations);

Notice of Proposed Rulemaking (61 FR 3621, February 1, 1996)

1996-3 

11 CFR 100, 104, 105, 109, 110 and 114: Document 

Filing Point-of-Entry Technical Amendments; Final 

Rule (61 FR 3549, February 1, 1996)

1996-4 

Filing Dates for Maryland Special Elections (61 FR

4666, February 7, 1996)

1996-5 

11 CFR 9034 and 9038: Public Financing of Presidential Primary and General Election Campaigns; Final

Rule, Correcting Amendments and Announcement of 

Effective Date (61 FR 4849, February 9, 1996)

1996-6 

11 CFR 100 and 108: Point of Entry; Final Rule; Technical Amendments (61 FR 6095, February 16, 1996)

1996-7 

Computerized Magnetic Media Requirements for

Presidential Committees (61 FR 6245, February 16,

1996)

1996-8

Filing Dates for the Oregon Special Elections (61 FR

6837, February 22, 1996)

1996-9 

11 CFR 100, 102, 109, 110 and 114: Corporate and 

Labor Organization Activity, Express Advocacy and 

Coordination with Candidates; Announcement of Effective Date (61 FR 10269, March 13, 1996)

1996-10 

11 CFR 104: Electronic Filing of Reports by Political 

Committee; Notice of Proposed Rulemaking (61 FR

13465, March 27, 1996)

1996-11 

11 CFR 110: Candidate Debates and News Stories 

(staged by cable television stations); Final Rule (61

FR 18049, April 24, 1996)

1996-12 

11 CFR 110: Candidate Debates and News Stories 

(produced by cable television organizations); Announcement of Effective Date (61 FR 31824, June 21, 

1996)

1996-13 

Filing Dates for Kansas Special Election (61 FR

33508, June 27, 1996)

1996-14 

11 CFR Part 110: Coordinated Party Expenditures; 

Technical Amendment; Final Rule (61 FR 40961, August 7, 1996)

1996-15 

Rulemaking Petition: Democratic Senatorial Campaign Committee and Democratic Congressional

Campaign Committee; Notice of Availability (61 FR 

41036, August 7, 1996)

1996-16 

11 CFR Part 104: Electronic Filing of Reports by Political Committees; Final Rules; Transmittal to Congress 

(61 FR 42371, August 15, 1996)

1996-17 

Filing Dates for Missouri Special Election (61 FR

45426, August 29, 1996)

1996-18

Filing Dates for Texas Special Elections (61 FR 

50298, September 25, 1996)

1996-19 
96 Appendices 

11 CFR Part 104: Recordkeeping and Reporting by 

Political Committees: Best Efforts; Notice of Proposed 

Rulemaking (61 FR 52901, October 9, 1996)

1996-20 

11 CFR Part 104: Electronic Filing of Reports by Political Committees; Interim Rules (61 FR 58460, November 15, 1996)

1996-21 

Best Efforts; Extension of Comment Period (61 FR 

68688, December 30, 1996)

1996-22 

Examinations and Audits; Correcting Amendments (61 

FR 69020, December 31, 1996)