Federal 

Election 

Commission 

Annual Report 1999 
Federal 

Election 

Commission 

Annual Report 1999 

Federal Election Commission 

Washington, DC 20463 
Table of Contents 

Introduction 1 

Chapter One 

The Commission 

PricewaterhouseCoopers Audit 3 

Commissioners 4 

Staff Director 4 

Inspector General 4 

Year 2000 Computer Readiness 5 

New Personnel Director Appointed 5 

Equal Employment Opportunity 5 

The FEC’s Budget 5 

Chapter Two 

Keeping the Public Informed 

Public Disclosure 9 

Educational Outreach 12 

Office of Election Administration 14 

Chapter Three 

Interpretation and Enforcement of the Law 

Regulations 15 

Advisory Opinions 16 

Enforcement 16 

Chapter Four 

Legal Issues 

Express Advocacy 21 

Coordination 22 

Illegal Contributions 25 

Use of Internet 26 

Definition of Member 28 

Limited Liability Company 29 

Soft Money 30 

Contributions from Foreign Nationals 33 

Chapter Five 

Presidential Public Funding 

Shortfall for 2000 35 

Certification of Primary Matching Funds 35 

Convention Funding 36 

Public Funding Regulations 36 

Update on 1996 Presidential Debate Lawsuit 37 

Repayment of Public Funds 38 

Chapter Six 

Legislative Recommendations 41 

Chapter Seven 

Campaign Finance Statistics 61 

Appendices

1. Biographies of Commissioners 

and Officers 69 

2. Chronology of Events 71 

3. FEC Organization Chart 75 

4. FEC Offices 77 

5. Statistics on Commission Operations 81 

6. 1999 Federal Register Notices 85 
Table of Charts

Chapter One 

The Commission 

Chart 1-1: 

Functional Allocation of Budget 6 

Chart 1-2: 

Divisional Allocation 7 

Chapter Two 

Keeping the Public Informed 

Chart 2-1: 

Size of Detailed Database by Election Cycle 11 

Chapter Three 

Interpretation and Enforcement of the Law 

Chart 3-1: 

Conciliation Agreements by Calendar Year 18 

Chart 3-2: 

Median Civil Penalty by Calendar Year 18 

Chart 3-3: 

Ratio of Active to Inactive Cases by Calendar Year 18 

Chart 3-4: 

Cases Dismissed under EPS 19 

Chart 3-5: 

Average Number of Respondents and 

Enforcement Cases by Calendar Year 19 

Chapter Five 

Presidential Public Funding 

Chart 5-1: 

Matching Fund Certifications 

and Payments, January 2000 36 

Chapter Seven 

Campaign Finance Statistics 

Chart 7-1: 

Number of PACs, 1974-1999 61 

Chart 7-2: 

Receipts of House Candidates for Each Year of 

Election Cycle, 1990-1999 62 

Chart 7-3: 

House Campaign Fundraising in Nonelection Years 63 

Chart 7-4: 

Senate Campaign Fundraising in Nonelection Years63 

Chart 7-5: 

Nonelection Year Fundraising by National Party 

Committees: Federal and Nonfederal Accounts 64 

Chart 7-6: 

Sources of National Party Committee: Federal 

Account Receipts in Nonelection Years 65 

Chart 7-7: 

Sources of National Party Committee: Nonfederal 

Account Receipts in Nonelection Years 66 

Chart 7-8: 

Presidential Primary 2000: 

Estimated Cumulative Shortfall/Balance by Month 67 
1 

Introduction 

The Federal Election Commission faced a variety 

of challenges as it prepared for the new millennium. In 

addition to carrying out its responsibility to administer 

and enforce the Federal Election Campaign Act, the 

Commission worked to implement the recommendations of a Congressionally-mandated audit of its operations. 

The agency received the results of the audit, conducted by PricewaterhouseCoopers (PwC), in January 1999. PwC’s overall evaluation of the agency was 

generally favorable, finding the agency “competently 

managed” and “without partisan bias.” Nonetheless, 

the Commission recognized that the audit offered an 

opportunity to further improve its disclosure and enforcement operations. It embarked, therefore, on an 

ambitious plan to implement the audit report’s recommendations and continue to work on other agency 

projects initiated in 1998. By year’s end, the agency 

had carried out many of these recommendations and 

projects, and expected to complete nearly all of them 

by the end of the year 2000. 

Amid all of this activity, the Commission continued 

to enhance its disclosure of campaign finance information, to promote compliance with the law through 

educational outreach and disclosure, to advise the 

regulated community through regulations and advisory opinions, to monitor the financing of the upcoming 2000 elections and to investigate a myriad of alleged campaign finance violations. 

All of these endeavors benefited from changes in 

computer technology. Enhancements to the agency’s 

Internet web site and its electronic filing program improved disclosure; a searchable document imaging 

system helped to streamline investigations that involved large collections of documents; and a new 

computerized case management system—whose 

implementation began in 1999—provided a more 

effective tool for managing and tracking the agency’s 

enforcement and litigation cases. 

The material that follows details the Commission’s 

1999 activities. Additional information concerning 

most matters may be found in the 1999 issues of the 

FEC newsletter, the Record. 
3 Chapter One 

The Commission 

PricewaterhouseCoopers Audit 

In January 1999, the FEC received the results of a 

Congressionally-mandated audit of its operations, 

conducted by PricewaterhouseCoopers (PwC). The 

results of the audit were generally favorable. Even so, 

the Commission saw the report as an opportunity to 

further improve its operations. Consequently, it devoted considerable resources to implementing the 

audit report’s recommendations as well as completing other initiatives begun in 1998. 

The PwC audit determined that the Commission 

executes its duties “...without partisan bias,” and it 

addressed the necessity for Congress to authorize 

mandatory electronic filing of campaign reports. (See 

Chapter 2, p. 9.) The audit had been requested by 

Congress in 1997, and was conducted during 1998. 

The paragraphs that follow describe many of the 

report’s recommendations and the actions the Commission has taken in response to them. Others are 

described in subsequent chapters. (See, for example, 

pages 9, 12 and 17.) 

Findings 

In the report’s Executive Summary, the PwC auditors stated: “The FEC is basically a competently managed organization with a skilled and motivated staff, 

although it has its shortcomings. The ability of the 

FEC to adapt to the changing election environment, 

however, has been hindered by the FECA [Federal 

Election Campaign Act] statute itself, escalating campaign finance disclosure and compliance workloads, 

and an organizational culture that has attempted incremental change in a deadline-driven environment 

stretched by limited resources.” 

Among specific FEC strengths, the independent 

audit report mentioned that: 

• Confidentiality of potential and existing compliance 

matters is maintained throughout the report review, 

referral, audit and enforcement process. 

• Disclosure and compliance activities are executed 

without partisan bias. 

• The FEC has a strong organizational focus on facilitating voluntary compliance within the filing community to create an accurate public record of campaign 

finances. 

• The filing community is generally satisfied with the 

products and services provided by the FEC. 

• Productivity has increased in the processing, review 

and dissemination of campaign finance transactions 

in the face of increasing workloads. 

Recommendations 

With regard to the future, the PwC audit report 

identified opportunities for the refinement of Commission operations, as follows: 

• The Congress and the FEC need to initiate actions 

that will eventually allow the FEC to shift some resources from its disclosure activities to its compliance programs by the following means: 

- Develop a comprehensive, mandatory electronic 

data filing system for the major filers in conjunction 

with a significant business process reengineering 

throughout the FEC; 

- Redesign disclosure processes (using industry 

standard software) and realign organizational units 

to improve processing time, accuracy and cost; 

and 

- Monitor compliance with the FECA through a 

computer-based system that can verify transaction 

accuracy, content and disclosure thresholds. 

• The FEC should increase compliance and enforcement productivity in the following ways: 

- Move nondeliberate and straightforward reporting 

violations, such as failure to meet reporting deadlines, into an administrative fine system, thus freeing up enforcement resources to handle more 

significant violations; 

- Establish workload and performance standards 

for all compliance matters; 

- Aggregate data about compliance matters by 

descriptive offense category to better coordinate 

screening criteria and prioritize compliance; and 

- Reassess the roles and responsibilities of the 

Office of the General Counsel to reduce staff time 

consumed in legal reviews of enforcement matters 

and to better harmonize activity with the reports 

review and audit compliance criteria. 
4 Chapter One 

• The FEC needs to renew itself by conducting a 

broad range of organizational development activities 

to strengthen leadership and accountability, to enhance human resource management and to nurture 

increased communication and collaboration throughout the organization. 

FEC Response 

The Commission’s official response, published as 

Section 6 of the report, focused on PwC’s recognition 

of FEC accomplishments, the influence of outside 

factors on FEC operations and the need for legislative 

change in order to accomplish some of the PwC recommendations. 

During 1999, the Commission completed a number 

of new projects, many of which had been recommended in the PwC audit, including: 

• Selecting a permanent Staff Director tasked to improve overall organizational performance; 

• Redesigning the FEC web site; 

• Beginning the transition to a paperless disclosure 

and reports review process; 

• Preparing and maintaining documentation regarding 

EPS (Enforcement Priority System) case-activation 

decisions; 

• Transferring payroll and personnel systems to the 

National Finance Center; 

• Setting up Internet connections on computers in the 

Public Records office to provide alternative ways for 

the public to access images of campaign finance 

reports, using the FEC’s web site; 

• Establishing several new interdivisional working 

groups to improve efficiency and encouraging more 

collaboration and communication among existing 

work groups; and 

• Ensuring that the agency’s computer systems were 

Y2K compliant. 

In addition, the agency established several task 

forces to address PwC recommendations and other 

Commission initiatives. 

Amidst all this, the agency also began an extensive 

renovation of its office space. The project was expected to be completed in May 2000. 

Commissioners 

During 1999, Scott E. Thomas served as Chairman 

of the Commission and Darryl R. Wold as its Vice 

Chairman. On December 10, 1999, the Commission 

elected Mr. Wold to be its Chairman and Danny L. 

McDonald to be its Vice Chairman in the year 2000. 

For biographies of the Commissioners and statutory 

officers, see Appendix 1. 

Staff Director 

On April 14, 1999, the FEC announced the appointment of James A. Pehrkon as Staff Director. Mr. 

Pehrkon had been serving as Acting Staff Director 

since August 1998. With this new appointment, he 

officially replaced John M. Surina, who left the agency 

last year for a position at the Department of Agriculture. For a biography, see Appendix 1. 

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, and to promote 

economy, effectiveness and efficiency within the 

Commission. The OIG audited several facets of 

agency operations in 1999, focusing particular attention on the FEC’s management of computer software 

and its Y2K readiness. The office also reviewed recommendations it made in prior audits concerning 

computer hardware/software management and the 

agency’s employee appraisal process to determine 

what actions FEC management had taken in response. The office posted all of its audit reports and 

its semiannual reports to Congress on the Internet at 

http://www.fec.gov/fecig.htm. 

Also during 1999, a peer review of the OIG confirmed that the office had established an effective 

internal control system and was following applicable 

Government Auditing Standards. 
The Commission 5 

Year 2000 Computer Readiness 

During 1999, the Commission’s Data Division 

worked to ensure that the agency’s computer systems 

were Y2K compliant. In addition to its own testing and 

remediation efforts, the Data Division hired a contractor to conduct independent verification and validation 

of all internally written program codes. As a result of 

these measures, the FEC experienced no Y2K-related computer problems. 

New Personnel Director Appointed 

On March 15, 1999, William J. Fleming took over 

as the FEC’s new Director of Personnel and Labor 

Management Relations. Mr. Fleming succeeded 

former FEC personnel director David Orr. The hiring 

of Mr. Fleming was the first of what became a wholesale staffing change in the Personnel office. 

Among its 1999 accomplishments, the Personnel 

office: 

• Helped transfer the agency’s payroll and personnel 

systems to the National Finance Center; 

• Negotiated revisions to four articles of the Labor/ 

Management Agreement, as well as several agreements regarding the health and safety and subsequent temporary relocation of employees during 

building renovations; and 

• Administered the Federal Employees Group Life 

Insurance (FEGLI) open season—the program’s first 

open enrollment period in 10 years. 

Equal Employment Opportunity (EEO) 

The Equal Employment Opportunity Commission 

(EEOC) has mandated that, by January 1, 2000, all 

government agencies offer an Alternative Dispute 

Resolution (ADR) Program to informally resolve EEO 

complaints and other workplace disputes. The FEC’s 

Office of Equal Employment Opportunity has been a 

leader in the area of ADR, establishing and successfully utilizing mediation to informally resolve EEO matters since March 1994. The agency’s ADR Program 

was featured in the November 1999 issue of Government Executive magazine, discussed on the FedTalk 

Radio Show, included in the Office of Personnel 

Management’s 1999 ADR Resource Guide and featured in several publications and on the World Wide 

Web. 

Jointly administered by the EEO Director, Personnel Director and three EEO Counselors, the ADR 

program or Early Intervention program seeks to resolve employee concerns that might otherwise result 

in formal EEO complaints. Prior to filing an EEO complaint, employees may voluntarily agree to meet, 

separately or jointly, with the EEO or Personnel Director, an EEO Counselor, and/or the party allegedly 

responsible for the discrimination or wrongdoing. If 

resolution attempts fail, the employee may proceed 

with EEO counseling and may file a formal EEO complaint or grievance, if applicable. 

During the period March 1994 through December 

1999, the Commission informally resolved 100 percent of the complaints employees voluntarily brought 

before the EEO Director. 

The FEC’s Budget 

Fiscal Year 1999 

The Commission received a $36.5 million FY 1999 

appropriation, the full amount the agency had requested. That amount, combined with a $350,000 

carryover from FY 1998 and a $59,000 rescission, 

resulted in a $36.8 million FY 99 operating budget for 

the agency. Congress earmarked nearly $4.5 million 

of the appropriation for computerization and limited 

staff to 347 full-time equivalent (FTE) employees. 

Fiscal Year 2000 

In the spring of 1999, Darryl R. Wold, then Vice 

Chairman of the Commission and chairman of the 

FEC’s finance committee, presented the FEC’s FY 

2000 budget request to members of a House appropriations subcommittee and to the Committee on 

House Administration. The Commission requested 

$38.6 million and 356.5 FTE for FY 2000, a net increase of $1.7 million (4.5 percent) and 9.5 FTE over 

FY 1999. Vice Chairman Wold noted that the majority 

of the requested budget increase was due to inflation, 

while the remainder was for additional staff resources, 

primarily in enforcement programs. 
6 Chapter One 

The vice chairman said that three of the requested 

additional staff would be added to the FEC’s Audit 

Division “to handle the anticipated increase in the 

number of funding requests in the Presidential matching fund program in the 2000 elections,” and that six 

of the additional requested staff would be added in 

the General Counsel’s Office “to improve our compliance efforts, both in regular enforcement matters and 

in the Presidential public funding program.” 

In the end, the Commission received a $38.152 

million appropriation, supporting a total FTE level of 

351.5. When combined with a $270,000 carryover 

from FY 99 and a $144,000 rescission, the Commission netted a $38.278 million budget for FY 2000. 

Congress earmarked nearly $5 million of the budget 

for computerization initiatives. 

Budget Allocation: FYs 1999 and 2000 

Budget allocation comparisons for FYs 1999 and 

2000 appear in the table and charts that follow. 

CHART 1-1 

Functional Allocation of Budget 

FY 1999 FY 2000 

ersonnel P $22,688,756 25,911,000 

Travel/Transportation 333,002 435,000 

Space Rental 3,114,971 3,346,500 

Phones/Postage 460,445 415,000 

rinting P 243,177 330,500 

Training/Tuition 218,368 138,500 

Contracts/Services 2,746,609 2,492,000 

Maintenance/Repairs 357,868 353,500 

Software/Hardware 2,094,899 2,682,500 

Federal Agency Service 1,472,788 627,000 

upplies S 298,194 325,000 

Publications 367,315 387,500 

Equipment Purchases 1,005,847 501,000 

otal T $36,791,000 38,278,000 
CHART 1-2 

Divisional Allocation 

FY 1999 Actual 

FY 2000 Projected 

Percent 

Allocation of Budget 0 5 10 15 20 25 30 35

Commissioners 

Inspector General 

Staff Director 

Administration 

Audit 

Information 

Office of Election Administration 

Office of General Counsel 

Data Systems Development 

Public Disclosure Division 

Reports Analysis Division 

IT/Electronic Filing/Internet 

The Commission 7 

Allocation of Staff 

Commissioners 

Inspector General 

Staff Director 

Administration 

Audit 

Information 

Office of Election Administration 

Office of General Counsel 

Data Systems Development 

Public Disclosure Division 

Reports Analysis Division 

Percent 

0 5 10 15 20 25 30 35 
9 Chapter Two 

Keeping the Public Informed 

The FEC’s disclosure and educational outreach 

programs work hand-in-hand to help educate the 

electorate and promote compliance with the campaign 

finance law. Public knowledge about who contributes 

and how candidates and committees spend their 

money helps to create an informed electorate. At the 

same time, 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. 

As detailed below, the Commission’s continuing 

investment in computer technology paid substantial 

dividends in the disclosure and educational outreach 

programs during 1999. 

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 1999. The 

Commission received the reports filed by committees, 

reviewed them to ensure compliance with the law, 

entered the data into the FEC’s computer database 

and made the reports available to the public within 48 

hours of receipt. 

Continued advances in computer technology, combined with legislative amendments, greatly enhanced 

the disclosure process during 1999. As detailed below, these changes are expected to benefit both the 

public and the regulated community. 

New Legislation 

As part of the Commission’s FY 2000 appropriation, Congress passed three amendments to the Federal Election Campaign Act, two of which were designed to enhance disclosure. The first mandated 

electronic filing for committees whose financial activity 

exceeds a certain threshold (to be determined by the 

Commission). The second requires authorized candidate committees to report on an election-cycle (rather 

than calendar-year) basis. The Commission had recommended both of these changes in its 1999 Legislative Recommendations. (See Annual Report 1998.) 

Both are to be in place for the 2002 election cycle. 

Electronic Filing 

Mandatory electronic filing comes on the heels of 

the Commission’s successful voluntary electronic 

filing program. Launched in January 1997, the voluntary program permits filers to submit reports to the 

Commission by modem and via the Internet, using the 

agency’s free FECFile software or compatible commercial software applications. 

The growth of electronic filing has been smooth 

and impressive. In April 1998, 50 committees had 

filed electronically. Now, more than a year later, that 

number has increased to 468 committees. Electronic 

filers have transmitted more than 3,000 reports to the 

Commission disclosing over $275 million in transactions. Careful planning has ensured that this growth, 

and the rapid expansion expected throughout the 

2000 election cycle, will not stress the electronic filing 

system. 

During 1999, the Commission upgraded its 

FECFile software. The new Version 3.0 offered three 

new features: A simplified interface; an expanded 

HELP component; and a directory of committee/candidate addresses that filers can copy automatically into 

their reports. It also contained Schedule H forms for 

those committees that must report the allocation of 

federal and nonfederal expenses, and it sorted information much more quickly than previous versions. 

The FEC distributed the upgrade to over 1,300 

committees that had previously requested the software, and offered it free on the agency’s Web site. 

In a further effort to ease the transition from paper 

to electronic filing, the FEC’s Electronic Filing Office 

conducted classes in electronic filing. The classes 

covered FECFile basics, data entry requirements for 

all types of transactions and procedures for reviewing 

and filing reports. In addition to the classes, which 

were held at the Commission, staff also presented 

information on electronic filing at FEC conferences 

throughout the country. 
10 Chapter Two 

State Filing Waivers 

On October 14, 1999, the Commission approved a 

state filing waiver program, relieving qualified state 

offices of the requirement to receive and maintain 

paper copies of campaign finance reports from Presidential and House candidates and most other political 

committees that file their reports with the Commission. 

The waiver program also relieved committees of the 

obligation to file these paper copies. 

Under the new program, qualified states disclose 

campaign finance information by providing public 

access, via computer, to the FEC’s Web site, which 

displays the reports of most federal candidates and 

committees. In order to qualify for the waiver, states 

must fulfill the following criteria to show they have a 

system that ensures public Internet access to the 

FEC’s Web site, where visitors can view and copy 

reports and statements filed with the Commission: 

• The state has at least one computer terminal that 

can electronically access the Commission’s Web 

page, with at least one printer (connected either 

directly or through a network); and 

• The state will, to the greatest extent possible, allow 

anyone requesting federal campaign finance data to 

use the computer terminal at any time during regular 

business hours. 

As part of the program, the Commission offered to 

provide participating offices with free computer equipment and free Internet access for the remainder of the 

2000 election cycle, provided that the state would 

continue to provide the access effective March 1, 

2001, at its own expense. 

On December 8, the Commission certified Arkansas, Florida, Idaho, Illinois, Kansas, Michigan, Nebraska, New York, North Dakota, South Dakota, Utah 

and Wisconsin as eligible for the program.1

 As a result, beginning with the December 1999 monthly report, most political committees that used to file copies 

of their reports in these 12 states no longer had to do 

so. Senate candidates, however, continued to file 

copies of their reports with the states.2 

The concept for the state waiver program originated in December 1995, when President Clinton 

signed Public Law 104-79, which exempts a state 

from receiving and maintaining paper copies of federal campaign finance reports, as long as the state 

“has a system that permits electronic access to, and 

duplication of, reports and statements that are filed 

with the Commission.” 

Imaging and Processing Campaign Finance Data 

The Commission scans all of the reports filed with 

the agency to create digital images of the documents. 

(Senate candidates continue to file with the Secretary 

of the Senate, so their reports are not available on the 

digital imaging system. The Commission hopes, however, to make digital images of Senate-filed reports 

available in the near future.) As detailed below, the 

public can then view those images in the FEC’s Public 

Records Office or on the Commission’s Web site. 

In addition to the digital imaging system, 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 name Smith 

and operating in Washington, the report referred to. 

1

 At the time of publication, the Commission had certified 

the following additional states: Alabama, California, Colorado, Connecticut, Delaware, Hawaii, Indiana, Kentucky, 

New Hampshire, New Jersey, New Mexico, Ohio, Oregon, 

Pennsylvania, Rhode Island, Tennessee, Vermont, U.S. 

Virgin Islands, Virginia, Washington and West Virginia. 

2 The law requires Senate candidate committees to file 

their reports and statements with the Secretary of the Senate. Because the Commission was unable to scan these 

reports, the reports were not available to the public through 

the Commission’s Web site and, therefore, were not electronically available to the states. 
Keeping the Public Informed 11 

CHART 2-1 

Size of Detailed Database by Election Cycle 

Year Number 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 

1997 619,170 

1998 1,652,904 

1999 840,241 

* Figures for even-numbered years reflect the cumulative total for each two-year election cycle. 

† Beginning in 1989, the entry threshold for individual 

contributions was dropped from $500 to $200. 

‡ The FEC began entering nonfederal account data in 

1991. 

Public Access to Campaign Data 

During 1999, the Commission continued to provide 

campaign finance data via its Web site— 

www.fec.gov. The site’s query system allowed visitors 

to access the name and contribution amount of any 

individual who contributed $200 or more to a federal 

political committee; to access lists of PACs or party 

committees that contributed to specific candidates; 

and to view lists of candidates to whom selected 

PACs and parties contributed. 

The Commission’s disclosure database, which 

contains millions of transactions, enabled researchers 

to select information in a flexible way. For example, 

the database could instantly produce a profile of a 

committee’s financial activity for each election cycle. 

As another example, researchers could 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). 

Visitors to the Public Records Office used computer terminals to inspect digital images of reports 

and to access the disclosure database and more than 

25 different campaign finance indices that organize 

the data in different ways. During 1999, the Commission configured the terminals to provide connections 

to the FEC’s Web site, thereby offering the public an 

alternative way of retrieving images. Those outside 

Washington, DC, also accessed the information via 

the Internet or the Direct Access Program, or ordered 

it using the Commission’s toll-free number. 

The Public Records Office continued to make available microfilmed copies of all campaign finance reports, paper copies of reports from 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 1,300 subscribers to the fourteen-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 1999, the Commission’s State Access 

Program gave 38 state or local 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. 

Review of Reports 

The Commission’s reports analysts review all reports to ensure that the public record provides a full 

and accurate portrayal of campaign finance activity. 

When analysts find that a report contains errors or 

suggests violations of the law, they send the reporting 

committee a request for additional information (RFAI). 

The committee treasurer can then make additions or 

corrections to the report. Apparent violations, how-
12 Chapter Two 

ever, may be referred to the Audit Division or the Office of General Counsel for possible enforcement 

action. 

During 1999, the reports analysts used a new automated review tool that significantly accelerated their 

review of electronically filed reports. Analysts also 

used the FEC Web site to access images of reports 

and related information. Web access served as additional backup to the FEC imaging system. The agency 

revised and consolidated other computer programs to 

ensure greater efficiency, consistency and quality in 

the review process. In addition to that, RAD management began to develop other methods for ensuring 

the quality and consistency of review. 

Educational Outreach 

The Commission continued to promote voluntary 

compliance with the law by educating committees 

about the law’s requirements. 

Home Page (www.fec.gov) 

In its fourth year of operation, the Commission’s 

Web site continued to offer visitors a variety of resources. On August 15, 1999, the Commission made 

its advisory opinions (AOs) issued since 1977 available on the site. For the first time, the public could 

search for AOs on the Web by using words or 

phrases or by entering the year and AO number. In 

addition, visitors could access brochures on a variety 

of topics, read agency press releases, review national 

election results and voter registration and turnout 

statistics, look up reporting dates and download the 

national mail voter registration form, FEC registration 

and reporting forms, copies of the Record newsletter, 

the Campaign Guides for PACs, parties and candidates and other agency publications. 

In the closing weeks of 1999, the Commission redesigned and streamlined its site, reorganizing materials to offer the most efficient presentation of relevant 

and appropriate information to various audiences, 

including the general public, candidates, campaign 

workers and the media. 

At the same time, the agency implemented MediaIndependent Presentation Language (MIPL), an 

Internet-based technology that allows persons with 

special needs to access many types of information by 

using a wide variety of hardware and software solutions. Using this system, the visually handicapped 

could dial a phone number and receive a voice menu 

of phone-touch choices that parallel the FEC’s Web 

site choices.

 By the end of 1999, the FEC Web site was receiving about three million page hits per month. 

Meeting Documents Now Available Via E-Mail 

In yet another example of the FEC’s increased use 

of computer technology, the Commission began distributing draft advisory opinions and agendas for open 

meetings via electronic mail. Those with standing 

requests to receive these documents and anyone else 

who requested draft advisory opinions or meeting 

agendas from the Public Records Office could opt for 

either e-mail or paper delivery. 

Previously, these documents were available to the 

public only as paper copies. 

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 research relevant advisory opinions and litigation, as needed. Callers receive, at no charge, FEC 

documents, publications and forms. In 1999, the Information Division responded to 53,137 callers with compliance questions. 

Faxline 

The Commission’s automated Faxline continued to 

be a popular method for the public to obtain publications or other documents quickly and easily. 

During 1999, 3,836 callers sought information from 

the 24-hour Faxline and received 5,100 documents. 
Keeping the Public Informed 13 

Reporting Assistance 

During 1999, 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. 

Monthly Roundtables 

In February 1999, the FEC began hosting monthly 

roundtable sessions for the regulated community. The 

roundtables, limited to 10-12 participants per session, 

focused on a range of topics from PAC fundraising 

fundamentals to advancing money to a campaign 

through personal funds. Nearly 100 people attended 

roundtable sessions during 1999, and the response 

from those attendees was overwhelmingly positive. 

Conferences 

During 1999, the agency conducted a full program 

of conferences to help candidates and committees 

understand and comply with the law. In the spring and 

summer, the Commission held conferences in Washington, DC, for corporations and labor organizations, 

membership and trade associations and partnerships. 

Then, in the fall, the agency held regional conferences in Chicago and San Francisco. 

In addition to hands-on workshops on the fundamental areas of the law, the conferences featured 

workshops on the Commission’s electronic filing program and on the impact of recent court decisions on 

the federal election law. 

Tours and Visits 

Visitors to the FEC during 1999, including 24 student groups and 26 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 responded to 12,136 calls and visits from 

media representatives and prepared 130 news releases. These releases alerted reporters to new campaign finance data and illustrated the statistics in 

tables and graphs. 

Publications 

During 1999, the Commission published several 

documents to help committees, the press and the 

general public understand the law and find information about campaign finance. All of the new publications were available both in print and on the FEC Web 

site. 

One of the new publications, Availability of FEC 

Information, was designed to help people find and 

obtain information from the agency, including information available under the Freedom of Information Act. 

This publication satisfied the requirement, in 5 U.S.C. 

§552(b), that agencies publish a “handbook” on how 

to obtain different types of public information from the 

agency. In addition, the Commission published an 

updated version of its Campaign Guide for Congressional Candidates and Committees and released a 

new edition of its Selected Court Case Abstracts, 

1976-September 1999 (CCA). The CCA is a collection 

of summaries of court cases pertinent to the Federal 

Election Campaign Act. Most originally appeared in 

the FEC’s monthly newsletter, the Record. 

As in past years, the Commission continued to 

provide 10,817 free subscriptions to the Record. The 

newsletter summarizes recent advisory opinions, litigation, changes in regulations, audit reports and compliance cases. It also includes graphs and charts on 

campaign finance statistics. 

The Combined Federal/State Disclosure Directory 

1999 directs researchers to federal and state offices 

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

Commission also published a new edition of 

Pacronyms, an alphabetical list of acronyms, abbreviations, common names and locations of federal 
14 Chapter Two 

PACs. The publication lists PACs’ connected, sponsoring or affiliated organizations and helps researchers identify PACs and locate their reports. Both the 

disclosure directory and PAC listing were available 

not only in print and on the Web, but also on computer disks formatted for popular hardware and software. The Web page version of the Disclosure Directory includes hyperlinks to the Web pages of state 

offices and e-mail addresses for state officials. 

The Commission also published a supplement to 

Campaign Finance Law 98—a summary of state campaign finance laws—and posted “quick reference 

charts” from it on the FEC Web site. The supplement 

summarizes the campaign finance laws of the U.S. 

territories and possessions of American Samoa, 

Guam, the Commonwealth of the Northern Mariana 

Islands, the Commonwealth of Puerto Rico and the 

U.S. Virgin Islands. 

The FEC also released Federal Elections 98, a 

130-page publication that provides an historical 

record of federal election results. 

Office of Election Administration 

During 1999 the Office of Election Administration 

held its Advisory Panel Meeting of state and local 

election officials in Chicago. The agenda for the twoday meeting included lectures and discussions on: 

• The National Voter Registration Act (NVRA) Report 

• The Accessibility of the Election Process 

• Biometrics Report/Internet Voting 

• A Political Retrospective on the 20th Century 

• The 2000 Census 

• Recent Developments in Election Case Law 

• Contested Elections 

• Updating the Voting Systems Standards 

At the FEC, on February 25, 1999, the Commission 

approved a new project to reorganize and revise the 

FEC’s national voting system standards. The voluntary standards, first published in 1990, set performance benchmarks to assure election officials and 

the public that voting equipment would count votes 

accurately and securely. Independent test authorities 

use the standards to evaluate voting equipment under 

the direction of the National Association of State Election Directors (NASED). 

The Commission’s approval was based upon a 

requirements analysis conducted by ManTech Advanced Systems International, Inc. (ManTech). As 

part of this project, ManTech representatives reviewed current standards, observed voting equipment 

in operation, and considered input from NASED’s 

Voting Systems Board, independent test authorities, 

voting system vendors and others. 

Twenty-seven states currently require voting systems marketed in the state either to meet the national 

standards adopted by the state or to pass the NASED 

evaluation process. Four more states are expected to 

require election equipment to meet the standards 

within the next election cycle. All told, the FEC standards affect nearly 3,200 counties, 13,000 election 

offices and 180,000 precincts nationwide. 

On June 18, 1999, the Commission approved a 

report to Congress documenting the impact of the 

National Voter Registration Act (NVRA) during 1997 

and 1998 and reiterating three recommendations to 

improve the administration of elections. Specifically, 

the report: 

• Urged states to request only partial social security 

numbers from registration applicants and current 

voters; 

• Urged states to employ technology that computerizes all voter registration offices and links all of the 

offices within the respective states; and 

• Urged the U.S. Postal Service to create a new class 

of mail with a reduced postage rate for “official election material” required for the NVRA and to provide 

free space in postal lobbies for state and local voter 

registration materials. 

Based on surveys from 43 states and the District of 

Columbia, the report found that between 1994 and 

1998 active voter registration in states covered by the 

NVRA rose by 3.72 percent (nearly 7.1 million 

people). The report also found that, in 1998, 70.15 

percent of the voting age population (nearly 141 million people) was registered to vote. Despite this figure—the highest since Congressional elections in 

1970—the number of people who actually voted in 

1998 declined by more than 2.38 percent over the 

same period of time. 
15 Chapter Three 

Interpreting and 

Enforcing 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, sometimes incorporating interpretations of the law that the Commission 

made in advisory opinions. Advisory opinions, in turn, 

clarify how the statute and regulations apply to reallife situations. 

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 publish proposed rules in the 

Federal Register and seeks public comment on them. 

The agency may also invite those making written 

comments to testify at a public hearing. The Commission considers the comments and testimony when 

deliberating on the final rules in open meetings. Once 

approved, the text of the final regulations and the 

Explanation and Justification of the new regulations 

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.1 

Rulemakings Completed in 1999 

The following new rules took effect in 1999: 

• Two sets of rules addressing when credit card and 

debit card contributions to Presidential candidates 

(including those made over the Internet) can be 

matched with public funds, and what documentation 

is needed for the contributions to qualify for matching. Took effect (retroactively) January 1, 1999. 

• Rules on pre-nomination party committee coordinated expenditures and costs of media travel with 

publicly financed Presidential campaigns. Took effect November 3. 

• Regulations governing public financing of Presidential primary and general election candidates (e.g., 

winding down costs; lost, misplaced or stolen items; 

disposition of capital assets; and receipts and disbursements of convention and host committees). 

Took effect November 12. 

• Rules regarding solicitations to Presidential candidates’ General Election Legal and Accounting Compliance Fund (GELAC). Will take effect June 1, 

2000. 

• Rules governing the Presidential audit process, the 

“bright line” between primary and general election 

expenses, and contributions to and expenditures by 

Vice Presidential committees prior to nomination. 

These rules were pending before Congress at year’s 

end. 

• Rules that treat limited liability companies (LLCs) as 

partnerships under the Act unless they opt to be 

treated as corporations for tax purposes or are publicly traded. Took effect November 12. (See page 

29.) 

• A revised regulatory definition of “member.” Took 

effect November 2. (See page 28.) 

Other Rulemakings in Process 

In addition to completing the above rules, the Commission took the following additional actions: 

• It published a Notice of Proposed Rulemaking 

(NPRM) on March 4 concerning amendments to the 

FEC’s Freedom of Information Act regulations. The 

amendments complied with the Electronic Freedom 

of Information Act Amendments of 1996 (EFOIA), 

which were enacted to make covered documents 

available by electronic means.2 

1

 This requirement to wait 30 legislative days before 

publishing the effective date applies only to regulations 

based upon Titles 2 and 26 of the U.S. Code. Other rules 

take effect 30 days after publication in the Federal Register. 

2 Although the Commission did not complete its work on 

these regulations during 1999, the agency was already 

complying with the EFOIA requirements. See also, “Publications,” p. 13. In February 2000, the Commission approved 

EFOIA regulations, which were to take effect March 27, 

2000. 
16 Chapter Three 

• It published a Notice of Availability (NOA) on June 

10 in response to a petition that it amend its rules for 

debates by Presidential and Vice Presidential candidates. The petition urged the Commission to establish objective criteria for debate participants, rather 

than leaving it to the discretion of the debate-staging 

organizations.3 

• It published an NOA on August 25 in response to a 

petition urging the repeal of the FEC’s rules on distribution by corporations and labor organizations of 

voting records and voter guides outside the restricted class. 

• It published an NOA on October 13 in response to a 

petition that sought various changes to the disclosure requirements applicable to political action committees. 

• It published a Notice of Inquiry (NOI) on November 5 

seeking comments on the issues raised by the use 

of the Internet to conduct campaign activity. (See 

page 26.) 

• It published an NPRM on December 9 concerning 

coordinated communications made in support of or 

in opposition to clearly identified candidates by persons other than candidates, authorized committees 

and party committees. (See page 22.) 

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. If, however, a candidate’s campaign 

submits a valid request within 60 days before an election, and the request directly relates to that election, 

the Commission must respond within 20 days. 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 34 advisory opinions in 

1999. Of that number, five involved use of the 

Internet, five others examined party committees’ use 

of “soft money” and three dealt with the definition of 

“member.” These and other 1999 advisory opinions 

are discussed in Chapter Four, “Legal Issues.” 

Enforcement 

The Enforcement Process 

The Commission learns of possible election law 

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 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 the 

Commission should find 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 

3

 The Commission subsequently voted to suspend this 

rulemaking until after the 2000 elections. See also p. 37 for 

discussion of a lawsuit on Presidential debates. 
Interpreting and Enforcing the Law 17 

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 with respect to all respondents in the matter and releases the information to the 

public. 

Enforcement Initiatives 

During 1999, the Commission continued to use a 

prioritization system to focus its limited resources on 

more significant enforcement cases. 

Now in its seventh year of operation, the Enforcement Priority System (EPS) has helped the Commission manage its heavy caseload involving thousands 

of respondents and complex financial transactions. 

The Commission instituted the system after recognizing that the agency did not have sufficient resources 

to pursue all of the enforcement matters that came 

before it. Under the system, the agency uses formal 

criteria to decide which cases to pursue. Among those 

criteria are: the intrinsic seriousness of the alleged 

violation, the apparent impact the alleged violation 

had on the electoral process, the topicality of the activity and the development of the law and the subject 

matter. The Commission continually reviews the EPS 

to ensure that the agency uses its limited resources to 

best advantage. Based on a recommendation in the 

PricewaterhouseCoopers (PwC) audit, the Office of 

General Counsel (OGC) developed, and the Commission approved, a new system to document EPS caseactivation decisions. This process was intended to 

increase the transparency and accountability of the 

system. 

Based on other PwC recommendations: 

• Congress passed legislation authorizing the Commission to establish an administrative fine system for 

straightforward reporting violations occurring between January 1 and December 31, 2000. The Commission planned to activate such a system in the 

spring of 2000. 

• The Commission contracted with Booz/Allen & 

Hamilton to define the requirements for a comprehensive offense profile database. The database 

would inform Commissioners, policy makers and the 

public about emerging enforcement trends. 

• An OGC working group surveyed OGC staff and 

Commissioners to identify ways to reduce the number of legal reviews embedded in the enforcement 

process.4 

• The Commission enlisted the Federal Mediation and 

Conciliation Service to study a possible Alternative 

Dispute Resolution (ADR) pilot program at the FEC.5 

In addition, during 1999, OGC used a computerized system to image documents and create a 

searchable database. Developed with help from a 

support contractor, the system was designed to help 

streamline the investigation of cases that involve large 

collections of documents.

 Also during the year, the counsel’s office began to 

implement a computerized case management system 

to help manage and track the agency’s enforcement 

and litigation cases, as well as other projects in OGC. 

Implementation involved three components: Staff 

received training; information from legacy systems 

was incorporated into the system; and OGC began to 

enter information relating to active cases. 

Statistics: Civil Penalties, Active/Inactive Cases 

and Number of Respondents 

Chart 3-1 (page 18) compares civil penalties negotiated in 1999 conciliation agreements with those of 

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

negotiated in 1999 is compared with the median civil 

penalty of previous years. Chart 3-3 tracks the ratio of 

active to inactive enforcement cases over the last 

three years. Chart 3-4 examines the numbers and 

types of cases dismissed under the EPS over the last 

six years. Chart 3-5 illustrates the marked increase in 

the number of respondents per enforcement action 

during 1999. 

4

 The working group incorporated the survey results in 

its recommendations to the Commission, dated January 24, 

2000. 5

 The Commission discussed this study at its meeting of 

December 14, 1999, along with an analysis of ADR conducted by an FEC task force. On January 21, 2000, the 

Commission posted a vacancy announcement for an ADR 

Director. 
CHART 3-1 

Conciliation Agreements 

by Calendar Year 

Number of Agreeements 

Total Civil Penalty Amount 

Number Thousands of Dollars

300 2,000 

250 

1,500 

200 

150 1,000 

100 

500 

50 

0 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 

CHART 3-2 

Median Civil Penalty 

by Calendar Year 

Dollars 

10,000 

8,000 

6,000 

4,000 

2,000 

0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 

18 Chapter Three 

CHART 3-3 

Ratio of Active to Inactive Cases by Calendar Year Active Cases

Inactive Cases 

1996 1997 1998 1999 

(271 Cases) (296 Cases) (189 Cases) (193 Cases) 
Interpreting and Enforcing the Law 19 

CHART 3-4 

Cases Dismissed under EPS 

Stale Cases 

Low-Rated Cases 

250 

200 

150 

100 

50 

0 

1994 1995 1996 1997 1998 1999 

CHART 3-5 

Average Number of Respondents and 

Enforcement Cases by Calendar Year 

Respondents 

Cases 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

0 

1995 1996 1997 1998 1999 
21 Chapter 4 

Legal Issues 

As the independent regulatory agency responsible 

for administering and enforcing the Federal Election 

Campaign Act (the Act), the Federal Election Commission promulgates regulations explaining the Act’s 

requirements and issues advisory opinions that apply 

the law to specific situations. The Commission also 

has jurisdiction over the civil enforcement of the Act. 

This chapter examines major legal issues confronting 

the Commission during 1999 as it considered regulations, advisory opinions, litigation and enforcement 

actions. 

Express Advocacy 

The FEC’s regulatory definition of express advocacy, and its effect on corporate/labor activity, continued to receive attention in the courts and at the Commission during 1999. To understand the issue, it is 

necessary to examine earlier court decisions. In FEC 

v. Massachusetts Citizens for Life (MCFL), the Supreme Court, citing First Amendment concerns, held 

that the Act’s 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. In response to this decision, the Commission prescribed a 

new regulatory definition of express advocacy. The 

definition was based largely on two court opinions: the 

Supreme Court’s opinion in Buckley v. Valeo and the 

Ninth Circuit Court of Appeals opinion in FEC v. 

Furgatch. 

Paragraph (a) of 11 CFR 100.22 includes the examples of phrases that constitute express advocacy 

that were listed in the Buckley opinion—the so-called 

“magic words” : “vote for,” “elect,” “support,” “cast your 

ballot for,” “vote against,” “defeat,” “reject.” 

Paragraph (b)—often referred to as the “reasonable person” test—is based, inter alia, on the 

Furgatch decision. The court of appeals had 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. 

Since the Commission promulgated this definition 

in 1995, it has faced several legal challenges, virtually 

all of which have focused on paragraph (b) of the 

definition. During 1999, the Commission declined to 

act on a rulemaking petition on the subject and, in two 

court cases, district courts examined the express 

advocacy standard. 

Petition for Rulemaking 

On April 29, 1999, the Commission, by a pair of 3-3 

votes, declined to act on a petition for rulemaking that 

sought to repeal paragraph (b) of the Commission’s 

express advocacy definition. The petition, filed by 

James Bopp, Jr., and the James Madison Center for 

Free Speech on behalf of the Virginia Society for Human Life, was nearly identical to one Mr. Bopp filed in 

1997 on behalf of the James Madison Center for Free 

Speech. (See Annual Report 1997.) 

The latest petition came in response to the 

Commission’s 1998 split vote on whether to appeal 

the Right to Life of Dutchess County v. FEC (RLDC) 

decision, in which a district court determined that subpart (b) violates the First Amendment and enjoined 

the FEC from enforcing it against RLDC. (See Annual 

Report 1998.) 

FEC v. Christian Coalition 

In its August 1999 decision, the U.S. District Court 

for the District of Columbia, without relying on the 

regulations, discussed both the “magic words” and 

“the context of the entire communication” to determine 

that one of the three Christian Coalition expenditures 

that the FEC had alleged to be unlawful violated 

§441b’s ban on corporate independent expenditures. 

Based on decisions by the Supreme Court and 

lower courts in other jurisdictions, the district court 

concluded that an express advocacy communication 

is one that a reasonable person would understand 

contains an explicit directive that unmistakably exhorts the audience to take electoral action to support 

or defeat a clearly identified candidate. More specifically, the court held that, in order for an expenditure 

made by a corporation to contain express advocacy 

and violate §441b: 

• The communication must contain an explicit directive 

that uses an active verb or its functional equivalent 
22 Chapter Four 

(e.g., “Vote for Smith” or “Smith for Congress” or an 

unequivocal symbol); and 

• The “active verb or its immediate equivalent—considered in the context of the entire communication, 

including its temporal proximity to the election—must 

unmistakably exhort the [receiver] to take electoral 

action to support the election or defeat of a clearly 

identified candidate.” Electoral action includes campaigning for and/or contributing to a clearly identified 

candidate, as well as voting for or against the candidate. 

On September 22, 1999, the Commission voted not 

to appeal the district court’s decision. 

FEC v. Freedom’s Heritage Forum, et al. 

In September 1999, the U.S. District Court for the 

Western District of Kentucky at Louisville handed 

down a ruling in the Commission’s suit against 

Freedom’s Heritage Forum, et al., a political committee that promotes pro-life and other social issues. 

Although this case did not involve corporate activity, it 

did pertain to express advocacy. 

In this case, the court took a similar view as the 

Christian Coalition court with regard to the use of 

“magic words” or the equivalent. In pertinent part, the 

court stated that, “although a communication does not 

have to contain ‘magic words’ [‘vote for,’ ‘elect,’ ‘support,’ ‘cast you ballot for,’ ‘Smith for Congress,’ ‘vote 

against,’ ‘reject’] to constitute express advocacy, it will 

ordinarily contain some sort of functional equivalent of 

an exhortation, directive, or imperative for it to expressly advocate the election or defeat of a candidate.” 

With regard to the meaning of electoral action, 

however, the court differed from the Christian Coalition decision. In Freedom’s Heritage Forum, the court 

distinguished between a message that urges the 

reader to vote for or against a candidate and a message that merely urges the reader to contribute time 

or money to the candidate. Only the former, in the 

court’s view, constitutes express advocacy.1 

Coordination 

Coordination between campaigns and the person 

making a communication that influences federal elections was an issue in three 1999 court cases—those 

involving the Christian Coalition, the Freedom’s Heritage Forum and Public Citizen. It also was the subject 

of a Notice of Proposed Rulemaking. In Buckley v. 

Valeo, the 1976 landmark decision, the Supreme 

Court ruled that expenditures made in coordination 

with a campaign are in-kind contributions. As such, 

coordinated expenditures are subject to the Act’s 

contribution limits and prohibitions, regardless of 

whether they contain express advocacy. 

FEC. v. Christian Coalition 

In this case, the U.S. District Court for the District 

of Columbia sought to determine what level of contact 

between a corporation and a campaign constitutes 

“coordination” and thereby converts a corporate expenditure that influences an election into a prohibited 

contribution. 

The Commission alleged that the Coalition had 

coordinated its voter guides during the 1990, 1992 

and 1994 elections with various federal candidates. In 

only one instance did the court decide that there was 

coordination.2 

The district court limited its decision to what the 

court called “expressive coordinated expenditures” by 

corporations. According to the court, an “expressive 

coordinated expenditure” is an expenditure for a communication that (although not containing express advocacy) is “made for the purpose of influencing a federal election in which the spender is responsible for a 

substantial portion of the speech and for which the 

spender’s choice of speech has been arrived at after 

coordination with the campaign.” The court distinguished this type of coordinated expenditure from 

other types such as coordinated expenditures for 

noncommunicative materials (e.g., food or travel expenses for campaign staff). 

1

 The court denied the Commission’s motion to reconsider its decision on this issue. 

2

 With respect to Oliver North’s 1994 U.S. Senate campaign in Virginia, the court determined that there were contested issues to be resolved after a future hearing. However, 

the parties settled the case without an additional hearing. 
Legal Issues 23 

The court concluded that “expressive coordinated 

expenditures” made at the request or suggestion of 

the campaign are contributions. In the absence of a 

request or suggestion from the campaign, the court 

decided, an expressive expenditure is still coordinated 

where the candidate or his agent exercises control 

over the communication, or where there has been 

substantial discussion or negotiation between the 

campaign and the spender about such things as the 

content, timing, location, mode, intended audience or 

volume of the communication. A substantial discussion, the court explained, is one from which the 

spender and the campaign emerge as partners (not 

necessarily equal partners) or joint venturers in the 

expressive expenditure. “This standard limits §441b’s 

contribution prohibition on expressive coordinated 

expenditures to those in which the candidate has 

taken a sufficient interest to demonstrate that the 

expenditure is perceived as valuable for meeting the 

campaign’s needs or wants.” 

As noted above, the Commission decided not to 

appeal the district court’s decision. 

Supplemental Notice of Proposed Rulemaking3 

In response to the Christian Coalition decision, the 

Commission published a Supplemental Notice of Proposed Rulemaking (NPRM) on December 9, 1999, 

regarding coordinated communications that are made 

in support of or in opposition to clearly identified candidates and that are paid for by persons other than 

candidates, authorized committees or party committees. The proposed rules largely follow the language 

of the Christian Coalition decision, except that the 

Commission replaced the term “expressive coordinated expenditure” with “coordinated general public 

political communications.” 

The NPRM proposed a definition of “general public 

political communications” that would include those 

communications that: 

• Are made through a broadcasting station, including 

cable television, newspaper, magazine, outdoor 

advertising facility, mailing or any electronic medium, 

including the Internet and the World Wide Web; 

• Have an intended audience of over one hundred 

people; and 

• Include a “clearly identified candidate,” as defined in 

11 CFR 100.17 and 2 U.S.C. §431(17). 

With respect to the coordination standard itself, the 

Commission proposed several alternatives. Generally, 

under the proposed rules, a communication would be 

coordinated if it were paid for by someone other than 

the candidate’s campaign or party and were “created, 

produced or distributed”: 

• “At the request or suggestion of” the campaign or 

party; 

• After the campaign or party “exercised control or 

decision-making authority over” specific elements of 

the communication; or 

• Based on “substantial discussion or negotiation” 

between the campaign and those making the communication regarding the particulars of the communication. 

Alternative proposals would consider whether “the 

communication is distributed primarily in the geographic area in which a candidate is running;” and 

whether the nature of the contacts between the campaign and those making the communication results in 

“collaboration or agreement.” 

Comments on the NPRM were due by January 24, 

2000.4 

FEC v. Freedom’s Heritage Forum, et al. 

In addition to its findings with respect to express 

advocacy (mentioned above), the Kentucky district 

court addressed coordination in its Freedom’s Heritage Forum decision. 

The FEC alleged that more than $23,000 worth of 

Forum expenditures in support of Tim Hardy, a candidate in the 1994 Republican primary in Kentucky, 

were not independent expenditures (as the Forum 

3

 The Commission published two earlier NPRMs on this 

subject in 1997 and 1998. 

4

 The Commission held a hearing on the proposed rules 

February 16, 2000. 
24 Chapter Four 

had argued) but, rather, were coordinated expenditures. As such, the FEC argued, the expenditures 

resulted in excessive contributions to the Hardy campaign. The court disagreed. 

To qualify as an independent expenditure, an expenditure must not be made in concert with, or at the 

request or suggestion of, the candidate or the campaign. FEC regulations further explain that: “An expenditure will be presumed to be so made [in cooperation with the campaign] when it is based on information about the candidate’s plans, projects, or needs 

provided to the expending person by the candidate, or 

by the candidate’s agents, with a view toward having 

an expenditure made.” 11 CFR 109.1(b)(4)(i)(A). 

The Commission alleged two instances of coordination between the Forum and the Hardy campaign. 

The first was a meeting between the Forum’s treasurer and representatives of the Hardy campaign. The 

second took place at a political event where Mr. 

Hardy gave a speech asking for support in the election, after which Forum members planned strategies 

“on how to get Tim Hardy elected.” Following the 

event, the Forum made four separate direct mailings 

of campaign literature that supported the election of 

Mr. Hardy. 

The court rejected the Forum’s assertion that actual coordination of a specific disbursement must be 

shown in order to consider it a “coordinated expenditure.” Further, the court stated, “[W]e do not find any 

requirement that coordinated expenditures must contain ‘express advocacy’ in order for them to fall within 

the purview of the statute.” Nevertheless, the court 

found that “the FEC [had] not sufficiently plead 

enough facts that allege that the expenditures made 

by the Forum were coordinated with the Hardy campaign.” 

Regarding the first meeting, the court said that the 

FEC had not explicitly alleged that “Hardy actually 

informed [the Forum’s treasurer] of his plans, projects, 

or needs with a view toward having an expenditure 

made.” As to the direct mailings of campaign literature, the court held that there were no allegations that 

the mailings were at the request or suggestion of Mr. 

Hardy. The court stated that, “Hardy’s mere presence 

at the meeting, even if his presence was accompanied by the giving of a campaign speech, [was] insufficient to make these expenditures coordinated.” Following its conclusion that there was no coordination, 

the court dismissed the charges that the Forum had 

failed to report its expenditures as contributions.5 

FEC v. Public Citizen

 In another district court decision involving coordination, the U.S. District Court for the Northern District 

of Georgia, Atlanta Division, dismissed an enforcement case brought by the FEC against Public Citizen, 

Inc., and its separate segregated fund, Public 

Citizen’s Fund for a Clean Congress (the Fund). 

The Commission alleged that the Fund had made 

excessive in-kind contributions to Herman Clark, a 

1992 primary opponent of former Representative 

Newt Gingrich, by coordinating several anti-Gingrich 

expenditures with the Clark campaign. The 

Commission’s position was that contact with the Clark 

campaign to ascertain whether he would challenge 

Mr. Gingrich and repeated contacts between the Fund 

and representatives of Mr. Clark’s campaign regarding suggested negative attacks constituted coordination. As such, the Fund’s expenditures could not 

qualify as independent expenditures, as the Fund had 

characterized them, but would instead be excessive 

in-kind contributions. 

In its September 15, 1999, decision, the court rejected the Commission’s argument. Coordination, the 

court stated, implies some measure of collaboration 

that goes beyond inquiry regarding a candidate’s position on an issue. In the court’s view, the Fund’s expenditures were permissible independent expenditures. The Commission voted not to appeal this portion of the district court’s decision. 

5

 On February 4, 2000, the district court denied the 

Commission’s motion to reconsider its decision. However, 

the court granted the FEC’s alternative motion to amend the 

complaint to add the language (that campaign information 

was provided “with a view toward having an expenditure 

made”) that the court had previously found to be the touchstone for an adequate allegation of coordination. Therefore, 

the coordination counts in this case have been reinstated 

for further litigation. 
Legal Issues 25 

Illegal Contributions 

The Act prohibits corporations and labor organizations from using their treasury funds to make contributions or expenditures in connection with federal elections. 2 U.S.C. §441b. As part of this ban, corporations are prohibited from serving as a conduit for earmarked contributions to federal candidates or from 

making an advance to federal candidates. 

FEC v. Friends of Jane Harman 

In August 1999, the U.S. District Court for the Central District of California found that Friends of Jane 

Harman, the principal campaign committee of former 

Congresswoman Jane Harman, and its treasurer violated the Act when they accepted corporate contributions in the form of contribution collection and transmittal services of a corporate representative and an 

advance from the same corporation. 

Hughes Aircraft Company (Hughes), a Los Angeles 

corporation, sponsored a fundraiser for Ms. Harman 

at her request during the 1993-1994 election cycle. 

The corporation’s CEO approved the fundraiser and 

directed Hughes’s employees to handle logistics for 

the event, including the collection and forwarding of 

contributions to the Harman campaign. The campaign 

later reimbursed the corporation for its labor costs and 

the use of its facilities. 

The court found that the collection of contributions 

by a Hughes employee in her official capacity as director of public relations conferred a benefit on the 

campaign from the corporation. Therefore, when the 

Harman campaign received the checks collected, it 

violated §441b’s prohibition against accepting anything of value from a corporation—i.e., a contribution. 

In addition, the court concluded that, “because the 

Harman Campaign did not pay for the use of employee services in putting on a fundraiser for the campaign until after the event occurred,” the value of the 

employees’ labor constituted an advance of corporate 

funds and was, therefore, an impermissible corporate 

contribution. 

While the court found that the committee knowingly 

violated the Act, the court imposed no remedy, denying the FEC’s requests to require the committee to 

disgorge to the U.S. Treasury an amount equal to the 

contributions it received as a result of the violations, 

to assess a civil penalty against the committee and/or 

to enjoin the committee from accepting such corporate contributions again. 

On October 19, 1999, the Commission voted to 

appeal that portion of the decision denying any remedy for the Harman campaign’s violations. Later in the 

year, however, the Commission voted to withdraw its 

appeal. 

MUR 4879 

It is unlawful for a corporation to make contributions or expenditures in connection with any federal 

election. 2 U.S.C. §441b(a). It is also unlawful for any 

person to make a contribution in the name of another 

or to knowingly permit his or her name to be used to 

effect such a contribution. 2 U.S.C. §441f. The Commission found violations of both these provisions in 

MUR 4879. 

Beaulieu of America, Inc., paid a $200,000 civil 

penalty for using corporate funds to reimburse employees and their spouses for contributions they made 

to Alexander for President (the Committee), Lamar 

Alexander’s 1996 campaign committee. The civil penalty was one of the largest civil penalties ever paid by 

a respondent. 

Beaulieu CEO Carl M. Bouckaert served as a national co-chair of the Committee, and was a co-chair 

of a March 1995 fundraiser held in Dalton, Georgia, 

where the corporation was based. At the request of 

corporate officers, 36 persons, consisting of Beaulieu 

employees and their spouses, made $36,000 in contributions to the Committee by purchasing tickets to 

the fundraiser. All but two contributors were later reimbursed with corporate funds by Beaulieu executives, 

who disguised the money as bonuses or expense 

reimbursements. The two contributors who did not 

receive a corporate reimbursement were reimbursed 

with personal funds of two of the company’s executives. 

Beaulieu, which accepted the responsibility for the 

actions of its managers, knowingly and willfully violated both of these provisions in the Federal Election 

Campaign Act. 
26 Chapter Four 

Use of Internet 

The FEC first addressed Internet campaigning in 

1995. Since that time, the Commission has responded to an increasing number of inquiries regarding the use of the Internet. During 1999, the Commission issued five advisory opinions (AOs) on the subject, and published a Notice of Inquiry requesting 

comment on the need for regulations specific to the 

Internet. 

Advisory Opinions 

Three of the Internet AOs issued during 1999 involved organizations interested in providing nonpartisan information about candidates and their campaigns, two involved credit card contributions made 

over the web and one answered a Presidential 

candidate’s questions about the medium. 

Nonpartisan Voting Information. Under FEC 

regulations, payments for nonpartisan activity designed to encourage individuals to vote or to register 

to vote are not an expenditure provided that no effort 

is or has been made to determine the party or candidate preference of individuals before encouraging 

them to register to vote or to vote. 11 CFR 

100.8(b)(3). Applying this provision, the Commission 

concluded in AO 1999-7 that the Secretary of State’s 

office in Minnesota could provide links from its web 

site, containing information about candidates for elective office, to those same candidates’ campaign web 

sites without making an expenditure. The Secretary of 

State’s web site included a disclaimer stating that the 

hyperlinks were displayed for voter information purposes only. The Commission determined that the 

state’s activities fit within the exemption for nonpartisan voting information. 

The Commission reached a similar conclusion in 

AO 1999-25 with respect to a web site sponsored by 

two corporations—the League of Women Voters Education Fund (the League) and the Center for Governmental Studies (CGS). The Commission concluded 

that the corporations could sponsor Democracy Network (DNet), a Web site providing information on federal candidates, without making a corporate expenditure because the composition, purpose and activities 

of DNet fell within the nonpartisan voting information 

exemption. Under the approved plan, DNet would 

provide all registered candidates with an ID and password so they could submit on-line biographies and 

policy positions and could reply to questions and 

statements from other candidates and the public—all 

done on-line. 

The Commission determined that DNet’s activities 

fell within the exemption for nonpartisan voting information based on the fact that DNet would: 

• Invite all qualified candidates in an election; 

• Not attempt to determine the political party or candidate preference of the viewers; 

• Try to link to a representative sample of newspapers 

that had made endorsements in a relevant race; 

• Not discuss with any candidate his/her plans, 

projects or needs; and 

• Not score or rate the candidates or make statements 

expressly advocating their election or defeat. 

In AO 1999-24, the Commission reached a similar 

conclusion with respect to a web site established by 

Election Zone LLC (Ezone). 

Like DNet, EZone sought to provide a means of 

electronic communication between candidates and 

voters on a nonpartisan basis. The EZone site would 

include: 

• A “Q & A Zone,” where viewers could submit questions to the candidates in a selected political race; 

• A “Candidate Chat Zone,” where each candidate 

would have an equal opportunity to discuss issues 

with his or her voting constituency; 

• An “On-Line Debate Zone,” where two or more candidates in a particular race could debate on-line; and 

• Hyperlinks to candidate sites. 

EZone planned to finance the site by accepting 

sponsorship or advertising revenues from commercial 

entities. 

Based on an analysis of the composition, purpose 

and activities of EZone, the Commission determined 

that its activities were permissible under the nonpartisan voting exception. Specifically, the Commission 

noted that EZone: 

• Was not affiliated with any candidate, political party, 

PAC or advocacy group; 

• Was created for the purpose of “expanding democracy” by serving as a channel between candidates 

and voters on a nonpartisan basis; 
Legal Issues 27 

• Would invite all ballot-qualified candidates to participate; 

• Would impose equal word limits and criteria to candidate responses; 

• Would not attempt to determine the political party or 

candidate preference of the viewers; 

• Would limit its contacts with candidates to those 

necessary for the effective operation of the Web site; 

and 

• Would not score or rate the candidates or make 

statements expressly advocating their election or 

defeat. 

Credit Card Contributions. The Commission first 

approved credit card contributions made via the 

Internet in AO 1995-9, issued in 1995. The Commission responded to additional questions on the subject 

in two 1999 opinions. 

In AO 1999-9, the Commission concluded that Bill 

Bradley for President, Inc., could request matching 

funds for credit and debit card contributions received 

over the Internet.6 Under the approved plan, the Bradley campaign would use an Internet credit card processing company, which would compare contributor 

information submitted to the Committee with records 

on file with the issuer of the credit card. The campaign 

would screen for impermissible or nonmatchable contributions through a series of measures, including an 

electronic form that would require information about 

the contributor. 

For purposes of federal matching payments, a contribution is a gift of money made by a written instrument that identifies the person making the contribution. 11 CFR 9034.2. The Commission concluded that 

the campaign’s electronic contributor form was the 

functional equivalent of a written instrument. The 

contributor’s authorized response to questions on the 

form would be tantamount to a written signature on 

that form. The Commission further noted that the 

screening procedures proposed by the Committee 

would provide a “safe harbor” for other Presidential 

committees that sought federal matching payments 

for credit card contributions received over the Internet, 

but the Commission did not mandate the use of the 

identical safeguards mentioned in this advisory opinion. 

In AO 1999-22, the Commission determined that 

Aristotle Publishing’s credit card contribution plan fell 

within the “safe harbor” established in the Bradley 

opinion. In addition, the Commission approved a detailed plan whereby Aristotle would collect credit card 

contributions for its clients via the Internet using its 

own merchant ID number. It could not, however, use 

a single merchant ID number for contributions to 

Presidential campaigns that were to be submitted for 

Federal matching payments. 

Internet Use by Campaign. In AO 1999-17, the 

Commission responded to a number of Internet-related questions posed by the Governor George W. 

Bush for President Exploratory Committee, Inc. (the 

Committee). The Commission concluded that: 

• Pro-Bush web sites established by volunteers would 

not result in contributions, as long as the volunteer 

prepared the web site using his or her personal 

property at home. The same rule would apply to email sent by volunteers. In addition, volunteers could 

redistribute campaign materials as part of their 

Internet fundraising efforts for the Committee without 

making a contribution to the Bush campaign. 11 

CFR 100.7(b)(4). 

• Providing a hyperlink to the Committee’s web site 

would result in a contribution if the owner of the site 

would normally charge for a link but chose not to 

charge the Committee, or charged the Committee 

less than it would charge a similarly situated nonpolitical organization. 11 CFR 100.7(a)(1)(iii)(A). 

• Vendors of campaign merchandise could forward to 

the Committee the names of supporters and also 

provide a link to the Committee’s web site as long as 

the Committee paid the usual and normal charge for 

the list of supporters and for the link (if it were the 

standard business practice to be charged for the 

link). 

• The campaign could use its web site or e-mail to 

support Mr. Bush via Internet polling. 

6

 The Commission approved this opinion on a provisional 

basis, pending promulgation of new regulations to permit 

the matching of credit card contributions. Those regulations 

were published in the Federal Register on August 5, 1999 

(64 FR 42584) and were effective retroactive to January 1, 

1999. See Chapter 5 for details. 
28 Chapter Four 

• Absent some exemption under the law, disclaimers 

would be required on web sites that expressly advocated the election or defeat of a clearly identified 

candidate or solicited contributions. 11 CFR 

110.11(a)(1). See AO 1998-22. 

• The Committee could substitute e-mail communications for written or oral communications as a means 

of exerting best efforts to obtain missing contributor 

information. 11 CFR 104.7(b)(2). See AO 1995-9. 

Notice of Inquiry 

To date, the Commission has addressed several 

issues involving the use of new technologies for campaign activity consistent with the campaign finance 

laws. Nevertheless, many issues regarding the use of 

technological innovations for campaign activity remain 

unanswered. In an attempt to deal with them in a systematic manner, the Commission published a Notice 

of Inquiry (NOI) in the Federal Register on November 

5, 1999. The NOI asked some fundamental questions 

regarding application of the laws to Internet campaigning: 

• Are Internet campaign activities analogous to campaign activities conducted in other contexts, or do 

they differ to such a degree as to require different 

rules? 

• When the Internet is used for activity relating to federal elections and candidates, should the activity be 

treated as an expenditure or a contribution? If so, 

under what circumstances? 

• Should campaign activity conducted on the Internet 

be subject to the Act and Commission regulations at 

all? 

The Commission will use the comments it receives 

to determine whether to issue a Notice of Proposed 

Rulemaking (NPRM), which might include proposed 

changes to its regulations. An NPRM would seek 

further comment on any proposed revisions to the 

regulations. 

Comments on the NOI were due on or before January 7, 2000.7 

Definition of Member 

On July 22, 1999, the Commission concluded a 

lengthy rulemaking process by approving final rules 

for determining who qualifies as a “member” of a 

membership organization. The Commission’s previous definition of “member” had been partially invalidated in 1995 in the DC circuit in Chamber of Commerce of the United States v. FEC. 

The “member” definition is important because, under the Act, only “members” of an incorporated membership organization (and the organization’s executive 

and administrative personnel and the families of both 

groups) may be solicited for contributions to the 

organization’s separate segregated fund, commonly 

called a political action committee or PAC. Additionally, only members are allowed to receive organization communications that expressly advocate the 

election or defeat of candidates. 

In its Chamber of Commerce decision, the court of 

appeals concluded that the FEC’s previous regulatory 

definition of “member” did not square with the Supreme Court’s definition in FEC v. National Right to 

Work Committee (NRWC). In that case, the Supreme 

Court had ruled that “members of nonstock corporations were to be defined . . . by analogy to stockholders of business corporations and members of labor 

unions . . . . [which] suggest[ed] that some relatively 

enduring and independently significant financial or 

organizational attachment is required . . . .” According 

to the court of appeals, the Commission’s former rules 

interpreted the disjunctive “or” between “financial” and 

“organizational” as if the Supreme Court had used the 

conjunctive “and.” The court also concluded that the 

mandatory voting requirements in the old membership 

rules “ignored other indications of organizational attachment.” 

The new rules, which took effect on November 2, 

replace the term “membership association” with 

“membership organization” and, for the limited purposes of the internal communication exemption at 11 

CFR 100.8, expand the definition to include unincorporated associations. 

With respect to the definition of “member,” the rules 

continue to require members to satisfy the qualifications for membership in a membership organization 7

 The Commission received more than 1,200 comments. 
Legal Issues 29 

and affirmatively accept the membership 

organization’s invitation to become a member. The 

rules then establish new criteria for being a member, 

reflecting the Commission’s revised interpretation of 

the NRWC decision. Under the new rules, members 

must: 

• Have some significant financial attachment to the 

membership organization, such as a significant investment or ownership stake; or 

• Pay annual dues set by the membership organization;8

 or 

• Have a significant organizational attachment to the 

membership organization that includes: 

- affirmation of membership on at least an annual 

basis9 and 

- direct participatory rights in the governance of 

the organization.10 

With regard to retired, student and lifetime members, and other persons who do not meet the above 

requirements but have a relatively enduring and independently significant attachment to the organization, 

the Commission will determine their membership status on a case-by-case basis through the advisory 

opinion process. 

Advisory Opinions 

During 1999—but prior to the effective date of the 

new rules—the Commission issued three AOs dealing 

with the definition of member (AOs 1999-10, 1999-15 

and 1999-16) . In each case the Commission found 

that the organizations and members qualified as 

“membership associations” and “members” under the 

more stringent regulations in place at the time. Consequently, the organizations that requested these 

opinions can feel confident that their members also 

satisfy the more inclusive definition contained in the 

new membership regulations. 

Limited Liability Companies 

Prior to November 1999, neither the Act nor FEC 

regulations specifically addressed the status of limited 

liability companies (LLCs), which bear some resemblance to both corporations and partnerships. The 

Commission, however, had been asked to address 

the status of LLCs, case-by-case, in several advisory 

opinions. In these opinions, the Commission had 

looked to state law to determine how LLCs should be 

treated under the Act. Using this approach, LLCs 

were typically considered “persons,” subject to the 

same limits as individuals (except for the $25,000 

annual limit, which applies only to individuals). 

On November 12, 1999, the Commission promulgated new regulations governing contributions to federal candidates and committees by LLCs. The new 

rules follow the Internal Revenue Service’s (IRS) 

“check the box” approach in classifying LLCs. IRS 

rules allow LLCs to decide whether to be treated as 

partnerships or corporations for federal tax purposes. 

If an LLC selects neither option, and is not traded 

publicly, it is automatically treated as a partnership. 

All publicly-traded LLCs are treated as corporations. 

Under the new FEC regulations, an LLC is treated 

as a partnership unless it opts to be treated as a corporation for tax purposes.11 LLCs that choose corporate tax treatment and those that are publicly traded 

are treated as corporations. In adopting the new rules, 

8

 The regulations do not specify a minimum amount of 

dues. 9

 The regulations provide some flexibility in interpreting 

the phrase “annual affirmation.” For example, activities such 

as attending and signing in at a membership meeting or 

responding to a membership questionnaire would satisfy 

this requirement. 10 The regulations cite as examples of “direct participatory rights” the right to vote directly or indirectly for at least 

one individual on the membership organization’s highest 

governing board; the right to vote on policy questions where 

the highest governing body of the membership organization 

is obliged to abide by the results; the right to approve the 

organization’s annual budget; or the right to participate 

directly in similar aspects of the organization’s governance. 

11 Contributions by a partnership are subject to the limits 

contained in 2 U.S.C. §441a(a). In addition, partnership 

contributions are attributed proportionately against each 

contributing partner’s limit for the same candidate and election. 11 CFR 110.1 
30 Chapter Four 

the Commission said that this approach was a narrow 

exception to its general practice of relying on state 

law to determine corporate status of any given entity. 

The NPRM had also sought comments on how 

Subchapter S corporations should be treated for purposes of the Act. Because Subchapter S corporations 

are considered corporations under all states’ laws, the 

final rules do not address them; they continue to be 

barred from making contributions in federal elections. 

The new regulations supersede AOs 1998-15, 

1998-11, 1997-17, 1997-4, 1996-13 and 1995-11. 

Soft Money 

Soft money—funds raised and/or spent outside the 

limitations and prohibitions of the Act—received considerable attention during 1999, both in the courts and 

at the FEC. 

Litigation 

USA v. Kanchanalak, et al. As part of its October 

8, 1999, decision in this criminal case, the U.S. Court 

of Appeals for the District of Columbia Circuit reversed a district court decision concerning the disclosure of soft money donations. The U.S. District Court 

for the District of Columbia had determined that neither the Act nor Commission regulations require political committees to report the sources of soft money 

donations. 

While the appellate court did not question the lower 

court’s determination that the Act does not require 

soft money reporting, it held that the FEC’s own regulation does require such disclosure. The appeals court 

pointed to the Commission’s regulation at 11 CFR 

104.8(e), which requires disclosure of any entity that 

“donates an aggregate amount in excess of $200 in a 

calendar year to the committee’s nonfederal 

account(s).” In upholding the FEC’s interpretation of 

its regulation to require the disclosure of the sources 

of soft money, the opinion noted the appeals court’s 

long history of deferring to agencies’ interpretations of 

their own regulations, and quoted a Supreme Court 

opinion which stated “that the [Federal Election] Commission is precisely the type of agency to which deference should presumptively be afforded.” 

The court of appeals also affirmed the 

Commission’s position that the Act’s ban on contributions by foreign nationals applies to donations to support candidates for state and local offices, not just 

federal offices. The opinion cited 2 U.S.C.§441e, 

which states that “it shall be unlawful for a foreign 

national directly or through any other person to make 

any contribution...in connection with an election to any 

political office.” Based on this language, the court 

concluded that “Congress plainly intended to reach 

certain contributions made to state and local offices.” 

(See also “Foreign Nationals,” p. 33.) 

FEC v. California Democratic Party, et al. On 

October 14, 1999, the U.S. District Court for the Eastern District of California ruled that the California 

Democratic Party (CDP) violated the Commission’s 

allocation rules when it used soft money to pay for a 

voter registration drive that was “targeted” at potential 

Democratic registrants.12 On November 2, 1999, the 

court issued a consent order and judgment in which 

the CDP agreed to pay a civil penalty to the FEC in 

the amount of $70,000 and to transfer $354,500 from 

its federal account to its nonfederal account. 

The case involved donations the CDP made from 

its nonfederal account to a California group for a voter 

registration drive. The undisputed evidence of the 

case demonstrated that the voter registration drive 

was “a targeted effort to register Democrats to vote in 

a general election.” 

Under Commission regulations, political committees must allocate expenses for generic voter drives 

between their federal and nonfederal accounts, must 

pay for the expenses directly from their federal account or a special allocation account, and must disclose the allocation in their reports to the FEC. 11 

CFR 102.5(a)(1)(i), 104.10(b)(4) and 106.5(d) and (g). 

In this case, the CDP failed to allocate any of the 

voter drive costs to its federal account, paid for all of 

the costs directly from a nonfederal account and failed 

to report any of the costs to the FEC. 

12 The Commission reached a similar conclusion in MUR 

3774, involving payments by the National Republican Senatorial Committee for generic voter drives. The case was 

closed in February 2000. 
Legal Issues 31 

Advisory Opinions 

The Commission considered several advisory opinions during 1999 that dealt with soft money issues. 

Most involved the Commission’s rules on allocation of 

shared federal and nonfederal expenses by party 

committees. 

AO 1999-4. In AO 1999-4, the Commission determined that Minnesota’s Senate District 43 committee 

(SD 43), a local party organization, could make contributions to federal candidates and exempt payments 

on behalf of federal candidates without registering as 

a federal political committee, so long as it used “hard 

money” for those purposes (i.e., funds that complied 

with the Act’s limits and prohibitions) and its contributions and payments did not exceed federal registration thresholds. 

The Commission noted that local party organizations are subject to the allocation rules13 regardless of 

whether they have separate federal and nonfederal 

accounts. Therefore, if SD 43 engaged in exempt 

party activities involving federal and nonfederal elections, the portion of its payments allocable to federal 

activity would count toward the $5,000 registration 

threshold that applies to exempt activities. 11 CFR 

106.5(a)(1), 106.5(a)(2)(iii) and 106.5(e). 

AOs 1999-5, 1999-18 and 1999-30. These opinions all involved the “ballot composition” allocation 

method. Under FEC regulations, state and local party 

committees must allocate their administrative and 

generic voter drive expenses between “hard money” 

(federal) sources and “soft money” (nonfederal) 

sources, based on the ratio of federal offices expected on the ballot to total federal and nonfederal 

offices expected on the ballot in the next general election to be held in the committee’s state or geographic 

area. 11 CFR 106.5(d)(1)(i). This ratio is determined 

by the number of categories of federal and nonfederal 

offices on the ballot. 11 CFR 106.5(d)(1)(i). The regulations list the relevant federal and state offices and 

how they should be counted for purposes of the ratio. 

11 CFR 106.5(d)(1)(ii). 

In AOs 1999-5 and 1999-18, the Commission determined that the Democratic Party of New Mexico 

(DPNM) and the San Diego County Republican Central Committee (SDCRCC), respectively, could adjust 

their ballot ratios by adding nonfederal points for 

some additional state and local offices included on the 

state ballots. The DPNM’s support of Democratic 

candidates for two seats on a newly-created state 

utilities regulatory body earned it one additional 

nonfederal point. Similarly, the SDCRCC could treat 

the candidates it endorsed and supported in “nonpartisan” local races as partisan local candidates and 

could, therefore, add two nonfederal points when 

calculating its allocation ratio. The Commission based 

its decision on a 1996 district court decision that 

found unconstitutional Article II, §6(a), of the California Constitution, which mandates that local elections 

be nonpartisan.14 The Commission’s position could 

change if future legal developments indicated that 

§6(b) could be lawfully applied or enforced. 

In AO 1999-30, the Commission addressed an 

unusual situation facing the Nebraska State Democratic Party (NDP). Normally, using the ballot composition method, state party committees can avail themselves of two nonfederal points, one for each house in 

a bicameral legislature. See 11 CFR 106.5(d). Unlike 

every other state legislature, the Nebraska legislature 

consists of only one house. The individual members 

of the legislature each hold the office of State Senator, and one-half of the seats are up for election every 

two years. Based on the explicit language of its regulations and their Explanation and Justification (E & J), 

the Commission concluded that the NDP could take 

only one nonfederal point with respect to the state 

legislative office. 

13 The Commission’s allocation regulations require party 

committees to pay for certain kinds of expenses with both 

soft money and hard money (or exclusively with hard money 

if they so choose), according to specific allocation formulae 

established by the regulations. 

14 California Democratic Party v. Lungren, 919 F. Supp. 

1397 (N.D. Cal. 1996). 
32 Chapter Four 

AO 1999-27. In this opinion, the Commission concluded that all the funds spent by the Alaska Federation of Republican Women (the Federation), a party 

committee, in connection with a presidential straw poll 

would be subject to the limitations and prohibitions of 

the Act. Soft money could not be used. Unlike allocable generic party activities (for which both soft 

money and hard money are permissible), the straw 

poll would focus on a specific group of Presidential 

candidates, and the straw poll form itself would list 

specific Presidential candidates. Consequently, the 

Commission concluded that the Federation had to 

finance the poll exclusively with “hard dollars,” i.e., 

funds subject to the limitations and prohibitions of the 

Act. 

Enforcement 

In three 1999 enforcement cases, the Commission 

examined improper transfers of soft money by party 

committees.15 Under FEC rules, a committee may 

only transfer funds from its nonfederal (soft money) 

account to its federal account to defray the nonfederal 

share of allocable expenses. The rules also require 

that these transfers occur within a specific time frame. 

MUR 4751. In MUR 4751, the New Jersey Democratic State Committee paid a $15,000 civil penalty 

and transferred $54,279 from its federal account to its 

nonfederal account after the FEC determined that the 

committee had improperly transferred $117,000 during the 1996 election cycle from its nonfederal account to its federal account in excess of the 

nonfederal share of allocable expenses. (The committee had previously transferred $62,216 from its federal account to its nonfederal account to remedy 

some of the excessive ’96 transfers.) 

In addition to finding improper transfers, the Commission found that these transfers contained excessive individual and PAC contributions and impermissible corporate contributions. 2 U.S.C. §§441a(f) and 

441b(a). New Jersey state law, which governs the 

committee’s nonfederal activities, permits individuals, 

PACs and corporations to make contributions of up to 

$25,000 annually. Federal statutes, however, limit 

contributions to state party committees to $5,000 per 

year for individuals and PACs, and prohibit corporate 

contributions. 

MURs 4797/4798. In these two related MURs, an 

unregistered party organization, the Randolph County 

Republican Executive Committee, illegally transferred 

prohibited funds to the federal accounts of two party 

committees. (In both cases, the recipient federal accounts were appropriately registered as federal committees under the Act.) The two federal accounts, in 

turn, illegally accepted the transfers. Additional violations included one of the recipient committees’ failure 

to allocate and failure to accurately report transfers. 

The transfers, amounting to $32,425 and $13,925, 

occurred just prior to the 1996 elections in North 

Carolina. The Randolph Committee made the transfers so that the two federal committees could purchase public communications. Although most of the 

communications appeared to support local candidates, one of them had a federal component. 

The Act and Commission regulations state that an 

organization that does not qualify as a federal political 

committee, but influences federal elections, must 

either establish a federal account that receives only 

funds subject to the limitations of the Act or be able to 

demonstrate through a reasonable accounting 

method that it has sufficient funds permissible under 

federal law to cover the amount of the federal disbursement at the time the contribution is made. 11 

CFR 102.5(b)(1). The Randolph Committee had done 

neither, and it had accepted soft money—i.e., donations that, while legal under North Carolina law, had 

exceeded the limits of the Act. It passed these funds 

on to the two federal party committees. Those two 

party committees, in turn, permitted the deposit of 

impermissible funds from an unregistered committee 

into their federal accounts. 

The Commission entered into conciliation agreements with the three committees prior to a finding of 

probable cause to believe that they had violated the 

Act and Commission regulations. Each committee 

agreed to pay a $6,000 civil penalty. 

15 These were among several 1999 enforcement matters 

on this topic. 
Legal Issues 33 

Contributions from Foreign Nationals 

The Act’s ban on contributions from foreign nationals was the subject of a significant court case, an 

advisory opinion and an enforcement matter during 

1999. 

Litigation 

USA v. Kanchanalak, et al. On October 8, 1999, 

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

Circuit reversed a district court decision to dismiss 

charges against Pornpimol Kanchanalak and 

Duangnet Kronenberg for illegally disguising donations from foreign nationals and corporations. The 

Department of Justice originally filed suit against Ms. 

Kanchanalak and Ms. Kronenberg for willfully causing 

the Democratic National Committee (DNC) and other 

committees to file false reports of hard money contributions and soft money donations with the FEC, in 

violation of 18 U.S.C.§§2(b), 1001. The defendants 

were allegedly involved in a scheme in which permanent U.S. residents signed checks for both hard and 

soft money when the actual source of the funds was a 

foreign corporation, Ban Chang International (USA), 

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

dismissed the charges against Ms. Kanchanalak and 

Ms. Kronenberg, concluding that the government had 

failed to prove that the defendants had directly 

caused the making of false reports to the FEC. The 

court also determined that neither the Act nor Commission regulations could be read to regulate foreign 

soft money donations. The Court of Appeals reversed 

on each of these matters. 

Hard Money. The appeals court reinstated the hard 

money counts against the defendants based on its 

previous decision in United States v. Hsia,16 which 

established that the Act requires political committees 

to report the true source of the federal funds they 

receive. 2 U.S.C.§441f. The appellate court ruled that 

the defendants’ scheme of illegally utilizing conduits 

caused the DNC and other committees to report the 

conduits rather than the true sources of the contributions on FEC forms. Because the defendants’ actions 

“caused false statements to be made to a government 

agency,” the appeals court summarily reversed the 

district court’s decision on these counts. 

Soft Money Donations by Foreign Nationals. In 

reversing the district court’s judgment with regard to 

the soft money counts, the appeals court found that 

the FEC had reasonably interpreted the Act to forbid 

donations by foreign nationals to support candidates 

for state and local offices, not just federal offices. 

While the defendants had argued that the prohibition 

applied only to federal elections, the appellate court 

ruled that it extends to state and local elections as 

well. The opinion cited 2 U.S.C.§441e, which states 

that “it shall be unlawful for a foreign national directly 

or through any other person to make any 

contribution...in connection with an election to any 

political office.” While the defendants had focused on 

the fact that “contribution” is defined elsewhere in the 

statute to include “any gift...made by any person for 

the purpose of influencing any election for Federal 

office” (2 U.S.C.§431(8)(A)(i)), the appeals court emphasized the use of the term “any political office” in 

§441e. The appeals court compared §441e to §441b, 

which differentiates between contributions in connection with elections to federal office and those in connection with election to “any political office.” The opinion noted that, “[b]y distinguishing federal offices from 

‘any political office,’ Congress plainly intended to 

reach certain contributions made to state and local 

offices.” In this regard, the appellate court again relied 

on the FEC’s interpretation of the law, namely, that 

nonfederal offices are included in the foreign national 

prohibition. 

Reporting Soft Money. The court of appeals also 

reversed the district court’s ruling regarding the soft 

money reporting regulation. The appellate court did 

not question the lower court’s determination that nothing in the Act specifically requires soft money reporting, but pointed to the Commission’s regulation at 11 

CFR 104.8(e), which requires disclosure about any 

entity that “donates an aggregate amount in excess of 

$200 in a calendar year to the committee’s nonfederal 

account(s).” (See also “Soft Money,” p. 30.) 

16 United States v. Hsia, 176 F.3d 517 (D.C. Cir. 1999). 
34 Chapter Four 

Advisory Opinions 

AO 1999-28. Consistent with its previous holdings 

on the subject, a majority on the Commission con-

cluded that a domestic subsidiary of a foreign corpo-

ration may solicit PAC contributions from—and send 

election advocacy communications to—the restricted 

class of its foreign corporate parent and any of its 

U.S. subsidiaries, so long as those individuals are not 

foreign nationals and foreign nationals do not partici-

pate in PAC operations or decision making. The affili-

ated status of the various corporations provided the 

basis for the Commission’s conclusion that qualified 

personnel within the restricted class of any one of the 

corporations would be included within the restricted 

class of all. 11 CFR 100.5(g)(3)(i) and 110.3(a)(2)(i). 

Enforcement 

MUR 4834. In MUR 4834, Howard Glicken agreed 

to pay a $40,000 civil penalty for knowingly and will-

fully soliciting a $20,000 contribution from a foreign 

national and for causing a contribution from a foreign 

national to be falsely made in the name of a U.S. citi-

zen. 

The evidence showed that Mr. Glicken solicited the 

contribution from Thomas Kramer in April 1993 and 

knew at the time that Mr. Kramer was a German na-

tional and that foreign nationals are prohibited from 

making contributions in elections in the U.S. Mr. 

Glicken told Mr. Kramer that he should have someone 

else write the check to the DSCC and then reimburse 

that person. Subsequently, Mr. Glicken was present 

when Mr. Kramer asked his secretary to write a 

$20,000 contribution check, which the DSCC received 

a few days after it was made. Mr. Glicken apparently 

knew that Mr. Kramer reimbursed his secretary for the 

full amount of the check. 

This scheme violated not only the foreign national 

ban, but also the prohibition on contributions in the 

name of another. 2 U.S.C.§§441e and 441f. 
35 Chapter Five 

Presidential Public Funding 

Public funding has been a key part of our Presidential election system since 1976. Using funds from the 

$3 tax checkoff, the federal government provides 

matching funds to qualified candidates for their primary campaigns, funding to major and minor parties 

for Presidential nominating conventions, and grants to 

Presidential nominees for their general election campaigns. 

Shortfall for 2000 

During 1999, the Commission continued to warn of 

a significant shortfall in the Presidential Election Campaign Fund during the 2000 Presidential elections. 

That forecast was based on several factors: 

• Payments from the Fund are adjusted for inflation, 

but Fund receipts are not. 

• Three parties were expected to participate in the 

public funding program in 2000. 

• Open races for the 2000 nomination would occur in 

both major parties. 

• Taxpayer participation in the tax checkoff had remained low. 

Early projections for 2000 had indicated that candidates might initially receive as little as 32 percent of 

their entitlement in January 2000, and that the shortfall might persist until early 2001. (See Annual Report 

1998.) When Texas Governor George W. Bush announced that he would forego federal matching funds, 

however, the Commission revised its estimates. The 

revised figures continued to forecast a significant 

shortfall, but FEC staff believed that all certified funds 

would be paid by July 20, 2000, and that initial payments would equal 39 percent of the candidates’ entitlements. Later in the year, Elizabeth Dole announced that she would not accept matching funds, 

further increasing the percentage of entitlement that 

could be paid in January 2000. 

The actual payment process began at the end of 

1999. On December 22, the Commission certified 

eight primary candidates as eligible to receive a total 

of more than $34 million in federal matching funds. 

(That figure was nearly $3 million less than the 

Commission’s initial certifications for 10 candidates in 

the 1992 election.) The Treasury Department’s January 3, 2000, payments to the candidates amounted to 

roughly 50 cents on the dollar. (See Chart 5-1, p. 36.) 

Based on these facts, the Commission expected the 

funding shortfall to end by June 20, 2000. Of course, 

a lag in deposits from the tax checkoff or an acceleration in requested payments could alter those estimates. To bridge the funding gap, candidates could 

secure loans by pledging anticipated matching fund 

receipts as collateral. 

The Commission for several years has urged Congress to help alleviate the shortfall problem. Revising 

the “set aside” of general election funds and increasing and indexing the checkoff amount are possible 

solutions. 

Certification of Primary Matching 

Funds 

Presidential candidates eligible to participate in the 

matching fund program 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. To establish eligibility, a candidate must 

submit documentation showing that he or she has 

raised in excess of $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. 

Presidential candidates may establish their eligibility during the year before the election (i.e., in 1999 for 

the 2000 primaries) and, once eligible, they may submit additional contributions for matching funds (called 

matching fund submissions) on specified dates. 

Chart 5-1 (next page) lists the 2000 Presidential 

primary candidates who qualified for matching funds 

and the total amount of matching funds certified and 

actually paid to each, as of January 2000. 
36 Chapter Five 

CHART 5-1 

Matching Fund Certifications and Payments, January 2000 

Candidate Certification Amount Actual Payment on 1/3/00 

Gary L. Bauer (R) $ 3,964,359.04 $ 1,969,126.75 

Bill Bradley (D) $ 8,343,853.83 $ 4,144,454.52 

Patrick J. Buchanan (Reform) $ 2,372,196.26 $ 1,178,287.60 

Al Gore (D) $11,070,709.82 $ 5,498,904.26 

Alan L. Keyes (R) $ 1,241,434.35 $ 616,629.71 

Lyndon H. LaRouche, Jr. (D) $ 733,767.72 $ 364,467.91 

John S. McCain (R) $ 4,190,650.22 $ 2,081,527.27 

Dan Quayle (R) $ 2,102,525.00 $ 1,044,339.87 

Convention Funding 

Federal election law permits all eligible national 

committees of major and minor parties to receive 

public funds to pay the official costs of their Presidential nominating conventions. 

Based on its Presidential candidate’s performance 

in the 1996 election, the National Committee of the 

Reform Party, USA, and its convention committee 

qualified as a minor party under the Presidential Election Campaign Fund Act for purposes of convention 

financing and eligibility. A minor party is defined as a 

political party whose candidate for the Presidency in 

the preceding Presidential election received more 

than 5 percent, but less than 25 percent, of the total 

popular votes cast. In the 1996 general election, the 

Reform Party candidate, Ross Perot, received 8.4 

percent of the popular vote. Accordingly, the Reform 

Party was entitled to partial convention funding for 

2000. On November 22, 1999, the FEC certified the 

Reform Party 2000 Convention Committee as eligible 

to receive $2,468,921 in public funds. 

Under the statute, major party conventions are fully 

funded at $4 million, plus an adjustment for inflation 

since 1974. On June 28, 1999, the 2000 Democratic 

National Convention Committee, Inc. and the Committee on Arrangements for the 2000 Republican National Convention each received payments of $13.224 

million. 

In addition to these initial certifications, all of the 

convention committees will receive a second payment 

from the Department of Treasury during 2000 to adjust for inflation. 

Public Funding Regulations 

Over the years, the Commission has developed 

and refined its regulations explaining the requirements and procedures for public funding. After each 

Presidential cycle, the agency revises the regulations 

to clarify the law and address problems that arose in 

the previous cycle. During 1999, the Commission 

amended its rules in several areas, including the following: 

• The revised rules permit the matching of credit or 

debit card contributions, including those made via 

the Internet. 11 CFR 9034.2, 9034.3 and 9036.1. 

(See Chapter 4, p. 27.) 

• The amendments establish a “bright line” between 

primary and general election expenses. Under the 

revised rule, salary and overhead costs incurred 

between June 1 of the Presidential election year and 

the date of the nomination are treated as primary 

expenses. However, Presidential campaign committees have the option of attributing to the general 

election an amount of salary and overhead ex-
Presidential Public Funding 37 

penses incurred during this period of up to 15 percent of the primary election spending limit. 11 CFR 

9034.4(e)(1) and (e)(3).1 

• The new rules also require a Vice Presidential committee to begin aggregating its contributions and 

expenditures with those of the Presidential nominee 

on the date that either the future Presidential or Vice 

Presidential nominee publicly indicates that the two 

candidates intend to run on the same ticket. Alternatively, aggregation of contributions would begin 

when the Vice Presidential candidate accepts an 

offer to be the running mate, or when the committees of these two candidates become affiliated. 11 

CFR 9035.3.1 

• The revised rules permit party committees to make 

coordinated party expenditures in connection with 

the general election before they select their nominee. However, all prenomination coordinated expenditures are subject to the coordinated expenditure 

limits, whether or not the candidate with whom they 

are coordinated receives the party’s nomination. 11 

CFR 110.7(d). 

• The amended rules also modify the Presidential 

audit process to include Commission approval of the 

Preliminary Audit Report before it is provided to the 

audited committee following the exit conference. 

This preliminary audit report replaces the exit conference memorandum. 11 CFR 9007.1(b)(2)(iii), (c) and 

(d)(1), and 9038.1(b)(2)(iii), (c) and (d)(1).1 

• The changes also modify the General Election Legal 

and Accounting Compliance (GELAC) Fund rules by: 

- Restricting GELAC Fund deposits made prior to 

June 1 of the Presidential election year to those 

primary election contributions that exceed the 

contributors’ contribution limits and are properly 

redesignated to the Fund; and 

- Specifying that the GELAC Fund may not solicit 

contributions before June 1 of the Presidential 

election year. 11 CFR 9003.3(a)(1)(i).2 

- Modifying rules on joint fundraising involving the 

GELAC Fund. 11 CFR 9034.4(e)(6). 

• The new rules also modify the reimbursement requirements for media use of campaign transportation 

and other services by: 

- Specifying that publicly funded campaigns may 

seek reimbursement from the media for the items 

listed in the White House Press Corps Travel Policies and Procedures issued by the White House 

Travel Office plus those items or services not 

listed if they are requested by media personnel; 

and 

- Specifying that Presidential campaign committees have 60 days to provide each media representative traveling or attending a campaign event 

with an itemized bill for each segment of the trip. 

Payments for uncontested charges from the media 

representatives are due 60 days after the date of 

the bill. 

The Commission also amended the rules concerning: documentation of disbursements; winding down 

costs; lost, misplaced or stolen items; capital and 

noncapital assets; Net Outstanding Campaign Obligations (NOCO) and Net Outstanding Qualified Campaign Expenses (NOQCE); compliance costs for primary committees; matching fund submissions; and 

nominating conventions. 

Update on 1996 Presidential Debate 

Lawsuit 

In April 1998, Perot ’96, the 1996 committee of 

former Reform Party Presidential candidate Ross 

Perot, filed a lawsuit asking the U.S. District Court for 

the District of Columbia to find that the FEC acted 

contrary to law in dismissing an administrative complaint that Perot ’96 had filed against the Commission 

on Presidential Debates (CPD). The CPD had sponsored the 1996 Presidential debates in which Mr. 

Perot was not invited to participate. Perot ’96 had 

asked the court to order the FEC to take action on the 

complaint or to find that the agency’s regulations governing nonpartisan candidate debates were unconstitutional. 11 CFR 110.13 and 114.4(f). 

1

 An effective date for these regulations had not been 

announced at year’s end. 2

 Neither one of these GELAC Fund provisions will be 

implemented until June 1, 2000. 
38 Chapter Five 

On April 12, 1999, the court dismissed this case 

with prejudice at the plaintiff’s request. At the time of 

the plaintiff’s voluntary motion to dismiss with prejudice, the Commission’s motion to dismiss for lack of 

standing was pending and awaiting judgment.3 

Repayment of Public Funds 

Once a Presidential election is over, the Commission audits all of the candidates and committees that 

received public funds to ensure that they used those 

funds only for qualified campaign expenses and that 

they maintained proper records and filed accurate 

reports. These audits are mandated under the Presidential Election Campaign Fund Act. Sometimes an 

audit finds that a candidate or committee exceeded its 

expenditure limits, spent public funds on nonqualified 

expenses or ended the campaign with a surplus. In 

those cases, the Commission may require the candidate or committee to make a repayment to the U.S. 

Treasury. 

Repayments may also stem from Commission determinations that contributions that were initially 

thought to be matchable were later determined to 

have been nonmatchable. Such determinations may 

or may not result from the FEC’s audit of the committee. 

During 1999, the Commission determined that several 1996 campaigns had to make repayments, including those discussed below. 

Clinton Committees 

On June 3, 1999, the Commission approved the 

audit reports on the committees for the Clinton/ 

Gore’96 Primary, the General Election and the General Election Legal and Accounting Compliance Fund. 

These reports contained the Commission’s repayment 

and payment determinations. The Commission concluded that most of the repayments set forth in the 

reports would not be necessary if the Clinton/Gore 

campaign transferred specific amounts of funds 

among the committees. On August 12, 1999, the 

committees filed a joint response and attached payment and repayment checks of $11,180 for staledated checks and $3,241 for interest income, as well 

as documentation of the transfers recommended in 

the audit reports, which obviated the remaining repayments. 

In addition to the repayments and payments arising 

from the Commission’s audits of the Clinton committees, on July 15, 1999, the Commission determined 

that the Clinton/Gore ’96 Primary Committee, Inc., 

had to repay nearly $11,000 to the US Treasury for 

public funding payments that had been made on the 

basis of contributions that were later determined to 

have been nonmatchable. 11 CFR 9038.2(b)(1)(iii). 

This determination was based on information obtained during a Department of Justice (DOJ) investigation of campaign irregularities involving Future 

Tech International, Inc., Mark Vision Computers, Inc., 

Mark Jimenez and Juan Ortiz. One aspect of the investigation involved 25 contributions to the Clinton/ 

Gore ’96 Primary Committee, Inc., that were connected to Future Tech and the above-stated individuals. The Commission concluded that guilty pleas entered into by Future Tech and Mr. Ortiz as a result of 

the DOJ investigation were sufficient to conclude that 

these contributions should not have been matched 

with public funds. 

Dole Committees 

The Commission made a repayment determination 

that Former Senator Bob Dole’s 1996 primary committee, Dole for President, Inc., repay $515,272 to the 

Treasury. The Commission noted a surplus repayment of $283,481 resulting from amounts due from 

the general election campaign for winding-down expenses paid on its behalf and $6,255 in nonqualified 

campaign expenses. The Commission also determined that the committee pay the Treasury $225,536 

for stale-dated checks. 

The Commission’s repayment determination for 

Dole/Kemp ’96, Inc., and the Dole/Kemp ’96 Compliance Committee, Inc., totaled $3.2 million. Of this 

amount, more than $2.5 million was due to the fact 

3

 A similar case, brought by the Natural Law Party, was 

pending at year’s end. See also p.16 for discussion of a 

rulemaking petition on candidate debates. 
Presidential Public Funding 39 

that the Dole committees exceeded the 1996 Presidential general election expenditure limit ($61.82 million). The largest factor in the excessive spending 

related to overbilling the press and Secret Service for 

travel on the campaign. The Commission also cited 

$574,158 in nonqualified campaign expenses related 

to expenses that should have been paid by Dole for 

President (the primary election committee); and 

$46,510 in interest income earned by the two committees. In addition, the Commission determined that the 

committee pay the Treasury $44,046 for stale-dated 

checks. The Commission also determined that Dole/ 

Kemp ’96 refund $1.15 million to press representatives and $65,754 to the Secret Service because it 

had overcharged them for campaign travel. 

The Dole committees disputed the FEC’s findings 

and requested administrative review. In December 

1999, the committees presented their arguments at 

an oral hearing. The Commission will issue Statements of Reason addressing those arguments in a 

post-administrative review repayment determination. 

Perot ’96 Repayment Reduced 

Based on a committee challenge, the Commission 

reduced the amount the Perot ’96 committee had to 

repay the U.S. Treasury to $1,706,915—approximately $600,000 less than the Commission’s original 

repayment determination. 

The Perot committee had challenged the original 

repayment determination on the basis of two arguments. First, because the committee was unable to 

terminate in April 1998, as it had expected to do, it 

needed more funds to pay winding-down costs. Second, the committee argued that $1,447,000 in litigation expenses were qualified campaign expenses and 

should be reflected in its Statement of Net Outstanding Qualified Campaign Expenses. 

The Commission allowed the additional funds for 

winding-down costs, but rejected the committee’s 

claim that its litigation expenses were qualified campaign expenses. The Commission found that the litigation expenses—for two lawsuits filed by the committee—were not incurred in furtherance of the 1996 

general election and were not incurred prior to the 

close of the expenditure report period. 11 CFR 

9002.11(a)(1) and (2). The lawsuits had challenged 

the Commission on Presidential Debates and the 

Republican and Democratic national committees. 

(See p. 37.) 

Buchanan Committee 26 U.S.C. § 9039(b) 

Investigation4 

On June 16, 1998, the Commission opened an 

inquiry under 26 U.S.C. § 9039(b) and 11 C.F.R. 

9039.3 to determine whether the reattribution of certain contributions to Patrick J. Buchanan and 

Buchanan for President, Inc., were proper and 

whether the Committee received any matching funds 

for nonmatchable contributions. Based upon this inquiry, on July 15, 1999, the Commission determined 

that Patrick J. Buchanan and Buchanan for President, 

Inc., repay $63,750 to the US Treasury for matching 

funds received in excess of the candidate’s entitlement. The repayment was based on the 

Commission’s determination that some of the 

matched contributions were nonmatchable. 26 U.S.C. 

§ 9038(b)(1); 11 C.F.R. 9038.2(b)(1)(iii). The repayment amount included $62,116 for matching funds 

related to improper reattributions and $1,634 for 

matched contributions that were later refunded. The 

repayment determination was in addition to the repayment determinations arising from the Commission’s 

audit of the Buchanan Committee. See 11 C.F.R. 

9038.2(f) and 9039.3(b)(4). The Buchanan Committee 

responded to the repayment determination on October 12, 1999. 

4

 This provision permits the Commission to conduct additional investigations to obtain information relevant to candidate eligibility, matchability of contributions and repayments. 
41 Chapter Six 

Legislative Recommendations 

In March 2000, the Federal Election Commission 

submitted to Congress and the President two sets of 

legislative recommendations. The first set contained 

six priority recommendations. The second set comprised 32 additional recommendations, including technical changes and amendments that addressed problems that the regulated community and the Commission have encountered. The entire collection of 38 

recommendations follows. 

Part A: Priority Recommendations 

Disclosure 

Election Cycle Reporting of Operating 

Expenditures and Other Disbursements (2000)* 

Section: 2 U.S.C. §434(b)(5) and (6) 

Recommendation: The Commission recommends 

that Congress make technical amendments to sections 434(b)(5) and (6) to require itemization of operating expenditures by authorized committees on an 

election-cycle basis rather than on a calendar-year 

basis and to clarify the basis for itemization of other 

disbursements. More specifically, Congress should 

make a technical amendment to section 434(b)(5)(A) 

to ensure that authorized committees (i.e., candidate 

committees) itemize operating expenditures on an 

election-cycle basis. Section 434(b)(6)(A) should be 

modified to address only election-cycle reporting 

since the subparagraph applies only to authorized 

candidate committees. Finally, sections 

434(b)(6)(B)(iii) and (v) should be amended to address only calendar-year reporting since these subparagraphs apply only to unauthorized political committees (i.e., PACs and party committees). 

Explanation: In 1999, Congress amended the statute 

at section 434(b) to require authorized candidate 

committees to report on an election-cycle basis, 

rather than on a calendar-year basis, with respect to 

reporting periods beginning after December 31, 2000. 

Pub. Law No. 106-58, Section 641. However, the 

1999 amendment did not include section 434(b)(5)(A), 

which states that operating expenditures must be 

itemized on a calendar-year basis and details the 

information required in that itemization. The result is 

that, under section 434(b)(4), operating expenditures 

will be required to be aggregated on an election-cycle 

basis, while under section 434(b)(5), they are still 

required to be itemized on a calendar-year basis. 

To establish consistency within the Act, the Commission recommends that Congress make a technical 

amendment to section 434(b)(5)(A) by inserting “(or 

election cycle in the case of an authorized committee 

of a candidate for Federal office)” after “calendar 

year.” This amendment would require authorized 

committees to itemize operating expenditures on an 

election-cycle basis. 

Congress also should tighten up the language in section 434(b)(6)(B)(iii) and (v) by striking “(or election 

cycle, in the case of an authorized committee of a 

candidate for Federal office).” The references to authorized committees are unnecessary as section 

434(b)(6)(B) applies solely to unauthorized political 

committees. Similarly, in section 434(b)(6)(A), Congress should strike “calendar year (or election cycle, 

in the case of an authorized committee of a candidate 

for Federal office)” and insert in its place the phrase, 

“election cycle,” as section 434(b)(6)(A) only applies 

to authorized committees. 

Legislative Language: 

ELECTION CYCLE REPORTING OF OPERATING 

EXPENDITURES AND OTHER DISBURSEMENTS 

Paragraph (5)(A) of section 304(b) of the Federal 

Election Campaign Act of 1971 (2 U.S.C. 

434(b)(5)(A)) is amended by inserting after “calendar 

year” the following: “(or election cycle, in the case of 

an authorized committee of a candidate for Federal 

office)”. * The date, 2000, appearing after the name of the recommendation, indicates the recommendation was new in 2000. 

Those recommendations without any date were carried 

over, in the same form, from previous years. 
42 Chapter Six 

Paragraph (6)(A) of section 304(b) of the Federal 

Election Campaign Act of 1971 (2 U.S.C. 

434(b)(6)(A)) is amended by striking “calendar year 

(or election cycle, in the case of an authorized committee of a candidate for Federal office),” and inserting in its place the following: “election cycle,”. 

Paragraphs (6)(B)(iii) and (v) of section 304(b) of the 

Federal Election Campaign Act of 1971 (2 U.S.C. 

434(b)(6)(B)(iii) and (v)) are amended by striking the 

following in both paragraphs: “(or election cycle, in the 

case of an authorized committee of a candidate for 

Federal office)”. 

Waiver Authority 

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 PreGeneral report must be postmarked by the 15th day 

before the election. As a result of these specific due 

dates mandated by the law, the 1998 October 

Monthly report, covering September, was required to 

be postmarked October 20. Meanwhile, the 1998 

Pre-General report, covering October 1 -14, was required to be postmarked October 19, one day before 

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 pre-election 

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 preelection 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 Language: 

Waiver Authority 

Section 304 (2 U.S.C. 434) is amended by adding at 

the end the following new subsection: 

“(d) The Commission may relieve any person or 

category of persons of the obligation to file any re-
Legislative Recommendations 43 

ports required by this section, or may change the due 

dates of any of the reports required by this section, if 

it determines that such action is consistent with the 

purposes of this title. During each calendar quarter, 

the Commission shall publish a list of each waiver 

granted under this subsection during the previous 

quarter.” 

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. 

The Commission notes, however, that, in certain circumstances, switching to a monthly reporting schedule would create a lag in disclosure directly before a 

primary election. In States where a primary is held in 

the beginning of the month, the financial activity occurring the month before the primary would not be 

disclosed until after the election. To remedy this, 

Congress should specify that Congressional committees continue to be required to file a 12-day Pre-Primary, regardless of whether a campaign has opted to 

file quarterly or monthly. However, where the timing 

of a primary will cause an overlap of reporting due 

dates between a regular monthly report and the PrePrimary report, Congress should grant the Commission the authority to waive one of the reports or adjust 

the reporting requirements. (See the recommendation entitled “Waiver Authority.”) Congress should 

also clarify that campaigns must still file 48-hour notices disclosing large last-minute contributions of 

$1,000 or more during the period immediately before 

the primary, regardless of their reporting schedule. 

Legislative Language: 

Monthly Reporting for Congressional Candidates 

Section 304(a) (2 U.S.C. 434(a)) is amended— 

(1) in paragraph (2), by striking “If” and inserting 

“Except as provided in paragraph (12), if”; and 

(2) by adding at the end the following new paragraph: 

“(12)(A) The principal campaign committee of a candidate for the House of Representatives or for the Senate may file monthly reports in accordance with this 

paragraph in lieu of the reports required to be filed 

under paragraph (2), provided that— 

“(i) in addition to such monthly reports, the committee shall file a pre-election report in accordance 

with paragraph (2)(A)(i) with respect to any primary 

election in which the candidate participates, except 

that in the case of a primary election occurring during 

the first 20 days of a month, the Commission may 

waive the requirement to file such pre-election report 

or the requirement to file the report otherwise due 

under this paragraph during the month, or may revise 

the deadlines otherwise applicable for submitting such 

reports; and 

“(ii) in lieu of filing the reports otherwise due under this paragraph in November and December of any 

year in which a regularly scheduled general election is 

held, a pre-general election report shall be filed in 

accordance with paragraph (2)(A)(i), a post-general 

election report shall be filed in accordance with paragraph (2)(A)(ii), and a year end report shall be filed no 

later than January 31 of the following calendar year. 
44 Chapter Six 

“(B) Monthly reports under this paragraph shall be 

filed by the treasurer of the committee no later than 

the 20th day after the last day of the month and shall 

be complete as of the last day of the month.” 

Contributions and Expenditures 

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 Commission to better monitor the annual limit. 

Through the use of our data base, we could more 

easily monitor contributions made by one individual 

regardless of whether they were given to retire the 

debt of a candidate’s previous campaign, to support 

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

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

an amendment would not alter the per candidate, per 

election limits. Nor would it affect the total amount 

that any individual could contribute in connection with 

federal elections. 

Legislative Language: 

APPLICATION OF $25,000 ANNUAL LIMIT 

Section 315(a)(3) of the Federal Election Campaign 

Act of 1971 (2 U.S.C. 441a(a)(3)) is amended by striking the second sentence of that paragraph. 

Contributions by Foreign Nationals (revised 2000) 

Section: 2 U.S.C. §441e 

Recommendation: The Commission recommends 

that Congress explicitly clarify that section 441e of the 

Act applies to both contributions and expenditures 

received and made in connection with both federal 

and nonfederal elections. 

Explanation: The Commission has consistently interpreted and enforced section 441e of the Act, banning 

contributions by foreign nationals, as applying to both 

federal and nonfederal elections. Although two district court decisions have rejected this interpretation, 

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

interpreted section 441e to apply to both federal and 

nonfederal elections (United States v. Trie, 21 

F.Supp.2d 7 (DDC 1998); 23 F.Supp. 55 (DDC 1998); 

United States v. Kanchanalak et al., 37 F.Supp.2d 1 

(DDC 1999); rev’d., 192 F.3d 1037 (D.C. Cir. 1999). 

While the Commission continues to believe that the 

statute permits, and the legislative history supports, 

application of section 441e to nonfederal elections, 

statutory clarification of this point would be useful. 

Congress could clarify section 441e either by changing the term “contribution” to “donation,” or by explicitly applying the definition of contribution included in 

section 441b(b)(2) to section 441e. In this regard, 

Congress may also wish to note that, while section 

441b (banning corporate, national bank, and union 

spending in connection with elections) prohibits both 

“contributions” and “expenditures,” section 441e (foreign nationals) prohibits “contributions” only. The 

Commission has sought to clarify this apparent discrepancy through its regulation at 11 CFR 110.4(a), 

which prohibits both contributions and expenditures 

by foreign nationals. A statutory clarification would 

make clear Congress’s intent. 
Legislative Recommendations 45 

Legislative Language: 

Contributions by Foreign Nationals 

Section 319 (2 U.S.C. 441e) is amended— 

(1) in the heading, by striking “CONTRIBUTIONS” and inserting “DONATIONS AND OTHER 

DISBURSEMENTS”; 

(2) in subsection (a), by striking “contribution” 

each place it appears and inserting “donation or other 

disbursement”; and 

(3) in subsection (a), by striking the semicolon 

and inserting the following: “, including any donation 

or other disbursement to a political committee of a 

political party or to any organization or account created or controlled by a political party and any donation 

or other disbursement for an independent expenditure;”. 

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 from a financial institution, such 

as 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. 

Legislative Language: 

Lines of Credit and Other Loans Obtained by Candidates 

Section 301(8)(B) (2 U.S.C. 431(8)(B)) is amended— 

(1) by striking “and” at the end of clause (xiii); 

(2) by striking the period at the end of clause (xiv) 

and inserting “; and”; and 

(3) by adding at the end the following new 

clause: 

“(xv) any loan of money derived from an advance on a 

candidate’s brokerage account, credit card, home 

equity line of credit, or other line of credit available to 

the candidate, if such loan is made in accordance with 

applicable law and under commercially reasonable 

terms and if the person making such loan makes 

loans in the normal course of the person’s business.” 
46 Chapter Six 

Part B: Other Recommendations 

Disclosure 

Incomplete or False Contributor Information 

Section: 2 U.S.C. §434 

Recommendation: Congress should amend the Act to 

address the recurring problem of committees’ failure 

to provide full disclosure about their contributors. 

First, Congress might wish to prohibit the acceptance 

of contributions until the contributor information is 

obtained and recorded in the committee’s records. 

Second, Congress might wish to amend the law to 

make contributors or the committee liable for submitting information known by the contributor or the committee to be false. 

Explanation: There is consistent concern expressed 

by the Commission, the public and the press about 

the failure of candidates and political committees to 

report the addresses and occupations of many of their 

contributors. Some press reports have suggested 

that this requirement is deliberately evaded in order to 

obfuscate the special-interest origins of contributions. 

Currently, in those cases where contributor information is inadequate, the law states that committees will 

be in compliance if they make “best efforts” to obtain 

the information. In 1994, the FEC revised its “best 

efforts” regulations at 11 CFR 104.7 to specify that a 

committee can demonstrate “best efforts” by requesting contributor identification in the initial solicitation 

(including a statement of the law) and making one 

follow-up request for each contribution lacking the 

required information. See 58 FR 57725 (October 27, 

1993), as amended at 62 FR 23335 (April 30, 1997). 

Even with stronger regulations in place, however, 

political committees are still not obtaining and disclosing important contributor information in a timely fashion. 

An inducement to campaigns and political committees 

to fulfill this responsibility would be to prohibit the 

acceptance and/or expenditure of contributions until 

the contributor information is obtained and recorded in 

the committee’s records. In the case of publicly 

funded Presidential campaigns, Congress may wish 

to tie the eligibility of a campaign to receive public 

funding to its ability to gather contributor information. 

These restrictions would have an immediate effect 

upon a committee’s ability to effectively campaign 

before the election, which would be a powerful inducement to campaigns and political committees to 

obtain the information promptly. Moreover, violations 

would be relatively easy to detect and prove by reviewing the committee’s disclosure reports. 

Finally, Congress may wish to add another mechanism for improving disclosure. Congress should make 

clear that the contributor or committee is liable for 

submitting information known by the provider of the 

information to be false. Taken together, these measures should improve efforts to achieve full disclosure. 

Commission as Sole Point of Entry for Disclosure 

Documents (revised 2000)1 

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 primarily affect Senate candidate 

committees, but would also apply to the Republican 

and Democratic Senatorial Campaign Committees. 

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 

and the Senatorial Campaign Committees still must 

1

 This recommendation was also made by 

Pricewaterhouse Coopers LLP in its Technology and Performance Audit and Management Review of the Federal Election Commission, pages 4-37 and 5-2. 
Legislative Recommendations 47 

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. As of January 

1997, political action committees, political party committees (except for the Senatorial Campaign Committees), House campaigns and Presidential campaigns 

all could opt to file FEC reports electronically. This 

filing option is unavailable to Senate campaigns and 

to the Senatorial Campaign Committees though, because the point of entry for their reports is the Secretary of the Senate. It should be noted, however, that 

the FEC is working closely with the Secretary of the 

Senate to improve disclosure within the current law. 

For example, the FEC and the Secretary of the Senate are exploring ways to implement digital imaging of 

reports and to develop the capacity of the Secretary’s 

office to accept electronically filed reports. While 

these measures, once completed, will undoubtedly 

improve disclosure, absent mandatory electronic filing 

for Senate campaigns and Senatorial Campaign 

Committees, a single point of entry remains desirable. 

It is important to note as well that, if the Congress 

adopted mandatory electronic filing for Senate campaigns and Senatorial Campaign Committees, the 

recommendation to change the point of entry for Senate filers would be rendered moot. 

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 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)). 

Fraudulent Solicitation of Funds 

Section: 2 U.S.C. §441h 

Recommendation: Section 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. 
48 Chapter Six 

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 (revised 2000) 

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 exceed the contribution 

limits applicable to federal candidates (e.g., in the 

case of individuals, $1,000 per election). Further, the 

law should clarify that a draft committee is separate 

from a campaign committee, for purposes of the contribution limits. 

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 U. S. 

Court of Appeals for 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. 
Legislative Recommendations 49 

Contributions and Expenditures 

Election Period Limitations for Contributions to 

Candidates (revised 2000) 

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. 

Moreover, Public Law No. 106-58 (the fiscal 2000 

appropriations bill) amended the Federal Election 

Campaign Act to require authorized candidate committees to report on a campaign-to-date basis, rather 

than on a calendar year basis, as of the reporting 

period beginning January 1, 2001. Placing the limits 

on contributions to candidates on an election cycle 

basis would complement this change and streamline 

candidate reporting. 

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 would 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. 

Moreover, adoption of this recommendation would 

eliminate the current requirement that candidates who 

lose the primary election refund or redesignate any 

contributions collected for the general election. 

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 
50 Chapter Six 

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. 

Contributions from Minors (revised 2000) 

Section: 2 U.S.C. §441a(a)(1) 

Recommendation: The Commission recommends that 

Congress establish a minimum age of 16 for making 

contributions. 

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 of 16 for 

contributors, or otherwise provide guidelines ensuring 

that parents are not making contributions in the name 

of another. 

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 

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 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. 

Enforcement 

Addition of Commission to the List of Agencies 

Authorized to Issue Immunity Orders According to 

the Provisions of Title 18 

Section: 18 U.S.C. §6001(1) 

Recommendation: The Commission recommends 

that Congress revise 18 U.S.C. §6001(1) to add the 

Commission to the list of agencies authorized to issue 

immunity orders according to the provisions of title 18. 

Explanation: Congress has entrusted the Commission with the exclusive jurisdiction for the civil enforcement of the Federal Election Campaign Act of 1971, 

as amended, the Presidential Election Campaign 

Fund Act and the Presidential Primary Matching Payment Account Act. The Commission is authorized, in 

any proceeding or investigation, to order testimony to 

be taken by deposition and to compel testimony and 

the production of evidence under oath pursuant to 

subpoena. See 2 U.S.C. §437d(a)(3) and (4). However, in some instances, an individual who has been 

called to testify or provide other information refuses to 

do so on the basis of his privilege against self-incrimination. There is currently no mechanism whereby the 

Commission, with the approval of the Attorney General, can issue an order providing limited criminal 

immunity for information provided to the Commission. 

A number of other independent agencies do have 

access to such a mechanism. 

Federal immunity grants are controlled by 18 U.S.C. 

§§6001-6005. 18 U.S.C. §§ 6002 and 6004(a) pro-
Legislative Recommendations 51 

vide that if a witness asserts his Fifth Amendment 

privilege against self-incrimination and refuses to 

answer questions at any “proceeding before an 

agency of the United States,” the agency may seek 

approval from the Attorney General to immunize the 

witness from criminal prosecution for testimony or 

information provided to the agency (and any information directly or indirectly derived from such testimony 

or information). If the Attorney General approves the 

agency’s request, the agency may then issue an order immunizing the witness and compelling his testimony. Once that order is issued and communicated 

to the witness, he cannot continue to refuse to testify 

in the inquiry. The order issued by the agency only 

immunizes the witness as to criminal liability, and 

does not preclude civil enforcement action. The immunity conferred is “use” immunity, not “transactional” 

immunity. The government also can criminally prosecute the witness for perjury or giving false statements if the witness lies during his immunized testimony, or for otherwise failing to comply with the order. 

Only “an agency of the United States,” as that term is 

defined in 18 U.S.C. §6001(1), can avail itself of the 

mechanism described above. The term is currently 

defined to mean an executive department or military 

department, and certain other persons or entities, 

including a large number of enumerated independent 

federal agencies. The Commission is not one of the 

enumerated agencies. When the provision was 

added to title 18 in 1970, the enumerated agencies 

were those which already had immunity granting 

power, but additional agencies have been substituted 

or added since then. Adding the Commission as one 

of the enumerated agencies in 18 U.S.C. §6001(1) 

would facilitate its obtaining of information relevant to 

the effective execution of its enforcement responsibilities. 

Referral of Criminal Violations (revised 2000) 

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 

Justice Department for criminal prosecution at any 

stage of a Commission proceeding. 

Explanation: The Commission has noted an upsurge 

of §441f contribution reimbursement schemes, which 

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. 

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. 

2 The 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. 
52 Chapter Six 

Modifying Terminology 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” 

terminology 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. 

Public Financing 

Averting Impending Shortfall in Presidential 

Public Funding Program (revised 2000) 

Section: 26 U.S.C. §§6096, 9008(a) and 9037(a) 

Recommendation: The Commission strongly recommends that Congress take immediate action to avert 

the impending shortfall in the Presidential public funding program in the 2000 election year. 

Explanation: The Presidential public funding program 

is experiencing a shortfall for the election of 2000 

because participation in the checkoff program is declining and the checkoff is not indexed to inflation 

while payouts are indexed. This shortfall impacts 

foremost upon primary candidates. In January 2000, 

when the U.S. Treasury made its first payment for the 

2000 election, it was only able to provide approximately 50 percent of the public funds to which qualified Presidential candidates were entitled to receive. 

Specifically, an estimated $16.9 million was available 

for distribution to qualified primary candidates on 

January 3, 2000, after the Treasury paid the convention grants and set aside the general election grants.3 

However, the entitlement (i.e., the amount which the 

qualified candidates were entitled to receive) was $34 

million, which equates to roughly 50 cents on the dollar. Moreover, the total entitlement for primary candidates for the entire election cycle is estimated to be 

$67.1 million. Thus, if FEC staff estimates and presumptions are correct, a significant shortfall will exist 

until June 2000. The Commission recommends that 

Congress take appropriate action to reduce the impact of this shortfall. 

Qualifying Threshold for Eligibility for Primary 

Matching Funds (revised 2000) 

Section: 26 U.S.C. §9033 

Recommendation: The Commission recommends that 

Congress raise the qualifying threshold for eligibility 

3

 The Commission has certified a total of $28.9 million in 

convention grants, and $147.2 million will be set aside for 

use by general election candidates. 
Legislative Recommendations 53 

for publicly funded Presidential primary candidates 

and make it adjustable for inflation. 

Explanation: The present law sets a very low bar for 

candidates to qualify for federal primary matching 

funds: $100,000 in matchable contributions ($5,000 in 

each of at least 20 states from individual donations of 

$250 or less). In other words, to qualify for matching 

funds, a candidate needs only 400 individual contributors, contributing $250 each. The threshold was 

never objectively high; now, a quarter century of inflation has effectively lowered it yet by two thirds. Congress needs to consider a new threshold that would 

not be so high as to deprive potentially late blooming 

candidates of public funds, nor so low as to permit 

individuals who are clearly not viable candidates to 

exploit the system. 

Rather than establishing a new set dollar threshold, 

which would eventually require additional inflationary 

adjustments, Congress may wish to express the 

threshold as a percentage of the previous Presidential 

primary election spending limit, which itself is adjusted 

for inflation. For example, a percentage of 5% of the 

1996 spending limit would have computed to a threshold of a little over $1.5 million. In addition, the test for 

broad geographic support might be expanded to require support from at least 30 states, as opposed to 

20, along with an increase in the amount to be raised 

from within each state, which is the current statutory 

requirement. 

State Expenditure Limits for Publicly Financed 

Presidential Primary Campaigns 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

the state-by-state limitations on expenditures for publicly financed Presidential primary candidates be eliminated. 

Explanation: The Commission has now administered 

the public funding program in 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. 
54 Chapter Six 

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 COLA 4) limit for 

campaign expenditures and a $2 million (plus COLA) 

limit for fundraising (20 percent of overall limit), each 

candidate would have one $12 million (plus COLA) 

limit for all campaign expenditures. 

Explanation: Campaigns that have sufficient funds to 

spend up to the overall limit usually allocate some of 

their expenditures to the fundraising category. These 

campaigns come close to spending the maximum 

permitted under both their overall limit and their special fundraising limit. Hence, by combining the two 

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

do not spend up to the overall expenditure limit, the 

separate fundraising limit is meaningless. Many 

smaller campaigns do not even bother to use it, except in one or two states where the expenditure limit 

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

the state limitations are eliminated or appropriately 

adjusted, this recommendation would have little impact on the election process. The advantages of the 

recommendation, however, are substantial. They 

include a reduction in 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 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, 510 U.S. 992 (1993). In addition, Congress should make it clear that eligibility to serve in 

the office sought is a prerequisite for eligibility for 

public funding. 

Applicability of Title VI to Recipients of Payments 

from the Presidential Election Campaign Fund 

(revised 2000) 

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 requirements of 

Title VI of the Civil Rights Act of 1964, as amended. 4 Spending limits are increased by the cost-of-living adjustment (COLA), which the Department of Labor calculates 

annually. 
Legislative Recommendations 55 

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, 13 F.3d 412 (D.C. Cir 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. 13 F.3d at 416. 

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’ 

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. 
56 Chapter Six 

Part C: Technical 

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. 

Filing Reports Using Registered or Certified Mail 

(revised 2000) 

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.) 

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. 

With the advent of mandatory electronic filing for certain filers as of the reporting periods after December 

31, 2000, this recommendation takes on added significance as a way to establish a clear, concise, 

across-the-board reporting deadline for all filers, regardless of methodology used to file reports. 

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 
Legislative Recommendations 57 

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 the 

increased use of computerized recordkeeping by political committees, imposing a filing deadline of the 

fifteenth of the month would not be unduly burdensome. 

Facsimile Machines (revised 2000) 

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 or by other 

technologies such as e-mail or web based filing. 

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 or other electronic technology 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) or by other technologies such as email or web based filing. This could be accomplished 

by allowing the committee to fax, e-mail, or electronically fill out via the FEC’s web site, 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. 

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) machine. (See Legislative Recommendation titled “Facsimile Machines.”) Clarification by Congress would be very helpful. 

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 committees 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. 
58 Chapter Six 

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. 

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 

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. 

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. 
Legislative Recommendations 59 

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 

$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 

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. 

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. 
60 Chapter Six 

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 

members 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. 
61 

Chapter Seven 

Campaign Finance 

Statistics 

CHART 7-1 

Number of PACs, 1974-1999 

Corporate 

Nonconnected 

Trade/Membership/Health 

Labor 

Other 

2,000 

1,500 

1,000 

500 

0 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 
CHART 7-2 

Receipts of House Candidates for 

Each Year of Election Cycle, 1990-1999 

Election Year 

Nonelection Year 

62 Chapter Seven 

Millions of Dollars 

200 

150 

100 

50 

0 

90 92 94 96 98 99 90 92 94 96 98 99 90 92 94 96 98 99 90 92 94 96 98 99 90 92 94 96 98 99 90 92 94 96 98 99 

Democrats Republicans Democrats Republicans Democrats Republicans 

Incumbents Challengers Open Seat Candidates 
CHART 7-3 

House Campaign Fundraising 

in Nonelection Years 

Receipts from Other Sources 

Receipts from PACs 

Receipts from Individuals 

Millions of Dollars 

150 

100 

200 

50 

0 1989 1991 1993 1995 1997 1999 

Campaign Finance Statistics 63 

CHART 7-4 

Senate Campaign Fundraising 

in Nonelection Years 

Receipts from Other Sources 

Receipts from PACs 

Receipts from Individuals 

Millions of Dollars 

120 

100 

80 

60 

40 

20 

0 1989 1991 1993 1995 1997 1999 
Federal Dollars 

Nonfederal Dollars 

64 Chapter Seven 

CHART 7-5 

Nonelection Year Fundraising by National Party 

Committees: Federal and Nonfederal Accounts 

Republican National Committee 

Millions of Dollars 

0 

10 

20 

30 

40 

50 

1991 1993 1995 1997 1999

Democratic National Committee 

Millions of Dollars 

0 

10 

20 

30 

40 

1991 1993 1995 1997 1999 

50 
CHART 7-6 

Sources of National Party Committee: 

Federal Account Receipts 

in Nonelection Years 

1991 

1993 

1995 

1997 

1999 

Democratic National Committee 

Millions of Dollars 

35 

30 

25 

20 

15 

10 

5 

0 

Individuals Individual PACs Other 

Less Than $200 

$200 or More 

Republican National Committee 

Millions of Dollars 

35 

30 

25 

20 

15 

10 

5 

0 

Individuals Individual PACs Other 

Less Than $200 

$200 or More 

Campaign Finance Statistics 65 
CHART 7-7 

Sources of National Party Committee: 

Nonfederal Account Receipts 

in Nonelection Years 

1991 

1993 

1995 

1997 

1999 

Democratic National Committee 

Millions of Dollars 

20 

15 

10 

5 

0 

Corporate Labor Individuals PACs Other 

Republican National Committee 

Millions of Dollars 

20 

15 

10 

5 

0 

Corporate Individuals Other 

66 Chapter Seven 
CHART 7-8 

Presidential Primary 2000: 

Estimated Cumulative Shortfall/Balance by Month* 

*These figures exclude the funds set aside for the national nominating conventions and general election nominees. 

Shortfall 

Balance

Campaign Finance Statistics 67 

Millions of Dollars 

35 

30 

25 

20 

15 

10 

5 

0 

-5 

-10 

-15 

-20 

-25 

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 

2000 2001 
69 

Appendix 1 

Biographies of 

Commissioners 

and Officers 

Commissioners 

Scott E. Thomas, Chairman 

April 30, 2003 1 

Scott Thomas was appointed to the Commission in 

1986 and reappointed in 1991 and 1998. He served 

as acting Chairman during the last four months of 

1998, and as Chairman throughout 1999. He previously served as Chairman in 1987 and 1993. Prior to 

serving as a Commissioner, Mr. Thomas was the 

executive assistant to former Commissioner Thomas 

E. Harris. He originally joined the FEC as a legal intern in 1975 and later 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. 

Darryl R. Wold, Vice Chairman 

April 30, 2001 

Darryl Wold was nominated to the Commission by 

President Clinton on November 5, 1997, and confirmed by the U.S. Senate on July 30, 1998. Prior to 

his appointment, Commissioner Wold had been in 

private law practice in Orange County, California, 

since 1974. In addition to his own practice, he was 

counsel, for election law litigation and enforcement 

defense matters, to Reed and Davidson, a California 

law firm. Mr. Wold’s practice included representing 

candidates, ballot measure committees, political action committees and others with responsibilities under 

federal, state and local election laws. Mr. Wold’s 

business practice emphasized business litigation and 

counseling closely-held companies. 

Commissioner Wold graduated cum laude from 

Claremont McKenna College in California and earned 

an LL.B. from Stanford University. He is a member of 

the California and U.S. Supreme Court bars. 

Lee Ann Elliott, Commissioner 

April 30, 1999 

Lee Ann Elliott was first appointed in 1981 and 

reappointed in 1987 and 1994. She served as Chairman in 1984, 1990 and 1996. 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. 

David M. Mason, Commissioner 

April 30, 2003 

David Mason was nominated to the Commission by 

President Clinton on March 4, 1998, and confirmed by 

the U.S. Senate on July 30, 1998. Prior to his appointment, Mr. Mason served as Senior Fellow, Congressional Studies, at the Heritage Foundation. He joined 

Heritage in 1990 as Director of Executive Branch 

Liaison. In 1995 he became Vice President, Government Relations, and in 1997 Mr. Mason was designated Senior Fellow with a focus on research, writing 

and commentary on Congress and national politics. 

Prior to his work at the Heritage Foundation, Commissioner Mason served as Deputy Assistant Secretary of Defense and served on the staffs of Senator 

John Warner, Representative Tom Bliley and thenHouse Republican Whip Trent Lott. He worked in 

numerous Congressional, Senate, Gubernatorial and 

Presidential campaigns, and was himself the Republican nominee for the Virginia House of Delegates in 

the 48th District in 1982. 

1

 Term expiration date. 
70 Appendices 

Commissioner Mason attended Lynchburg College 

in Virginia and graduated cum laude from Claremont 

McKenna College in California. He is active in political 

and community affairs at both the local and national 

level. He and his wife reside in Lovettsville, Virginia, 

with their six children. 

Danny L. McDonald, Commissioner 

April 30, 1999 

Now serving his fourth term as Commissioner, 

Danny 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 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, 1989 and 1995. 

Karl J. Sandstrom, Commissioner 

April 30, 2001 

Karl Sandstrom was nominated to the Commission 

by President Clinton on July 13, 1998, and confirmed 

by the U.S. Senate on July 30, 1998. Prior to his appointment, Commissioner Sandstrom served as 

Chairman of the Administrative Review Board at the 

Department of Labor. From 1988 to 1992 he was Staff 

Director of the House Subcommittee on Elections, 

during which time he also served as the Staff Director 

of the Speaker of the House’s Task Force on Electoral Reform. From 1979 to 1988, Commissioner 

Sandstrom served as the Deputy Chief Counsel to the 

House Administration Committee of the House of 

Representatives. In addition, he has taught public 

policy as an Adjunct Professor at American University. 

Commissioner Sandstrom received a B.A. degree 

from the University of Washington, a J.D. degree from 

George Washington University and a Masters of the 

Law of Taxation from Georgetown University Law 

Center. 

Statutory Officers 

James A. Pehrkon, Staff Director 

James Pehrkon became staff director on April 14, 

1999, after serving as Acting Staff Director for eight 

months. Prior to that, Mr. Pehrkon served 18 years as 

the Commission’s Deputy Staff Director with responsibilities for managing the FEC’s budget, administration 

and computer systems. Among the agency’s first employees, Mr. Pehrkon is credited with setting up the 

FEC’s data processing department and establishing 

the Data Systems Development Division. He directed 

the data division before assuming his duties as 

Deputy Staff Director. 

An Austin, TX, native, Mr. Pehrkon received an 

undergraduate degree from Harvard University and 

did graduate work in foreign affairs at Georgetown 

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 and for 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 A. 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. 

Later, she worked 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. 
71 

Appendix 2 

Chronology of Events 

January 

1 — Chairman Scott E. Thomas and Vice Chairman Darryl R. Wold begin their one-year 

terms of office. 

— Regulations on matching credit card and 

debit card contributions in Presidential campaigns take effect. 

4 — FEC releases Version 3.0 of FECFile electronic filing software. 

29 — PricewaterhouseCoopers submits audit report on FEC operations to Congress. 

31 — 1998 year-end report due. 

February 

3 — FEC conducts monthly roundtable on “Trade 

Association PACs: Fundraising Basics for 

Newcomers”. 

9 — Appeals court affirms lower court’s dismissal 

for lack of standing in National Committee of 

the Reform Party v. FEC. 

12 — FEC releases semiannual PAC count. 

23 — District court rules coordinated party expenditure limits unconstitutional (FEC v. Colorado Republican Federal Campaign Committee). 

— Georgia holds special general election in 6th 

Congressional District. 

25 — Commission approves reorganization of 

national voting system standards. 

March 

2 — FECFile 3.0 available for download on FEC 

web site. 

3 — FEC conducts monthly roundtable on “Candidate Preparations for the Next Election 

Cycle”. 

8 — FEC submits three urgent legislative recommendations to Congress and the President. 

9 — Vice Chairman Darryl R. Wold testifies before House Appropriations Subcommittee on 

FY 2000 budget request. 

15 — FEC names William J. Fleming personnel 

director. 

17 — Commission holds hearing on “Member” 

rulemaking. 

23 — Commission votes to appeal district court 

decision in Colorado Republicans case. 

24 — Commission holds hearing on public funding 

rules. 

25 — FEC certifies Bill Bradley eligible for primary 

matching funds. 

April 

1 — FEC submits 38 additional legislative recommendations to Congress and the President. 

— FEC publishes updated Campaign Guide for 

Congressional Candidates and Committees. 

7 — FEC conducts monthly roundtable on “FEC 

Rules on Use of the Internet to Raise 

Funds”. 

9 — FEC releases report on party activity for 

1997-98. 

12 — District court dismisses lawsuit on 1996 

Presidential debates (Perot 96 v. FEC). 

14 — Commission names James A. Pehrkon Staff 

Director. 

22-23— FEC holds corporate/labor conference in 

Washington, DC. 

28 — FEC releases report on congressional 

fundraising for 1997-98. 

29 — By 3-3 vote, Commission declines to act on 

express advocacy rulemaking petition. 

May 

1 — Louisiana holds special general election in 

1st Congressional District. 

5 — FEC conducts monthly roundtable on 

“Fundraising Through Payroll Deductions 

and Combined Dues/PAC Solicitations”. 

7 — Appeals court reverses lower court’s dismissal for lack of standing in Judicial Watch 

v. FEC. 

18 — Chairman Thomas and Vice Chairman Wold 

present FY 2000 budget request to Committee on House Administration. 

26 — FEC publishes Annual Report 1998. 

27 — FEC certifies Gary Bauer and Dan Quayle 

eligible for primary matching funds. 

— Commission approves final audit reports on 

1996 Clinton and Dole campaigns. 
72 Appendices 

June 

1 — FEC publishes Federal Elections 98. 

— FEC surveys committees on electronic filing. 

2 — FEC conducts monthly roundtable on “Candidate Reporting Basics”. 

7-8 — FEC holds membership/trade conference in 

Washington, DC. 

8 — FEC releases report on PAC activity for 

1997-98. 

15 — Commission appoints four new members to 

Office of Election Administration’s 1999 Advisory Panel and renews Panel’s charter 

through July 15, 2001. 

18 — Commission approves report on impact of 

National Voter Registration Act—the “motor 

voter” law. 

— Appeals court reverses lower court’s dismissal of charges regarding collecting and 

disguising impermissible contributions in 

1995-96 election (USA v. Hsia). 

28 — FEC certifies 2000 Democratic National 

Convention Committee, Inc. and the Committee on Arrangements for the 2000 Republican National Convention eligible for 

public funding. 

July 

1 — FEC certifies John McCain eligible for primary matching funds. 

— FEC publishes “Availability of FEC Information” brochure. 

2 — Commission modifies procedures for Presidential and Vice Presidential candidates’ 

personal financial reports. 

7 — FEC conducts monthly roundtable on “Using 

Prizes or Entertainment to Raise SSF 

Funds”. 

19 — Commission approves revisions to National 

Mail Voter Registration form. 

20 — FEC releases semiannual PAC count. 

29 — FEC holds partnership/limited liability company conference in Washington, DC. 

30 — FEC certifies Elizabeth Dole eligible for primary matching funds. 

31 — Mid-year report due. 

August 

2 — District court rules on express advocacy and 

coordination by nonprofit corporation (FEC 

v. Christian Coalition). 

4 — FEC conducts monthly roundtable on “Corporate Mergers and Spin-Offs—Effect on the 

SSF”. 

6-7 — Office of Election Administration Advisory 

Panel meets in Chicago. 

15 — FEC makes advisory opinions issued since 

1977 available on Web site. 

17 — Electronic Filing Office offers classes on 

FECFile 3 software. 

18 — District court finds campaign illegally accepted corporate contributions made in others’ names (FEC v. Friends of Jane 

Harman). 

19 — Commission approves Notice of Availability 

on petition to repeal regulations governing 

corporate/labor voting records and voter 

guides 

24 — Electronic Filing Office offers classes on 

FECFile 3 software. 

31 — Electronic Filing Office offers classes on 

FECFile 3 software. 

September 

1 — FEC conducts monthly roundtable on 

“Fundraising Through Payroll Deductions”. 

15 — District court finds alleged excessive in-kind 

contributions to be permissible independent 

expenditures (FEC v. Public Citizen). 

21 — California holds special general election in 

42nd Congressional District. 

22 — FEC releases mid-year congressional and 

party committee fundraising figures. 

27-29— FEC holds regional conference in Chicago, 

IL. 

29 — President Clinton signs FY 2000 appropriation bill, mandating electronic filing, administrative fines and election-cycle reporting. 

— District court rules on express advocacy and 

coordination by PAC (FEC v. Freedom’s 

Heritage Forum). 
Appendices 73 

30 — FEC certifies Pat Buchanan, Al Gore, Alan 

Keyes and Lyndon LaRouche eligible for 

primary matching funds. 

October 

6 — FEC conducts monthly roundtable on “Making Contributions to Federal Candidates: 

Designations, Redesignations and 

Reattributions”. 

8 — Appeals court reverses district court’s dismissal of alleged foreign and corporate, hard 

and soft money contributions made in others’ names (USA v. Kanchanalak). 

14 — Commission approves state filing waiver 

program. 

— District court finds state party impermissibly 

spent soft money for voter drive (FEC v. 

California Democratic Party). 

18 — District court finds FEC unreasonably delayed action on complaint and orders 

agency to conclude matter within 30 days 

(Democratic Senatorial Campaign Committee v. FEC). 

26 — Parties settle case in which plaintiff sought 

to recover illegal contributions the Dole campaign had disgorged to US Treasury (Simon 

C. Fireman v. USA). 

29 — FEC publishes Selected Court Case Abstracts. 

November 

2 — Regulations on definition of “member” of 

membership organization take effect. 

3 — FEC conducts monthly roundtable on “Update on New FEC Regulations: Definition of 

Member; Contributions from Limited Liability 

Companies”. 

— Regulations on party coordinated expenditures and costs of media travel with publicly 

financed Presidential campaigns take effect. 

5 — Commission publishes Notice of Inquiry on 

use of Internet for campaign activity. 

12 — Regulations on treatment of limited liability 

companies under Federal Election Campaign Act take effect. 

— Regulations on public financing of Presidential primary and general election candidates 

take effect. 

15-17— FEC holds regional conference in San Francisco, CA. 

22 — FEC certifies Reform Party 2000 Convention 

Committee eligible for public funding. 

December 

1 — FEC conducts monthly roundtable on “Reporting Requirements for 2000: Deadlines; 

Pitfalls to Avoid”. 

2 — Commission approves Notice of Proposed 

Rulemaking on coordinated communications 

supporting or opposing candidates. 

8 — Commission grants state filing waivers for 

12 states. 

9 — FEC submits FY2001 budget request for 

$41.323 million and 356 personnel. 

16 — Commission elects Darryl R. Wold 2000 

Chairman and Danny L. McDonald 2000 

Vice Chairman. 

23 — FEC launches redesigned Web site. 
General Counsel 

Public Financing, 

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 

Press Office 

Policy 3 

Reports 

Analysis 

Litigation 

Enforcement 

The Commissioners 

Scott E. Thomas, Chairman1 

Darryl R. Wold, Vice Chairman2 

Lee Ann Elliott, Commissioner 

David M. Mason, Commissioner 

Danny L. McDonald, Commissioner 

Karl J. Sandstrom, Commissioner 

75 

Appendix 3 

FEC Organization Chart 

1

 Darryl R. Wold was elected 2000 Chairman. 

2 Danny L. McDonald was elected 2000 Vice Chairman. 

3 Policy covers regulations, advisory opinions, legal review and administrative law. 
77 

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 202-694-1100. 

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—no more than three of 

whom may represent the same political party—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: 202-694-1006; 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. 
78 Appendices 

Among its duties related to internal operations, the 

division provides computer support for the agency’s 

automation systems and for administrative functions 

such as management information, document tracking, 

personnel and payroll systems as well as the MUR 

prioritization system. 

Local phone: 202-694-1250; 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 lead 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: 202-694-1100; tollfree 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 is required to report to Congress on a semiannual basis the activities 

of the Office of Inspector General. The semiannual 

report to Congress may include a description of any 

serious problems or deficiencies in agency operations 

and of any corrective steps taken by the agency. 

Law Library 

The Commission law library, a government document depository, is located on the eighth floor and is 

open to the public. The library contains a basic reference collection, which includesmaterials on campaign 

finance reform, election law and current political activity. Visitors to the law library may use its computers to 

access the Internet and FEC databases. FEC advisory opinions and computer indices of enforcement 

proceedings (MURs) may be searched in the law 

library or the Public Disclosure Division. Local phone: 

202-694-1600; toll-free: 800-424-9530. 
Appendices 79 

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 answers questions from the public and briefs 

foreign delegations on the U.S. election process, including voter registration and voting statistics. 

Local phone: 202-694-1095; 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 labormanagement relations program and a comprehensive 

package of employee benefits, wellness and familyfriendly 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: 202-694-1220; 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 the 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 Office receives incoming 

reports and processes them into formats which can 

be easily retrieved. These formats include paper, 

microfilm and digital computer images that can be 

easily accessed from terminals in the Public Records 

Office and those of agency staff. 

The Public Disclosure Division also manages 

Faxline, an automated faxing service for ordering FEC 

documents, forms and publications, available 24 

hours a day, 7 days a week. 

Local phone: 202-694-1120; toll-free phone: 800-

424-9530 (press 3 on a touch-tone phone); Faxline: 

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 
80 Appendices 

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: 202-694-1130; toll-free phone 

800-424-9530 (press 2 on a touch-tone phone). 

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. 
Appendix 81 

Appendix 5 

Statistics on Commission 

Operations 

Summary of Disclosure Files 

Total Filers 

Existing in 

1999 

Filers 

Terminated 

as of 

12/31/99 

Continuing 

Filers as of 

12/31/99 

Number of 

Reports and 

Statements 

in 1999 

Gross Receipts 

in 1999 

(dollars) 

Gross 

Expenditures 

in 1999 

(dollars) 

Presidential Candidate 

Committees 312 26 286 720 265,106,053 211,078,429 

Senate Candidate Committees 571 85 486 1,178 152,213,920 66,693,825 

House Candidate Committees 2,603 330 2,273 5,027 215,412,861 118,367,328 

Party Committees 609 49 561 2,116 508,561,330 413,081,658 

Federal Party Committees 

Reported Nonfederal

474 49 425 1,739 379,267,636 321,805,848 

Party Activity 136 0 136 377 129,293,694 91,275,810 

Delegate Committees 15 0 15 9 0 0 

Nonparty Committees 4,185 277 3,908 18,522 266,258,773 205,669,244 

Labor Committees 339 22 317 1,895 59,818,834 43,620,681 

Corporate Committees 1,673 136 1,537 8,461 78,639,371 64,753,177 

Membership, Trade and

 Other Committees 2,173 119 2,054 8,166 127,800,568 97,295,386 

Communication Cost Filers 234 0 234 19 0 177,719 

Independent Expenditures by 

Persons Other Than 

Political Committees 

370 7 363 62 217,444 214,019 
82 Appendix 

Divisional Statistics for Calendar Year 1999 

Total 

Reports Analysis Division 

Documents processed 34,414 

Reports reviewed 33,815 

Telephone assistance and meetings 8,928 

Requests for additional information (RFAIs) 7,860 

Second RFAIs 2,938 

Data coding and entry of RFAIs and 

miscellaneous documents 15,218 

Compliance matters referred to Office 

of General Counsel or Audit Division 118 

Data Systems Development Division * 

Documents receiving Pass I coding 32,885 

Documents receiving Pass III coding 31,196 

Documents receiving Pass I entry 34,689 

Documents receiving Pass III entry 31,353 

Transactions receiving Pass III entry 

• In-house 262,372 

• Contract 489,068 

Public Records Office 

Campaign finance material processed 

(total pages) 818,970 

Cumulative total pages of documents 

available for review 16,290,664 

Requests for campaign finance reports 3,369 

Visitors 9,413 

Total people served 12,782 

Information telephone calls 9,849 

Computer printouts provided 34,956 

Faxline requests 3,836 

Total income (transmitted to U.S. Treasury) $30,497 

Contacts with state election offices 4,616 

Notices of failure to file with state 

election offices 320 

Total 

Administrative Division 

Contracting and procurement transactions 1,079 

Publications prepared for print 32 

Pages of photocopying 13,950,200 

Information Division 

Telephone inquiries 53,137 

Information letters 89 

Distribution of FEC materials 9,220 

Prior notices (sent to inform filers 

of reporting deadlines) 15,969 

Other mailings 10,877 

Visitors 59 

Public appearances by Commissioners 

and staff 130 

Roundtable workshops 10 

Publications 22 

Press Office 

News releases 130 

Telephone inquiries from press 10,229 

Visitors 1,907 

Freedom of Information Act 

(FOIA) requests 131 

Fees for materials requested under FOIA 

(transmitted to U.S. Treasury) $6,500 

Office of Election Administration 

Telephone inquiries 5,787 

National surveys conducted 6 

Individual research requests 367 

Materials distributed * 6,104 

Election presentations/conferences 22 

Foreign briefings 76 

Publications 3 

* 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. 
Appendix 83 

Total 

Office of General Counsel 

Advisory opinions 

Requests pending at beginning of 1999 2 

Requests received 40 

Issued 34 

Not issued * 1 

Pending at end of 1999 7 

Compliance cases † 

Pending at beginning of 1999 212 

Opened 118 

Closed 129 

Pending at end of 1999 201 

Litigation 

Cases pending at beginning of 1999 31 

Cases opened 7 

Cases closed 12 

Cases pending at end of 1999 26 

Cases won 8 

Cases lost 1 

Cases settled‡ 3 

Law Library

 Telephone inquiries 988 

 Visitors 629 

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 

1997 6 6 12 

1998 5 7 12 

1999 20 7 27 

Total 445 133 578 

* One advisory opinion request was withdrawn by the requester. 

† In annual reports previous to 1994, the category “compliance 

cases” included only Matters Under Review (MURs). As a result of 

the Enforcement Priority System (EPS), the category has been 

expanded to include internally-generated matters in which the 

Commission has not yet made reason to believe findings. 

‡ Cases settled includes cases withdrawn, dismissed or remanded. 

* 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. 
84 Appendix 

Audits Completed by Audit Division, 1975 – 1999 

Total 

Presidential 112 

Presidential Joint Fundraising 12 

Senate 23 

House 164 

Party (National) 47 

Party (Other) 139 

Nonparty (PACs) 81 

Total 578 

Status of Audits, 1999 

Pending Opened Closed Pending 

at Beginning at End 

of Year of Year 

Presidential 6 0 6 0 

Presidential Joint Fundraising 1 0 1 0 

Senate 0 1 0 1 

House 0 16 12 4 

Party (National) 1 0 1 0 

Party (Other) 5 7 4 8 

Nonparty (PACs) 4 0 3 1 

Total 17 24 27 14 
85 

Appendix 6 

1999 Federal Register 

Notices 

1999-1 

Filing Dates for the Georgia Special Election (64 FR 

3298, January 21, 1999) 

1999-2 

Definition of Express Advocacy; Notice of Availability 

of Rulemaking Petition (64 FR 5200, February 3, 

1999) 

1999-3 

Definition of “Member” of a Membership Association; 

Notice of Public Hearing (64 FR 8270, February 19, 

1999) 

1999-4 

Public Financing of Presidential Primary and General 

Election Candidates; Notice of Public Hearing (64 FR 

8270, February 19, 1999) 

1999-5 

Electronic Freedom of Information Act Amendments; 

Notice of Proposed Rulemaking (64 FR 10405, March 

4, 1999) 

1999-6 

Filing Dates for the Louisiana Special Election (64 FR 

13582, March 19, 1999) 

1999-7 

Definition of Express Advocacy; Notice of Disposition 

on Petition for Rulemaking (64 FR 27478, May 20, 

1999) 

1999-8 

Presidential Debates; Notice of Availability of Petition 

for Rulemaking (64 FR 31159, June 10, 1999) 

1999-9 

Matching Credit Card and Debit Card Contributions in 

Presidential Campaigns; Final rules and transmittal of 

regulations to Congress (64 FR 32394, June 17, 

1999) 

1999-10 

Treatment of Limited Liability Companies Under Federal Election Campaign Act; Final Rules and Transmittal of Regulations to Congress (64 FR 37397, July 

12, 1999) 

1999-11 

Candidate Debates; Extension of Comment Period 

(64 FR 39095, July 21, 1999) 

1999-12 

Definition of “Member” of a Membership Organization; 

Final Rules and Transmittal of Regulations to Congress (64 FR 41266, July 30, 1999) 

1999-13 

Party Committee Coordinated Expenditures; Costs of 

Media Travel with Publicly Financed Presidential Candidates; Final Rules and Transmittal of Regulations to 

Congress (64 FR 42579, August 5, 1999) 

1999-14 

Voting Records and Voter Guides; Notice of Availability of Rulemaking Petition (64 FR 46319, August 25, 

1999) 

1999-15 

Matching Credit Card and Debit Card Contributions in 

Presidential Campaigns; Final Rules and Transmittal 

of Regulations to Congress (64 FR 42584, August 5, 

1999) 

1999-16 

Filing Dates for the California Special Election (64 FR 

42696, August 5, 1999) 

1999-17 

Public Financing of Presidential Primary and General 

Election Candidates; Final Rules and Transmittal of 

Regulations to Congress (64 FR 49355, September 

13, 1999) 

1999-18 

Matching Credit Card and Debit Card Contributions in 

Presidential Campaigns; Announcement of Effective 

Date (64 FR 51422, September 23, 1999) 
86 Appendix 

1999-19 

Treatment of Limited Liability Companies Under Federal Election Campaign Act; Announcement of Effective Date (64 FR 55125, October 12,1999) 

1999-20 

Reporting by Political Action Committees; Notice of 

Availability of Rulemaking Petition (64 FR 55440, 

October 13, 1999) 

1999-21 

Definition of “Member” of a Membership Organization; 

Announcement of Effective Date (64 FR 59113, November 2, 1999) 

1999-22 

Matching Credit Card and Debit Card Contributions in 

Presidential Campaigns; Announcement of Effective 

Date (64 FR 59607, November 3, 1999) 

1999-23 

Party Committee Coordinated Expenditures; Costs of 

Media Travel with Publicly Financed Presidential 

Campaigns; Announcement of Effective Date (64 FR 

59606, November 3, 1999) 

1999-24 

Use of Internet for Campaign Activity; Notice of Inquiry (64 FR 60360, November 5, 1999) 

1999-25 

Public Financing of Presidential Primary and General 

Election Candidates; Announcement of Effective Date 

(64 FR 61475, November 12, 1999) 

1999-26 

Audit Procedures, Presidential Primary/General 

“Bright Line,” and Vice Presidential Committees; Final 

Rules and Transmittal of Regulations to Congress (64 

FR 61777, November 15, 1999) 

1999-27 

General Public Political Communications Coordinated 

with Candidates; Supplemental Notice of Proposed 

Rulemaking (64 FR 68951, December 9, 1999)