Federal 

Election 

Commission 

Annual Report 2000 
Federal 

Election 

Commission 

Annual Report 2000 

Federal Election Commission 

Washington, DC 20463 
Commissioners 

Danny L. McDonald, Chairman 

David M. Mason, Vice Chairman 

Karl J. Sandstrom, Commissioner 

Bradley A. Smith, Commissioner 

Scott E. Thomas, Commissioner 

Darryl R. Wold, Commissioner 

Statutory Officers 

James A. Pehrkon, Staff Director 

Lois G. Lerner, Acting General Counsel 

Lynne A. McFarland, Inspector General 

The Annual Report is prepared by: 

Louise D. Wides, Assistant Staff Director, 

Information Division 

Gregory J. Scott, Deputy Assistant Staff Director, 

Information Division 

Kathleen K. Miller, Public Affairs Specialist, 

Information Division 

Robert W. Biersack, Supervisory Statistician, 

Data Division 

Table of Contents 

Introduction 1 

Chapter One 

Keeping the Public Informed 

Public Disclosure 3 

Educational Outreach 6 

Office of Election Administration 8 

Chapter Two 

Interpreting and Enforcing the Law 

Regulations 9 

Advisory Opinions 9 

Enforcement 10 

Administrative Fines Program 11 

Alternative Dispute Resolution Program 13 

Chapter Three 

Presidential Public Funding 

Shortfall 15 

Certification of Public Funds 15 

Use of Public Funds 17 

Public Funding Regulations 18 

Presidential Debate Lawsuits 18 

Repayment of Public Funds–1996 Election 19 

Chapter Four 

Legal Issues 

Express Advocacy 21 

Corporate Contributions 22 

Coordination 23 

Use of Internet 26 

Soft Money 28 

American Indian Tribes 29 

Chapter Five 

The Commission 

Commissioners 31 

General Counsel 31 

Inspector General 31 

ADR and Administrative Fines Offices 31 

Equal Employment Opportunity 31 

Personnel 32 

The FEC’s Budget 32 

Chapter Six 

Legislative Recommendations 35 

Chapter Seven 

Campaign Finance Statistics 55 

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. 2000 Federal Register Notices 85 

7. Summaries of Selected New Regulations 87 
Table of Charts 

Chapter One 

Keeping the Public Informed 

Chart 1-1: 

Size of Detailed Database by Election Cycle 5 

Chapter Two 

Interpreting and Enforcing the Law 

Chart 2-1: 

Conciliation Agreements by Calendar Year 11 

Chart 2-2: 

Median Civil Penalty by Calendar Year 11 

Chart 2-3: 

Ratio of Active to Inactive Cases by Calendar Year 12 

Chart 2-4: 

Cases Dismissed under EPS 12 

Chart 2-5: 

Monthly Average Number of Respondents and 

Pending Cases by Calendar Year 12 

Chart 2-6: 

Percentage of Reports Filed Late 13 

Chapter Three 

Presidential Public Funding 

Chart 3-1: 

Matching Fund Certifications 16 

Chapter Five 

The Commission 

Chart 5-1: 

Functional Allocation of Budget 32 

Chart 5-2: 

Divisional Allocation 33 

Chapter Seven 

Campaign Finance Statistics 

Chart 7-1: 

Number of PACs, 1974-2000 55 

Chart 7-2: 

House Candidates’ Sources of Receipts: 

Election Cycle 56 

Chart 7-3: 

Senate Candidates’ Sources of Receipts: 

Election Cycle 57 

Chart 7-4: 

House and Senate Activity by Election Cycle 58 

Chart 7-5: 

PAC Contributions to Candidates by Party 

and Type of PAC 59 

Chart 7-6: 

PAC Contributions to House and Senate 

Candidates by Party and Candidate Status 60 

Chart 7-7: 

PAC Contributions to House Candidates 

by Type of PAC and Candidate Status 61 

Chart 7-8: 

Major Party Federal Account Receipts: 2000 62 

Chart 7-9: 

Party Federal and Nonfederal Receipts 63 

Chart 7-10: 

Sources of Party Receipts 64 

Chart 7-11: 

Receipts of Presidential Primary Campaigns 

by Source 65 

Chart 7-12: 

2000 General Election: Funding Sources 

of Candidates Receiving Public Grants 66 

Chart 7-13: 

Presidential Spending by 2000 General 

Election Campaigns 67 
1 

Introduction 

The Federal Election Commission introduced a 

number of innovations during the year designed to 

improve disclosure, promote compliance and streamline agency operations. 

With respect to disclosure, new electronic filing 

regulations, effective January 1, 2001, require filers to 

submit their campaign finance reports electronically if 

they raise or spend over $50,000 in a calendar year, 

or expect to do so. Since reports filed electronically 

are publicly available almost instantaneously, the new 

regulations will result in more timely disclosure of 

campaign finance data. 

During the 2000 campaign, all Presidential candidates who received public funding were required to 

file their reports electronically. This process permitted 

immediate comprehensive disclosure of information 

from these reports. In addition, more than 1,000 other 

committees voluntarily filed electronically during 2000. 

Other disclosure rules that take effect in 2001 require candidates to disclose their campaign activity on 

an election-cycle basis, rather than the calendar-year 

basis used in the past. The change makes it easier for 

campaigns, the public and the Commission to track 

candidates’ aggregate receipts and disbursements. 

The Commission’s new Administrative Fines program streamlines the agency’s processing of violations 

involving committees that file reports late or fail to file. 

Like the Commission’s enforcement process, the Administrative Fines program encourages compliance 

and, thereby, should improve disclosure. The rules 

implementing the program took effect July 14, 2000. 

Another compliance-related initiative, the 

Commission’s new Alternative Dispute Resolution 

(ADR) program, encourages settlements outside the 

traditional enforcement and litigation processes. The 

Commission anticipates that the pilot program will help 

reduce the agency’s burgeoning enforcement workload. 

These innovations, combined with the 

Commission’s oversight of the financing of the Presidential and Congressional elections, made 2000 a 

busy and productive year at the FEC. 

The material that follows details the Commission’s 

activities during the year. Additional information concerning most matters may be found in the monthly 

issues, published in 2000, of the FEC newsletter, the 

Record. 
3 Chapter One 

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, new regulations and other innovations introduced during 2000 promise to enhance 

and streamline the disclosure and educational outreach programs. 

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 2000. 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. 

New disclosure regulations, combined with continued advances in computer technology, greatly enhanced the disclosure process during 2000. As detailed below, these changes are expected to benefit 

both the public and the regulated community. 

New Regulations 

During 2000, the Commission promulgated regulations to implement four disclosure-related legislative 

amendments. The first mandates electronic filing for 

filers whose financial activity exceeds a certain 

threshold. The second requires authorized candidate 

committees to report on an election-cycle (rather than 

calendar-year) basis. The third relieves committees of 

the obligation to file copies of their FEC reports with 

state election offices in certain states. The fourth expands the Freedom of Information Act (FOIA) to include electronic records. 

Electronic Filing 

Beginning with the reporting periods that start on or 

after January 1, 2001, all persons required to file reports with the FEC who receive contributions or make 

expenditures in excess of $50,000 in a calendar year, 

or who expect to do so, must submit their campaign 

finance reports electronically. Any filers who are required to file electronically, but who file on paper, will 

be considered nonfilers and may be subject to enforcement action. 

The new rules, approved by the Commission on 

June 15, will provide faster disclosure of filed reports 

and streamline operations for both filers and the Commission. The Commission estimates, based on data 

from the 1996 and 1998 election cycles, that, with the 

$50,000 threshold, 96 to 98 percent of all financial 

activity reported to the FEC will be available almost 

immediately on the FEC’s Web site. 

Mandatory electronic filing comes on the heels of 

the Commission’s successful voluntary electronic 

filing program. Launched in January 1997, the voluntary program permitted 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 voluntary electronic filing has been 

smooth and impressive. In April 1998, 50 committees 

had filed electronically. Now, just two years later, that 

number has increased to 1,033 committees, more 

than half of whom began filing electronically in 2000. 

To date, electronic filers have transmitted reports to 

the Commission disclosing over $1 billion in transactions. Careful planning has ensured that this growth, 

and the rapid expansion that will occur when mandatory electronic filing begins, will not stress the electronic filing system. 

Building on this success, the Commission introduced an additional on-line filing system in October 

2000. In order to reduce the number of faxed, mailed 

and hand-delivered 48-hour notices (disclosing lastminute contributions of $1,000 or more), the Commission developed a Web-based filing system to enable 

candidate committees to create and submit their 48-

hour notices entirely on line. Using the new system, 

even campaigns that do not file electronically and 

those that use software that does not generate the 
4 Chapter One 

48-Hour disclosure form (FEC Form 6) can file their 

48-Hour Notices on line. 

As part of the Commission’s 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. 

A complete summary of the new electronic filing 

regulations appears in Appendix 7. 

Election Cycle Reporting 

On July 5, 2000, the Commission approved new 

regulations requiring authorized committees of federal 

candidates to aggregate and report receipts and disbursements on an election-cycle basis rather than on 

the traditional calendar-year basis. These revised 

regulations affect reports covering periods that begin 

on or after January 1, 2001. The new rules do not 

affect PACs or party committees. 

The change to election cycle reporting is intended 

to simplify recordkeeping and reporting. Under the old 

rules, candidate committees monitored contribution 

limits on a per-election basis, but disclosed their financial activity on a calendar-year-to-date basis. Under the new system, committees report all of their 

receipts and disbursements on an election-cycle basis. 11 CFR 104.3. For example, campaigns must 

itemize a donor’s contributions once they exceed 

$200 for the election cycle, rather than for the calendar year. Likewise, candidate committees must itemize disbursements to a person once they aggregate in 

excess of $200 within the election cycle. 

Under FEC regulations, an election cycle typically 

begins the day after the general election for a seat or 

office and ends on the day of the next general election for that seat or office. The length of the election 

cycle, thus, depends on the office sought: the election 

cycle is two years for House candidates, six years for 

Senate candidates and four years for Presidential 

candidates. 

A complete summary of the new regulations appears in Appendix 7. 

State Filing Waivers 

On March 16, 2000, the Commission approved 

revisions to its rules governing the filing of campaign 

finance reports with state officers and the duties of 

state officers concerning the reports. The regulations, 

which took effect June 7, 2000, codify the 

Commission’s state waiver program that began in 

October 1999. 

Under the program, filers whose reports are available on the FEC Web site need not file duplicate copies of their reports in states that provide adequate 

public access to the Commission’s site. 

Initially, the waiver did not apply to Senate committees because their reports—which are filed with the 

Secretary of the Senate—were not available on the 

FEC Web site. Thanks to a joint effort by the Commission and Secretary of the Senate, the Commission 

was able to extend the State Filing Waiver Program to 

include campaigns for U.S. Senate and other political 

committees that support only U.S. Senate candidates. 

At the close of 2000, 46 states/territories had qualified for the state filing waiver.1 

EFOIA 

In another disclosure-related regulatory project, on 

February 17, 2000, the Commission approved rules 

implementing the Electronic Freedom of Information 

Act Amendments of 1996 (EFOIA). The Freedom of 

Information Act (FOIA) provides public access to all 

federal agency records except those that are protected from release by specified exemptions. The 

EFOIA extends that access to electronic records and 

1

 As of December 31, 2000, the Commission had certified that the following states and territories qualify for filing 

waivers: Alabama, American Samoa, Arkansas, California, 

Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, 

Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, 

Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New 

Mexico, New York, North Carolina, North Dakota, Ohio, 

Oklahoma, Oregon , Pennsylvania, Rhode Island, South 

Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, 

Virginia, Virgin Islands, Washington, West Virginia, Wisconsin and Wyoming. 
Keeping the Public Informed 5 

makes other changes in FOIA procedures that are 

designed to expedite and streamline the process by 

which agencies disclose information generally. The 

EFOIA requires each agency to make reasonable 

efforts to ensure that its records can be reproduced 

and searched electronically, except when such efforts 

would significantly interfere with the operation of the 

agency’s automated information system. The Commission has amended its FOIA rules to apply these 

statutory changes to its electronic records and procedures. 

New Disclosure Forms for 2001 

In light of the new electronic filing and election 

cycle reporting requirements, the Commission updated its campaign finance disclosure forms during 

2000. Some of the forms were reformatted so that 

staff could process them faster and more easily and 

so that they could eventually be read electronically 

through optical character recognition (OCR), in anticipation of the Commission’s future use of this technology. The Commission plans to make the new forms 

available for use in the first reporting periods covering 

activity in 2001. 

Imaging and Processing Campaign Finance Data 

For several years, the Commission has scanned all 

of the paper reports filed with the agency to create 

digital images of the documents. Since Senate committees file with the Secretary of the Senate rather 

than the FEC, their reports have not been scanned. In 

September 2000 that changed, thanks to a joint effort 

of the Commission and the Secretary’s office. Now, 

the Secretary of the Senate scans all of the paper 

reports it receives and makes the images available to 

the FEC. As a result, the public can view digital images of all types of reports 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 taken 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. 

CHART 1-1 

Size of Detailed Database by Election Cycle 

Year Number of Detailed Entries* 

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 

2000 2,390,837 

* Figures for even-numbered years reflect the cumulative 

total for each two-year election cycle. 

† The FEC began entering nonfederal account data in 1991. 

Public Access to Campaign Data 

During 2000, the Commission continued to expand 

access to campaign finance data via its Web site— 

www.fec.gov. In September, the agency enhanced 

the site’s query system by offering visitors quick access to summary statistical information on candidates, 

PACs and political party committees. Visitors could 

select by state, by political party or by candidate status (incumbent, challenger or open-seat), then simply 

click to access detailed lists of individual or PAC contributions. These new features supplement the site’s 
6 Chapter One 

existing query system, which allows 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, enables researchers 

to select information in a flexible way. For example, 

the database can instantly produce a profile of a 

committee’s financial activity for each election cycle. 

As another example, researchers can customize their 

searches for information on contributions by using a 

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

name, date, amount or geographic location). 

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. Visitors could also access 

the FEC’s Web site, which offers search and retrieval 

of more than 3 million images of report pages dating 

back to 1993 and over 2 million database entries 

since 1997. 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. 

Review of Reports 

The Commission’s Reports Analysis Division 

(RAD) reviews all reports to ensure that the public 

record provides a full and accurate portrayal of campaign finance activity and to track compliance with the 

statute and regulations. When reports 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, which are added to the public record. Apparent 

violations, however, may be referred to the Audit Division or to the Office of General Counsel for possible 

enforcement action. 

During 2000, reports analysts reviewed thousands 

of reports, which disclosed significantly more financial 

activity than was reported in 1998. Although several 

hundred committees voluntarily filed electronically, 

most committees continued to file paper reports. With 

the advent of mandatory electronic filing, the Commission will be able to further automate its review process. During 2000, RAD staff worked with a contractor to develop such a program. 

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 fifth year of operation, the Commission’s Web 

site continued to offer visitors a variety of resources. 

On February 1, 2000, the FEC added agenda documents for its public meetings to the site. In addition, 

visitors could continue to search for advisory opinions 

(AOs) on the Web by using words or phrases or by 

entering the year and AO number, and could access a 

variety of rulemaking documents, including Notices of 

Proposed Rulemaking and final rules. Visitors could 

also access brochures on a variety of topics, read 

agency news 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. 

The site averaged about 2 million hits per month in 

2000, but logged more than 10 million hits in October, 

the highest monthly usage ever. 

Telephone Assistance 

A committee’s first contact with the Commission is 

often a telephone call to the agency’s toll-free infor-
Keeping the Public Informed 7 

mation 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 2000, the Information Division responded to 54,178 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 2000, 1,714 callers sought information from 

the 24-hour Faxline and received 2,319 documents. 

Reporting Assistance 

During 2000, 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. 

Roundtables 

The FEC continued its roundtable sessions for the 

regulated community. The roundtables, limited to 10-

12 participants per session, focused on a range of 

topics from soliciting funds via the Web to completing 

FEC reports. 

Conferences 

During 2000, the agency conducted a full program 

of conferences to help candidates and committees 

understand and comply with the law. The Commission 

hosted conferences in Washington, DC, for candidates, corporations and labor organizations, and 

membership and trade associations. In addition, the 

agency held a regional conference in Miami for all 

types of committees. 

The conferences featured hands-on workshops on 

the fundamental areas of the law and specialized 

sessions 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 2000, including student 

groups and 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 16,714 calls and visits from 

media representatives and prepared 84 news releases. Many of these releases alerted reporters to 

new campaign finance data and illustrated the statistics in tables and graphs. 

Publications 

During 2000, 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. 

Among the new publications was a brochure on the 

Commission’s new Alternative Dispute Resolution 

(ADR) Program (discussed in Chapter Two). The 

brochure offers a step-by-step description of the ADR 

process. 

As in past years, the Commission continued to 

provide more than 10,000 free subscriptions to its 

monthly newsletter, the Record. The newsletter summarizes recent advisory opinions, compliance cases, 

audits, litigation and changes in regulations. It also 

includes graphs and charts on campaign finance statistics. During 2000, the Commission published a 

special Record Supplement summarizing regulatory 

changes since 1995. 

The Combined Federal/State Disclosure Directory 

2000 directs researchers to federal and state offices 

that provide information on campaign finance, candi-
8 Chapter One 

dates’ 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 

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 2000—a summary of state 

campaign finance laws—and posted “quick reference 

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

Office of Election Administration 

In 2000, the Office of Election Administration (OEA) 

continued its work in updating the Voting Systems 

Standards. During the first half of the year, staff attended three public meetings with the members of the 

National Association of State Election Directors 

(NASED) Voting Systems Board, vendors of voting 

systems and team members from American Management Systems (AMS), contractors to the FEC on 

Standards, to discuss pertinent issues, to listen to 

concerns from the vendor community, and to refine 

and review initial drafts of the Standards. 

OEA staff also assisted the National Taskforce on 

Election Accessibility in its study of polling place accessibility for the elderly and disabled; it mailed survey forms to approximately 8,000 local election officials across the U.S. 

On August 10, 2000, the OEA convened a one day 

meeting of its Advisory Panel of state and local election officials in Washington, DC. The meeting featured 

lectures and discussion on the Supreme Court ruling 

in California Democratic Party v. Jones and its effect 

on blanket primaries. Other agenda items included a 

review of legislation concerning polling place accessibility, internet voting and a briefing on the status of the 

Voting Systems Standards update. 

Over the course of the year, staff also worked to 

make a significant amount of new information available through the FEC Web site (www.fec.gov). This 

information included: 

• Answers to frequently asked questions about voter 

registration, state election day and voting procedures, and absentee voting; 

• Voter registration and turnout demographics from 

the 1998 general election; 

• Constitutional provisions relating to elections; 

• Statutory provisions relating to elections; 

• The administrative structure of state election offices; 

and 

• Updates to the National Mail Voter Registration form. 

During the hectic pre-election season, OEA staff 

conducted briefings on U.S. election procedures for 

over 1,100 foreign journalists, legislators and election 

officials. 
9 Chapter Two 

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. During 

2000, the Commission introduced two new programs—Administrative Fine and Alternative Dispute 

Resolution—that should similarly foster compliance. 

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 

accompanying Explanation and Justification are published in the Federal Register and sent to the U.S. 

House of Representatives and Senate. The Commission publishes a notice of effective date after the final 

rules have been before Congress for 30 legislative 

days. 

Rulemakings Completed in 2000 

The Commission completed work on the following 

new rules during 2000: 

• Rules mandating electronic filing for committees 

whose financial activity exceeds $50,000 per year. 

Took effect January 1, 2001. (See page 3.) 

• Rules changing the reporting aggregation requirements for candidate committees from a calendaryear to an election-cycle basis. Took effect January 

1, 2001. (See page 4.) 

• Rules granting certain states a waiver from the requirement to receive and maintain copies of reports 

and statements filed by federal committees. Took 

effect June 7, 2000 . (See page 4.) 

• Rules implementing an Administrative Fine Program 

for committees that fail to file reports or file late. 

Took effect July 14, 2000. (See page 11.) 

• Amendments to the FEC’s Freedom of Information 

Act regulations to comply with the Electronic Freedom of Information Act Amendments of 1996 

(EFOIA), which were enacted to make government 

documents available by electronic means. Took 

effect March 27, 2000 . (See page 4.) 

• Rules governing coordinated communications made 

in support of or in opposition to clearly identified 

candidates by persons other than candidates, authorized committees and party committees. Approved 

November 30, 2000. (See page 24.) 

Other Rulemakings in Process 

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

• It reviewed and analyzed more than 1,200 comments received in response to a Notice of Inquiry 

regarding the use of the Internet to conduct campaign activity. (See page 26.) 

• It began consideration of final rules on allocation of 

expenses between federal and nonfederal accounts. 

(Soft Money, see page 28.) 

• It declined to act on a rulemaking petition filed by the 

Project on Government Oversight (POGO) that recommended changes to the rules governing reporting 

by political action committees. 

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 
10 Chapter Two 

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 41 advisory opinions in 

2000. Of that number, seven involved use of the 

Internet, and at least one examined party committees’ 

use of “soft money.” These and other 2000 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 

(OGC) determines whether the document satisfies 

specific criteria for a proper complaint. 

The General Counsel recommends whether the 

Commission should find “reason to believe” and open 

an investigation. If the Commission finds there is “reason to believe” the respondents have committed a 

violation, it notifies the respondents and begins to 

investigate the matter. The Commission has authority 

to subpoena information and can ask a federal court 

to enforce a subpoena. At the end of an investigation, 

the General Counsel prepares a brief, which states 

the issues involved and recommends whether the 

Commission should find “probable cause to believe” a 

violation has occurred. Respondents may file briefs 

supporting their positions. 

If the Commission finds “probable cause to believe” 

the respondents violated the law, the agency attempts 

to resolve the matter by entering into a conciliation 

agreement with them. (Some MURs, however, are 

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

public. 

Enforcement Initiatives 

During 2000, the Commission continued to use a 

prioritization system to focus its limited resources on 

more significant enforcement cases. 

Now in its eighth year of operation, the Enforcement Priority System (EPS) has helped the Commission manage a 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. 

In addition, during 2000, OGC continued to use a 

computerized system to image documents and create 

a searchable database. Developed with help from a 

support contractor, the system is designed to help 

streamline the investigation of cases that involve large 

collections of documents.

 Also during the year, the Counsel’s office entered 

data into a computerized case management system 

designed to help manage and track the agency’s enforcement and litigation cases, as well as other 
projects in OGC. OGC hopes eventually to use the 

system to develop an offense profile database that 

would inform Commissioners, policy makers and the 

public about emerging enforcement trends. 

Statistics: Civil Penalties, Active/Inactive Cases 

and Number of Respondents 

Chart 2-1 compares civil penalties negotiated in 

2000 conciliation agreements with those of previous 

years. In Chart 2-2, the median civil penalty negotiated in 2000 is compared with the median civil penalty 

of previous years. Chart 2-3 (next page) tracks the 

ratio of active to inactive enforcement cases over the 

last three years. Chart 2-4 examines the number and 

types of cases dismissed under the EPS over the last 

seven years. Chart 2-5 tracks the monthly average 

number of respondents and pending enforcement 

actions during each of the last six years. 

CHART 2-1 

Conciliation Agreements 

by Calendar Year 

Number of Agreeements 

Total Civil Penalty Amount 

Number Thousands of Dollars 

300 2000 

250 

1500 

200 

150 1000 

100 

500 

50 

0 0 85868788899091929394959697989900 

CHART 2-2 

Median Civil Penalty 

by Calendar Year 

Dollars 

10000 

8000 

6000 

4000 

2000 

0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 

Interpreting and Enforcing the Law 11 

Administrative Fine Program 

Beginning with the July 15, 2000, quarterly reports, 

the Commission implemented a new program for assessing civil money penalties for violations involving: 

• Failure to file reports on time; 

• Failure to file reports at all; and 

• Failure to file 48-hour notices. 

The regulations implementing the Administrative 

Fine program are based on legislative amendments 

that permit the FEC to impose civil money penalties, 

based on schedules of penalties, for violations of reporting requirements that occur between January 1, 

2000, and December 31, 2001. 

The July 2000 Quarterly Report was the first report 

filed under the new program, and the number of late 

filers dropped significantly. While 30 percent of filers 

were late for the April 2000 quarterly filing, only 18 
12 Chapter Two 

CHART 2-3 

Ratio of Active to Inactive Cases by Calendar Year 

Active Cases 

Inactive Cases 

1996 1997 

(271 Cases) (296 Cases) 

1998 1999 2000 

(189 Cases) (193 Cases) (207 Cases) 

CHART 2-4 

Cases Dismissed under EPS 

Stale Cases 

Low-Rated Cases 

250 

200 

150 

100 

50 

0 

1994 1995 1996 1997 1998 1999 2000 

CHART 2-5 

Monthly Average Number of Respondents 

and Pending Cases by Calendar Year 

Respondents 

Cases 

3000 

2500

2000 

1500 

1000 

500 

0 

1995 1996 1997 1998 1999 2000 
Interpreting and Enforcing the Law 13 

percent of filers were late for the July report. A similar 

trend emerges when comparing the 2000 reports to 

those filed in previous years. As illustrated in Chart 2-

6, the percentage of reports filed late in the latter 

stages of the election cycle decreased in 2000 as 

compared with the previous two election cycles. 

Chart 2-6 

Percentage of Reports Filed Late 

Type of Report 1996 1998 2000 

July Quarterly 25% 25% 18% 

October Quarterly 25% 24% 22% 

12-Day Pre-General 18% 17% 13% 

30-Day Post-General 22% 22% 17% 

How the Program Works 

In the past, the FEC handled reporting violations 

(late filers, nonfilers and committees that failed to file 

48-hour notices) under its regular enforcement procedures, described above. Under the new rules, if the 

Commission finds “reason to believe” that a committee violated the applicable reporting provisions, the 

Commission provides written notification to the committee and its treasurer (the respondents) containing 

the factual and legal basis of its finding and the 

amount of the proposed civil money penalty. The respondents have 40 days from the date of the reasonto-believe finding to either pay the civil money penalty 

or submit to the Commission a written response, with 

supporting documentation, outlining the reasons why 

it believes the Commission’s finding and/or penalty is 

in error. If the committee submits such a response, it 

is forwarded to the Office of Administrative Review, 

for consideration by an impartial reviewing officer who 

was not involved in the original reason-to-believe 

recommendation. 

After reviewing the Commission’s reason-to-believe 

finding and the respondent’s written response, the 

reviewing officer forwards a recommendation to the 

Commission, along with the original reason-to-believe 

finding, the respondent’s written response and any 

supporting documentation. Respondents have an 

opportunity to submit a written response to the reviewing officer’s recommendation. The Commission 

then makes a final determination as to whether the 

respondent violated the law and, if so, assesses a 

civil money penalty based on schedules of penalties. 

Should a respondent fail to pay the civil money 

penalty or submit a challenge within the original 40 

days, the Commission will issue a final determination 

with an appropriate civil money penalty. The respondent will then have 30 days to pay the civil money 

penalty or seek judicial review. 

When a respondent fails to pay the civil money 

penalty after the Commission makes a final determination, the Commission may transfer the case to the 

U.S. Department of Treasury for collection. Alternatively, the Commission may decide to file suit in the 

appropriate U.S. district court to collect owed civil 

money penalties under 2 U.S.C. §437g(a)(6). 

Calculating Penalties 

Under the program, respondents may face administrative penalties ranging from $125 to $16,000 (or 

more for repeat late- and nonfilers). The interaction of 

several factors determines the size of the penalty: 

1. Election sensitivity of the report; 

2. Whether the committee is a late filer (and the 

number of days late) or a nonfiler; 

3. The amount of financial activity in the report; and 

4. Prior civil money penalties for reporting violations. 

For more detailed information on the Administrative 

Fine Program, see Appendix 7. 

Alternative Dispute Resolution 

Program 

On July 25, 2000, the Commission approved a pilot 

Alternative Dispute Resolution (ADR) program, designed to promote compliance by encouraging settlements outside the agency’s regular enforcement context. By expanding the tools for resolving complaints 

and Title 2 audit referrals, the program aims to: 

• Resolve complaints and audit referrals faster; 

• Increase the number of complaints and referrals 

processed; 
14 Chapter Two 

• Reduce costs for respondents; 

• Ensure greater satisfaction for the respondents involved; and 

• Enhance FEC enforcement efforts by freeing up 

resources from less compelling complaints and Title 

2 audit referrals.1 

Overview of the ADR Process 

The ADR program aspires to bring complaints and 

Title 2 audit referrals to resolution expeditiously 

through both direct and, when necessary, mediated 

negotiations between the parties. The speed with 

which each case is settled is contingent upon: 

• The willingness of respondents to engage and cooperate in the process; 

• The complexity of the case in question; and 

• The availability of resources. 

Taking these contingencies into account, the ADR 

office expects to process complaints and Title 2 audit 

referrals within five months following the receipt of the 

complaint or the referral. 

After OGC makes an initial determination that certain cases are suitable for the ADR program, it—or 

the Commission—refers them to the ADR office. That 

office then evaluates the cases to determine whether 

they meet the requirements for the ADR program. In 

order to have a case considered for treatment within 

the ADR program, the respondent must: 

• Express a willingness to engage in the ADR process; 

• Agree to set aside the statute of limitations while the 

complaint is pending in the ADR Office; and 

• Agree to participate in bilateral negotiations and, if 

necessary, mediation. 

After the Commission concurs that the case can be 

dealt with through ADR procedures, the ADR office 

notifies the respondent and forwards an agreement to 

engage in bilateral negotiations and/or mediation. 

The ADR Process 

Bilateral Negotiations. The bilateral negotiation 

phase involves direct negotiations between the respondent and a representative from the ADR office of 

the FEC. Any resolution reached in negotiations is 

submitted to the Commission for final approval. If a 

resolution is not reached in bilateral negotiations, the 

case proceeds to mediation. 

Mediation. The mediation phase begins with the 

selection of a mediator agreed upon by the respondent and the representative from the ADR office. Under the pilot program, the Commission pays for all 

mediation costs, unless the respondent wants to split 

them with the ADR Office. 

The mediator meets with the parties both jointly 

and separately as needed. Information disclosed in 

mediation remains strictly confidential. Information 

discussed in closed “caucus” meetings between the 

mediator and a single party cannot be shared with the 

other party unless that party has given the mediator 

express permission to do so. Nor can such information be used in a later enforcement proceeding, 

should one take place. In those instances when no 

agreement is reached, the case is returned to OGC 

for processing. 

If an agreement is reached in mediation, the ADR 

office sends the agreement to the Commission for 

approval. All approved agreements are a matter of 

public record. Settlements cannot serve as a precedent for the settlement of future cases. 

1

 In its first four months of operation (October 2000 

through January 2001), the ADR office resolved six complaints. All of those settlements were negotiated directly 

with the respondents or their attorneys. 
15 Chapter Three 

Presidential Public Funding 

Public funding has been a key part of our Presidential election system since 1976. The program is 

funded by the $3 tax checkoff and administered by 

the Federal Election Commission. Through the public 

funding program, the federal government provides 

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

parties for Presidential nominating conventions, and 

grants to Presidential nominees for their general election campaigns. 

Shortfall 

A shortfall in the Presidential Election Campaign 

Fund resulted in partial matching fund payments to 

Presidential primary candidates during the first six 

months of 2000. The temporary shortfall was the result of several factors: 

• Payments from the Fund are adjusted for inflation, 

but Fund receipts are not. 

• Three parties participated in the public funding program in 2000. 

• Open races for the 2000 nomination occurred in 

both major parties. 

• Taxpayer participation in the tax checkoff remained 

low. On 1999 tax returns, the participation rate for 

the checkoff was only 11.83 percent. 

• Under Treasury rules, funds must be set aside for 

general election and convention financing before 

any monies can be used for primary matching payments. This year, $147.2 million was set aside for 

use by the general election candidates and $28.9 

million was set aside for convention grants. 

Early projections for 2000 had indicated that primary 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 1999.) However, Texas Governor 

George W. Bush announced that he would forego 

federal matching funds, and Republican candidate 

Elizabeth Dole rejected matching funds after withdrawing from the race. Both of these events decreased the severity of the shortfall, although it remained significant. 

The actual payment process began at the end of 

1999. On December 22, 1999, the Commission certified eight primary candidates as being eligible to receive a total of more than $34 million in federal 

matching funds.1

 With the amounts previously set 

aside for the general election and convention committees, however, only $16.9 million remained in the 

Fund. As a result, the Treasury Department’s January 3, 2000, payments to the candidates amounted to 

roughly 50 cents on the dollar. Eligible candidates did 

not receive 100 percent of the matching funds they 

were due until June 2000. 

For several years, the Commission has urged Congress to help alleviate the shortfall problem. Possible 

solutions include a revision of the “set aside” provisions and an increase in the checkoff amount. Even 

assuming that one major party nominee does not take 

federal matching funds in the primaries, FEC projections indicate that initial payments to eligible candidates in the 2004 election cycle could be less than 20 

percent of that certified. In addition, the Commission 

projects that, although payments would reach 90 percent of that certified by the close of 2004, the shortfall 

of payments due would not be made whole until April 

of 2005. 

Certification of Public Funds 

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. To 

establish eligibility, a candidate must submit documentation showing that he or she has raised more 

than $5,000 in matchable contributions in each of at 

least 20 states (i.e., over $100,000). The FEC reviews 

this threshold submission to determine whether the 

candidate has met the eligibility requirements. The 

candidate must also agree to comply with the law in a 

letter of agreement and certification. Once the Commission has determined a candidate to be eligible, the 

1

 Two additional candidates, John Hagelin and Ralph 

Nader, were later certified to receive matching funds. 
16 Chapter Three 

federal government will match up to $250 per contributor, but only contributions from individuals qualify 

for matching. 

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

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

matching fund submissions) on specified dates. 

Chart 3-1 lists the 2000 Presidential primary candidates who qualified for matching funds and the total 

amount of matching funds certified to each. 

Convention Funds 

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. 

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 

$13,224,000. 

On March 28, 2000, the Commission approved an 

additional payment of $288,000 to each of the major 

parties’ convention committees to reflect an adjustment in the consumer price index, bringing the total 

received by each committee to $13,512,000. 

The Presidential Election Campaign Fund Act also 

allows a minor party to receive some federal funding 

to run its convention, based on its Presidential 

candidate’s performance in the previous election. In 

2000, the National Committee of the Reform Party, 

USA, and its convention committee qualified as a 

minor party 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 

CHART 3-1 

Matching Fund Certifications 

Candidate Cumulative Certifications through 12/31/00 

Gary L. Bauer (R)* $4,925,216.40 

Bill Bradley (D)** $ 12,462,047.69 

Patrick J. Buchanan (Reform) $ 4,407,422.64 

Al Gore (D) $ 15,456,083.75 

John Hagelin (NL) $690,477.06 

Alan L. Keyes (R) $ 4,871,773.88 

Lyndon H. LaRouche, Jr. (D) $ 1,422,014.83 

John S. McCain (R)** $14,635,685.69 

Ralph Nader (G) $723,307.60 

Dan Quayle (R)† $2,102,525.00 

*Gary Bauer withdrew from the race in February 2000. 

**John McCain and Bill Bradley withdrew from the race in March 2000. 

†Dan Quayle withdrew from the race in September 1999 and actually received only $2,087,749.86. 
Presidential Public Funding 17 

entitled to partial convention funding for 2000. In 

1999, the FEC certified $2,468,921 to the Reform 

Party 2000 Convention Committee, and in 2000 

added an additional cost-of-living payment ($53,769), 

bringing the total amount to $2,522,690.2 

General Election Grants 

The Presidential nominee of each major party may 

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

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

election campaign. In addition, minor and new party 

candidates may qualify for partial general election 

funding based on their party’s electoral performance. 

Minor party candidates (nominees of parties whose 

Presidential candidates received between 5 and 25 

percent of the vote in the preceding election) may 

receive public funds based on the ratio of their party’s 

vote in the previous Presidential election to the average vote for the major party candidates in that election. New party candidates may receive public funds 

after the election if they receive 5 percent or more of 

the vote. The amount is based on the ratio of the new 

party candidate’s vote to the average vote for the two 

major party candidates in the election. 

In 2000, the general election committees of the two 

major party candidates, George W. Bush and Al Gore, 

each received $67.56 million in federal funds to run 

their campaigns for the general election. In doing so, 

each campaign agreed to abide by the overall spending limit and other legal requirements, including a 

post-campaign audit. Additionally, as major party 

candidates, they agreed to limit campaign spending to 

the amount of the public funding grant and not to accept private contributions for their campaign. 

Reform Party Presidential candidate Patrick J. 

Buchanan received $12,613,452 in federal funds to 

run his general election campaign.3 Mr. Buchanan 

was eligible to receive funds as the candidate of a 

minor party because the Reform Party’s 1996 candidate, Ross Perot, had won more than 5 percent of the 

popular vote. In order to receive funding in a given 

election, a minor party’s nominee must provide evidence showing that he or she has qualified to appear 

on the ballot as the candidate of that party in at least 

10 states. Pre-election minor party funding has occurred only once before, in 1996, when Ross Perot 

received $29,055,400 based on the popular vote for 

him in the 1992 election. 

Use of Public Funds 

Use of Federal Convention Funds 

In AO 2000-06, the Commission determined that 

the Reform Party could use federal convention funds 

to pay for the development of a voter data base and 

balloting system to choose the party’s presidential 

nominee. The data base included the names of all 

members of the Reform Party as well as others who 

wanted to participate in the Reform Party’s primary 

process. A national vote was scheduled to take place 

when those voters cast their ballots by telephone, 

mail or e-mail, and the party planned to announce the 

results at the Reform Party National Convention in 

2

 The Reform Party’s convention funds were deposited 

and held in a United States district court registry pending 

the outcome of a leadership dispute within the Party. In 

Reform Party of the United States v. Gargan (89 F.Supp.2d 

751 (W.D.Va. 2000)), the court ruled that the rightful Party 

Chairman and Treasurer were Pat Choate and Tom 

McLaughlin, respectively, and that the Party had duly removed John Gargan and Ronn Young from those positions 

at a meeting on February 12, 2000. Having resolved the 

leadership dispute, the court released the public funds to 

Gerald Moan as the duly appointed Chairman of the Party’s 

convention committee. 

3

 A controversy took place between two factions of the 

Reform Party, one led by John Hagelin and the other by Pat 

Buchanan, as to which of them was the official Reform 

Party Presidential candidate. On September 12, 2000, the 

Commission, after reviewing documents submitted by Mr. 

Buchanan and Mr. Hagelin, made an initial determination 

that Mr. Buchanan was the official Reform Party candidate 

entitled to receive federal funds. The next day, September 

13, 2000, a California superior court enjoined Mr. Hagelin 

and his running mate, Nat Goldhaber, from representing 

themselves to the public as the Reform Party’s Presidential 

and Vice-Presidential nominees. (Reform Party of the 

United States v. Hagelin, No. NC 028469 (Cal.Super.Ct., 

L.A.County)) The Commission confirmed its decision with a 

final determination on September 14, 2000. 
18 Chapter Three 

August 2000. The Commission found that both the 

data base and balloting system were integral to the 

process of choosing the party’s nominee, and thus the 

costs associated with them were permissible convention expenses. As a result, the Reform Party could 

pay for them with federal convention funds. 

Using Campaign Funds to Pay Convention 

Expenses of Former Candidates 

In AO 2000-12, the Commission allowed former 

Presidential candidates Bill Bradley and John McCain 

to use federal matching funds to pay for travel and 

other expenses associated with their parties’ national 

conventions, so long as their convention expenses 

were “qualified campaign expenses” directed toward 

fundraising efforts to pay down their campaigns’ outstanding obligations. Under the Matching Fund Act, a 

committee may use matching funds to pay for “qualified campaign expenses,” which include any lawful 

purchases, payments or anything of value incurred by 

the candidate or committee in connection with his 

campaign for nomination. 26 U.S.C. §9032(9). For 

example, Mr. Bradley and Senator McCain could use 

federal matching funds to pay for travel to the convention and for activities at the convention that were a 

part of their committees’ “winding down” expenses, 

such as gifts and “thank-you” receptions for committee employees, consultants and volunteers. They 

could also use federal funds to pay the costs of 

fundraising to retire debts from their campaigns. 

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 2000, regulations in the 

following areas became effective: 

• Bright Line Between Primary and General. 

Amendments establish a “bright line” between primary and general election expenses and apply to 

candidates who accept public funds in either the 

primary or general election, or both. Under the revised rule, the “exclusive use” exception only applies 

if the expenses in question do not fit into the specific 

categories listed in the regulations. The amendments also establish that 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 expenses incurred during this period of up to 15 percent of the primary election spending limit. 11 CFR 

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

• Aggregating Presidential and Vice Presidential 

Candidate Spending. New FEC rules 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. 

• Preliminary Audit Report. Amended rules 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). 

Presidential Debate Lawsuits 

Under FEC regulations, certain nonprofit corporations may stage or sponsor candidate debates, exempt from the prohibition against corporate contributions, so long as the corporations follow specific rules 

(“safe harbor”). For example, the debates must be 

between at least two candidates, and must be staged 

so as not to promote or advance one candidate over 

another. A debate sponsor must also use “pre-established objective criteria” for choosing which candidates will participate. 11 CFR 110.13. In 2000, four 

lawsuits were filed challenging these debate regulations. 
Presidential Public Funding 19 

Becker v. FEC and Committee for a Unified 

Independent Party v. FEC 

These two cases primarily challenged FEC regulations at 11 CFR 114.4(f), which allow corporate sponsorship of the debates.

 In Becker v. FEC, the U.S. District Court for the 

District of Massachusetts rejected a challenge to the 

Commission’s debate regulations filed by independent 

voter Heidi Becker, candidate Ralph Nader, the Green 

Party and others (collectively, “Becker”). The plaintiffs 

had argued that the debate regulations: 

• Exceed the FEC’s statutory authority by permitting 

corporations to help stage debates; and 

• Allow corporations to fund debates (between the 

major party candidates) that exclude independent 

and ballot-qualified third party candidates. 

The court found that the regulations did not exceed 

the FEC’s statutory authority. The court also found 

that, while Mr. Nader and his political party had standing to challenge the debate regulations, the individualvoter plaintiffs did not. The plaintiffs appealed, but the 

First Circuit Court of Appeals affirmed the district 

court’s decision on November 1, 2000. 230 F.3d 

381.A.1 (Mass.), 2000. 

In the other case, the Committee for a Unified Independent Party and other plaintiffs filed a lawsuit contending that the debate regulations permitted corporations and labor unions to make prohibited contributions to the major party candidates by allowing them 

to stage partisan debates. On December 15, 2000, a 

Magistrate Judge in the Southern District of New York 

ruled in favor of the FEC, concluding that the FEC’s 

regulations reflected a reasonable interpretation of the 

statute. 

Patrick J. Buchanan, et al. v. FEC and Natural Law 

Party v. FEC 

These cases primarily challenged the 

Commission’s dismissal of complaints concerning the 

candidate-selection criteria chosen by the Commission on Presidential Debates (CPD), the not-for-profit 

corporation that has staged all of the presidential debates since 1988. In 2000, the CPD included only 

those candidates who had at least a 15 percent level 

of support in the national electorate, as indicated in 

nationwide polls. 

On July 25, 2000, Presidential candidate Patrick 

Buchanan, Buchanan Reform (his principal campaign 

committee) and Angela Buchanan asked the U.S. 

District Court for the District of Columbia to require 

the FEC to reconsider its dismissal of their March 

2000 administrative complaint against the CPD. 

Plaintiffs argued that the CPD’s staging of presidential 

debates did not fall within the Act’s “safe harbor” for 

corporate sponsorship of nonpartisan candidate debates because: 

• It was a bipartisan organization, organized by and 

supporting the Democratic and Republican parties, 

and therefore did not qualify as a nonpartisan organization; and 

• Its criterion of including only those candidates who 

demonstrated at least a 15 percent level of support 

in the national electorate, as measured by the average of 5 national polls, was subjective rather than 

objective because it was designed to exclude third 

party candidates. 

The Natural Law Party filed a lawsuit making similar claims. In both cases, the U.S. District Court for 

the District of Columbia ruled in favor of the FEC and 

stated that, although the plaintiffs had standing to 

challenge the FEC’s dismissal of their administrative 

complaint against the CPD, they failed to show that 

the FEC’s interpretation of the debate regulations was 

arbitrary and capricious. The U.S. Court of Appeals 

for the District of Columbia Circuit affirmed the district 

court’s decisions in both cases. 112 F.Supp.2d 58 

(D.D.C., 2000) (Buchanan), 111 F.Supp.2d 33 

(D.D.C.,2000) (Natural Law Party). 

Repayment of Public Funds—1996 

Election 

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 
20 Chapter Three 

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 2000, the Commission made final determinations that two 1996 campaigns had to make repayments. 

Dole Committees 

The Commission determined that former Senator 

Bob Dole’s 1996 primary committee, Dole for President, Inc. (the Committee), had to repay $6,255 to the 

Treasury. This amount represented public funds that 

the Committee used to pay for nonqualified campaign 

expenses. These expenses included $1,237 for the 

“refund” of an unpaid contribution, $930 for payment 

for services to prepare financial statements and 

$4,088 for unchallenged nonqualified campaign expenses. In addition, the Commission found that the 

Committee had to repay the Treasury $225,536 for 

stale-dated checks. 

The Commission also made a repayment determination that Senator Dole’s general election committee, Dole/Kemp ’96, Inc., had to repay a total of 

$1,416,093 to the Treasury. This amount represented 

$1,369,583 for expenses incurred in excess of the 

expenditure limit for 1996 ($61.82 million) and 

$46,510 received in interest income. The Commission found that a major factor in the excessive spending related to overbilling the press for many expenses, 

including those for events and airline travel. 

Buchanan Committee 

The Commission made a determination, upon administrative review, that Patrick J. Buchanan’s 1996 

primary committee, Buchanan for President, Inc. (the 

Committee), had to make repayments of $63,750 and 

$29,328 to the Treasury. The first amount represented matching funds received by the Committee for 

contributions that were later determined to be 

nonmatchable—$62,116 for improperly reattributed 

contributions and $1,634 for contributions that the 

Committee later refunded. The second amount represented $12,159 for inadequately documented disbursements and $17,169 for duplicate payments and 

noncampaign-related expenditures. In addition, the 

Commission found that the Committee owed $27,431 

for stale-dated checks. 
 

 

21 Chapter Four 

Legal Issues 

As the independent regulatory agency responsible 

for administering and enforcing the Federal Election 

Campaign Act (the Act), the Federal Election Commission 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 2000 as it considered regulations, advisory opinions, litigation and enforcement 

actions. 

Express Advocacy 

The FEC’s regulatory definition of express advocacy continued to receive attention in the courts and 

at the Commission during 2000. To understand the 

issue, it is necessary to examine earlier court decisions. In FEC v. Massachusetts Citizens for Life 

(MCFL) (479 U.S. 238 (1986)), 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, in 1995 the Commission prescribed a new regulatory definition of express advocacy. 11 CFR 100.22. 

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 the definition in section 100.22 

includes the examples of phrases that constitute express advocacy that were listed in the Buckley opinion: “vote for,” “elect,” “support,” “cast your ballot for,” 

“vote against,” “defeat,” “reject.” 

Paragraph (b) of section 100.22—often referred to 

as the “reasonable person” test—is largely based, 

inter alia, on the Furgatch decision. Under paragraph 

(b), 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, 

it has faced several legal challenges, virtually all of 

which have focused on paragraph (b) of the definition, 

the “reasonable person test.” During 2000, one district 

court examined paragraph (b) of the FEC’s express 

advocacy definition, another court evaluated a political committee’s flyers to determine if they contained 

express advocacy and the Commission declined to 

open a rulemaking on the subject. 

Virginia Society for Human Life, Inc. (VSHL) v. FEC 

In its January 4, 2000, ruling on this case, the U.S. 

District Court for the Eastern District of Virginia found 

11 CFR 100.22(b) to be “blatantly unconstitutional” 

under Buckley, and issued an order prohibiting the 

FEC from enforcing it “against the VSHL or against 

any other party in the United States of America.” 

VSHL—a nonprofit, tax-exempt membership corporation, which accepts corporate contributions— 

planned to distribute voter guides to the general public in connection with federal elections. The guides 

would outline VSHL’s stance on abortion-related issues and tabulate candidates’ positions on those issues. Although VSHL contended that the guides 

would not expressly advocate the election or defeat of 

a particular candidate, it acknowledged that recipients 

of the voter guide could reasonably determine VSHL’s 

preference for one of the candidates over the others. 

The district court said that the Buckley court defined express advocacy as “communications that in 

express terms advocate the election or defeat of a 

clearly identified candidate for federal office,” and thus 

funds spent on such advocacy could be regulated by 

the FEC. On the other hand, the district court said, 

funds spent on issue advocacy could not be regulated 

by the FEC because “discussion of public issues and 

debate on the qualifications of candidates are integral 

to the operation of the system of government established by our Constitution.” According to the district 

court, the Buckley court stated that, although the distinction between express advocacy and issue advocacy could be “fuzzy,” express advocacy should not 

be classified “according to an audience’s reasonable 

interpretations of the communication at issue.” 

The district court held that, by allowing the FEC to 

regulate advocacy based upon the understanding of 

the audience rather than the actual message of the 

advocate, the regulation at 100.22(b) fails the Buckley 
22 Chapter Four 

test. Moreover, the district court concluded, the regulation empowers the FEC to regulate issue advocacy, 

which was “clearly forbidden by Buckley.” The district 

court also pointed out that even the Ninth Circuit’s 

decision in Furgatch “acknowledges that express 

advocacy must contain a ‘clear plea for action,’ but 

the regulation contains no such requirement—it in fact 

is broader than Furgatch, which itself runs afoul of 

Buckley.” 

Finally, concluding that “First Amendment protections do not cease at the boundaries of the Eastern 

District,” the court stated that it is “unwilling to perpetuate the state of uncertainty faced across the land 

by potential participants in the public arena” and 

therefore enjoined the FEC from enforcing paragraph 

(b) “against VSHL or any other party in the United 

States of America.” 

In February, the Commission voted to appeal the 

court’s decision that the VSHL had standing to sue 

the FEC and the court’s order prohibiting the FEC 

from enforcing 11 CFR 100.22(b) against any party in 

the United States. 

FEC v. Freedom’s Heritage Forum 

On April 28, 2000, the U.S. District Court for the 

Western District of Kentucky handed down its latest 

ruling in the FEC’s suit against the Freedom’s Heritage Forum political committee, its President and a 

candidate the Forum supported. The FEC had alleged 

that seven flyers the Forum had distributed in connection with federal elections contained express advocacy, but lacked the disclaimers required by 2 U.S.C. 

§441d(a). 

As in its September 1999 decision in this case (see 

Annual Report 1999), the court stated that, “although 

a communication does not have to contain specific 

‘magic words’ to constitute express advocacy, it will 

ordinarily contain some functional equivalent of an 

exhortation, directive, or imperative for it to expressly 

advocate the election or defeat of a candidate.” Additionally, 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. 

Applying these standards, the court concluded that, 

in sum, three of the seven flyers the Forum distributed 

contained express advocacy. The parties continue to 

litigate other issues in this case. 

Rulemaking Proposal 

On February 9, the Commission failed to approve a 

motion by Commissioner David Mason that the 

agency initiate a rulemaking to repeal paragraph (b) 

of the express advocacy definition. Commissioner 

Mason made the motion in connection with the 

Commission’s discussion on whether or not to appeal 

the decision in Virginia Society for Human Life, Inc. v. 

FEC. He reasoned that, if the Commission were to 

repeal paragraph (b), there would be no need to appeal the decision. As noted above, the Commission 

subsequently decided to appeal the case. 

Corporate 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. During 2000, a number of lawsuits challenged the constitutionality of that ban and 

related provisions of FEC regulations. Two of the 

cases are described below. 

Christine Beaumont, et al. v. FEC 

On October 3, 2000, the U.S. District Court for the 

Eastern District of North Carolina, Northern Division, 

found that provisions of the Act and FEC regulations 

prohibiting corporate independent expenditures and 

contributions on behalf of federal candidates violated 

the plaintiffs’ First Amendment rights. On October 26, 

2000, the court imposed a preliminary injunction barring the FEC from enforcing the provisions against the 

plaintiffs.1 

The suit, brought by the North Carolina Right to 

Life, Inc. (NCRL), members of its board of directors 

and an unaffiliated individual, challenged not only 

1

 On January 24, 2001, the court permanently enjoined 

the Commission from enforcing this provision against the 

plaintiffs. 
Legal Issues 23 

Section 441b’s ban on corporate contributions and 

expenditures (and the comparable regulations at 11 

CFR 114.2(b)), but also an FEC regulation that creates an exemption from the ban on corporate expenditures for certain nonprofit corporations, pursuant to 

the Supreme Court’s decision in FEC v. Massachusetts Citizens for Life. 11 CFR 114.10. 

Commission regulations at 11 CFR 114.10 provide 

that certain “qualified nonprofit corporations” may be 

exempt from the prohibition on corporate independent 

expenditures. To be considered a “qualified nonprofit 

corporation,” a corporation must meet the following 

criteria: 

• Its only express purpose is the promotion of political 

ideas; 

• It does not engage in business activities; 

• It has no shareholders or other individuals who receive a benefit that might discourage an individual 

from disassociating from the corporation on the basis of that corporation’s political positions; and 

• It was not established by a business corporation or 

labor organization and does not accept direct or 

indirect donations from business corporations. 

NCRL argued that it failed to meet this exemption 

only because it accepted a small amount of corporate 

contributions and participated in “minor business activities incidental and related to its advocacy of issues.” NCRL further argued that, even though the 

FEC had conceded that a Fourth Circuit decision in 

an earlier case between NCRL and North Carolina 

over a similar provision in a North Carolina statute 

barred enforcement of the Act’s prohibition against 

NCRL, its officers remained subject to criminal liability 

and, as a result, their First Amendment rights were 

censored. 

NCRL also argued that, in this case, the Act’s ban 

on corporate contributions to political candidates infringed on the organization’s right to association. 

While the FEC argued that NCRL’s ability to contribute through a separate segregated fund minimized 

this infringement, NCRL contended that the maintenance of such a fund was a burden. 

The court found no compelling justification for denying NCRL (a nonprofit, ideological organization) the 

right to make contributions and independent expenditures solely because it was an incorporated entity. 

Moreover, the court was not persuaded by the FEC’s 

argument that a ban on corporate contributions was 

constitutional, as applied to NCRL, while a ban on 

corporate independent expenditures might not be.2 

The court found the distinction between contributions 

and independent expenditures immaterial. 

The court declared that the provisions in question 

were unconstitutional as applied to NCRL. 

On December 21, 2000, the Commission appealed 

the district court’s preliminary injunction to the U.S. 

Court of Appeals for the Fourth Circuit. 

Renato P. Mariani v. USA 

In another challenge to the ban on corporate contributions, on May 18, 2000, the U.S. Court of Appeals 

for the Third Circuit rejected Renato P. Mariani’s constitutional challenge to §441b.3 

Mr. Mariani—who was the subject of criminal prosecution concerning the very provisions he challenged 

in this case—argued that the development of issue 

advocacy and the increasing role of unregulated “soft 

money” in the electoral process have “so eroded the 

theoretical distinction between hard and soft money” 

that §441b’s prohibition against corporate contributions has become “fatally underinclusive.” As such, he 

asserted, it should be struck down. He also challenged the ban as a violation of corporations’ First 

Amendment rights. 

In response, the court acknowledged that “[t]he 

practical distinctions between hard and soft money 

may have diminished in the past decade with the rise 

of issue advocacy, but not to such an extent that there 

is no practical distinction between the two.” The court 

went on to note, “If hard and soft money were equivalent, it would be hard to imagine why Mariani would 

have gone to the lengths he allegedly went to in order 

to give hard money instead of soft.” Noting that Congress can act incrementally—and referencing legal 

2

 The Supreme Court’s decision in FEC v. Massachusetts Citizens for Life, permitting qualified nonprofit corporations to make independent expenditures, extends only to 

corporate expenditures and not to corporate contributions. 

3

 The court also rejected Mr. Mariani’s challenge to 

§441f’s ban on contributions in the names of others. 
24 Chapter Four 

precedents—the court concluded that the corporate 

ban “is not fatally underinclusive.” 

The court also rejected the First Amendment challenge, citing the U.S. Supreme Court’s decisions in 

FEC v. National Right to Work Committee, FEC v. 

National Conservative PAC and Austin v. Michigan 

Chamber of Commerce. Though the court stated that 

none of these cases directly addressed the constitutionality of the corporate ban, their “strong implications” led the court “to reject Mr. Mariani’s facial challenge to §441b(a).” 

Coordination 

During 2000, the Commission approved new regulations regarding coordination between campaigns 

and persons making communications that influence 

federal elections.4 Coordination was also an issue in a 

court decision handed down in 2000—FEC v. Colorado Republican Federal Campaign Committee. 236 

F.3d 1174 (10th Cir. 2000). 

Coordination is important because, in its landmark 

Buckley v. Valeo 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. By contrast, independent expenditures—while generally subject to the prohibitions of 

the Act—are not limited. 

Regulations 

On November 30, 2000, the Commission approved 

new rules addressing coordinated communications 

made to the general public that refer to clearly identified candidates and are paid for by persons other than 

candidates, candidates’ authorized committees or 

party committees.5 

The new rules at 11 CFR 100.23 apply only to 

“general public political communications,” i.e., communications made through a broadcasting station, 

newspaper, magazine, outdoor advertising facility, 

mailing or any electronic medium and that are intended for an audience of more than 100 people. 

Other than the requirement that covered communications include a clearly identified candidate, the rules 

do not establish a content standard.6 Instead, the new 

regulations generally define “coordinated general 

public political communications” according to the standard set by the district court in FEC v. The Christian 

Coalition (see Annual Report 1999). 52 F.Supp.2d 

45, 85 (D.D.C.1999).7 

Under the new rules, an expenditure for a general 

public political communication is considered to be 

coordinated with a candidate or party committee if the 

communication is paid for by any person other than 

the candidate’s authorized committee or a party committee and is created, produced or distributed: 

• At the request or suggestion of the candidate, the 

candidate’s authorized committee, a party committee or their agents; 

• After one of these persons or parties has exercised 

control or decision-making authority over the content, timing, location, mode, intended audience, volume of distribution or frequency of placement of that 

communication; or 

4

 The rules do not apply to coordination between a candidate and a party committee. 

5

 The Commission notes that coordinated communications are not the only type of coordinated expenditure. In 

fact, coordinated expenditures can include many other 

types of expenses incurred by candidates, including costs 

for staff, polling and other services. 

6

 The Commission may revisit the issue of a content 

standard for all coordinated communications when it considers the other portion of this rulemaking—dealing with coordination between a candidate and his/her political party— 

which is being held in abeyance until the Supreme Court 

addresses the dollar limits on the amount party committees 

may spend in coordination with their candidates in FEC v. 

Colorado Republican Federal Campaign Committee (Colorado II). 

7

 The Commission uses the phrase “expenditures for 

general public political communications” in place of “expressive expenditure,” the term used by the Christian Coalition court, because it more precisely describes the types of 

communications covered by these rules. See 11 CFR 

100.23(a)(1). 
Legal Issues 25 

• After substantial discussion or negotiation between 

the purchaser, creator, producer or distributor of the 

communication and the candidate, the candidate 

committee, the party committee or their agents that 

results in collaboration or agreement about the content, timing, location, mode, intended audience, volume of distribution or frequency of placement of the 

communication.

 The regulations define “substantial discussion or 

negotiation” to include one or more meetings, conversations or conferences about the value or importance 

of a communication for a particular election. The 

Commission clarified that whether these discussions 

or negotiations qualify as “substantial” depends upon 

their substance—whether they contain specific information about how to communicate an issue in a way 

that is valuable to the campaign—rather than upon 

their frequency or duration. 

As part of this rulemaking, the Commission also 

revised its definition of “independent expenditure” at 

109.1(b)(4) to conform with the new coordination 

standard, and it stated that the rulemaking superseded several advisory opinions that relied on a 

broader definition of coordination than that stated in 

the new rules. 

The remaining portion of this rulemaking, involving 

coordinated party expenditures, was on hold pending 

the Supreme Court’s decision in FEC v. Colorado 

Republican Campaign Committee. 

FEC v. Colorado Republican Federal Campaign 

Committee 

On May 5, 2000, the U.S. Court of Appeals for the 

10th Circuit affirmed a district court decision that the 

coordinated party expenditure limits at 2 U.S.C. 

§441a(d)(3) are unconstitutional. 

The case—on remand from the U.S. Supreme 

Court—involves $15,000 worth of expenditures the 

Colorado Republican Party made in 1986 for advertisements critical of Democratic Senate candidate Tim 

Wirth. The Commission argued that the ads, which 

contained an “electioneering message” related to a 

clearly identified candidate, represented coordinated 

expenditures by the party. (The Commission further 

maintained that these expenditures, when aggregated 

with previous coordinated expenditures by the party, 

exceeded the statutory limits of 441(a)(d).) The party 

contended that the ads did not contain express advocacy and were not coordinated party expenditures 

subject to the 441a(d) limits. The party further argued 

that the 441a(d) limits violated its First Amendment 

rights. 

Colorado I. In the first ruling on this case, the U.S. 

District Court for the District of Colorado concluded 

that the ads were not subject to the 441a(d) limits 

because they did not contain express advocacy. Having already ruled in the party’s favor, the court did not 

address the party’s constitutional challenge. 

On appeal, the U.S. Court of Appeals for the 10th 

Circuit, agreeing with the FEC that a 441(a)(d) expenditure need only depict a clearly identified candidate 

and convey an electioneering message, reversed the 

district court’s decision. The appeals court also held 

that the 441a(d) limits did not violate the party’s First 

Amendment rights. 

The U.S. Supreme Court agreed to hear the case 

principally to resolve the constitutional question. In its 

June 26, 1996, plurality decision, the Court concluded 

that the Party’s expenditures had not been coordinated with a candidate, and were instead independent 

expenditures. The Court then also concluded that the 

441a(d) limits were unconstitutional as applied to 

political parties’ independent expenditures on behalf 

of congressional candidates. The Court did not rule 

on the constitutionality of the limits as applied to coordinated party expenditures but, instead, remanded the 

case to the district court for further proceedings on 

that issue. 

Colorado II. On remand, the district court ruled 

that the coordinated expenditure limits were unconstitutional. The court concluded that the FEC had failed 

to offer evidence that there was a compelling need for 

limits on coordinated party expenditures. In its opinion, the court equated coordinated party expenditures 

with a candidate’s own campaign expenditures which, 

based on the Supreme Court’s ruling in Buckley, cannot be limited. 

Court of Appeals Decision. On May 5, 2000, the 

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

lower court’s decision. In defending the constitutional-
26 Chapter Four 

ity of the 441a(d) limits, the Commission had offered 

three principal arguments that the limits prevent corruption or the appearance of corruption. 

The court, in a 2-1 decision, rejected all three of the 

Commission’s arguments. It noted that—based on 

the Supreme Court’s earlier ruling in this case—party 

committees can already make unlimited independent 

expenditures. The court refused to consider the potential corrupting influence of unregulated “soft 

money” contributions, since those funds cannot legally be spent to influence federal elections. 

The court further held that “there is nothing pernicious” about a party “shaping the views of its candidates.” The court added that, “Parties are simply too 

large and too diverse to be corrupted by any one faction.” 

Having found no persuasive evidence that coordinated party expenditures corrupt or appear to corrupt 

the electoral process, the appeals court concluded 

that “441a(d)(3)’s limit on party spending . . . constitutes an ‘unnecessary abridgment’ of First Amendment freedoms.” The court stated explicitly that its 

analysis and holding apply only to party spending in 

connection with Congressional races. 

In dissent, Chief Judge Seymour said that the 

panel majority “substitute[d] its judgment for that of 

Congress on quintessentially political matters the 

Supreme Court has cautioned courts to leave to the 

legislative process. In so doing, the majority creates 

a special category for political parties based on its 

view of their place in American politics, a view at odds 

with history and with legislation drafted by politicians.” 

Appeal to Supreme Court. The Commission 

voted to appeal the decision to the Supreme Court, 

and the Court agreed to hear the case. In addition, 

the Commission issued a statement indicating that it 

would not file any action in the courts in the 10th Circuit to enforce section 441a(d)(3), but would continue 

the administrative processing of matters concerning 

the section. The Commission’s statement explained 

that “only the Tenth Circuit has found section 

441a(d)(3) unconstitutional, and its decision is not 

controlling outside that court’s geographic jurisdiction. 

Furthermore, if the United States Supreme Court 

overrules the Tenth Circuit, the Court’s decision upholding section 441a(d)(3) will apply retroactively to 

any activities in the interim that violate section 

441a(d)(3), even in the Tenth Circuit. . . . Therefore, 

anyone who chooses to act in contravention of section 441a(d)(3)—within or without the Tenth Circuit— 

before the Supreme Court rules in Colorado could be 

subject to liability for violating the statute if the Colorado decision is reversed.” 

Use of the 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 2000, the Commission issued seven advisory opinions (AOs) on the 

subject. 

Advisory Opinions 

Electronic Checks. In AO 1999-36, the Commission determined that candidates could collect contributions (including matchable contributions to Presidential candidates) via electronic check transmitted 

over the Internet, using a system developed by Advantage, a Maryland corporation. The Commission 

based this conclusion, in part, on AO 1999-9, which 

allowed Bill Bradley for President, Inc., to receive 

matchable credit and debit card contributions over the 

Internet. In both cases, screenings would be done for 

impermissible or nonmatchable contributions through 

a series of measures, including required electronic 

information provided by the contributor. See also AO 

1999-22. 

Independent Expenditures Via Web Site and EMail. In AO 1999-37, the Commission concluded that 

X-PAC, a nonconnected committee, could post communications containing express advocacy on its Web 

site and distribute them through e-mail without making 

a contribution to any candidate. Since the communications expressly advocated the election or defeat of 

specific federal candidates but were made without 

consulting any candidate’s campaign, they qualified 

as independent expenditures. The communications, 

which were created specifically for electronic distribution, were developed “in-house” by X-PAC using commercially available software and would be hosted on 
 

Legal Issues 27 

its Web site at no additional cost. The Commission 

required X-PAC to follow all FEC regulations regarding disclaimers and reporting. 

Corporate PAC’s Use of Internet and E-Mail. 

Under the Act, a corporation is able to solicit money 

for its PAC only from a restricted class of individuals. 

In AO 2000-07, the Commission determined that 

Alcatel USA, Inc., could post certain messages referring to its PAC on the company’s government relations intranet Web site (accessible to all Alcatel employees, including those outside the PAC’s restricted 

class). The PAC messages did not solicit contributions, nor did they encourage them. They also included a statement that Alcatel would not accept contributions from those outside the restricted class. 

In addition, the Commission concluded that Alcatel 

PAC could use its Web site and the company’s e-mail 

system to solicit contributions. Since the Web site 

was available only to the restricted class through the 

use of a password, there was no danger of soliciting 

beyond the restricted class. See AO 1995-33. 

Electronic Prior Approval. Under Commission 

regulations, a trade association must obtain prior written authorization from a member corporation before 

soliciting the member’s restricted class. 11 CFR 

114.8(d) and (e). In AO 2000-10, the Commission 

allowed America’s Community Bankers Community 

Campaign Committee (COMPAC), the separate segregated fund of America’s Community Bankers (ACB), 

to put a form on its “members only” Web page to obtain prior approval from corporate members to solicit 

contributions from their restricted classes. In addition, 

COMPAC could put a notice on ACB’s public Web 

page providing information about the PAC. The Commission concluded that both COMPAC’s notice and its 

prior approval form were permissible because they 

did not solicit or encourage contributions and because 

COMPAC planned to employ safeguards to ensure 

that no prohibited contributions would be received. 

In a related opinion, AO 2000-22, the Commission 

determined that corporate members of the Air Transportation Association of America and a number of 

other incorporated trade associations could grant prior 

approval using electronic signatures. In the past, the 

Commission has approved the use of an electronic 

signature, concluding that, like a traditional signature, 

it is a unique identifier of the authorizing individual. 

See AOs 1999-3 and 1999-6. In this case, the associations had to verify that the permission-to-solicit 

forms were only available to authorized corporate 

representatives, and that each electronically signed 

authorization came from the corporate representative. 

Internet Convention Coverage. In AO 2000-13, 

the Commission ruled that iNEXTV Corporation 

(iNEXTV), through its affiliate, EXBTV, could provide 

gavel-to-gavel Internet video coverage of the Republican and Democratic national conventions without 

making a prohibited corporate contribution or expenditure. The proposed activities fell within the Act’s exemption for news stories and commentary. 2 U.S.C. 

§431(9)(B)(i). iNEXTV and EXBTV met the criteria for 

the exemption because they qualified as press entities both in their purpose and function; they were not 

owned by any political party, political committee or 

candidate; and they would be acting in their capacity 

as press entities in undertaking this media coverage. 

Ads on Internet for Academic Study. In AO 

2000-16, the Commission allowed Third Millennium: 

Advocates for the Future, Inc., (Third Millennium) to 

place advertisements for Presidential candidates on 

the Internet in order to study their effects on voter 

participation among young adults. Third Millennium 

retained the services of an Internet service provider 

that maintained demographic information on its subscribers. Using that data, Third Millennium intended 

to randomly select subscribers to view ads supporting 

one or all of the Presidential candidates, and then 

measure those subscribers’ voting patterns through a 

post-election survey. Third Millennium planned to use 

either the content and design of advertisements created by each Presidential campaign or to create its 

own advertisements from available materials. In doing so, Third Millennium would treat each candidate 

equally, giving none a qualitative or quantitative advantage. It would not pay the campaigns for materials 

provided, and it reserved the right to reject material 

that mentioned or alluded to another candidate. The 

Commission determined that Third Millenium’s proposed activities did not constitute a contribution and 

were therefore permissible. 
28 Chapter Four 

Status of Rulemaking 

Although the Commission has issued a number of 

advisory opinions on the application of the law to 

Internet activity, many issues remain unanswered. In 

2000, the Commission reviewed and analyzed some 

1,200 comments that it received in response to a 

1999 Notice of Inquiry on the use of the Internet in 

campaigning. These comments will help the agency 

decide whether to proceed with further rulemaking on 

this subject. 

Soft Money 

Soft money—funds raised and/or spent outside the 

limitations and prohibitions of the Act—received considerable attention during 2000. Under FEC regulations, committees that have both federal and 

nonfederal accounts must allocate certain expenses, 

including administrative and generic voter drive expenses, based on an allocation formula. Committees 

must pay the federal portion of the expenses with 

funds subject to the limitations and prohibitions of the 

Act, but may use soft money for the rest. 

Advisory Opinions 

The Commission considered one advisory opinion 

during 2000 that dealt with soft money issues. In AO 

2000-19, the Commission determined that the Republican Party of Florida (RPF) could retroactively adjust 

its federal-to-nonfederal (hard-to-soft money) allocation ratio—and reallocate its administrative expenses 

accordingly—to reflect the addition of two state offices, which had become vacant earlier in the year.8 

RFP was required to submit an amended schedule 

H1 for the period in question and to transfer funds 

between its federal and nonfederal accounts to correct its prior allocation for this period. 

8

 Under Commission regulations, state and local party 

committees are required to allocate their administrative 

expenses and costs of generic voter drives using the “ballot 

composition method,” which is 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). 

Enforcement 

In MUR 3774, an enforcement case, the Commission examined the failure of a party committee to allocate expenses between its federal and nonfederal 

accounts. The National Republican Senatorial Committee (the Party) and its treasurer paid a civil penalty 

of $20,000 and transferred $88,207.60 from the 

Party’s federal account to its nonfederal account for 

failing to allocate payments made to a third party to 

conduct get-out-the-vote drives (GOTV). Between 

October 31 and November 4, 1994, the Party disbursed a total of $175,000 from its nonfederal account 

to the National Right to Life Committee (NRLC), which 

then made payments of at least $135,704 for GOTV 

phone calls targeting pro-life supporters in states with 

elections that included federal candidates. 

The Commission determined that the Party knew 

and intended that the nonfederal funds it transferred 

to NRLC would be used for these purposes. 

A national party committee, such as the Party, 

must allocate expenses for generic voter drive activities9

 between its federal and nonfederal accounts 

according to the formula set out at 11 CFR 

106.5(c)(2): a minimum of 65 percent of these costs 

must be allocated to the federal account. The Commission found probable cause to believe that the 

Party’s disbursements of 100 percent nonfederal 

funds to NRLC in 1994, which NRLC used to finance 

GOTV activities, was not in accordance with the Act 

or Commission regulations. The Party contended that 

no violations occurred or were proven by the record, 

but, in order to settle the matter, the Party agreed not 

to further contest the Commission’s probable cause 

findings that it had violated 2 U.S.C. §§441a(f) and 

441b(a) and 11 CFR 102.5(a)(1)(i), 106.5(c) and 

106.5(g)(1)(i). (For a more complete discussion of this 

case, see the March 2000 Record.) 

9

 Generic voter drives include voter identification, voter 

registration and get-out-the-vote drives, or any other activity 

that urges the general public to register, vote or support 

candidates of a particular party or associated with a particular issue, without mentioning a specific candidate. 

106.5(a)(2)(iv). 
Legal Issues 29 

Status of Rulemaking 

Plans for additional regulations on soft money re-

mained a priority for the Commission during 2000. 

The Office of General Counsel (OGC) completed 

analysis of the comments and testimony that it re-

ceived in response to the 1998 Notice of Proposed 

Rulemaking (NPR), and it forwarded its recommenda-

tions to the Commissioners on February 4, 2000. 

After Commission discussion of the rules, OGC for-

warded alternative versions of the draft final rules on 

October 16, 2000, for further consideration. 

American Indian Tribes 

The Commission addressed the issue of contribu-

tions from American Indian tribes in two separate 

advisory opinions during 2000. 

Advisory Opinions 

AO 1999-32. The Commission said that the 

Tohono O’odham Nation (the Nation) could make 

contributions to influence federal elections even 

though its Utility Authority (TOUA) was a government 

contractor. Under 2 U.S.C. §441c, it is unlawful for a 

Federal contractor to make contributions in connec-

tion with a federal election. Based on a variety of fac-

tors, the Commission determined, however, that 

TOUA was a separate entity from the Nation and, 

consequently, the Nation was permitted to make con-

tributions. The Nation would not, however, be able to 

make contributions if it received any revenues from 

TOUA. 

AO 2000-05. In AO 2000-05, the Commission 

ruled that the Oneida Nation of New York (the Nation) 

could make contributions in support of federal candi-

dates totaling in excess of $25,000 in a calendar year. 

The Act states that no “individual” can make contribu-

tions of more than $25,000 in a calendar year. 2 

U.S.C. §441a(a)(3). While the Nation qualifies as a 

“person”—which is defined to include various types of 

organizations, as well as individuals—the Commis-

sion concluded that it is an organization and not an 

individual. Therefore, it is not subject to the $25,000 

limit. 
31 Chapter Five 

The Commission 

Commissioners 

President Clinton nominated Bradley A. Smith to the 

Commission on February 9, 2000, and the U.S. Senate confirmed the nomination on May 24, 2000. 

Prior to his appointment, Commissioner Smith was 

Professor of Law at Capital University Law School in 

Columbus, Ohio, where he taught Election Law, Comparative Election Law, Jurisprudence, Law & Economics and Civil Procedure. 

During 2000, Darryl R. Wold served as Chairman 

of the Commission and Danny L. McDonald as its 

Vice Chairman. On December 14, 2000, the Commission elected Mr. McDonald to be its Chairman and 

David M. Mason to be its Vice Chairman in 2001. For 

biographies of the Commissioners and statutory officers, see Appendix 1. 

General Counsel 

Lawrence M. Noble, the FEC’s General Counsel, 

resigned from the agency in order to accept a position 

as the Executive Director and General Counsel of the 

Center for Responsive Politics, a nonpartisan, nonprofit research group. Mr. Noble, who joined the FEC 

in 1977 and served as the Commission’s General 

Counsel from 1987 through 2000, left the Commission 

on December 30, 2000. 

The Commission appointed Lois G. Lerner to serve 

as Acting General Counsel for a period of six months, 

during which time the Commission will conduct an 

open selection process to fill the General Counsel’s 

position. Ms. Lerner joined the staff of the FEC’s Office of General Counsel in 1981 and most recently 

served as the FEC’s Associate General Counsel for 

Enforcement. 

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 2000, focusing particular attention on the FEC’s procurement procedures. The office 

also received and responded to a Congressional request concerning the types of information available 

from the FEC’s Web site, conducted unannounced 

quarterly cash counts of the FEC’s imprest fund and 

began to develop an OIG Policy and Procedures 

pamphlet to help FEC employees understand the 

OIG’s role. 

Also during 2000, the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency presented OIG senior auditor 

Jonathan Hatfield with an award for individual accomplishment. 

ADR and Administrative Fines 

Offices 

During 2000, the Commission established new 

offices—under the direction of the Staff Director—to 

administer its Alternative Dispute Resolution (ADR) 

and Administrative Fine programs. 

The ADR pilot program is designed to promote 

compliance with the federal election law by encouraging settlements outside the traditional enforcement or 

litigation processes. For additional information about 

the program, see page 13. 

The Administrative Fine program streamlines the 

Commission’s processing of violations involving latefiling and failure to file reports. For more information 

on the program, see page 11. 

Equal Employment Opportunity 

(EEO) 

The FEC’s Office of Equal Employment Opportunity has been a leader in the area of Alternative Dispute Resolution (ADR), establishing and successfully 

utilizing mediation to informally resolve EEO matters 

since March 1994. 

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, 
32 Chapter Five 

separately or jointly, with the EEO Director 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 

2000, the Commission informally resolved 100 percent of the complaints employees voluntarily brought 

before the EEO Director. 

In addition to this accomplishment, during 2000, 

the EEO office presented cultural diversity training to 

staff of the Office of General Counsel, sponsored an 

African-American Fashion Show and hosted AsianPacific Islander and Hispanic Heritage luncheons. 

Personnel 

Among the Personnel Office’s accomplishments 

during 2000 were: 

• Implementing new oversight procedures for the 

Commission’s Performance Management System to 

ensure that employee performance appraisals are 

appropriate and timely; 

• Providing training to managers regarding Performance Standards development and their responsibilities under the labor relations laws; and 

• Providing pre-retirement training to approximately 35 

employees. 

The FEC’s Budget 

Fiscal Year 2000 

The Commission received a $38.152 million FY 

2000 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. 

Fiscal Year 2001 

In the spring of 2000, Danny L. McDonald, then 

Vice Chairman of the Commission and chairman of 

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

FY 2001 budget request to members of a House Appropriations subcommittee and to the Committee on 

House Administration. The Commission requested 

$40.96 million and 356 FTE for FY 2001, a modest 

increase of 7.5 percent and 4 additional personnel 

over FY 2000. Vice Chairman McDonald noted that 

the majority of the requested budget increase was 

needed to cover inflation in operating costs, but would 

also provide additional resources in core program 

areas. 

In the end, the Commission received a $40.5 million FY 2001 appropriation. After a .22 percent government-wide rescission, the FEC netted a $40.41 

appropriation for FY 2001. 

Budget Allocation: FYs 2000 and 2001 

Budget allocation comparisons for FYs 2000 and 

2001 appear in the table and charts that follow. 

CHART 5-1 

Functional Allocation of Budget 

FY 2000 FY 2001 

Personnel $25,530,642 27,757,000 

Travel/Transportation 700,839 507,500 

Space Rental 3,398,336 3,544,000 

Phones/Postage 402,972 441,000 

Printing 293,791 375,500 

Training/Tuition 93,258 218,000 

Administrative Expenses 127,339 108,500 

Contracts/Services 2,881,266 2,721,500 

Maintenance/Repairs 573,563 986,500 

Software/Hardware 2,053,512 2,312,000 

Federal Agency Service 646,597 414,000 

Supplies 380,646 357,500 

Publications 402,892 421,000 

Equipment 789,412 246,900 

Total $38,275,065 40,410,900 
The Commission 33 

CHART 5-2 

Divisional Allocation 

FY 2000 Actual 

FY 2001 Projected 

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 

0 5 10 15 20 25 30 35 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 
35 

Chapter Six 

Legislative Recommendations 

In late February and early March 2001, the Federal 

Election Commission submitted to Congress and the 

President two sets of legislative recommendations. 

The first set contained two 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 34 recommendations follows. 

Part I: Priority Recommendations 

Compliance 

Extending Administrative Fine Program for 

Reporting Violations (2001)1 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

Congress extend the Commission’s authority to assess administrative fines for straightforward violations 

of the law requiring the timely reporting of receipts 

and disbursements. Congress should extend the 

administrative fine authority to cover violations that 

relate to reporting periods that begin on or after January 1, 2002, and that end on or before December 31, 

2003. 

Explanation: Congress amended the Act in 1999 to 

permit the Commission to impose civil money penalties for violations of filing requirements that occur 

between January 1, 2000, and December 31, 2001. 

Public Law 106-58. Accordingly, the Commission 

promulgated new regulations at 11 CFR Part 111, 

Subpart B, to implement a new Administrative Fine 

program for violations of reporting deadlines. See 64 

FR 31787 (May 19, 2000). Under the program in 

place, when a committee files a late report, or fails to 

file a report, the Commission assesses a civil penalty 

1 The recommendation to implement an administrative 

fines program was also made by Pricewaterhouse Coopers 

LLP in its Technology and Performance Audit and Management Review of the Federal Election Commission, pages 4-

78 and 5-2. 

based on a schedule of penalties that takes into account the committee’s level of financial activity in the 

reporting period, the election sensitivity of the report, 

the number of days late and the number of previous 

violations. Committees have the option to either pay 

the civil penalty assessed or challenge the 

Commission’s finding and/or proposed penalty. 

The Administrative Fine program has introduced 

greater certainty about the consequences of noncompliance with the Act’s filing requirements, with the 

result that compliance has increased. For example, 

the number of late filers dropped significantly with the 

July quarterly report, the first report handled under the 

new program. While 30 percent of filers were late for 

the 2000 April quarterly filing, only 18 percent of filers 

were late for the 2000 July quarterly filing. 

Because the program is scheduled to end in December 2001, the Commission has only a limited number 

of reporting periods in which to evaluate the 

program’s effectiveness. Also, new legislation and 

regulations on mandatory electronic filing became 

effective on January 1, 2001. (See Public Law 106-

58, section 639, and 65 FR 38415 (June 21, 2000).) 

Extending the duration of the Administrative Fine pilot 

would give the Commission and Congress an opportunity to evaluate the effects of the impact of the pilot 

program on one full cycle of reporting—the final report 

for the current cycle is due January 31, 2003. Additionally, the extension would allow the agency to 

evaluate the effects of mandatory electronic filing 

upon the ability of filers to meet reporting deadlines 

and avoid administrative penalties. The new mandatory electronic filing program began on January 1, 

2001. 

Election Administration 

Duties of the Office of Election Administration, 

Advisory Panel (2001) 

Section: 2 U.S.C. §438(a)(10) 

Recommendation: The Commission recommends 

that Congress amend 2 U.S.C. §438(a)(10), both to 

clarify that the responsibilities of the Office of Election 

Administration (OEA) include the periodic update and 
36 Chapter Six 

enhancement of the voluntary Voting System Standards (VSS) program, and to establish statutorily an 

Advisory Panel. The state and local officials who 

serve on the Commission’s Advisory Panel counsel 

the Commission on the most useful allocation of resources and advise the Commission and election 

officials on consensus best practices in the administration of elections. A statutorily-chartered Advisory 

Panel specifically would be responsible for advising 

the Commission on the VSS program, including issues relating to the scope and frequency of updates 

to the VSS, and the independent testing authority that 

would use the VSS to test voting equipment. 

Explanation: The FEC’s Office of Election Administration was established as part of the Commission by the 

Federal Election Campaign Act Amendments of 1974 

(codified at 2 U.S.C. §438(a)(10)), which mandated 

that the Federal Election Commission serve as a national clearinghouse for the compilation of information 

and review of procedures with respect to the administration of federal elections. In connection with the 

OEA’s duties, the Commission established an Advisory Panel of state and local officials by administrative 

action in 1976. The OEA has served as a national 

clearinghouse for 25 years, gathering information on 

the voting process and other election administration 

practices and issues, establishing voluntary standards 

for voting equipment and providing guidance to state 

and local election administrators throughout the 

United States. The Office has acquired a wealth of 

experience and expertise. It successfully helped to 

implement the Polling Place Accessibility for the Elderly and Handicapped Act and the National Voter 

Registration Act (“Motor Voter”), and recently has 

overseen a multiyear project to revise the voluntary 

Voting System Standards. Since 1975, the OEA has 

administered more than 30 studies in the field of election administration and, as a result, has published 65 

volumes on these matters. 

The OEA’s expertise in voting system standards, voting equipment and election administration practices 

and issues is well established. Building upon both this 

expertise and the credibility it has established with 

state and local election officials, the FEC’s Office of 

Election Administration could immediately and efficiently undertake an expanded role in this field. With 

no need for start-up time, the OEA, with the assistance of its Advisory Panel, could help fulfill the increased demand for “the compilation of information 

and the review of procedures with respect to the administration of Federal elections” (2 U.S.C. 

§438(a)(10)) to directly benefit the conduct of elections in 2002. Specifically, the OEA would: 

• Continue to update the VSS first developed in 1990, 

and expand the VSS program beyond technical 

standards to include voluntary management standards and voluntary performance/design standards 

that will optimize ease of use and minimize voter 

confusion; 

• Increase outreach efforts to state and local jurisdictions (and vendors of voting equipment) regarding 

the VSS; 

• Work with existing association and membership 

organizations to provide training and technical assistance opportunities for election officials; 

• Develop and maintain a current data bank on election voting equipment; 

• Facilitate the timely exchange of information among 

state and local officials on issues relating to election 

administration; 

• Consult with other government agencies having 

responsibility for the conduct of federal elections; 

and 

• Compile information about funding needs of state 

and local officials relating to voting equipment, training of poll workers, voter education, and other areas 

that might be appropriate for a federal grant program, if Congress chooses to fund state and local 

initiatives in election administration. 
Legislative Recommendations 37 

Part II: (Valid and Technical) 

Supplemental Recommendations 

Part A: Other Valid Legislative 

Recommendations 

Disclosure 

Waiver Authority (revised 2001) 

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 

12-day pre-election reporting requirements and 48-

hour notice requirements for large last-minute contributions 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 2002 October 

Monthly report, covering September, will be required 

to be postmarked October 20. Meanwhile, the 2002 

Pre-General report, covering October 1 -16, will be 

required to be postmarked October 21, one day after 

the October Monthly. A waiver authority would enable 

the Commission to eliminate the requirement to file 

the monthly report, as long as the committee includes 

the activity in the Pre-General Election Report and 

files the report on time. The same disclosure would 

be available before the election, but the committee 

would only have to file one of the two reports. 

In other situations, disclosure would be served if the 

Commission had the authority to adjust the filing requirements, as is currently allowed for special elections. For example, runoff elections are often scheduled shortly after the primary election. In many instances, the close of books for the runoff 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. 

Monthly Reporting for Congressional Candidates 

(revised 2001) 

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 in both election and non-election years. 

Explanation: Political committees, other than principal 

campaign committees, may choose under the Act to 

file either monthly or quarterly reports. Committees 
38 Chapter Six 

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 

might 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 or runoff election or a nominating convention.1 

In States where a primary (including a runoff or nominating convention) 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 report (or prerunoff or pre-convention report), 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 Pre-election 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, runoff 

or nominating convention, regardless of their reporting 

schedule. 

Commission as Sole Point of Entry for Disclosure 

Documents (revised 2001)2 

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 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 

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. Moreover, Public Law 106-58, section 639, mandated elec1 In several states, a nominating convention is held in 

lieu of or in addition to a primary election, and has the ability 

to determine the general election nominee. 

2 This recommendation was also made by 

PricewaterhouseCoopers LLP in its Technology and Performance Audit and Management Review of the Federal Election Commission, pages 4-37 and 5-2. 
Legislative Recommendations 39 

tronic filing for committees who meet certain thresholds as specified by the Commission. Senate candidates and the Senatorial Campaign Committees, 

however, do not have the official authority to file electronic reports because the point of entry for their reports is the Secretary of the Senate (not the FEC). It 

should be noted, however, that such committees may 

file unofficial electronic copies of their reports with the 

FEC. It is also important to note that the FEC has 

worked closely with the Secretary of the Senate to 

improve disclosure within the current law. For example, the FEC and the Secretary of the Senate have 

implemented digital imaging of Senate reports and 

have developed the capacity of the Secretary’s office 

to accept electronically filed reports. While these 

measures have undoubtedly improved 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. 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. 

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. 
40 Chapter Six 

Draft Committees 

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

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

Recommendation: The Commission recommends that 

Congress consider the following amendments to the 

Act in order to prevent a proliferation of “draft” committees and to reaffirm Congressional intent that draft 

committees are “political committees” subject to the 

Act’s provisions. 

1. Bring Funds Raised and Spent for Undeclared but 

Clearly Identified Candidates Within the Act’s Purview. Section 431(8)(A)(i) should be amended to include in the definition of “contribution” funds contributed by persons “for the purpose of influencing a 

clearly identified individual to seek nomination for 

election or election to Federal office....” Section 

431(9)(A)(i) should be similarly amended to include 

within the definition of “expenditure” funds expended 

by persons on behalf of such “a clearly identified individual.” 

2. Restrict Corporate and Labor Organization Support 

for Undeclared but Clearly Identified Candidates. Section 441b(b) should be revised to expressly state that 

corporations, labor organizations and national banks 

are prohibited from making contributions or expenditures “for the purpose of influencing a clearly identified individual to seek nomination for election or election...” to federal office. 

3. Limit Contributions to Draft Committees. The law 

should include explicit language stating that no person shall make contributions to any committee (including a draft committee) established to influence the 

nomination or election of a clearly identified individual 

for any federal office which 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. 

Registration of Candidates and Principal 

Campaign Committees (revised 2001) 

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

Recommendation: The Commission recommends that 

Congress revise section 433(a) to require a principal 

campaign committee to file its Statement of Organization at the same time that the candidate is required, 

under section 432(e)(1), to file his or her Statement of 

Candidacy. 

Explanation: An individual becomes a candidate under the FECA once he or she crosses the $5,000 

threshold in raising contributions or making expenditures. Under current law, the candidate has 15 days 

to file his/her Statement of Candidacy, designating 

the principal campaign committee, which will subse-
Legislative Recommendations 41 

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

candidate’s designation to file a Statement of Organization, the document that officially registers the committee. 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 first report. During an election year, this 

period can be so long that it interferes with effective 

disclosure. For example, if a candidate triggered candidate status 44 days before his or her primary, he or 

she would be required to file the Statement of Candidacy 29 days before the primary. The committee in 

turn would not be required to register (i.e., file the 

Statement of Organization) until 19 days before the 

primary. This would allow the committee to avoid filing 

the pre-primary report (which covers financial activity 

up through 20 days before the primary and is due 12 

days before the primary). Although the committee 

would have to file 48-hour notices of last-minute large 

contributions received between 19 days and 48 hours 

before the primary, it would not provide complete 

financial disclosure of contributions and expenditures 

until after the primary election because the 

committee’s first required financial report would be the 

quarterly report (not due possibly for 2 more months). 

By requiring simultaneous registration of both the 

candidate and the principal campaign committee 

within 15 days of the date that the candidate triggered 

candidate status under the Act, the public would be 

assured of more timely disclosure of the campaign’s 

activity. Applying this principle to the example above, 

the candidate and committee in question would register with the Commission 29 days before the primary, 

and the committee would file the pre-primary report 

due 12 days before the primary, assuring complete 

disclosure of financial activity before the election. 

Reporting Deadlines for Semiannual, Year-End 

and Monthly Filers 

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

Recommendation: The Commission recommends that 

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

the close of books for the report. 

Explanation: Committees are often confused because 

the filing dates vary from report to report. Depending 

on the type of committee and whether it is an election 

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

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

that monthly, quarterly, semiannual and year-end 

reports are due 15 days after the close of books of 

each report. In addition to simplifying reporting procedures, this change would provide for more timely disclosure, particularly in an election year. In light of the 

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

fifteenth of the month would not be unduly burdensome. 

Contributions and Expenditures 

Application of $25,000 Annual Limit (revised 2001) 

Section: 2 U.S.C. §441a(a)(3) 

Recommendation: The Commission recommends that 

Congress modify 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. 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 
42 Chapter Six 

and inadvertently exceeds his $25,000 limit. (For 

example, see FEC Matters Under Review (MURs) 

4790 (Democratic contributor paid $13,989 civil penalty for exceeding annual limit in one calendar year) 

and 3929 (Republican contributor paid $32,000 civil 

penalty for exceeding annual limit in three calendar 

years).) 

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. Such an amendment would not alter the per candidate, per election 

limits. 

The change would also 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. 

Contributions by Foreign Nationals 

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.2d 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. 

Election Period Limitations for Contributions to 

Candidates (revised 2001) 

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 

for the proper election. Many enforcement cases have 

been generated where contributors’ donations are 

excessive vis-a-vis a particular election, but not vis-avis 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 
Legislative Recommendations 43 

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 “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 participates in more than two elections (e.g., in a postprimary runoff as well as a primary and general), the 

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

because Presidential candidates might opt to take 

public funding for the general election, but not the 

primary, and thereby be precluded from accepting 

general election contributions, the $1,000/5,000 “per 

election” contribution limits should be retained for 

Presidential candidates. 

A campaign cycle contribution limit would allow contributors to give more than $1,000 toward a particular 

primary or general election, but this would be balanced 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 made for the general election after the 

primary is over. 

Distinguishing Official Travel from Campaign 

Travel 

Section: 2 U.S.C. §431(9) 

Recommendation: The Commission recommends that 

Congress amend the FECA to clarify the distinctions 

between campaign travel and official travel. 

Explanation: Many candidates for federal office hold 

elected or appointed positions in federal, state or local 

government. Frequently, it is difficult to determine 

whether their public appearances are related to their 

official duties or whether they are campaign related. A 

similar question may arise when federal officials who 

are not running for office make appearances that 

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

behalf of specific candidates. 

Another difficult area concerns trips in which both 

official business and campaign activity take place. 

There have also been questions as to how extensive 

the campaign aspects of the trip must be before part 

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

criteria for determining when such activity is campaign 

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

of a trip. This will also help Congress determine when 

official funds must be used under House or Senate 

Rules. 

Contributions from Minors 

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. 
44 Chapter Six 

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. 

Compliance 

Ensuring Independent Authority of FEC in 

Supreme Court Litigation (2001) 

Section: 2 U.S.C. §§437c(f)(4), 437d(a)(6), 

437g(a)(9) and 437h 

Recommendation: Congress should clarify that the 

Commission is authorized to initiate and/or conduct 

Supreme Court litigation on matters arising under Title 

2 of FECA. 

Explanation: The Commission, rather than the Solicitor General’s Office, should be responsible for initiating and/or conducting Supreme Court litigation on 

matters arising under Title 2 of the Federal Election 

Campaign Act (FECA). This would include civil enforcement actions brought by the agency, actions 

against the agency for its dismissal or failure to act on 

enforcement matters, subpoena enforcement actions 

and actions challenging or construing the constitutionality of the FECA. 

The statute clearly provides Supreme Court litigation 

authority to the Commission under the Title 26 presidential public funding provisions. The Commission 

had conducted its own Supreme Court litigation, even 

under Title 2, for 18 years. In 1994, however, the 

Supreme Court interpreted the statute to preclude the 

FEC from having authority to conduct Supreme Court 

litigation without the prior authorization of the Solicitor 

General’s Office. See FEC v. NRA Political Victory 

Fund, cert. dismissed for want of jurisdiction, 513 U.S. 

88 (1994) (“NRA”). Under this ruling, the Solicitor 

General may decline to authorize action even in 

cases where the six-member Commission believes 

Supreme Court review is advisable. Indeed, on several cases since the NRA decision, the Commission’s 

requests have been denied. This has occurred even 

though the Commission clearly had authority to conduct the litigation in the lower courts. 

The Commission should be able to determine which 

issues merit Supreme Court resolution. Some difficult 

legal questions for which the Commission sought 

Supreme Court review might have been resolved by 

now, one way or another, if the Solicitor General’s 

Office had not declined the Commission’s requests. 

The Commission is a unique federal agency that 

regulates those persons seeking election to the Presidency and the political parties that support them. No 

more than three commissioners may be from any one 

political party; thus, the required majority vote to take 

any action cannot be controlled by any one party. 

This insures that any Commission litigation decisions 

in the Title 2 area are not subject to an appearance of 

conflict. This certainly underlies the legislative history 

indicating that Congress intended the Commission to 

have broad independent litigation authority. In the 

Commission’s view, the difference in language between the Title 26 provisions and the Title 2 provisions was not intended by Congress to deprive the 

Commission of Supreme Court litigating authority 

under Title 2. 
Legislative Recommendations 45 

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) provide 

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 

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 that 

may merit heavy criminal sanction. Although there is 

no prohibition preventing the Department of Justice 

from initiating criminal FECA prosecutions on its own, 

the vehicle for the Commission to bring such matters 

to the Department’s attention is found at 

§437g(a)(5)(C), which provides for referral only after 

the Commission has found probable cause to believe 
46 Chapter Six 

that a criminal violation of the Act has taken place.3 

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. 

Public Financing 

Averting Impending Shortfall in Presidential 

Public Funding Program (revised 2001) 

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

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

projected impending shortfall in the Presidential public 

funding program in the 2004 election year. 

Explanation: The Presidential public funding program 

experienced 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 impacted 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 that qualified 

Presidential candidates were entitled to receive. Specifically, only $16.9 million was available for distribution to qualified primary candidates on January 1, 

2000, after the Treasury paid the convention grants 

and set aside the general election grants.4 However, 

the entitlement (i.e., the amount that the qualified 

candidates were entitled to receive) on that date was 

$34 million, twice as much as the amount of available 

public funds. By January 2001, total payments made 

to primary candidates was in excess of $61 million. 

Moreover, FEC staff predict that an even more significant shortfall will exist in the 2004 election cycle. The 

balance in the Presidential Election Campaign Fund 

in January 2004 is estimated to be approximately $8.5 

million while demand is estimated to be $37 million. 

Based on those estimates, candidates will receive 

approximately 23 cents on the dollar with the first 

payment, and it is estimated that the shortfall will extend until March 2005. The Commission recommends that Congress take appropriate action to reduce the impact of this shortfall. 3 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. 

4 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 47 

Qualifying Threshold for Eligibility for Primary 

Matching Funds 

Section: 26 U.S.C. §9033 

Recommendation: The Commission recommends that 

Congress raise the qualifying threshold for eligibility 

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 (revised 2001) 

Section: 2 U.S.C. §441a(b)(1)(A) 

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 
48 Chapter Six 

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. 

Eligibility for Public Funding Following Violations 

of the Public Finance Laws (revised 2001) 

Section: 26 U.S.C. §§9003 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 knowing 

and willful (criminal) violation of the Presidential Primary Matching Payment Account Act (26 U.S.C. 

§9042), the Presidential Election Campaign Fund Act 

(26 U.S.C. §9012), or other offenses relating to public 

funding—or who have failed to make repayments in 

connection with a past campaign—will not be eligible 

for public funding in subsequent elections. 

Explanation: Neither Presidential public financing 

statute expressly restricts eligibility for funding because of a candidate’s prior violations of law, no matter how severe. In LaRouche v. FEC, 996 F.2d 1263 

(D.C. Cir. 1993), cert. denied, 510 U.S. 992 (1993), 

the court held that the Commission could not deny 

funding to a candidate who had been convicted of 

fraud involving election-related activities. The court 

reasoned that the Matching Payment Act did not authorize the Commission to evaluate a candidate’s 

“good faith” as part of the funding process. The same 

reasoning would seemingly apply to the Fund Act. 

There is a risk of serious erosion in the public confidence in the integrity of the public financing system if 

the U.S. Government were to provide public funds to 

candidates who had been convicted of crimes related 

to the public funding process, or additional funds to 

those who had not made past repayments. 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. 

Some criminal violations of the public finance laws are 

classified as felonies, while others are misdemeanors. 

(Under federal law, a misdemeanor is any crime for 

which the maximum penalty is one year’s imprisonment or less, and a felony is any crime for which the 

maximum penalty is more than one year’s imprisonment. See 18 U.S.C. §3559.) Accordingly, we recommend that this prohibition encompass all criminal violations covered by these Acts, be they misdemeanors 

or felonies. 

Part B: Technical 

Recommendations 

Disclosure 

Election Cycle Reporting of Operating 

Expenditures and Other Disbursements 

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, section 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, 
Legislative Recommendations 49 

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. 

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 
50 Chapter Six 

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. 

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. 

Compliance 

Modifying Terminology of “Reason to Believe” 

Finding (revised 2001) 

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.” 
Legislative Recommendations 51 

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 or referral 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. Note that the change 

in terminology recommended by the Commission 

would not change the standard that this finding simply 

represents that the Commission believes a violation 

may have occurred if the facts as described are accurate. 

Public Financing 

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 5

) 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. 

Enforcement of Nonwillful Violations (revised 2001) 

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. Congress should also consider amending the Presidential Election Campaign 

Fund Act to clarify how unlawful uses of payments by 

convention committees, if nonwillful, are to be penalized. 

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

annually. 
52 Chapter Six 

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. 

Section 9012(c)(2) governs the unlawful use of payments by a convention committee. The language of 

9012(c) fails, however, to specify the appropriate 

criminal penalty for such violations. Since criminal 

penalties are specified for all the other violations listed 

in section 9012(c), the absence of such a penalty for 

the convention violation mentioned in (c)(2) may be a 

statutory oversight. 

Alternatively, Congress may wish to clarify whether 

the unlawful use of payments by a convention committee under section 9012(c)(2) is a criminal violation. 

This is unclear because the language of section 

9012(c)(2) does not contemplate a “knowing and willful” violation, This contrasts with other violations of 

section 9012. Also, as noted above, the penalties 

specified in paragraph (c)(3) apply to other violations 

of the section, but not to violations by convention 

committees. 

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. 

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 (revised 2001) 

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 
Legislative Recommendations 53 

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, 513 U.S. 88 (1994).) 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. 
55 Chapter Seven 

Campaign Finance Statistics 

CHART 7-1 

Number of PACs, 1974-2000 

Corporate 

Nonconnected 

Trade/Membership/Health 

Labor 

Other 

2000 

1500 

1000 

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 00 
CHART 7-2 

House Candidates’ 

Sources of Receipts: 

Election Cycle 

Individuals 

PACs 

Candidate 

Other Receipts 

Open Seat Candidates 

Millions of Dollars 

400 

350 

300 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 2000 

Incumbents 

Millions of Dollars 

400 

350 

300 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 2000 

56 Chapter Seven 

Challengers 

Millions of Dollars 

400 

350 

300 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 2000 
CHART 7-3 

Senate Candidates’ 

Sources of Receipts: 

Election Cycle 

Individuals 

PACs 

Candidate 

Other Receipts 

Millions of Dollars 

250 

200 

150 

Open Seat Candidates 

100 

50 

0 1992 1994 1996 1998 2000 

Campaign Finance Statistics 57 

Challengers 

Millions of Dollars 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 2000 

Incumbents 

Millions of Dollars 

250 

200 

150 

100 

50 

0 1992 1994 1996 1998 2000 
Receipts 

Disbursements 

58 Chapter Seven 

CHART 7-4 

House and Senate Activity 

by Election Cycle 

Millions of Dollars 

1990 1992 1994 1996 1998 2000 

0 

200 

400 

600 

800 

1000 

1200 
CHART 7-5 

PAC Contributions to Candidates 

by Party and Type of PAC 

Democratic Candidates 

Republican Candidates 

Campaign Finance Statistics 59 

1998 Election Cycle 

Millions of Dollars 

100 

80 

60 

40 

20 

0 

Corp. Labor Trade/ Non- Other 

PACs PACs Member/ Connected PACs 

Health PACs 

PACs 

2000 Election Cycle 

Millions of Dollars 

100 

80 

60 

40 

20 

0 

Corp. Labor Trade/ Non- Other 

PACs PACs Member/ Connected PACs 

Health PACs 

PACs 
CHART 7-6 

PAC Contributions to House and Senate 

Candidates by Party and Candidate Status 

1996 

1998 

2000 

Millions of Dollars 

200 

150 

100 

50 

0 Republicans Democrats 

60 Chapter Seven 

Millions of Dollars 

200 

150 

100 

50 

0 Incumbents Nonincumbents 
CHART 7-7 

PAC Contributions to House Candidates 

by Type of PAC and Candidate Status 

1996 

1998 

2000 

Percent 

100 

80 

60 

40 

20 

0 Corp. Labor Noncon. Trade 

Incumbents 

Campaign Finance Statistics 61 

Percent 

100 

80 

60 

40 

20 

0 Corp. Labor Noncon. Trade 

Challengers 
CHART 7-8 

Major Party Federal 

Account Receipts: 2000 

National Committee 

National Senatorial Committee 

National Congressional Committee 

State/Local Committees 

62 Chapter Seven 

Millions of Dollars 

250 

200 

150 

100 

50 

0 

Democrats Republicans 
CHART 7-9 

Party Federal and 

Nonfederal Receipts 

Federal Receipts 

Nonfederal Receipts 

Campaign Finance Statistics 63 

Democratic National Committee (DNC) 

1993-94 1995-96 1997-98 1999-00 

$83.86 million $210.3 million $122.6 million $262.7 million 

Republican National Committee (RNC) 

1993-94 1995-96 1997-98 1999-00 

$132.27 million $306.1 million $178.8 million $377.9 million 
CHART 7-10 

Sources of Party Receipts 

1998 

2000 

DNC Federal Receipts by Source 

0 

Millions of Dollars 

40 80 120 

Individuals 

$200 or less 

Individuals 

over $200 

PACs 

Other 

RNC Federal Receipts by Source 

0 

Millions of Dollars 

40 80 

Individuals 

$200 or less 

Individuals 

over $200 

PACs 

Other 



DNC Nonfederal Receipts by Source 

Millions of Dollars 

0 20 40 60 80

Individuals 

Other 

Sources 

 1



RNC Nonfederal Receipts by Source 

Millions of Dollars 

0 20 40 60 80 100

Individuals 

Other 

Sources 

64 Chapter Seven 

120 

00
CHART 7-11 

Receipts of Presidential Primary 

Campaigns by Source 

Individuals 

Matching Funds 

Candidate 

Other 

Campaign Finance Statistics 65 

Smith 

Quayle 

Nader 

McCain 

LaRouche 

Keyes 

Kasich 

Hatch 

Hagelin 

Gore 

Forbes 

Dole 

Bush 

Buchanan 

Browne 

Bradley 

Bauer 

Alexander 

0 20 40 60 80

Millions of Dollars 

100 
CHART 7-12 

2000 General Election: 

Funding Sources of Candidates 

Receiving Public Grants 

Contributions to Compliance Fund 

Individual Contributions 

Party Expenditures 

Federal Funds 

66 Chapter Seven 

Millions of Dollars 

100 

80 

60 

40 

20 

0 

Bush/Cheney Gore/Lieberman Buchanan/Foster 
Campaign Finance Statistics 67 

CHART 7-13 

Presidential Spending by 2000 

General Election Campaigns 

Millions of Dollars 

30 

25 

20 

15 

10 

5 

0 

August September Oct. 1 - Oct. 19 - Nov. 28 -

Oct. 18 Nov. 27 Dec. 31 

Bush/Cheney 

Gore/Lieberman 

Buchanan/Foster 

Nader/LaDuke 
69 

Appendix 1 

Biographies of 

Commissioners 

and Officers 

Commissioners 

Darryl R. Wold, Chairman 

April 30, 20011 

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. 

Danny L. McDonald, Vice Chairman 

April 30, 2005 

Now serving his fourth term as Commissioner, 

Danny McDonald was first appointed to the Commission in 1981 and was reappointed in 1987, 1994 and 

2000. 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. 

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. 

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. 

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. 

1

 Term expiration date. 
70 Appendices 

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. 

Bradley A. Smith 

April 30, 2005 

Bradley Smith was nominated to the Commission 

by President Clinton on February 9, 2000, and confirmed by the U.S. Senate on May 24, 2000. Prior to 

his appointment, Commissioner Smith was Professor 

of Law at Capital University Law School in Columbus, 

Ohio, where he taught Election Law, Comparative 

Election Law, Jurisprudence, Law & Economics and 

Civil Procedure. 

Prior to joining the faculty at Capital in 1993, he 

had practiced with the Columbus law firm of Vorys, 

Sater, Seymour & Pease, served as United States 

Vice Consul in Guayaquil, Ecuador, worked as a consultant in the health care field and served as General 

Manager of the Small Business Association of Michigan, a position in which his responsibilities included 

management of the organization’s political action 

committee. 

Commissioner Smith received his B.A. cum laude 

from Kalamazoo College in Kalamazoo, Michigan, 

and his J.D. cum laude from Harvard Law School. 

Scott E. Thomas, Commissioner 

April 30, 2003 

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. 

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 DC 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 Darryl R. Wold and Vice Chairman Danny L. McDonald begin their oneyear terms of office. 

14 — FEC issues semiannual PAC count. 

— Commission certifies ten additional states 

for paper-filing waiver. 

24 — U.S. Supreme Court rules that Missouri’s 

contribution limits are constitutional (Nixon v. 

Shrink Missouri Government PAC). 

31 — 1999 year-end report due. 

February 

2 — FEC adds open meeting agenda documents 

to Web site. 

9 — President Clinton nominates Bradley A. 

Smith and reappoints Danny L. McDonald 

as FEC Commissioners. 

10-11— FEC holds candidate conference in Washington, DC. 

15 — Commission certifies ten additional states 

for paper-filing waiver. 

16 — Commission holds public hearing on proposed coordination rules. 

23 — FEC conducts monthly roundtable on “Soliciting Funds for Corporate/Labor/Trade PACs 

Using Newsletters and Web Sites.” 

29 — FEC submits $40.96 million FY 2001 budget 

request to Congress. 

March 

1 — FEC conducts monthly roundtable on “Reporting Basics for Corporate/Labor/Trade 

Association PACs.” 

1 — Commission announces 2000 Presidential 

spending limits and ß441a(d) limits. 

8-10 — FEC holds regional conference in Miami, FL. 

10 — Commission releases statistics on Congressional activity during 1999. 

13 — FEC submits six priority legislative recommendations to Congress and the President. 

16 — Commission sends additional 32 recommendations for legislative action to Congress 

and the President. 

22 — Vice Chairman Danny L. McDonald testifies 

before House Appropriations subcommittee 

on $40.96 million FY 2001 budget request. 

27 — Regulations on electronic Freedom of Information Act take effect. 

28 — FEC certifies additional $288,000 cost-ofliving payments to Democratic and Republican Parties for nominating conventions. 

31 — FEC certifies John Hagelin eligible for primary matching funds. 

April 

6-7 — FEC holds corporate/labor conference in 

Washington, DC. 

10 — Commission certifies three additional states 

for paper-filing waiver. 

15 — Quarterly report due. 

19 — Revised regulations governing aspects of 

the public funding of Presidential primary 

and general election campaigns take effect. 

May 

1 — FEC publishes 2000 Combined Federal/ 

State Disclosure and Election Directory. 

5 — U.S. Court of Appeals affirms district court 

decision that coordinated party expenditure 

limits are unconstitutional (FEC v. Colorado 

Republican Federal Campaign Committee). 

16-17— FEC holds member/trade conference in 

Washington, DC. 

18 — U.S. Court of Appeals rejects constitutional 

challenges to prohibitions on corporate contributions and contributions in the name of 

another (Mariani v. USA). 

24 — Commission certifies two additional states 

for paper-filing waiver. 

25 — Commission certifies additional $53,769 

cost-of-living payment to Reform Party for 

nominating convention. 

25 — Senate confirms nomination of Bradley A. 

Smith and renomination of Danny L. 

McDonald as FEC Commissioners. 
72 Appendices 

June 

1 — FEC issues Annual Report 1999. 

5 — Commission issues 15-month fundraising 

figures of major parties. 

7 — FEC conducts monthly roundtable on “Partner/Partnership Federal Election Activity.” 

7 — Regulations on state waiver program take 

effect. 

14 — Danny L. McDonald sworn in for fourth term 

as FEC Commissioner. 

15 — Commission approves final rules on mandatory electronic filing. 

26 — Bradley A. Smith sworn in as FEC Commissioner. 

30 — FEC certifies Ralph Nader eligible for primary matching funds. 

July 

5 — Commission approves final rules on election 

cycle reporting. 

14 — Regulations on administrative fines take 

effect. 

15 — Quarterly report due. 

25 — Commission approves pilot Alternative Dispute Resolution program. 

August 

2 — FEC conducts monthly roundtable on “Update on New and Proposed FEC Reporting 

Regulations.” 

4 — Commission certifies $67.56 million payment 

of public funds to Bush/Cheney campaign. 

18 — Commission certifies $67.56 million payment 

of public funds to Gore/Lieberman campaign. 

22 — FEC issues semiannual PAC count. 

September 

1 — Commission publishes Campaign Guide 

Supplement. 

11 — U.S. Court of Appeals rules that Missouri’s 

limits on party contributions to candidates 

are unconstitutional (Missouri Republican 

Party, et al. v. Charles F. Lamb, et al.). 

12 — Commission votes to deny public funding to 

Hagelin/Goldhaber campaign. 

13 — FEC conducts monthly roundtable on “PreElection Reporting Tune-Up.” 

14 — Commission certifies $12.6 million payment 

of public funds to Buchanan/Foster campaign. 

14 — District court rules that FEC’s debate regulations are not arbitrary or capricious 

(Buchanan et al. v. FEC). 

15 — FEC publishes “Alternative Dispute Resolution Program” brochure. 

22 — FEC makes Senate candidates campaign 

finance reports available on FEC Web site. 

27 — Commission releases 18-month fundraising 

figures of PACs and major parties. 

28 — FEC extends state filing waiver program to 

Senate candidates. 

October 

1 — FEC launches Alternative Dispute Resolution program. 

2 — Commission certifies one additional state for 

paper-filing waiver. 

3 — District court rules that prohibitions on contributions and independent expenditures by a 

nonprofit corporation are unconstitutional 

(Christine Beaumont, et al. v. FEC). 

10 — U.S. Supreme Court grants FEC’s petition 

for certiorari in FEC v. Colorado Republican 

Federal Campaign Committee. 

12 — FEC publishes list of Presidential candidates 

on state ballots. 

15 — Quarterly report due. 

18 — FEC makes additions to its Web site services, including on-line filing of 48-hour notices. 

26 — Pre-General report due. 

November 

2 — FEC releases statistics on 2000 House and 

Senate campaign spending. 

7 — General Election. 

7 — Georgia holds special general election for 

Senate seat. 
Appendices 73 

20 — FEC General Counsel Lawrence Noble announces resignation, effective January 1, 

2001. 

30 — Commission approves final rules on coordinated communications and independent 

expenditures. 

December 

1 — Lois G. Lerner designated Acting General 

Counsel, effective January 2, 2001. 

7 — Post-General report due. 

14 — Commission elects Danny L. McDonald 

Chairman and David M. Mason Vice Chairman for 2001. 

21 — First case resolved and certified under the 

Alternative Dispute Resolution Program. 

29 — Commission certifies one additional state for 

paper-filing waiver. 
Appendix 3 

FEC Organization Chart 

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 

Audit 

Staff Director Inspector General

Information 

Congressional 

Affairs 

Personnel 

Labor/Management 

Press Office 

Policy 3 

Reports 

Analysis 

Litigation 

Enforcement 

The Commissioners 

Darryl R. Wold, Chairman1 

Danny L. McDonald, Vice Chairman2 

David M. Mason, Commissioner 

Karl J. Sandstrom, Commissioner 

Bradley A. Smith, Commissioner 

Scott E. Thomas, Commissioner 

1 Danny L. McDonald was elected 2001 Chairman. 

2 David M. Mason was elected 2001 Vice Chairman. 

Office of 

Administrative 

Review 

Office of 

Alternative Dispute 

Resolution 

Office of Election 

Administration 

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, DC 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 consists of a Finance 

Office and an Administration Office. The Finance Office administers the agency’s accounting and payroll 

programs. The Administration Office is responsible for 

procurement, contracting, space management, 

records management, telecommunications, building 

security and maintenance. The office also handles 

printing, document reproduction and mail services. 

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 Commission Secretary is responsible for all 

administrative matters relating to Commission meetings, as well as Commission votes taken outside of 

the meetings. This includes preparing meeting agendas, agenda documents, Sunshine Act notices, meeting minutes and vote certifications. 

The Secretary also logs, circulates and tracks numerous materials not related to Commission meetings, and records the Commissioner’s votes on these 

matters. All matters on which a vote is taken are 

entrered into the Secretary’s database. 

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. 
78 Appendices 

The division also publishes the Reports on Financial 

Activity series of periodic studies on campaign finance 

and generates statistics for other publications. 

Among its duties related to internal operations, the 

division provides computer support for the agency’s 

automation systems and for administrative functions 

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, then 3 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 describe any serious problems or deficiencies in agency operations and 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 includes materials 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 Administrative Review 

The Office of Administrative Review (OAR) was 

established in 2000 as a result of statutory amendments permitting the Commission to impose civil 

money penalties for violations of certain reporting 

requirements occurring between January 1, 2000, and 

December 31, 2001. Under the program, if the Commission finds “reason to believe” (RTB) that a committee failed to file a required report or notice, or filed it 

late, the committee may within 40 days challenge that 

finding. OAR reviews these challenges and, based on 

its conclusions, may recommend that the Commission 

uphold the RTB finding and civil money penalty; uphold the RTB finding but modify or waive the civil 

money penalty; determine that no violation occurred; 

or terminate its proceedings. OAR also serves as the 

Commission’s liaison with the U.S. Department of the 

Treasury on debt collection matters involving unpaid 

civil money penalties under this program. 

Office of Alternative Dispute 

Resolution 

During 2000, the FEC established the Alternative 

Dispute Resolution (ADR) office to provide parties in 

enforcement actions with an alternative method for 

resolving complaints that have been filed against 

them or for addressing issues identified in the course 

of an FEC audit. The pilot program is designed to 

promote compliance with the federal campaign finance law and Commission regulations, and to reduce the cost of processing complaints by encouraging settlements outside the agency’s normal enforcement track. 

Office of Election Administration 

The Office of Election Administration (OEA) 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 (press 1 

on a touch-tone phone). 
80 Appendices 

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 

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. 
81 

Appendix 5 

Statistics on Commission 

Operations 

Summary of Disclosure Files 

Total Filers 

Existing in 

2000 

Filers 

Terminated 

as of 

12/31/00 

Continuing 

Filers as of 

12/31/00 

Number of 

Reports and 

Statements 

in 2000 

Gross Receipts 

in 2000 

(dollars) 

Gross 

Expenditures 

in 2000 

(dollars) 

Presidential Candidate 

Committees 355 136 219 1,317 366,067,863 398,958,368 

Senate Candidate Committees 644 250 394 2,696 345,635,717 415,712,646 

House Candidate Committees 2,873 1,297 1,576 12,983 419,874,635 487,649,417 

Party Committees 730 125 605 4,935 1,318,611,899 1,359,495,929 

Federal Party Committees 

Reported Nonfederal

578 125 453 4,289 844,998,175 850,749,609 

Party Activity 152 0 152 646 473,613,724 508,746,320 

Delegate Committees 16 9 7 54 305,465 317,799 

Nonparty Committees 4,516 609 3,907 36,705 337,873,403 369,811,077 

Labor Committees 350 33 317 3,117 76,431,245 82,222,294 

Corporate Committees 1,727 182 1,545 15,486 89,214,848 97,428,866 

Membership, Trade and

 Other Committees 2,439 394 2,045 18,102 172,227,310 190,159,917 

Communication Cost Filers 270 0 270 170 0 22,157,913 

Independent Expenditures by 

Persons Other Than 

Political Committees 

420 119 301 329 679,291 4,630,988 
82 Appendices 

Divisional Statistics for Calendar Year 2000 

Total 

Reports Analysis Division 

Documents processed 68,359 

Reports reviewed 35,426 

Telephone assistance and meetings 11,431 

Requests for additional information (RFAIs) 13,475 

Second RFAIs 3,713 

Data coding and entry of RFAIs and 

miscellaneous documents 19,354 

Compliance matters referred to Office 

of General Counsel or Audit Division 27 

Data Systems Development Division * 

Documents receiving Pass I coding 59,954 

Documents receiving Pass III coding 52,866 

Documents receiving Pass I entry 72,681 

Documents receiving Pass III entry 52,765 

Transactions receiving Pass III entry 1,753,458 

• In-house 425,677 

• Contract 1,327,781 

Public Records Office 

Campaign finance material processed 

(total pages) 1,654,331 

Cumulative total pages of documents 

available for review 17,546,103 

Requests for campaign finance reports 6,067 

Visitors 10,297 

Total people served 27,547 

Information telephone calls 11,183 

Computer printouts provided 33,654 

Faxline requests 1,714 

Total income (transmitted to U.S. Treasury) $35,534 

Contacts with state election offices 4,559 

Notices of failure to file with state 

election offices 51 

Total 

Administrative Division 

Contracting and procurement transactions 1,118 

Publications prepared for print 16 

Pages of photocopying 14,800,000 

Information Division 

Telephone inquiries 54,178 

Information letters 64 

Distribution of FEC materials 11,461 

Prior notices (sent to inform filers 

of reporting deadlines) 40,663 

Other mailings 21,572 

Visitors 55 

Public appearances by Commissioners 

and staff 141 

Roundtable workshops 6 

Publications 24 

Press Office 

News releases 84 

Telephone inquiries from press 14,998 

Visitors 1,716 

Freedom of Information Act 

(FOIA) requests 33 

Fees for materials requested under FOIA 

(transmitted to U.S. Treasury) $1,160 

Office of Election Administration 

Telephone inquiries 9,769 

National surveys conducted 4 

Individual research requests 429 

Materials distributed * 49,256 

Election presentations/conferences 30 

Foreign briefings 101 

Publications 0 

* Computer coding and entry of campaign finance information 

occur in two phases. In the first phase, Pass I, summary information is coded and entered into the computer within 48 hours of the 

Commission’s receipt of the report. During the second phase, Pass 

III, itemized information is coded and entered. 

* Figure includes National Voter Registration Act materials. 
Appendices 83 

Total 

Office of General Counsel 

Advisory opinions 

Requests pending at beginning of 2000 

Requests received 

Issued 

7 

40 

41 

Not issued * 3 

Pending at end of 2000 

Compliance cases † 

Pending at beginning of 2000 

Opened 

Closed 

3 

201 

195 

160 

Pending at end of 2000 

Litigation 

Cases pending at beginning of 2000 

Cases opened 

Cases closed 

236 

26 

25 

15 

Cases pending at end of 2000 

Cases won 

36 

7 

Cases lost 3 

Cases won/lost 

Miscellaneous Cases‡ 

1 

4 

Law Library

 Telephone inquiries

 Visitors 

908 

613 

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 7 6 13 

1998 5 7 12 

1999 20 7 27 

2000 14 0 14 

Total 460 133 593 

* Three advisory opinion requests were withdrawn by the requesters. † 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. 

‡ This category includes cases in which the Commission participated only as an amicus curiae, or cases that were voluntarily 

withdrawn prior to depository briefing. 

* 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 Appendices 

Audits Completed by Audit Division, 1975 – 2000 

Total 

Presidential 112 

Presidential Joint Fundraising 12 

Senate 23 

House 168 

Party (National) 47 

Party (Other) 147 

Nonparty (PACs) 84 

Total 593 

Status of Audits, 2000 

Pending Opened Closed Pending 

at Beginning at End 

of Year of Year 

Presidential 0 10 0 10

Presidential Joint Fundraising 0 0 0 0 

Senate 1 0 0 1 

House 4 0 4 0 

Party (National) 0 0 0 0 

Party (Other) 8 10 5 13 

Nonparty (PACs) 1 2 3 0 

Total 14 22 12 24 
85 

Appendix 6 

2000 Federal Register 

Notices 

2000-1 

Use of the Internet for Campaign Activity; Extension 

of Comment Period (65 FR 1074, January 7, 2000) 

2000-2 

Schedule of Matching Fund Submission Dates and 

Submission Dates for Statements of Net Outstanding 

Campaign Obligations (NOCO) for 2000 Presidential 

Candidates Post Date of Ineligibility (65 FR 3237, 

January 20, 2000) 

2000-3 

Electronic Freedom of Information Act Amendments; 

Final Rules and Statement of Basis and Purpose (65 

FR 9201, February 24, 2000) 

2000-4 

Filing Copies of Campaign Finance Reports and 

Statements with State Officers; Final Rules and 

Transmittal of Regulations to Congress (65 FR 15221, 

March 22, 2000) 

2000-5 

Public Funding of Presidential Primary Candidates— 

Repayments; Notice of Disposition and Termination of 

Rulemaking (65 FR 15273, March 22, 2000) 

2000-6 

Administrative Fines; Notice of Proposed Rulemaking 

(65 FR 16534, March 29, 2000) 

2000-7 

Electronic Filing of Reports by Political Committees; 

Notice of Proposed Rulemaking (65 FR 19339, April 

11, 2000) 

2000-8 

Public Financing of Presidential Primary and General 

Election Candidates; Final Rule; Announcement of 

Effective Date (65 FR 20893, April 19, 2000) 

2000-9 

Election Cycle Reporting by Authorized Committees, 

Notice of Proposed Rulemaking (65 FR 25672, May 

3, 2000) 

2000-10 

Administrative Fines; Final Rules and Explanation and 

Justification—Transmittal to Congress (65 FR 31787, 

May 19, 2000) 

2000-11 

Announcement of Changes to the Computerized Magnetic Media Requirements for Presidential Primary, 

General Election and Convention Committees (65 FR 

32094, May 22, 2000) 

2000-12 

Filing Copies of Campaign Finance Reports and 

Statements with State Officers; Final rules and Announcement of Effective Date (65 FR 36053, June 7, 

2000) 

2000-13 

Mandatory Electronic Filing; Final Rules and Explanation and Justification—Transmittal to Congress (65 FR 

38415, June 21, 2000) 

2000-14 

Guidance to Candidates and Political Party Committees on Status of FEC Civil Enforcement Actions 

Pending Supreme Court Consideration of FEC v. 

Colorado Republican Federal Campaign Committee 

(65 FR 42365, July 10, 2000) 

2000-15 

Election Cycle Reporting by Authorized Committees 

(Candidate Committees); Final Rules and Explanation 

and Justification—Transmittal to Congress (65 FR 

42619, July 11, 2000) 

2000-16 

Notice of Filing Dates for the Georgia Senate Special 

Election (65 FR 48710, August 9, 2000) 

2000-18 

Electronic Filing of Reports by Political Committees; 

Announcement of Effective Date (65 FR 63535, October 24, 2000) 
86 Appendices 

2000-19 

Rulemaking Petition; Reporting by Political Action 

Committees; Notice of Disposition (65 FR 66936, 

November 8, 2000) 

2000-20 

Rules on Election-Cycle Reporting by Authorized 

Candidate Committees; Announcement of Effective 

Date (65 FR 70644, November 27, 2000) 

2000-21 

General Public Political Communications Coordinated 

with Candidates and Party Committees; Final Rules 

and Explanation and Justification—Transmittal to 

Congress (65 FR 76138, December 6, 2000) 
87 

Appendix 7 

Summaries of Selected 

New Regulations 

Administrative Fine Program 

Beginning with the July 15, 2000, quarterly reports, 

the Commission implemented a new program for assessing civil money penalties for violations involving: 

• Failure to file reports on time; 

• Failure to file reports at all; and 

• Failure to file 48-hour notices. 

The Administrative Fine program is based on 

amendments to the Federal Election Campaign Act 

(the Act) that permit the FEC to impose civil money 

penalties, based on schedules of penalties, for violations of reporting requirements that occur between 

January 1, 2000, and December 31, 2001. 

How the Program Works 

In the past, the FEC handled reporting violations 

(late filers, nonfilers and committees that failed to file 

48-hour notices) under the same enforcement procedures it employs for other alleged campaign finance 

violations, culminating in agreement on a civil penalty 

or court action. Under the new rules, if the Commission finds “reason to believe” that a committee violated the law, the Commission will provide written 

notification to the committee containing the factual 

and legal basis of its finding and the amount of the 

proposed civil money penalty. The committee will 

have 40 days from the date of the reason-to-believe 

finding to either pay the civil money penalty or submit 

to the Commission a written response, with supporting documentation outlining the reasons why it believes the Commission’s finding and/or penalty is in 

error. (The Commission strongly encourages respondents to submit their documents in the form of affidavits or declarations. Documents submitted in these 

forms are generally given more weight and credibility.) 

If the committee submits such a response, it will be 

forwarded to the Office of Administrative Review 

(OAR), an FEC office that was not involved in the 

original reason-to-believe recommendation. 

After reviewing the Commission’s reason-to-believe 

finding and the committee’s written response, the 

OAR will forward a recommendation to the Commission, along with the original reason-to-believe finding, 

the committee’s written response and any supporting 

documentation. Respondents will have an opportunity 

to submit a written response to the reviewing officer’s 

recommendation. The Commission will then make a 

final determination as to whether the committee violated 2 U.S.C. §434a and, if so, assess a civil money 

penalty based on the schedules of penalties. 

Committee treasurers may be liable for civil money 

penalties if reports are not filed on time. 

Challenging Commission Determinations 

As noted above, the new rules allow committees to 

challenge the Commission’s reason-to-believe finding 

and to seek review by submitting documentation to 

the OAR, which makes a recommendation to the 

Commission as to the final determination. 

Should a committee fail to pay the civil money penalties or submit a challenge within the original 40 

days, the Commission will issue a final determination 

with an appropriate civil money penalty. The committee will then have 30 days to pay the civil money penalty or seek judicial review through a U.S. district 

court in the area where the committee resided or conducted business.1 

Reports Covered 

All reports that committees are required to file are 

covered under the Administrative Fine program. This 

includes semi-annual, quarterly, monthly, pre-election, 

30-day post-general and special election reports, as 

well as 48-hour notices that candidate committees are 

required to file for elections in which the candidate 

participates. 

Calculating Penalties 

The interaction of several factors will determine the 

size of the penalty: 

• Election sensitivity of the report; 

• Committee as late filer, including the number of days 

late, or nonfiler; 

• The amount of financial activity in the report; and 

• Prior civil money penalties for reporting violations. 

1

 The committee may also seek judicial review if it disagrees with a final determination made by the Commission 

after the committee submits a challenge. 
88 Appendices 

One factor used to determine the amount of the 

civil money penalty is the election sensitivity of the 

report. Under the new rules, the following reports are 

considered election sensitive: the October quarterly, 

the October monthly and the pre-election reports for 

primary, general and special elections. All other reports are considered nonsensitive. 

The Commission will also consider whether the 

committee is a late filer or a nonfiler. In the case of 

nonsensitive reports, a committee will be considered 

a late filer if it files its report within 30 days after the 

due date, and a nonfiler if it files its report later than 

that. 

In the case of election-sensitive reports, a committee will be considered a late filer if it files a report after 

its due date, but more than four days before the applicable election; a committee that files later than that 

will be considered a nonfiler. 

The third factor is the amount of financial activity— 

that is, the total amount of receipts and disbursements in the report. 

The final factor is the existence of prior civil money 

penalties for reporting violations under the Administrative Fine program. 

Schedules of Penalties 

The schedules of penalties, included in the new 

regulations, are based on the factors described 

above. 

For Reports Other Than 48-Hour Notices 

The calculation of the civil money penalties for late 

filers and nonfilers of reports, other than 48-hour notices, has four components, as described below. 

1. Base Amount for Late Filers. 

In calculating the penalty, the Commission begins 

with the base amount, a prescribed figure that depends on the total amount of financial activity in the 

report and the election sensitivity of the report. For 

example, on an election-sensitive report, if the total 

amount of receipts and disbursements is $80,000, the 

base amount will be $600. Or, if the total amount of 

receipts and disbursements is $500,000, the base 

amount will be $3,750. The base amount ranges from 

$100 to $5,000 for nonsensitive reports and from 

$150 to $7,500 for election-sensitive reports. 

2. Additional Set Amount for Late Filers. 

The Commission then adds to the base amount a 

number that is calculated by multiplying a set amount, 

based on the financial activity in the report, by the number of days the report is filed late (up to 30 days). The 

set amount ranges from $25 to $200 per day, depending on the total amount of receipts and disbursements. 

3. Base Amount for Nonfilers. 

In the case of nonfilers, the Commission begins 

with a base amount that depends on both the election 

sensitivity of the nonfiled report and the estimated 

level of activity based on the average activity in the 

current or prior two-year election cycle. The base 

amount will range from $900 to $12,000 for nonsensitive reports and from $1,000 to $16,000 for electionsensitive reports. 

4. Additional Premium for Previous Violation(s). 

With regard to both late filers and nonfilers, the 

Commission adds a premium for prior civil money 

penalties assessed for failure to file timely reports. 

The premium is equal to 25 percent of the civil money 

penalty times the number of final civil money penalties 

assessed during the previous and current two-year 

election cycles under the Administrative Fine program. 

For 48-Hour Notices 

The calculation of the civil money penalties for 

committees that fail to file timely 48-hour notices is 

$100 for each nonfiled notice plus 10 percent of the 

dollar amount of the contributions not timely reported. 

The civil money penalty increases by 25 percent for 

each time a prior civil money penalty was assessed 

during the previous and current two-year election 

cycles under the Administrative Fine program. 

The table on page 89 provides examples of how 

civil money penalties are calculated. 

Collecting Unpaid Penalties 

When a respondent fails to pay the civil money 

penalty, the Commission will transfer the case to the 

U.S. Department of the Treasury for collection.2 Alternatively, the Commission may decide to file suit in 

the appropriate U.S. district court to collect owed civil 

money penalties, under 2 U.S.C. §437g(a)(6). 

2

 In compliance with the Debt Collection Improvement 

Act of 1996 (31 U.S.C. §3711(g)). 
Appendices 89 

Examples of Civil Money Penalty Calculations 

EXAMPLE 1: Late Filer of Election-Sensitive Report. A committee files its October quarterly report (an 

election-sensitive report) 10 days late. The level of financial activity on the report is $105,000, and the committee has one prior violation in the current two-year election cycle. 

Applicable formula: 

Penalty = [base amount + (set amount x number of days late)] x [1 + (.25 x number of previous violations)] 

Penalty = [$900 + ($125 x 10)] x [1 + (.25 x 1)] 

Penalty = $2687.50 

EXAMPLE 2: Late Filer with Relatively Little Activity, No Prior Violations. A committee files its July quarterly report on August 4. The report contains $500 in receipts and disbursements, and the committee has no 

prior violations. 

Applicable formula: 

Penalty = The lesser of: the level of activity in the report; or 

[base amount + (set amount x number of days late)] 

Penalty = The lesser of: $500 or [$100 + ($25 x 20)] 

Penalty = The lesser of: $500 or $600 

Penalty = $500 

EXAMPLE 3: Nonfiler of Nonelection-Sensitive Report. A committee fails to file its July quarterly report 

within 30 days of its due date. Based on its previous filings, the committee’s estimated level of activity is 

$50,000. The committee has one prior violation in the current two-year election cycle. 

Applicable formula: 

Penalty = base amount x [1+ (.25 x number of previous violations)] 

Penalty = $2,700 x [1 + (.25 x 1)] 

Penalty = $3,375 

EXAMPLE 4: Nonfiler of 48-Hour Notice. A House campaign committee fails to submit a 48-hour notice to 

disclose its receipt of a last-minute $5,000 PAC contribution. The campaign has two prior violations in the 

current two-year election cycle. 

Applicable formula: 

Penalty = [$100 + (.10 x amount of contribution(s) not timely reported)] x [1 + (.25 x number of previous 

violations)] 

Penalty = [$100 + (.10 x $5,000)] x [1 + (.25 x 2)] 

Penalty = $900 
90 Appendices 

Election Cycle Reporting 

On July 5, 2000, the Commission approved new 

regulations requiring authorized committees of federal 

candidates to aggregate and report receipts and disbursements on an election-cycle basis rather than on 

a calendar-year basis, which was the previous system. These revised regulations affect reports covering 

periods that begin on or after January 1, 2001. The 

new rules do not affect unauthorized committees, 

such as PACs and party committees. 

The change to election cycle reporting, required by 

Public Law 106-58, is intended to simplify 

recordkeeping and reporting. Under previous regulations, candidate committees monitored contribution 

limits on a per-election basis, but disclosed their financial activity on a calendar-year-to-date basis. Under the new system, committees will report all of their 

receipts and disbursements on an election-cycle basis. 11 CFR 104.3. For example, campaigns must 

itemize a donor’s contributions once they exceed 

$200 for the election cycle, rather than for the calendar year. Likewise, candidate committees must itemize disbursements to a person once they aggregate in 

excess of $200 within the election cycle. 

Election Cycle 

Under FEC regulations, an election cycle typically 

begins the day after the general election for a seat or 

office and ends on the day of the next general election for that seat or office. 11 CFR 100.3(b). The 

length of the election cycle, thus, depends on the 

office sought. For example, the election cycle is two 

years for House candidates, six years for Senate candidates and four years for Presidential candidates. 

Transition to Election Cycle Reporting 

Since the new regulations took effect after the 

close of post-general and year-end reporting periods 

for 2000, many candidates have already reported 

receipts and disbursements related to the 2002, 2004 

or 2006 election cycles under the previous reporting 

system. Committees will need to include the total of 

this previously-disclosed activity in their electioncycle-to-date figures, beginning with their first report 

under the new system.1

 In some cases, the activity 

may span several years. For example, a Senate candidate for a 2002 election who has been receiving 

contributions and making disbursements since the 

1996 election for that seat will need to include the 

aggregate of that activity in his or her election-cycleto-date totals. Since committees are only required to 

retain records for a period of three years, the Commission intends to provide Senate committees registered for the 2002 and 2004 elections with their election cycle figures as of December 31, 2000. The figures will be based on reports previously filed by the 

committees. 

Electronic Filing 

On June 15, the Commission approved the final 

rules on mandatory electronic filing. Beginning with 

the reporting periods that start on or after January 1, 

2001, all persons required to file their reports with the 

FEC who receive contributions or make expenditures 

in excess of $50,000 in a calendar year, or who expect to do so, must submit their campaign finance 

reports electronically. Any filers who are required to 

file electronically, but who file on paper, will be considered nonfilers and may be subject to enforcement 

action. 

The new rules, required by Public Law 106-58, 

provide faster disclosure of filed reports and streamline operations for both filers and the Commission. 

The Commission estimates, based on data from the 

1996 and 1998 election cycles, that, with the $50,000 

threshold, 96 to 98 percent of all financial activity reported to the FEC will be available almost immediately 

on the FEC’s Web site. 

Mandatory v. Voluntary Filing 

The mandatory electronic filing regulations (11 

CFR 104.18) apply to any political committee or other 

person required to file reports, statements or designations with the FEC. This includes all filers except Senate candidate committees (and other persons who 

1

 For most campaigns, the first report under the new 

system will be the mid-year report, due July 31, 2001. 
Appendices 91 

support only Senate candidates), who are required to 

file with the Secretary of the Senate.1 

Since 1996, the Commission has encouraged voluntary electronic filing. For those individuals and political committees that do not exceed (or do not expect 

to exceed) the $50,000 threshold, voluntary electronic 

filing will still be encouraged. 

Voluntary electronic filers must continue to file electronically for the remainder of the calendar year unless the Commission determines that unusual circumstances make continued electronic filing impractical. 

11 CFR 104.18(b). No such waiver by the Commission, however, has been established for mandatory 

electronic filers. 

Who Must File Electronically 

Candidate Committees. All committees authorized 

by one candidate must file electronically if their combined total contributions or combined total expenditures exceed, or are expected to exceed, the $50,000 

threshold. 

PACs and Party Committees. By contrast, each 

unauthorized committee (PAC or party committee), 

whether or not it is affiliated, must file electronically if 

its total contributions or total expenditures exceed, or 

are expected to exceed, the threshold. 

Joint Fundraising Representatives. A joint 

fundraising representative must file electronically if its 

total contributions or total expenditures exceed, or are 

expected to exceed, the $50,000 threshold.2 

Independent Expenditures. Individuals and qualified nonprofit corporations whose independent expenditures exceed, or are expected to exceed, the 

$50,000 threshold must file electronically on FEC 

Form 5. Because Form 5 must be notarized, filers are 

required to submit a paper copy of Form 5 bearing the 

notarized seal and signature, or, if filing on diskette, 

attach a digital version of the seal and signature as a 

separate file when filing Form 5 electronically. 11 CFR 

104.18(h) and 109.2(a). 

Calculating the Threshold 

A committee (other than a Senate committee) must 

file electronically if: 

• It has received contributions of more than $50,000 or 

made expenditures of more than $50,000 during any 

calendar year; or 

• It has “reason to expect to exceed” the above 

threshold in any calendar year. 11 CFR 104.18(a)(1) 

and 104.18(a)(3)(i). 

“Have Reason to Expect to Exceed.” Once filers 

actually exceed the threshold, they have “reason to 

expect to exceed” the threshold in the following two 

calendar years. 11 CFR 104.18 (a)(3)(i). This means 

they must continue to file electronically for the next 

two years (January through December). 

Exception for Candidate Committees. In some 

cases, a candidate committee that has exceeeded the 

threshold and filed electronically may not have to 

continue filing electronically. This exception applies 

to a candidate committee that: 

• Has $50,000 or less in net debts outstanding on 

January 1 of the year following the election; 

• Anticipates terminating prior to the next election 

year; and 

• Supports a candidate who has not qualified for the 

next election and does not intend to become a candidate in the next election. 11 CFR 104.18 (a)(3)(i). 

Persons With No History. New political committees 

or other persons with no history of campaign finance 

activity may rely on one of the following formulas to 

determine whether they will exceed, or should expect 

to exceed, the threshold: 

• The filer receives contributions or makes expenditures that exceed one-quarter of the threshold 

amount in the first calendar quarter of the calendar 

year; or 

• The filer receives contributions or makes expenditures that exceed one-half of the threshold amount in 

the first half of the calendar year. 11 CFR 104.18 

(a)(3)(ii). 

1

 Senate candidates, however, are encouraged to voluntarily file electronically an unofficial copy of their reports with 

the FEC to ensure faster disclosure. 2

 For more information on joint fundraising, see 11 CFR 

102.17 and the Campaign Guides for Congressional candidates and committees and for party committees. 
92 Appendices 

Other Considerations. When a committee calculates whether it has exceeded, or expects to exceed, 

the $50,000 threshold, it should keep in mind the following: 

•The calculation is based on either making $50,000 in 

expenditures or receiving $50,000 in contributions 

during the calendar year; it is not based on a combination of expenditures and contributions. 

• Nonfederal funds are excluded from the calculation. 

• Cash on hand and outstanding debt at the beginning 

of the calendar year are excluded from the calculation. 

(Also, see chart on page 93: Calculating the Electronic Filing Threshold.) 

Filing Reports and Statements 

Validation of Report. Electronic filers (whether 

mandatory or voluntary) must file all their reports electronically. The reports must follow the FEC’s Electronic Filing Specifications Requirements, available 

online or on paper from the FEC. 11 CFR 104.18(d). 

An electronic report is considered “filed” when it is 

received and validated by the Commission’s computer 

system on or before 11:59 p.m. on the prescribed 

filing date. Incomplete or inaccurate reports that do 

not pass the FEC’s validation program will not be 

considered filed. The Commission will notify the filer 

that the report has not been accepted. 11 CFR 

104.18(e)(2). 

Filing an Amendment. To amend an electronically 

filed report, the filer must electronically resubmit the 

entire report, not just the amended portions. Additionally, the amendments must comply with the formatting 

rules contained in the FEC’s Electronic Filing Specifications Requirements. 11 CFR 104.18(f). 

Registration Documents (FEC Forms 1 and 2) 

If a committee has exceeded or expects to exceed 

the $50,000 threshold, its Statement of Organization 

(FEC Form 1) and Statement of Candidacy (FEC 

Form 2), and any amendments to either form, must be 

filed electronically. 11 CFR 102.2(a)(2) and 104.18(c). 

Note that all filers (whether electronic or paper) must 

include on their Statement of Organization the URL 

for their Web site, if they maintain one. Those committees that file electronically must also include their email address on their Statement of Organization. 11 

CFR 102.2(a)(1)(vii). 

Refiling Paper Reports 

Filers will not be expected to refile any reports or 

statements that were correctly filed on paper earlier in 

the calendar year or election cycle. 11 CFR 

104.18(a)(2). 

Signature Requirements 

A committee’s treasurer (or other person responsible for filing designations with the FEC) must verify 

that all electronically filed documents have been examined by the treasurer and (to the best of that 

person’s knowledge) are accurate and complete. Verification may be: 

• Direct transmission of the filing, using the treasurer’s 

personal password received from the FEC. (In order 

to receive a password, treasurers should call the 

electronic filing office at (202)208-5263); or 

• If filing on diskette, a digitized copy of a signed certification sent, as a separate file on the diskette, with 

the electronically filed documents. 11 CFR 

104.18(g). 

Availability of Forms 

FECFile software, available free from the FEC, 

currently generates FEC forms 3 and 3X for disclosure of financial information. The software will also 

generate forms 1 and 2. 

Many commercially available software products 

also include electronic filing capabilities. 

Nonfilers 

Those filers who are required to file electronically 

and who file on paper instead, or who fail to file, will 

be considered nonfilers and may be subject to enforcement action by the Commission, including publication of their names and the imposition of civil 

money penalties under the new Administrative Fine 

Program.3

 11 CFR 104.18(a)(2) and Part 111, Subpart 

B and 2 U.S.C §437g(a)(4) and (6)(A). 

3

 See page 11. 
Appendices 93 

Calculating the Electronic Filing Threshold 

Political committees should use the following formulas to determine if their total expenditures or total contributions 

are over $50,000 per calendar year: 

CANDIDATE COMMITTEES 

Total Contributions Received1 

– Refunds of Contributions 

Total Contributions (if over $50,000, must file electronically) 

Total Operating Expenditures 

+ Contributions Made 

Total Expenditures (if over $50,000, must file electronically) 

PACS 

Total Contributions Received 

– Refunds of Contributions 

+ Transfers from affiliated federal committees 

Total Contributions (if over $50,000, must file electronically) 

Total Federal Operating Expenditures 

+ Transfers to affiliated federal committees 

+ Contributions Made 

+ Independent Expenditures 

Total Expenditures (if over $50,000, must file electronically) 

POLITICAL PARTY COMMITTEES 

Total Contributions Received 

– Refunds of Contributions 

+ Transfers from affiliated federal political party committees 

Total Contributions (if over $50,000, must file electronically) 

Total Federal Operating Expenditures 

+ Transfers to affiliated federal political party committees 

+ Contributions Made 

+ Independent Expenditures 

+ Coordinated Expenditures 

Total Expenditures (if over $50,000, must file electronically) 

1

 Including the outstanding balance of any loans made, guaranteed or endorsed by the candidate or other person.