Federal 

Election 

Commission 

Annual Report 1997 
Federal 

Election 

Commission 

Annual Report 1997 

Federal Election Commission 

Washington, DC 20463 
Commissioners 

Joan D. Aikens, Chairman 

Scott E. Thomas, Vice Chairman 

Lee Ann Elliott, Commissioner 

Danny L. McDonald, Commissioner 

John Warren McGarry, Commissioner 

Statutory Officers 

John C. Surina, Staff Director 

Lawrence M. Noble, General Counsel 

Lynne A. McFarland, Inspector General 

The Annual Report is prepared by: 

Louise D. Wides, Assistant Staff Director,

 Information Division 

Gregory J. Scott, Writer, Information Division 

Robert W. Biersack, Supervisory Statistician,

 Data Division 

R. Blake Lange, Chart Design,

 Administrative Division 
Table of Contents 

Introduction 1 

Chapter One 

Keeping the Public Informed 3 

Public Disclosure 3 

Educational Outreach 4 

Office of Election Administration 6 

Chapter Two 

Interpreting and Enforcing the Law 9 

Regulations 9 

Advisory Opinions 9 

Enforcement 10 

Chapter 3 

Legal Issues 15 

Corporate/Labor Communications 15 

Enforcement Process 20 

Contributions in the Name of Another 22 

Major Purpose Test 24 

Soft Money 24 

Independent Expenditures by Party Committees 25 

State/Local Party Status 26 

Personal Use of Campaign Funds 27 

Limited Liability Company 28 

Definition of Member 28 

Best Efforts 30 

Chapter Four 

The Commission 31 

Commissioners 31 

The FEC’s Budget 31 

Computer Upgrades 34 

EEO and Special Programs 34 

Ethics 34 

Inspector General 34 

Chapter Five 

Presidential Public Funding 35 

Shortfall Predicted for 2000 35 

Update on Presidential Debate Lawsuits 35 

Audits of 1996 Presidential Campaigns 35 

Repayments 36 

Chapter Six 

Legislative Recommendations 39 

Chapter 7 

Campaign Finance Statistics 71 

Appendices 

1. Biographies of Commissioners and Officers 81 

2. Chronology of Events 83 

3. FEC Organization Chart 85 

4. FEC Offices 87 

5. Statistics on Commission Operations 91 

6. 1997 Federal Register Notices 95 
Table of Charts 

Chapter One 

Keeping the Public Informed 

Chart 1-1: 

Size of the Detailed Database 

Chapter Two 

Interpreting and Enforcing the Law 

Chart 2-1: 

Conciliation Agreements by Calendar Year 

Chart 2-2: 

Median Civil Penalty by Calendar Year 

Chart 2-3: 

Ratio of Active to Inactive Cases 

by Calendar Year 

Chart 2-4: 

Average Number of Respondents and 

Enforcement Cases by Calendar Year 

Chapter Four 

The Commission 

Chart 4-1: 

Functional Allocation of Budget 

Chart 4-2: 

Divisional Allocation 

Chapter Five 

Presidential Public Funding 

Chart 5-1: 

Audit Reports Approved During 1997 

Chapter 7 

Campaign Finance Statistics 

Chart 7-1: 

Number of PACs, 1974-1997 

Chart 7-2: 

Receipts of House Candidates for Each Year of 

Election Cycle, 1990-1998 

Chart 7-3: 

House Campaign Fundraising in 

Nonelection Years 

Chart 7-4: 

Senate Campaign Fundraising in 

Nonelection Years 

Chart 7-5: 

Nonelection Year Fundraising by National 

Committees: Federal and Nonfederal Accounts 74 

Chart 7-6: 

Sources of National Committee: Federal Account 

Receipts in Nonelection Years 75 

Chart 7-7: 

Sources of National Committee: Nonfederal 

Account Receipts in Nonelection Years 76 

Chart 7-8: 

Major Party Federal Account Receipts: 1997 77 

Chart 7-9: 

Major Party Federal Receipts Broken Down 

by Committee and by Source: 1997 78 

Chart 7-10: 

Presidential Election Campaign Fund: Projected 

Payments and Funds Available for 2000 Election 79 

4 

12 

12 

12 

13 

32 

33 

36 

71 

72 

73 

73 
Introduction 1 Introduction 

Alleged campaign finance violations from the 1996 

elections made headlines during 1997. Congress held 

hearings, the Justice Department conducted criminal 

investigations and the Federal Election Commission 

grappled with an unprecedented number of civil enforcement cases. 

The volume and complexity of the FEC’s cases— 

combined with record-setting campaign spending in 

the 1996 election—strained the agency’s limited resources. In response, the Commission requested 

supplemental funding from Congress and additional 

investigative support from the Department of Justice. 

However, Congress rejected the agency’s funding 

request and, at year’s end, the Justice Department 

had not detailed any of its staff to the FEC. As a result, the Commission had more enforcement cases 

awaiting assignment than under investigation, 

throughout 1997. 

Though not a replacement for a much-needed increase in staff, technological improvements helped 

the Commission handle its burgeoning workload. During 1997, the agency upgraded its PC hardware and 

software; expanded access to its digital imaging system; unveiled a pool of modems, CD-ROMs and a 

shared computer faxing system; developed a 

groupware (e.g., intranet) strategy; and undertook 

case management and legal research initiatives to 

benefit the agency’s legal staff. The Commission also 

implemented a voluntary electronic filing program and 

developed filing software to help committees submit 

reports in electronic form. Forty-three committees 

chose to file their reports electronically during 1997. 

Late in the year, the Commission began to make 

committee reports available on its internet web site. 

The Commission’s audit staff also benefited from 

technological improvements. Field auditors used 

laptop computers to access the FEC’s in-house computer network and to conduct sampling and computerized analysis of data. This technology, along with 

streamlined audit procedures and experienced staff, 

helped the Commission complete more than half of 

the statutorily-mandated audits of committees that 

received public funding in connection with the 1996 

Presidential elections. 

In the midst of all this post-election activity, Congress enacted term limits for FEC Commissioners. 

Those appointed after December 31, 1997—except 

those the President nominated or announced an intent to nominate prior to December 31, 1997—will be 

eligible for only one term in office. Even as Congress 

imposed these limits, one seat on the Commission 

remained vacant for a second consecutive year. As a 

result, every Commission action during 1997 required 

the near-unanimous consent of 4 out of the 5 sitting 

Commissioners. 

The material that follows details the Commission’s 

1997 activities. Additional information concerning 

most matters may be found in the 1997 issues of the 

FEC newsletter, the Record. 
Keeping the Public Informed 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, the Commission’s continuing 

investment in computer technology paid substantial 

dividends in the disclosure and educational outreach 

programs during 1997. 

Public Disclosure 

Public disclosure of campaign finance information 

is a fundamental responsibility of the Commission. To 

fulfill that obligation, the agency receives and processes committees’ reports, reviews them for accuracy and compliance with the law, enters the data into 

the FEC’s computer database and makes the reports 

and database available to the public. 

Data Imaging and Electronic Filing 

The disclosure program continued to reap the benefits of improved computer technology. Using the 

FEC’s computerized digital imaging system, the public 

could access digitized copies of the actual reports 

filed by House candidates, PACs and party committees. (Senate candidates continue to file with the Secretary of the Senate, so their reports are not available 

on the digital imaging system.1

) Based on a Congressional directive included in its FY 1998 budget, the 

Commission began making imaged data available on 

the World Wide Web in December 1997. 

In January 1997, the Commission launched an 

interim electronic filing program that allowed committees to file reports via computer disk. To assist electronic filers, the agency created and distributed free 

filing software—FECFile—to more than 200 interested 

users. By year’s end, the agency had received more 

than 30 electronically-filed reports. 

The second phase of the electronic filing program 

is scheduled to go on-line in February 1998. At that 

time, filers will be able to submit reports to the Commission by modem as well as on computer disk. Once 

reports are received, they will be validated and posted 

on the internet. 

Review of Reports 

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

and accurate portrayal of campaign finance activity. If 

an analyst finds that a report contains errors or suggests violations of the law, he/she sends the reporting 

committee a request for additional information. The 

committee treasurer can then make additions or corrections to the report. Apparent violations, however, 

may lead to an enforcement action. 

Faced with record-setting amounts of financial 

activity from the 1996 elections, reports analysts reviewed more campaign finance reports than ever, 

during 1997. The Commission’s digital imaging system and the analysts’ level of experience contributed 

to the record-setting review. Staff used the imaging 

system to view reports at their own desks and applied 

refined computer programming tools to help them 

identify possible compliance problems more quickly. 

Processing Campaign Finance Data 

The Commission codes and enters information 

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

the present. 

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

which PACs made contributions to a specific candidate. For example, if a PAC’s report states that it 

1 Based on statutory amendments enacted in 1997, the 

Democratic Senatorial Campaign Committee and the National Republican Senatorial Committee also may file their 

reports with the Secretary of the Senate, rather than with 

the FEC. 
4 Chapter One 

made a contribution to the Smith for Congress committee with a Washington address, staff must determine which candidate committee, among those with 

the same name, the report referred to. 

CHART 1-1 

Size of the Detailed Database 

Election Cycle No. of Detailed Entries* 

1986 526,000 

1987 262,000 

1988 698,000 

1989 308,000† 

1990 767,000 

1991 444,000‡ 

1992 1,400,000 

1993 472,000 

1994 1,364,000 

1995 570,000 

1996 1,887,160 

1997 619,170 

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

† The entry threshold for individual contributions was dropped from 

$500 to $200 in 1989. 

‡ Nonfederal account data was first entered in 1991. 

Public Access to Campaign Data 

Visitors to www.fec.gov could examine digital images of campaign finance reports, plus a variety of 

statistical summaries. They could also download data 

to their own computers via the Commission’s FTP 

site. The FEC home page continued to attract numerous visitors during 1997. 

The Commission’s disclosure database, which 

contains millions of transactions, enabled researchers 

to select information in a flexible way. For example, 

the database can instantly produce a profile of a 

committee’s financial activity for each election cycle. 

As another example, researchers can customize their 

searches for information on contributions by using a 

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

name, date, amount or geographic location). 

During 1997, visitors to the Public Records Office 

used computer terminals to access the disclosure 

database and more than 25 different campaign finance indices that organize the data in different ways. 

Those outside Washington, DC, could order such 

information using the Commission’s toll-free number. 

Visitors could also inspect images of committee 

reports on the electronic imaging system installed on 

the personal computers in the Public Records Office. 

Electronic images of reports filed by House and Presidential candidates, party committees and PACs were 

available for viewing. 

The Public Records Office continued to make available microfilmed copies of all campaign finance reports, paper copies of reports from Congressional 

candidates, and Commission documents such as 

press releases, audit reports, closed enforcement 

cases (MURs) and agenda documents. 

The FEC also continued to offer on-line computer 

access to the disclosure database to 1,328 subscribers to the twelve-year-old Direct Access Program 

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

interested citizens. DAP saved time and money for 

the Commission because providing information on 

line is more efficient than processing phone orders for 

data. During 1997, the Commission’s State Access 

Program gave 34 state election offices free access to 

the database. In return, state offices helped the Commission track candidate committees that had failed to 

file copies of their FEC reports with the appropriate 

state, as required under federal law. 

Educational Outreach 

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 second year of operation, the Commission’s 

web site offered visitors a variety of resources. In 

addition to reviewing the statistical data described 

above, visitors could access brochures on a variety of 

topics; read agency press releases; review national 

election results and voter registration and turnout 

statistics; look up reporting dates; and download reporting forms, copies of the Record newsletter, the 
Keeping the Public Informed 5 

Campaign Guides for PACs, parties and candidates 

and other agency publications. The Record was 

placed on the Commission’s home page the same 

day that copy was sent to the printer. This meant that 

the public could access the newsletter a full week 

before the printed copy was available. 

Telephone Assistance 

A committee’s first contact with the Commission is 

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

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

documents, publications and forms. In 1997, the Information Division responded to 15,662 callers with compliance questions. 

Faxline and Computer Faxing 

The Commission expanded its faxing capability in 

1997 by introducing a computer faxing system that 

permits staff to fax documents directly from their 

desktop PCs. This innovation—combined with the 

agency’s existing automated Faxline—made it possible for the public to obtain publications or other 

documents quickly and easily. 

During 1997, 4,637 callers sought information from 

the 24-hour Faxline and received 6,351 documents. 

Reporting Assistance 

During 1997, 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. 

Conferences 

In preparation for the 1998 elections, the agency 

launched a full program of conferences in 1997 to 

help candidates and committees understand and 

comply with the law. The Commission conducted 

regional conferences in Seattle and Atlanta where 

participants attended workshops for candidate committees, party committees and corporate and labor 

PACs and their sponsoring organizations. 

The agency also hosted two Washington, DC, conferences. These conferences were tailored to meet 

the needs of specific audiences. The first was geared 

toward corporations and labor organizations, and the 

second was designed for membership organizations 

and trade associations.2 

Both the regional conferences and those held in 

Washington featured new workshops on the 

Commission’s electronic filing program and on the 

impact recent court decisions have had on the federal 

election law. 

After a budget-imposed, three-year hiatus, the 

agency resumed its informal outreach program 

whereby one or two staff members met with candidates, parties and PACs in different cities. During 

1997, staff assisted committees in Cleveland, Trenton, Des Moines, Phoenix and Madison. 

Tours and Visits 

Visitors to the FEC during 1997, including 29 student groups and 34 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 18,444 calls and visits from 

media representatives and prepared 103 news releases. These releases alerted reporters to new campaign finance data, illustrating the statistics in tables 

and graphs. 

2 The Commission also planned to conduct a DC conference for candidate committees in February 1998, a regional 

conference in Denver in March 1998 and a DC conference 

for nonconnected PACs in April 1998. 
 

6 Chapter One 

Publications 

During 1997, 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. 

In December, the Commission released a new 

edition of its Campaign Guide for Corporations and 

Labor Organizations and two new brochures— “Partnerships” and “Special Notices on Political Ads and 

Solicitations.” In addition to explaining the law in clear 

English and illustrating how to fill out reports, the 

Guide incorporates recent advisory opinions by the 

Commission and decisions by the courts. One of the 

brochures, “Partnerships,” represents the 

Commission’s first attempt at focusing on the needs 

of partnerships. Pulling together material from the 

statute, FEC regulations and advisory opinions, the 

brochure explains the rules that are unique to partnerships. The “Special Notices” brochure summarizes 

the rules requiring notices on public communications. 

The Combined Federal/State Disclosure Directory 

1997 directs researchers to federal and state offices 

that provide information on campaign finance, candidates’ personal finances, lobbying, corporate registration 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 agency also published Federal Elections 96, 

the eighth edition of a biennial series designed to 

provide an historical record of federal election results. 

The compilation lists the primary, run-off and general 

election results for the 1996 Presidential and congressional elections. For each state, the publication lists 

the names of candidates on the ballot, write-in candidates, party affiliations and the number and percentage of votes each candidate received as provided by 

state election officials 

The Commission also continued to provide 12,497 

free subscriptions to its award-winning monthly newsletter, the Record. The newsletter summarizes recent 

advisory opinions, litigation, changes in regulations, 

audit reports and compliance cases. It also includes 

graphs and charts on campaign finance statistics. 

Office of Election Administration 

During 1997, the FEC’s Office of Election Administration (OEA) completed its second report to Congress on the implementation of the National Voter 

Registration Act (NVRA), better known as the “Motor 

Voter” law. The report, entitled “The Impact of the 

National Voter Registration Act of 1993 on the Administration of Elections for Federal Office, 1994-1996,” 

contained an analysis of the NVRA’s impact and detailed information provided by states that have implemented the law. It also listed several recommendations for improving the administration of the NVRA. 

Another 1997 OEA publication—Developing a 

Statewide Voter Registration Database—detailed how 

state election administrators could assist and support 

local election offices by developing an integrated 

statewide voter registration database. The OEA also 

released new editions of two series—Election Case 

Law ‘97 and the Journal of Election Administration, 

Vol. 18. The case law update summarized court decisions on selected election administration topics 

through December 1996. The new volume of the 

Journal examined systems of representation, including Illinois’s experience with cumulative voting and a 

discussion of how alternative systems of representation can be used as voting rights remedies. 

Finally, during 1997, the OEA began to update its 

standards for computerized vote tally systems. The 

OEA had addressed voting systems standards in its 

1990 publication, Performance and Test Standards 

for Punchcard, Marksense and Direct Recording Electronic Voting Systems. In it, the OEA had suggested 

performance and test standards that states and voting 

system vendors could use to improve the accuracy, 
Keeping the Public Informed 7 

integrity and reliability of computer-based voting systems. As a first step toward updating the voting systems standards, the OEA contracted with Management Technologies Corp. to do a requirements analysis. The analysis will address: 

• The future role of the FEC, other federal agencies, 

state election officials and others; 

• Options for long term funding of the voting systems 

standards program; 

• Methods and alternatives to account for rapidly 

changing technology; and 

• The costs and time required to accomplish various 

alternatives. 

The requirements analysis should be completed in 

June 1998. 
Interpreting and Enforcing the Law 9 Chapter Two 

Interpreting and 

Enforcing the Law 

One of the ways the Commission promotes voluntary compliance with the campaign finance law is by 

clarifying the law through regulations and advisory 

opinions. FEC regulations flesh out the statute, often 

incorporating interpretations reached in previous advisory opinions. Advisory opinions, in turn, clarify how 

the statute and regulations apply to real-life situations. 

The agency’s enforcement actions also promote 

compliance by correcting past violations and demonstrating that violations can result in civil penalties and 

remedial action. 

Regulations 

The FEC may initiate a rulemaking on its own or in 

response to a rulemaking petition. During 1997, the 

Commission received five such petitions on four topics. The rulemaking process generally begins when 

the Commission votes to seek public comment on 

proposed rules by publishing the rules in the Federal 

Register. During 1997, for the first time, the Commission also published rulemaking notices on its web site 

and invited comments via electronic mail. The agency 

may invite those making written comments to testify at 

a public hearing. The Commission considers all comments when deliberating on the final rules in open 

meetings. Once approved, the text of the final regulations and the explanation and justification are published in the Federal Register and sent to the U.S. 

House and Senate. The Commission publishes a 

notice of effective date after the final rules have been 

before Congress for 30 legislative days. 

Rulemakings Completed in 1997 

The following new and revised rules took effect in 

1997: 

• New regulations establishing a voluntary system of 

electronic filing for political committee reports took 

effect April 28. (See page 3.) 

• Revised rules changing the “best efforts” statement 

that accompanies contribution solicitations and requiring PACs to disclose contributor information in 

the possession of their connected organizations took 

effect July 2. (See page 30.) 

• New regulations that increased by 10 percent the 

amount of civil penalties that can be assessed in 

FEC enforcement matters took effect April 29. (See 

page 11.) 

Other Rulemakings in Process 

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

• Approved a Notice of Proposed Rulemaking (NPRM) 

suggesting changes to its regulatory definition of 

“member,” in response to a petition for rulemaking 

and based on the court of appeals decision in 

Chamber of Commerce v. FEC (see page 28); 

• Published an NPRM and held a public hearing on 

regulations to implement the Supreme Court’s Colorado Republicans v. FEC opinion on independent 

expenditures by party committees (see page 25); 

• Published an NPRM regarding recordkeeping and 

reporting requirements, and proposed revisions to 

Forms 3 and 3X; 

• Published a Notice of Availability on two petitions 

that asked the FEC to curb or ban soft money (see 

page 24); 

• Published a Notice of Availability on a petition that 

urged the FEC to revise its “express advocacy” definition to conform to the appeals court decision in 

MRLC v. FEC (see page 16); 

• Held in abeyance a rulemaking on the major-purpose test, pending Supreme Court review of the 

appeals court decision in FEC v. Akins (see page 

24); and 

• Published a Notice of Availability on a petition that 

urged the FEC to conform its rules on “qualified nonprofit corporations” to the decision in MCCL v. FEC 

(see page 15). 

Advisory Opinions 

The Commission responds to questions about how 

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

request for an advisory opinion, it generally has 60 

days to respond. The Office of General Counsel prepares a draft opinion, which the Commissioners dis-
10 Chapter Two 

cuss and vote upon during an open meeting. A draft 

opinion must receive at least four favorable votes to 

be approved. 

The Commission issued 26 advisory opinions in 

1997. Of that number, five addressed the status of 

party committees, four addressed application of personal use rules and two addressed limited liability 

companies. These and other 1997 advisory opinions 

are discussed in Chapter Three, “Legal Issues.” 

Enforcement 

Allegations that the Federal Election Campaign Act 

had been violated on an unprecedented scale during 

the 1996 election cycle prompted the Commission to 

request additional funding for enforcement in 1997. 

(See Chapter 4.) The agency also asked for investigative assistance from the Department of Justice, as 

authorized under 2 U.S.C. §437c(f)(3).

 Financial activity in the 1996 election cycle surged 

to more than $2.7 billion, and the Commission received a third more complaints in the six months preceding the 1996 election than during the comparable 

period for the 1994 election cycle. Newspapers 

chronicled alleged campaign finance abuses from the 

‘96 elections almost daily. It was alleged that committees raised funds from nonresident foreign nationals; 

used soft money to circumvent the limits on spending 

related to publicly funded presidential candidates; and 

made purportedly independent disbursements related 

to federal elections in coordination with candidates; 

and that labor and business interests made massive, 

but undisclosed, expenditures on advertisements that 

either contained an express advocacy message or 

involved coordination with a candidate.1 

The Enforcement Process 

Possible violations of the law are usually brought to 

the Commission’s attention 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 based on formal, written complaints receive 

MUR numbers once the Office of General Counsel 

determines they satisfy specific criteria for a proper 

complaint. 

The General Counsel recommends whether there 

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

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

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

end of an investigation, the General Counsel prepares 

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

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

If the Commission finds “probable cause to believe” 

the respondents violated the law, the agency attempts 

to resolve the matter by entering into a conciliation 

agreement with them. (Some MURs, however, are 

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

to the public. 

Prioritization 

During 1997, the Commission continued to use a 

prioritization system to focus its limited resources on 

more significant enforcement cases. 

Now in its fifth year of operation, the prioritization 

system has helped the Commission manage its heavy 

caseload involving thousands of respondents and 

complex financial transactions. The Commission insti1 See the testimony of FEC Finance Committee Chairman Joan D. Aikens before the Senate Committee on Rules 

and Administration (January 30, 1997). 
Interpreting and Enforcing the Law 11 

tuted 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 presence of knowing and willful intent, the apparent impact the alleged violation had on the electoral process, the amount of money involved, the age and 

timing of the violation, and whether a particular legal 

area needs special attention. The Commission continually reviews the prioritization system to ensure that 

it uses its limited resources to best advantage. 

In addition, the Office of General Counsel acquired 

a new computerized system to create a database and 

image documents. Developed in conjunction with a 

support contractor, the new system was designed to 

help streamline investigation of those cases that involve large collections of documents. 

Despite the prioritization system, the number and 

complexity of the complaints filed in connection with 

the 1996 elections overwhelmed the Commission’s 

enforcement staff. During 1997, the agency had more 

cases awaiting assignment than being actively pursued. 

Civil Penalties 

In March 1997, the FEC issued regulations that 

increased by 10 percent the amount of civil penalties 

that can be assessed in cases involving violations of 

the Act. (See 62 FR 11316.) The increases were 

mandated by the 1996 amendments to the Federal 

Civil Penalties Inflation Adjustment Act. 

As a result of the change, the general provisions 

found at 2 U.S.C. 437g(a)(5) and (6) now provide for 

a maximum penalty of $5,500— up from $5,000—or 

the amount of the contribution or expenditure involved 

in the violation, whichever is greater. For knowing and 

willful violations, the penalty doubles: $11,000 or 

twice the amount of the contribution or expenditure 

involved in the violation, whichever is greater. 

Penalties for violating the Act’s confidentiality provisions (i.e., for making public any enforcement-related 

Commission notification or investigation) increased 

from $2,000 to $2,200; and, for knowing and willful 

violations of this provision, from $5,000 to $5,500. 2 

U.S.C. 437g(a)(12). 

It should be noted that the increase applies only to 

violations that occurred after the new penalty provisions took effect on April 29. In most FEC enforcement matters, however, the civil penalty reflects the 

amounts involved in the violation, rather than the fixed 

statutory penalty. As a result, the 10 percent increase 

may have little effect on the Commission’s total civil 

penalties. For the year, penalties from conciliation 

agreements totaled $863,250. 

Chart 2-1 (next page) compares civil penalties 

negotiated in 1997 conciliation agreements with those 

of previous years. In Chart 2-2, the median civil penalty negotiated in 1997 is compared with the median 

civil penalty of previous years. Chart 2-3 tracks the 

ratio of active to inactive enforcement cases over the 

last three years. Chart 2-4 illustrates the marked increase in the number of respondents per enforcement 

action during 1997. 
12 Chapter Two 

CHART 2-1 

Conciliation Agreements 

by Calendar Year 

Number of Agreements 

Number 

300 

250 

200 

150 

100 

50 

0 

Total Civil Penalty Amount 

Thousands of Dollars 

2,000 

1,500 

1,000 

500 

0 

86 87 88 89 90 91 92 93 94 95 96 97 

CHART 2-2 

Median Civil Penalty 

by Calendar Year 

Dollars 

9,000 

8,000 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

86 87 88 89 90 91 92 93 94 95 96 97 

CHART 2-3 

Ratio of Active to Inactive Cases by Calendar Year 

Active Cases

Inactive Cases

1996 1997 

(294 Cases) (272 Cases) (298 Cases) 

1995 
Interpreting and Enforcing the Law 13 

CHART 2-4 

Average Number of Respondents 

and Enforcement Cases by Calendar Year 

500 

0 

Monthly Average Number 

of Total Respondents in Pending Cases 

Monthly Average Number 

of Total Cases Pending 

2500 

2000 

1500 

1000 

1995 1996 1997 
Legal Issues 15 Chapter 3 

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 1997 as it considered regulations, advisory opinions, litigation and enforcement 

actions. 

Corporate/Labor Communications 

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. However, the statute and FEC 

regulations contain several exceptions that permit 

corporations and unions to form PACs and, under 

certain circumstances, to communicate their views on 

matters related to federal elections. Several 1997 

court decisions and FEC advisory opinions explored 

the parameters of the corporate/labor prohibition and 

the Commission’s regulations on corporate and labor 

communications. 

MCFL Nonprofits 

During 1997, the U.S. Court of Appeals for the 

Eighth Circuit ruled that the Commission’s regulations 

governing independent expenditures by certain types 

of corporations were unconstitutional. The issue first 

arose more than ten years ago when the Supreme 

Court, in its 1986 FEC v. Massachusetts Citizens for 

Life (MCFL) decision, concluded that §441b could not 

constitutionally prohibit certain types of nonprofit corporations from making independent expenditures 

using their corporate treasury funds. Subsequently, 

the Commission promulgated new regulations that 

attempted to codify the MCFL exemption. 11 CFR 

114.10. Under the regulations, in order for a nonprofit 

corporation to qualify for the exemption, it must have 

certain characteristics: 

• The corporation’s express purpose is to promote 

political ideas, and it cannot engage in business 

activities (11 CFR 114.10(c)(1), (2)); 

• The corporation must not have shareholders or other 

persons who have a claim on its assets or earnings, 

or for whom there are disincentives to disassociate 

themselves from the organization on the basis of its 

political positions (11 CFR 114.10(c)(3)); 

• The corporation must not have been established by 

a business corporation or labor union and must not 

directly or indirectly accept donations or anything of 

value from such entities. If the corporation cannot 

demonstrate this, it must have a policy not to accept 

donations from business corporations or labor 

unions (11 CFR 114.10(c)(4)(i), (ii), (iii)); and 

• The corporation is described in 26 U.S.C. §501(c)(4) 

(11 CFR 114.10(c)(5)). 

Soon after the Commission promulgated these 

regulations, Minnesota Citizens Concerned for Life 

(MCCL), a nonprofit corporation, filed a lawsuit challenging their constitutionality. MCCL alleged that it did 

not have all of the characteristics described in the 

FEC rules but, nonetheless, considered itself eligible 

to make independent expenditures from its general 

treasury funds and planned to do so. 

In April 1996, the U.S. District Court for the District 

of Minnesota ruled that the FEC’s regulations defining 

and governing qualified nonprofit corporations were 

unconstitutional on First Amendment grounds. The 

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

of Appeals for the Eighth Circuit that addressed a 

similar Minnesota state law. In that opinion, the appeals court rejected the argument that the three features cited in MCFL serve as a bright-line test for determining which corporations are entitled to make 

independent expenditures. Day v. Holahan (34 F.3d 

1356 (8th Cir., 1994)). The Day decision concluded 

that Minnesota’s regulations were too restrictive and 

not narrowly tailored to serve a compelling governmental interest because they disqualified from the 

independent-expenditure exemption those nonprofit, 

membership corporations that engaged in some business activities and/or accepted some corporate donations, but in insignificant amounts. 

The district court in the MCCL case also found that 

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

114.10; consequently, the court rejected the entire 

provision.1 

On May 7, 1997, a three-judge panel of the U.S. 

Court of Appeals for the Eighth Circuit affirmed the 

district court decision. The appellate court agreed that 

Day required voiding 11 CFR 114.10 (c)(2) and (c)(4). 

Only the court of appeals sitting en banc, the court 

noted, could overturn Day’s interpretation of the Supreme Court’s MCFL decision. Furthermore, because 

the district court concluded that the remainder of 11 

CFR 114.10 was not severable from the invalid portions—a ruling the Commission had not appealed—11 

CFR 114.10 as a whole was properly declared void. 

The FEC asked the appeals court to rehear the case 

and suggested a rehearing en banc, but the court 

denied the request. 

On November 17, 1997, the James Madison Center for Free Speech filed a rulemaking petition asking 

the Commission to revise its rules on qualified nonprofit corporations in light of the appeals court decision in MCCL. On December 10, the Commission 

published a Notice of Availability inviting comments 

on the petition. 

Express Advocacy 

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

at the Commission during 1997. The regulations, 

adopted in 1995, resulted from the Supreme Court’s 

MCFL decision. That decision limited the scope of 

the §441b prohibition on independent political spending by corporations and labor organizations. In response to this decision, the Commission prescribed a 

new regulatory definition of express advocacy. The 

definition was based largely on two court opinions: the 

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

Ninth Circuit Court of Appeals opinion in FEC v. 

Furgatch. 

1 A regulation that contains unconstitutional provisions 

must be stricken in its entirety unless that which remains 

after the unconstitutional provisions are excised is fully 

operative as law and the body enacting the regulation would 

have enacted the constitutional provisions even in the absence of those which are unconstitutional. 

The MCFL Court, citing First Amendment concerns, had held that the ban on corporate and labor 

organization independent expenditures could only be 

constitutionally applied in instances where the money 

was used to expressly advocate the election or defeat 

of a clearly identified candidate for federal office. The 

Court’s landmark Buckley v. Valeo decision listed 

examples of phrases that constitute express advocacy: “vote for,” “elect,” “support,” “cast your ballot 

for,” “vote against,” “defeat,” “reject.” The FEC incorporated this list into its definition of express advocacy 

at 11 CFR 100.22(a). 

Subpart (b) of 11 CFR 100.22 is based, inter alia, 

on the Furgatch decision. The court of appeals had 

held that language may be said to expressly advocate 

a candidate’s election or defeat if, when taken in context and with limited reference to external events, it 

can have no other reasonable interpretation. 

Maine Right to Life v. FEC 

A nonprofit corporation immediately challenged the 

new definition, and the courts responded quickly. In 

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

Circuit summarily upheld a district court ruling in 

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

the regulatory definition exceeded the FEC’s statutory 

authority because it broadened the definition of express advocacy beyond the Supreme Court’s interpretation in the Buckley v. Valeo opinion. On October 6, 

1997, the Supreme Court denied the Solicitor 

General’s request to hear this case. 

FEC v. Christian Action Network

 One of the cases the appeals court cited in its 

MRLC decision was FEC v. Christian Action Network 

(CAN). In that case, a district court had ruled that 

CAN’s television and newspaper ads purchased with 

corporate funds were not prohibited by §441b because they contained no express advocacy. The ads, 

which only ran during the weeks leading up to the 

1992 Presidential general election, pertained to Bill 

Clinton and Al Gore’s asserted views on homosexual 

rights issues. The Court of Appeals for the Fourth 

Circuit summarily affirmed the district court decision 

last year, in an unpublished opinion. The Solicitor 

General declined to ask the Supreme Court to review 
Legal Issues 17 

the case because the appeals court decision was 

unpublished and, under court rules, could not be cited 

as precedent. On April 7,1997, the court of appeals 

granted CAN’s request that the FEC pay its attorney 

fees and other costs associated with the case. Later 

in the year, the appeals court denied the 

Commission’s petition for a rehearing of the case and 

its suggestion for a rehearing en banc. After the Supreme Court denied certiorari in MRLC, the Solicitor 

General declined to seek Supreme Court review of 

the attorney fees decision in CAN. 

Right to Life of Dutchess County, Inc. v. FEC 

On April 11, 1997, Right to Life of Dutchess 

County, Inc. (RLDC), a nonprofit membership corporation based in New York, launched its own challenge 

to the Commission’s express advocacy definition. 

RLDC asked the U.S. District Court for the Southern 

District of New York to find that the FEC has been 

acting contrary to law in enforcing subpart (b) of the 

express advocacy definition. RLDC cited the appeals 

court decision in MRLC as the basis for its suit. 

In its suit, which was pending at year’s end, RLDC 

said it intends to make communications to its members and the general public—using newsletters, voter 

guides, columns, press conferences, fliers and other 

methods—about the stances of federal candidates on 

abortion. RLDC would pay for such communications 

from its general treasury, and would accept donations—even from corporations—in order to fund such 

endeavors. RLDC maintained that, under subsection 

(b) of the Commission’s regulations, their expenditures would be classified as express advocacy, but 

that, under the Buckley decision, they would not. 

The RLDC asked the court to find that the First 

Circuit decision in MRLC bars the Commission from 

adhering to subsection (b) even in other jurisdictions 

(i.e., outside the First Circuit) or, in the alternative, to 

find that subsection (b) of the regulation is void and 

unenforceable and to enjoin the FEC from enforcing 

it. The RLDC claimed that 11 CFR 100.22(b): 

“proximity”—and provides inadequate notice of what 

conduct is actually prohibited; and 

• Violates the Fifth Amendment’s due process clause 

by vesting the FEC with excessive discretion in enforcing the Act. 

Circuit Court Decisions 

Various opinions concerning express advocacy 

have been issued by several different circuit courts of 

appeal. The MRLC and CAN decisions were handed 

down by courts in the First and Fourth Circuits, respectively. The Furgatch decision—on which the challenged subsection (b) of the FEC’s express advocacy 

definition is based—was issued by the Ninth Circuit 

Court of Appeals. The Supreme Court has declined to 

review both the First Circuit and Ninth Circuit decisions. The pending RLDC case will be heard by a 

district court in the Second Circuit. 

Petition for Rulemaking 

On October 20, 1997, the James Madison Center 

for Free Speech filed a rulemaking petition urging the 

Commission to repeal subsection (b) of its regulation 

on express advocacy to conform with the appeals 

court decision in MRLC. On November 6, the Commission published a Notice of Availability seeking 

comments on the petition.2 

Coordination with Candidate 

Under a statutory exception to §441b, implemented 

through FEC regulations, corporations and labor organizations may make certain types of communications 

related to federal elections. Generally, corporations 

and unions may direct to their restricted class3 communications that expressly advocate the election or 

defeat of candidates. Communications that go beyond 

this “restricted class” may not contain an express 

advocacy message, and cannot be coordinated with 

the candidate (beyond the types of coordination spe2 On February 12, 1998, the Commission declined to 

open a rulemaking on express advocacy. 3 The restricted class of a corporation includes its executive and administrative personnel, stockholders and the 

families of both groups. For labor organizations, the restricted class comprises its executive and administrative 

personnel, members and the families of both groups. 

• Exceeds the statutory authority granted the FEC 

because it regulates speech that does not constitute 

express advocacy; 

• Contains vague language—such as “when taken as 

a whole,” “limited reference,” “external events” and 
18 Chapter Three 

cifically permitted in FEC regulations). The regulations 

make clear that such coordination generally results in 

prohibited in-kind contributions to the candidates. 

These regulations are based on Buckley and later 

opinions, which held that “controlled or coordinated 

expenditures are treated as contributions rather than 

expenditures under the Act.” 

The regulations, in certain instances, clarify what 

constitutes impermissible coordination with candidates. For example, specific regulations at 11 CFR 

114.4(c)(4) and (5) make it illegal for a corporation or 

labor organization to distribute voting records or voter 

guides to the general public if, among other things, 

the organization consults or coordinates with candidates concerning the content or distribution of such 

materials. At 11 CFR 114.4(c)(5)(ii), the FEC lists 

specific restrictions for voter guides produced with 

corporate or union treasury funds for distribution to 

the public. For example, in the case of guides that are 

based on candidates’ written responses to specific 

questions, the regulations prohibit a corporate or labor 

organization from contacting a candidate about the 

guide (other than through the exchange of written 

questions and answers) and require the guide to give 

all candidates for a particular office equal space and 

prominence. 

Clifton v. FEC 

On June 6, 1997, the U.S. Court of Appeals for the 

First Circuit in Clifton v. FEC declared the voting 

records regulations (11 CFR 114.4(c)(4)) invalid only 

insofar as they purport to prohibit mere inquiries to 

candidates. Similarly, the court found the voter guide 

regulation at 11 CFR 114.4(c)(5) invalid only insofar 

as it limits contact with candidates to written inquiries 

and replies and imposes an equal space and prominence restriction. 4 The appeals court found that, to 

avoid First Amendment concerns, it would construe 

§441b narrowly. Under this construction, both the 

Commission’s restriction on oral contact between 

MRLC and candidates and its requirement that voter 

guides provide equal space to candidates were unlawful. The appeals court found that the FEC’s requirement of equal space was a “content-based” restriction because it would affect the content of the 

MRLC’s voting guides. The court said that “[T]here is 

a strong First Amendment presumption against content-affecting government regulation of private citizen 

speech, even where the government does not dictate 

the viewpoint.” 

With regard to the Commission’s requirement that 

contact between corporations and candidates be limited to written communications when such corporations are preparing voter guides, the court said that 

the regulation treads “heavily upon the right of citizens, individual or corporate, to confer and discuss 

public matters with their legislative representatives or 

candidates for such office.” The court said that such a 

ban on communications served as a “handicap” for 

discourse between legislators—and would-be legislators—and those they wish to represent. 

With respect to both regulations, the court rejected 

the FEC’s argument that such restrictions were justified to prevent illegal corporate contributions to candidates. While the court acknowledged the 

Commission’s legitimate concern with uncovering 

prohibited contributions, it said that the agency should 

be able to investigate such impermissible actions 

through its normal enforcement procedures. 

The court did not take up MRLC’s challenge to the 

regulation concerning an “electioneering message” 

and instead referred the matter back to the district 

court. MRLC’s challenge concerned the FEC’s regulations at 11 CFR 114.4(c)(5)(ii)(D) and (E), which state 

that certain kinds of voter guides—those that are prepared after receiving written responses from candidates—must not include an “electioneering message” 

or “‘score or rate the candidates’ responses in such a 

way as to convey an electioneering message.” MRLC 

had argued that these regulations were unconstitutionally vague. The court concluded that it would not 

decide this matter because, at the district court level, 

there had been inadequate briefing as to the content, 

4 purpose and severability of these regulations. One judge dissented, finding that the regulatory restriction on contact with the candidate about the voter guide was 

valid. 
Legal Issues 19 

The plaintiffs, Robin Clifton and the Maine Right to 

Life Committee, Inc. (MRLC), petitioned the appeals 

court for a rehearing in this case, but that petition was 

denied, as was the FEC’s petition for rehearing and 

suggestion for rehearing en banc. 

In November 1997, the Solicitor General decided 

not to seek Supreme Court review of the appeals 

court decision. However, the plaintiffs have sought 

Supreme Court review.5 

FEC v. Christian Coalition 

Also during 1997, the Commission continued to 

pursue another significant case concerning issues of 

coordination—FEC v. Christian Coalition. The Commission filed suit against the Christian Coalition in 

July 1996 alleging that the organization, among other 

things, used its corporate treasury funds to make 

coordinated expenditures for voter guides, 

“scorecards,” get-out-the-vote drives and other public 

communications in support of or in opposition to various federal candidates. This suit came after the 

Democratic Party of Virginia and the Democratic National Committee had filed administrative complaints 

with the FEC in 1992 concerning the Christian 

Coalition’s activities. The complaints were combined 

and, after a review and investigation of Christian Coalition activities, the Commission found probable cause 

to believe a violation of the Act had occurred. Attempts at conciliation between the FEC and the Christian Coalition failed, leading to the filing of the suit. 

The Christian Coalition sought dismissal of those 

portions of the FEC’s suit that concerned prohibited 

activities that had occurred more than five years before the suit was filed—essentially the activities that 

related to the 1990 election cycle. 

On May 13, 1997, the U.S. District Court for the 

District of Columbia denied the Christian Coalition’s 

motion for partial dismissal of the case. The court said 

the FEC could seek declaratory and injunctive relief 

for all of the alleged violations of the Act, but would 

not be able to obtain civil penalties for any of the violations that occurred more than five years before the 

lawsuit was filed. (For additional information regarding 

the statute of limitations, see “Enforcement Process,” 

on page 20.) 

FEC v. Public Citizen 

In another 1997 case involving coordination between a candidate and a nonprofit corporation, the 

FEC asked the U.S. District Court for the Northern 

District of Georgia to find that Public Citizen, Inc., and 

its separate segregated fund (SSF) violated several 

sections of the FECA. 

Before the 1992 primary election, the SSF contacted the Friends of Herman Clark for Congress 

committee. Mr. Clark was Congressman Newt 

Gingrich’s only challenger in the Republican primary. 

Representatives from the SSF and the Clark committee communicated several times, discussing the 

campaign’s intent, plans and needs and reviewing 

suggestions about how to defeat Mr. Gingrich. 

The Commission determined that, as a result of 

that coordination, a series of SSF expenditures made 

in opposition to Mr. Gingrich’s campaign were, in fact, 

contributions to the Clark campaign. The SSF spent 

$59,200, resulting in excessive contributions of 

$58,200 to the Clark campaign. 

In addition, the SSF failed to report the $59,200 as 

contributions to Clark for Congress; failed to include 

appropriate disclaimers on the materials it distributed; 

and improperly solicited contributions to the SSF. See 

2 U.S.C. §§434(b), 441d(a)(2) and (3) and 

441b(b)(3)(B). 

The FEC asked the court to assess civil penalties 

against Public Citizen and its SSF, and to order the 

SSF to amend its reports and to refund any contributions it received as a result of the improper solicitations. 

The case was pending at year’s end. 

Corporate Communications to Restricted Class 

The Commission addressed the statutory exemption for corporate/labor communications to the restricted class in two 1997 advisory opinions. As noted 

above, the exception allows corporations and unions 

to send their “restricted class” communications that 

expressly advocate the election or defeat of a clearly 

identified candidate and that solicit contributions for 5 On February 23, 1998, the Supreme Court denied the 

plaintiffs’ petition for certiorari. 
20 Chapter Three 

the candidate. The regulations, however, prohibit 

sending such communications to people outside the 

restricted class. 

In AO 1997-16, the Commission ruled that Oregon 

Natural Resources Council Action (ONRC Action), a 

501(c)(4) tax-exempt corporation, could not put its 

endorsements of federal candidates on its web site; 

nor was a telephone caller’s self-identification as a 

member sufficient evidence to mail that person a 

printed list of ONRC Action’s endorsements. The 

group also could not record its endorsements to a 

voice mail box system. All of these forms of communications could result in sending express advocacy 

communications to nonmembers—people who were 

outside the restricted class. 

In AO 1997-22, the Commission approved the 

Business Council of Alabama’s plan to distribute candidate endorsements to the one or two representatives of each institutional member (corporate and 

noncorporate) with whom the Council normally had 

contact, and to ask those member organizations to 

forward the endorsements to their own restricted 

class personnel. The Commission rejected, however, 

BCA’s plan to supply the materials for redistribution 

by the member organizations, concluding it would 

transform BCA’s activity into an unlawful distribution 

of election advocacy communications to the restricted classes of its institutional members, which 

was a larger group than BCA’s own restricted class. 

Enforcement Process 

During 1997, the Commission faced several court 

challenges regarding its enforcement activity. Most 

concerned the timeliness of FEC actions. 

Court Review of Administrative Delays 

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

complaint with the FEC may seek court intervention if 

the FEC fails to complete action on the complaint 

within 120 days. The standard for evaluating administrative delay is whether the agency has acted “contrary to law.” To measure this, the courts use several 

criteria described in Rose v. FEC and Telecommunications Research & Action Center (TRAC) v. FCC; 

they are: 

• The credibility of the allegation; 

• The nature of the threat posed; 

• The resources and information available to the 

agency; 

• The novelty of the issues involved; 

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

• Whether Congress mandated a timetable for the 

agency to take action on such matters as the one at 

hand; 

• The nature of the matter (for instance, delayed 

agency action on matters affecting human health 

and welfare are less tolerable than those in the 

sphere of economic regulation); 

• The effect that court-ordered expedited action on the 

matter would have on agency activities of a higher or 

competing priority; 

• The nature and extent of the interest prejudiced by 

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

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

lurking behind agency lassitude in order to hold that 

agency action is ‘unreasonably delayed.’” 

The Democratic Senatorial Campaign Committee 

(DSCC) was among those who sought court review in 

1997. The DSCC’s litigation concerned an administrative complaint it had filed in 1993 against the National Republican Senatorial Committee (NRSC). In 

April 1996, the district court of the District of Columbia—applying the Rose and TRAC criteria—had 

found that the FEC’s initial delay in proceeding on the 

complaint was contrary to law, but declined to order 

any action by the Commission beyond what it was 

already doing. Dissatisfied with the Commission’s 

progress, the DSCC filed a second suit in November 

1996, asking the court to order the FEC to conclude 

its consideration of the complaint within 30 days or 

give the DSCC the authority to file a civil action 

against the NRSC. Acknowledging the FEC’s considerable work load, lack of resources and competing 

priorities, the court denied the DSCC’s request, but 

ordered the Commission to file monthly status reports 
Legal Issues 21 

on its progress in the investigation. On May 30, 1997, 

however, the court found that the Commission’s failure to reach a probable cause determination by then 

was “contrary to law,” and ordered the FEC to conform to that declaration within 30 days. When the 

Commission stated it was unable to do so, the DSCC 

filed suit on its own against the NRSC.6 

The DSCC’s suit is the first contested case in 

which a private party has sued another private party 

for violations of the Act, pursuant to 2 U.S.C. 

§437g(a)(8)(C). That section of the Act states that if 

the FEC fails to take action on a complaint within 30 

days after it has been ordered to do so by the U.S. 

District Court for the District of Columbia, then the 

complainant may file suit in his or her own name 

against the alleged offender of the Act. 

On August 27, the court granted a stay requested 

by the NRSC in the suit brought against it by the 

DSCC. The court based the stay primarily on the fact 

that the FEC was appealing the earlier determination 

that it had acted contrary to law. 

Statute of Limitations 

Another factor at work in FEC enforcement cases 

(including the DSCC case detailed above) is the statute of limitations. There is a general statute of limitations requiring that any federal government attempt to 

enforce a civil fine or penalty be initiated within five 

years from the date when the claim arose. 28 U.S.C. 

§2462. 

In two recent cases, courts ruled that the five-year 

limit had expired; but the two courts involved reached 

conflicting conclusions regarding application of the 

limit to injunctive relief. In FEC v. Larry Williams, the 

U.S. Court of Appeals for the Ninth Circuit reversed a 

district court decision by ruling that the FEC waited 

too long—approximately nine months after the fiveyear statute of limitations on filing a lawsuit had expired—before filing suit against Mr. Williams. In its 2-1 

split decision, the court ruled that the time limit started 

running at the time the alleged offenses occurred— 

not at the time the administrative complaint was filed 

with the Commission. The appeals court held that the 

general five-year statute of limitations applied to the 

FEC’s action seeking to assess civil penalties against 

Mr. Williams. The court also found that §2462 barred 

the FEC from seeking injunctive relief because the 

“claim for injunctive relief is connected to the claim for 

legal relief.” The court denied an FEC petition for a 

rehearing of the case en banc. On December 8, 1997, 

the U.S. Supreme Court denied the U.S. Solicitor 

General’s petition for a writ of certiorari in the case. 

In another significant statute-of-limitations case, 

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

denied the Christian Coalition’s motion for dismissal 

of those portions of an FEC lawsuit that concerned 

allegedly unlawful activities that had occurred more 

than five years before the suit was filed—essentially 

the activities that related to the 1990 election cycle. In 

its May 13 opinion, the district court concurred with 

the appeals court’s decision in Williams, finding that 

the five-year limit started running at the time the alleged offenses occurred—not at the time they were 

brought to the Commission’s attention. The district 

court, however, agreed with the FEC that, contrary to 

the conclusion in Williams, §2462 provides no shield 

for the Christian Coalition against declaratory or injunctive relief. At 2 U.S.C. §437g(a)(6), the FEC has 

the authority to seek injunctive relief separate from its 

authority to seek legal remedies (e.g., civil fines, penalties and forfeitures). The court concluded that the 

FEC could seek declaratory and injunctive relief for all 

of the alleged violations of the Act. However, the 

Commission would not be able to obtain civil penalties 

for any of the violations that occurred more than five 

years before the lawsuit was filed. 

Legal Standing 

Another enforcement-related issue before the 

courts in 1997 involved the legal standing of those 

seeking court review of FEC enforcement actions. On 

March 21, the U.S. Court of Appeals for the District of 

Columbia Circuit found that Common Cause lacked 

standing to challenge the Commission’s actions regarding an administrative complaint Common Cause 

had filed. The lawsuit concerned Montana’s 1988 

senatorial race. Common Cause had alleged that the 6 The Commission’s appeal of the district court’s decision 

was pending at year’s end. 
22 Chapter Three 

National Republican Senatorial Committee (NRSC) 

and the Montana Republican Party (MRP) had violated the Act by making contributions and expenditures in excess of the legal contribution limits for Republican candidate Conrad Burns. Common Cause 

had also alleged that the national and state parties 

had failed to accurately report these contributions and 

expenditures to the FEC. Common Cause and James 

K. Addy, a Montana Democrat, had filed administrative complaints with the FEC. After investigating those 

allegations, the FEC’s Office of General Counsel recommended that the Commission find probable cause 

to believe that the NRSC and the MRP had violated 

the Act. However, because none of the proposed 

probable cause findings garnered the required four 

affirmative votes, the Commission voted 5-0 to dismiss the complaints and close the matter. 

Common Cause and Mr. Addy challenged the 

FEC’s dismissal in U.S. District Court for the District 

of Columbia. The district court ruled in the FEC’s favor on most of these issues, finding “that deference is 

owed to the views of the ‘declining-to-go-ahead’ Commissioners when reviewing a Commission decision to 

dismiss a complaint based on a deadlock.” It granted 

partial summary judgment to the FEC and remanded 

one reporting violation to the Commission for review. 

Common Cause, alone, appealed the decision 

(except for the portion that was favorable to it), claiming that deference is not owed to the “declining-to-goahead” Commissioners when its members decide to 

dismiss a complaint based on a previous deadlock. 

The appeals court did not address this argument because it found that Common Cause lacked standing. 

In order to show standing, a plaintiff must have 

suffered an injury in fact, or an actual wrong against a 

legally protected interest, that is traceable to the 

defendant’s challenged actions and is likely to be 

redressed by a favorable decision from the court. An 

organization may have standing to sue in order to 

vindicate its own interests or, under certain conditions, on behalf of its members. Because Common 

Cause did not demonstrate an injury to itself or its 

members as a result of the alleged violations of the 

Act, it could not assert standing. 

In a decision based on Common Cause, the U.S. 

District Court for the District of Columbia granted the 

FEC’s motion to dismiss a case in which Alan Gottlieb 

and others had asked the court to order the FEC to 

take action on an administrative complaint on which 

the Commission had deadlocked. The complaint 

dated back to March 1995. The plaintiffs originally 

filed the administrative complaint with the Commission alleging that President Clinton’s 1992 campaign 

received more than $3 million in excess of the entitlement allowed under the Presidential Primary Matching 

Payment Account Act. 2 U.S.C. §§9034 and 9037. 

The complaint alleged that Clinton’s primary committee—the Clinton for President Committee—unlawfully 

treated some contributions received after the nomination as matchable primary contributions and others as 

contributions to the Clinton/Gore ’92 General Election 

Legal and Compliance fund, or GELAC fund. In August 1995, the Commission dismissed the case—after 

deadlocking in a 3-3 vote. The plaintiffs then filed suit, 

asking the court to find that the FEC’s action was 

contrary to law and to order the FEC to take action on 

the complaint. In its May 8 order dismissing Gottlieb v. 

FEC, the court agreed with the FEC that the plaintiffs 

did not have standing because they were not personally harmed by the Commission’s action. On May 14, 

plaintiffs appealed the decision to the DC Circuit. 

Contributions in the Name of 

Another 

Under the Act and Commission regulations, it is 

illegal for one person to make a contribution in the 

name of another person. 2 U.S.C. §441f. Violations 

of this provision often involve attempts to mask other 

transgressions. During 1997, the Commission concluded a number of enforcement actions involving 

§441f in which respondents had attempted to conceal 

excessive contributions, corporate/labor contributions 

and contributions by foreign nationals by laundering 

money through lawful contributors. One of the cases 

produced a record-setting civil penalty. 
Legal Issues 23 

MUR 4398 

In Matter Under Review (MUR) 4398, Thomas 

Kramer, a German national, paid a record $323,000 

civil penalty for making prohibited foreign contributions, some of which were made in the names of others.7 Mr. Kramer made a total of $322,600 in impermissible contributions to federal, state and local political committees in his own name ($13,000), through 

17 companies that he owned and controlled 

($287,600), by reimbursing his secretary ($21,000) 

and through unknown intermediaries ($1,000). 

Mr. Kramer’s secretary paid a $21,000 penalty for 

her part in the contributions scheme. In addition, the 

Republican Party of Florida paid an $82,000 civil penalty for accepting $110,000 in impermissible foreign 

contributions from Mr. Kramer and one of the corporations he owns. 

Mr. Kramer’s own civil penalty was the largest ever 

paid by an individual to the Commission, and the total 

sum of civil penalties attached to this case— 

$426,000—was among the largest in the FEC’s history. 

MUR 4090 

MUR 4090 also involved a reimbursement scheme 

and a substantial civil penalty. Firearms Training 

Systems, Inc., its former president and its former chief 

operating officer agreed to pay a total of $91,000 to 

the FEC after making six contributions with corporate 

funds during elections in the early 1990s and using 

bonus payments to mask reimbursements for two of 

the contributions. 

Between 1991 and 1993, the company’s former 

president Jody D. Scheckter made $7,500 in contributions from his personal checking account to various 

Democratic and Republican congressional candidates, as well as to the Democratic Congressional 

Campaign Committee. He received reimbursement 

from the company for four of the contributions and 

bonus payments for the other two. 

Prior to disclosure to the Commission, Mr. 

Scheckter repaid Firearms Systems for the contributions for which he was initially reimbursed. The company also instituted procedures to insure that future 

political activity would not violate the Act or FEC regulations. 

MUR 4286 

In another corporate reimbursement case (MUR 

4286), General Cigar Co., Inc. (GCC), and its president, Austin T. McNamara, paid an $80,000 civil penalty for making corporate contributions and contributions in the name of another. Mr. McNamara solicited 

four employees at GCC for contributions of $1,000 

each to Congressman Newt Gingrich’s 1994 campaign. He later solicited four employees for contributions of $1,000 each to former Senator Bob Dole’s 

1996 presidential campaign. GCC then reimbursed 

the employees and Mr. McNamara, who also contributed $1,000 to each of those campaigns and an additional $1,000 in 1995 to the Committee for Sam Gibbons. The reimbursements totaled $11,000. Each of 

the committees involved refunded the contributions to 

the respective contributors. In addition to paying the 

civil penalty, GCC and Mr. McNamara had to provide 

the FEC with evidence that all of the contributions that 

were refunded were either disgorged to the U.S. Treasury or reimbursed to GCC. 

MUR 4399 

MUR 4399 also involved a reimbursement scheme. 

The State Universities Retirement System of Illinois 

(SURS) and its former executive director, Dennis 

Spice, paid $10,500 in civil penalties to the FEC for 

making contributions in the names of others. Of that 

amount, Mr. Spice paid $7,500 for knowingly permitting his name to be used, and knowingly assisting 

others, to effect contributions in the names of others. 

SURS is an executive agency of the state of Illinois. During the 1994 election cycle, SURS reimbursed Mr. Spice and three of its other officers for 

$4,345 in contributions they had made to political 

parties and candidate fundraisers in order to advance 

7 In a related matter, MUR 4638, the law firm that advised Mr. Kramer agreed to pay a $77,000 civil penalty for 

soliciting foreign contributions, in violation of 2 U.S.C. 

§441e. During 1993 and 1994, the law firm participated in 

conversations with Mr. Kramer and his agents that resulted 

in his prohibited contributions. 
24 Chapter Three 

SURS’s funding agenda. The employees submitted 

vouchers generically labeled with such statements as 

“Legislative Conference” and “Legislative Meeting” 

without also disclosing that the events were sponsored by political committees. SURS was not revealed as the true source of the contributions. 

Major Purpose Test 

In 1997, the Supreme Court agreed to review Akins 

v. FEC, a case involving the definition of “political 

committee.” The Act defines a political committee as 

any group of persons that either receives contributions or makes expenditures exceeding $1,000 per 

year for the purpose of influencing a federal election. 

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

a group’s major purpose is the nomination or election 

of candidates. 

This “major-purpose test” dates back to the Supreme Court’s Buckley v. Valeo decision in which the 

Court ruled that, in order to avoid difficult constitutional questions, the definition of political committee 

“need only encompass organizations that are under 

the control of a candidate or the major purpose of 

which is the nomination or election of a candidate.” 

The Court reiterated this restriction in FEC v. Massachusetts Citizens for Life. 

In December 1996, the U.S. Court of Appeals for 

the District of Columbia Circuit, sitting en banc (i.e., 

with all active judges present), ordered the Commission to reconsider its dismissal of a complaint alleging 

that the American Israel Public Affairs Committee 

(AIPAC) had violated the Act by failing to register as a 

political committee. The court said that the Commission should have reviewed the complaint based solely 

on the Act’s definition of political committee and that 

the major-purpose test is inapplicable when an organization makes coordinated expenditures or contributions.

 In 1997, the U.S. Supreme Court granted the Solicitor General’s petition for certiorari in this case.8 

Pending the Court’s review, the Commission held in 

abeyance a Notice of Proposed Rulemaking on the 

major-purpose test. 

Soft Money 

The role of soft money—funds raised and/or spent 

outside the limitations and prohibitions of the Act— 

continued to receive considerable attention during 

1997. 

Petitions for Rulemaking 

On June 18, the Commission published a Notice of 

Availability concerning two rulemaking petitions on 

soft money. 62 FR 33040. The petitions asked that 

the Commission examine its rules governing soft 

money in light of the influence it had on political campaigns during the 1996 election cycle. 

The first petition, filed on May 20 by five members 

of the U.S. House of Representatives—Democrats 

Marty Meehan and James P. Moran and Republicans 

Marge Roukema, Christopher Shays and Zach 

Wamp—urged the Commission to modify its rules “to 

help end or at least significantly lessen the influence 

of soft money.” The second petition, submitted on 

June 5 by President Bill Clinton, asked the Commission to ban soft money and to require candidates for 

federal office and national party committees to raise 

and spend only federally-permissible funds, or hard 

dollars. 

The Commission received 188 timely comments in 

response to the petitions. At year’s end, the 

rulemaking was ongoing. 

Enforcement and Litigation 

While the Commission considered its regulatory 

response, it and the two major parties pursued other 

legal actions concerning soft money during 1997. 

MUR 3637 

The Commission completed action on an enforcement matter (MUR 3637) in which the Kentucky State 

Democratic Central Executive Committee agreed to 

pay a $75,000 civil penalty for numerous violations, 

most of which involved the FEC’s soft money allocation rules. Those rules specify—among other things— 8 The Court heard oral argument on January 14, 1998 
Legal Issues 25 

the minimum amount of federally-permissible funds 

that committees must use to defray shared federal/ 

nonfederal expenses. Several of the Kentucky party’s 

violations involved the committee’s failure to pay for 

the federal portion of such shared expenses with permissible funds. 

FEC v. California Democratic Party 

The FEC also initiated a lawsuit asking the U.S. 

District Court for the Eastern District of California to 

find that the California Democratic Party (CDP) violated the allocation rules by using only funds from its 

nonfederal account to pay for a voter registration drive 

instead of allocating the costs of the drive between its 

federal and nonfederal committee accounts. The CDP 

had made payments from its nonfederal account to a 

nonfederal committee that had been formed to conduct voter registration drives and get-out-the-vote 

activities aimed at defeating a California ballot initiative. The Commission alleged that the CDP knew that 

the registration drive was designed and conducted to 

increase the number of Democratic voters—voters 

who would support Democratic candidates for state 

and federal offices. Accordingly, the FEC contended 

that part of the payments should have come from the 

CDP’s federal committee account to avoid the use of 

prohibited contributions for federal election purposes. 

The FEC asked the court to assess civil penalties 

against the CDP and its treasurer and against the 

party’s federal and nonfederal committees. It also 

asked the court to order the CDP’s federal committee 

to transfer to the nonfederal committee the amount 

that should have been allocated for these expenditures, and to require the federal committee to amend 

its 1992 October quarterly, Pre-General and PostGeneral reports. 

The case was pending at year’s end. 

DSCC v. NRSC; RNC v. FEC 

The Democratic and Republican parties both 

sought judicial intervention concerning alleged impermissible use of soft money. In August 1997, the 

Democratic Senatorial Campaign Committee (DSCC) 

filed suit against the National Republican Senatorial 

Committee (NRSC) charging that it made at least 

$187,000 in illegal “soft money” expenditures to influence a 1992 Senate election in Georgia. The DSCC 

had filed an administrative complaint on the subject 

with the FEC in 1993 and had followed it with a 

supplemental complaint in 1995. Dissatisfied with the 

pace of the Commission’s consideration of the matter, 

the DSCC sought judicial relief, culminating in its 

1997 suit against the NRSC. (For more information, 

see “Enforcement Process,” on page 20.) 

The Republican Party’s lawsuit challenged the 

FEC’s dismissal of a soft money complaint it had filed 

in August 1995. The Republican National Committee 

(RNC) asked the U.S. District Court for the District of 

Columbia to find that the FEC’s dismissal of its administrative complaint against the Democratic National 

Committee (DNC) was contrary to law and to order 

the FEC to bring itself into compliance within 30 days. 

In the original administrative complaint (MUR 

4246), the RNC had alleged that the DNC had impermissibly used soft money to pay for a nationwide media campaign in 1993 and 1994 to rally support for 

President Bill Clinton and other Democratic candidates in connection with Democratic legislative proposals for health care reform. The RNC had charged 

that the DNC should have paid for the campaign with 

a combination of federal and nonfederal funds, based 

on the FEC’s allocation rules. 

The Commission deadlocked on whether to approve the General Counsel’s recommendation to accept a proposed conciliation agreement under which 

the DNC would have admitted violating the Act and 

paid an undisclosed penalty. Three Commissioners 

voted to accept the General Counsel’s recommendation, one voted against the recommendation and one 

was recused. Given the deadlock, the Commission 

voted unanimously to close the case. 

Both DSCC v. NRSC and RNC v. FEC were pending at year’s end. 

Independent Expenditures by Party 

Committees 

During 1997, the Commission continued to explore 

the ramifications of the Supreme Court’s 1996 ruling 

in Colorado Republican Federal Campaign Committee v. FEC. In that case, the court concluded that the 

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

§441a(d) could not be applied to expenditures by a 
26 Chapter Three 

party committee that were made independently of the 

candidate.9 This ruling recognized that the First 

Amendment bans dollar limits on the amounts party 

committees may spend to make independent expenditures to support or oppose candidates in congressional races. Prior to the ruling, FEC rules presumed 

that parties could not make independent expenditures 

on behalf of their candidates because of the close, 

on-going coordination party committees generally 

maintain with candidates. 

In light of the Colorado decision, the Democratic 

Senatorial Campaign Committee (DSCC) and the 

Democratic Congressional Campaign Committee 

(DCCC) filed a rulemaking petition with the FEC. On 

May 5, 1997, the Commission published proposed 

rules governing independent and coordinated expenditures by party committees (11 CFR 109.1 and 

110.7). The proposed rules addressed a number of 

different issues, including possible alternatives for 

defining coordination and determining whether and 

how party committees could make independent expenditures in light of the ways in which they usually 

coordinate election campaigns with their candidates.10 

At a June 18 public hearing, attorneys from national party committees and other interested organizations offered suggestions and comments that ranged 

from making minor adjustments to the existing regulations to making wholesale changes in the way political 

committees make expenditures. 

Attorneys for the DSCC, DCCC and the Democratic National Committee (DNC) urged the FEC to 

prohibit party committees from making virtually any 

independent expenditures on behalf of their candidates once they have made coordinated expenditures 

for those same candidates. Coordination, they contended, occurs when there is any general or specific 

understanding or arrangement between the person 

making the expenditure and the candidate. 

The Republican committees had different views on 

the Colorado decision and on how the FEC should 

craft its revised rules. They argued that independence 

should not hinge on previous coordinated expenditures made by the party on behalf of the candidate. 

Instead, coordination should be viewed as a “meeting 

of the minds” between a candidate and political committee with regard to a specific expenditure. 

Common Cause, an incorporated membership 

organization, suggested that all expenditures by political parties on behalf of congressional candidates 

should be subject to a “rebuttable presumption” that 

the expenditures are coordinated. And, similar to the 

Democrats’ proposals, Common Cause urged that 

party committees be prohibited from making either 

coordinated or independent expenditures on behalf of 

the same candidate. 

The National Right to Life Committee, Inc. (NRLC), 

another incorporated membership organization, denounced the entire NPRM and charged the FEC with 

trying to regulate issue advocacy. The NRLC felt that 

the proposals took too broad a view of coordination 

and failed to provide any clear guidance to nonprofit 

corporations that plan to make independent expenditures.

 In addition to receiving written testimony from 

those who spoke at the public hearing, the FEC received written comments from the Internal Revenue 

Service, the U.S. Chamber of Commerce and the 

National Republican Congressional Committee (the 

DCCC’s and DSCC’s comments were combined). 

The rulemaking was pending at year’s end. 

State/Local Party Status 

The Commission issued three advisory opinions in 

1997 that addressed “state party committee” status 

and one that addressed “local party committee” status. These designations are important because the 

Act grants qualified state and local party committees 

certain spending rights not available to other types of 

committees. A state party, for example, may make 

coordinated party expenditures in support of its general election nominees, and may authorize qualified 

local party committees to spend against its coordinated expenditure limit. 2 U.S.C. §441a(d). In addition, both state and local party committees may spend 

unlimited amounts for certain activities that benefit 

9 The Court deferred consideration of a constitutional 

challenge to §441a(d) pending further lower court proceedings consistent with its ruling. 10 To review the numerous alternatives, please consult 

the Notice of Proposed Rulemaking (62 FR 24367). 
Legal Issues 27 

federal candidates but are not considered contributions or expenditures. These “exempt activities” include preparing and distributing slate cards, sample 

ballots and campaign materials, and conducting voter 

drives on behalf of the party’s Presidential and Vice 

Presidential nominees. 

State Party Status 

Under the Act and Commission regulations, a 

“state committee” is defined as an organization which, 

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

state level, as determined by the Commission. 

In AO 1992-30, the Commission established two 

criteria necessary to qualify as a state committee of a 

political party. First, the organization must engage in 

activities that “are commensurate with” the day-to-day 

operations of a party at a state level. Second, the 

state organization must gain ballot access for its federal candidates. 

During 1997, the Commission applied these criteria 

to determine that the Reform Party of Arkansas (AO 

1996-51), the Constitutional Party of Pennsylvania 

(AO 1997-3) and the Virginia Reform Party (AO 1997-

7) satisfied the requirements for state party status. 

Local Party Status 

The Act and Commission regulations do not explicitly define “local party committee,” but it can be 

viewed as a “subordinate committee.” A subordinate 

committee is “any organization which is responsible 

for the day-to-day operation of the political party at the 

level of city, county, neighborhood, ward, district, precinct, or any other subdivision of a State or any organization under the control or direction of the State 

committee.” 11 CFR 100.14(b). 

In AO 1997-18, the Commission determined that 

the California Reform Party Congressional Committee 

did not qualify as a local party committee because it 

met neither of the two regulatory requirements of 

“subordinate committee”: (1) responsibility for the dayto-day operations of the party on the local level; or (2) 

being under the control or direction of a state committee. Since the Congressional Committee was active in 

districts throughout the state (not just one local area) 

and since it indicated that it was independent of any 

state committee and had no relationship with the National Reform Party, it could not qualify as a local 

party committee. 

Personal Use of Campaign Funds 

Under the Act, excess campaign funds cannot be 

used to pay for personal expenses. 2 U.S.C. §439a. 

The Commission revised its rules (11 CFR 113.1(g)) 

in 1995 to clarify what is meant by “personal use” of 

campaign funds. The regulations differentiate campaign and officeholder expenses from unlawful personal use expenses. During 1997, the Commission 

received a number of advisory opinion requests seeking guidance on how the “personal use” rules would 

apply to specific situations. 

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

campaign or officeholder duties. The regulations list 

specific expenses that are considered per se (or automatic) personal use expenses, which cannot be 

defrayed with campaign funds. The rules state that 

the Commission will consider payments for legal services, meals, travel, vehicles and mixed-used expenses on a case-by-case basis. The requests for 

advisory opinions pertained to those case-by-case 

categories. 

Advisory Opinions 

In response to these requests, the Commission 

issued the following four advisory opinions: 

• In AO 1997-1, the Commission determined that a 

former member of Congress could donate the remaining cash balance of his campaign committee to 

a charitable foundation provided the foundation did 

not use the funds to compensate the candidate, his 

family or former campaign staff. 

• In AO 1997-2, the Commission concluded that members of the U.S. House of Representatives could use 

campaign funds to pay travel expenses and attendance for themselves, their spouses and their children in connection with a Bipartisan Congressional 

Retreat. 
28 Chapter Three 

• In AO 1997-11, the Commission ruled that a Member of Congress who was a candidate could use 

campaign funds for tuition, travel and other related 

expenses to participate in a Spanish language immersion program intended to improve her communication with Spanish speaking constituents. 

• In AO 1997-12, the Commission decided that a 

Member of Congress who was a candidate could 

use campaign funds to pay some of the fees 

charged by a law firm to help him refute allegations 

reported by the media that he was involved in illegal 

activities during his tenure as a federal officeholder. 

Limited Liability Company 

Neither the Act nor FEC regulations specifically 

address the status of limited liability companies 

(LLCs), which bear some resemblance to both corporations and partnerships. Not surprisingly, then, LLCs 

have requested advisory opinions about their status 

under the election law. The Commission responded to 

two such requests in 1997, and had responded to two 

similar requests in previous years. 

In the advisory opinions, the Commission determined that LLCs in three states and the District of 

Columbia should not be considered either partnerships or corporations. Instead, the Commission concluded that the LLC would be considered “any other 

organization or group of persons” for purposes of the 

Act. As such, it could use its treasury funds to influence federal elections without also attributing its contributions to its individual members. 

In determining that LLCs formed under the laws of 

Missouri, Virginia, Pennsylvania and the District of 

Columbia were eligible to make contributions, the 

Commission noted: 

• The state’s recognition of the LLC as a distinct form 

of business, separate from a corporation or partnership, with its own statutory framework; 

• The state’s requirements for naming the LLC; 

• The corporate attribute of limitation of liability for all 

members; and 

• The lack of the general corporate attributes of free 

transferability of interests and continuity of life. 

The Commission also noted that, in order to make 

contributions, the LLC could not be a federal contractor; nor could any of its members be a corporation, 

federal contractor or foreign national because direct 

or indirect contributions by those entities would be 

prohibited under the Act. See AOs 1995-11, 1996-13, 

1997-4 and 1997-17. 

Definition of Member 

During 1997, the Commission issued an advisory 

opinion and considered a rulemaking petition concerning its judicially-invalidated definition of “member.” The definition is important because, under the 

Act, only “members” of an incorporated membership 

organization (and the organization’s executive and 

administrative personnel and the families of both 

groups) may be solicited for contributions to the 

organization’s separate segregated fund, commonly 

called a political action committee or PAC. Additionally, only members are allowed to receive the 

organization’s communications that expressly advocate the election or defeat of candidates. 

To qualify as a member of a membership association under current FEC rules, a member must: 

• Pay regular dues and be entitled to vote for at least 

one member of the association’s “highest governing 

body” or for those who choose at least one member 

of that body; or 

• Have a significant financial attachment to the association, not merely the payment of dues; or 

• Have the right to vote directly for all those on the 

association’s highest governing board; or 

• Have an organizational and financial attachment to 

the association that is significant enough to confer 

membership status, as determined by the Commission on a case-by-case basis. 11 CFR 114.1(e)(2), 

100.8(b)(4)(iv)(B). 

Rulemaking 

On December 15, 1997, the Commission approved 

for public comment a Notice of Proposed Rulemaking 

(NPRM) outlining possible revisions to its definition of 

“member.” The action came in response to a 
Legal Issues 29 

rulemaking petition filed by James Bopp, Jr., on behalf of the National Right to Life Committee, Inc. The 

petition cited the 1995 decision by the U.S. Court of 

Appeals for the District of Columbia Circuit in Chamber of Commerce of the United States v. FEC, which 

found a portion of the FEC’s membership rules unconstitutional. 

In its decision, the court of appeals concluded that 

the FEC’s regulatory definition of “member” did not 

square with the Supreme Court’s definition in FEC v. 

National Right to Work Committee (NRWC). 459 U.S. 

197 (1982). In that case, the Supreme Court had 

ruled that “members of nonstock corporations were to 

be defined . . . by analogy to stockholders of business 

corporations and members of labor unions. . . .[which] 

suggest[ed] that some relatively enduring and independently significant financial or organizational attachment is required . . . .” According to the court of 

appeals, the Commission’s rules interpreted the disjunctive “or” between “financial” and “organizational” 

as if the Supreme Court had used the conjunctive 

“and.” The court also concluded that the voting requirements in the FEC’s membership rules “ignored 

other indications of organizational attachment.” There 

were not four Commission votes to appeal the court of 

appeals’ decision. 

In response to the court’s decision, the 

Commission’s NPRM sought comments on three alternative definitions of member. 

Alternative A. This alternative would set out three 

sets of criteria for membership: (1) annual dues of at 

least $50; (2) a major organizational attachment to the 

membership association (possible attachments are 

suggested); or (3) a combination of annual dues of 

less than $50 and some lesser organizational attachment to the association. Under this alternative a person who satisfied any one of these criteria would 

qualify as a member. 

Alternative B. This alternative would set the amount 

of annual dues required for membership at $200—the 

same amount that triggers itemized disclosures for 

political committees—for membership organizations 

formed to further an ideological, social welfare or political philosophy. Persons affiliated with these types 

of groups who paid less than $200 per year in dues 

still would be considered members for FECA purposes if they had some right to participate in the governance of the organization. Suggested examples 

were described in the NPRM.

 However, members of organizations formed to 

further business or economic interests would be 

treated as members if they paid any set amount of 

regular dues. Those individuals and entities generally 

join membership organizations to foster their business 

or economic interests, thus creating an attachment 

that is independent of any political attachment, unlike 

the previous category where political support may be 

the only reason for joining the organization. The business category would include business leagues, trade 

associations, labor organizations and self-regulating 

professional associations. 

Alternative C. This alternative would allow any 

amount of annual dues set by a membership association to be sufficient to confer membership status. This 

alternative treats ideological organizations the same 

as economic or business associations for purposes of 

the rules. 

In addition to the alternatives described above, the 

proposed rules would provide that direct membership 

in any level of a multitiered association be construed 

as membership in all tiers of the association for purposes of the regulations. 

Comments on the NPRM were due by January 21, 

1998. 

Advisory Opinion 

In AO 1997-5, the Commission relied upon the 

NRWC and Chamber of Commerce decisions to determine that the Chicago Mercantile Exchange (CME) 

could solicit PAC contributions from its noncorporate 

member-lessees who leased seats from its full members. Specifically, the Commission noted that “the 

rights and duties of member-lessees were similar to 

those cited with approval by the court in Chamber.” 

For example: 

• Member-lessees could serve on policy formulating 

committees. 

• They were subject to sanctions within CME that 

would affect their professions. 

• They assumed significant financial obligations associated with CME that were comparable to those 

mentioned in the Chamber case. 
30 Chapter Three 

Consequently, the Commission concluded that 

member-lessees qualified as members for purposes 

of the Act, and that those who were individuals could 

be solicited for contributions to CME’s PAC.11 

Best Efforts 

On July 2, 1997, the Commission promulgated 

revised “best efforts” regulations. The rules establish 

procedures to ensure that political committees meet 

the statutory requirement to use their best efforts to 

obtain, maintain and report the required contributor 

information—name, address, occupation and employer—of individuals who contribute $200 or more 

during a calendar year. The changes enacted in July 

came in response to the court decision in Republican 

National Committee v. FEC,

12 in which the U.S. Court 

of Appeals for the District of Columbia Circuit upheld 

the Commission’s “best efforts” regulations, but ruled 

that the solicitation notice, required by former FEC 

regulations, was inaccurate and misleading. For a 

summary of that case, see Annual Report 1996. 

The revised rules abandon the former requirement 

that committees use specific language to request 

contributor information. Now, the rules simply require 

that all solicitations include an accurate and clear 

statement of the law’s requirements for the collection 

and reporting of contributor information. The rules 

offer the following examples of acceptable wording 

that may be included in solicitations, but these are not 

the only allowable statements: 

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

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

contributions exceed $200 in a calendar year.” 

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

individuals whose contributions exceed $200 per 

calendar year.” 

This request, or one of similar meaning, must be 

displayed in a clear and conspicuous manner on any 

response materials included in a solicitation. 

104.7(b)(1). 

The revised rules also clarify that separate segregated funds (PACs) must report contributor information in the possession of their connected (sponsoring) 

organizations. 104.7(b)(3). 

11 The conclusion that member-lessees qualified as 

members and that a single seat on the Exchange could 

have two members—the full-member owner and the member lessee—superseded portions of AOs 1987-31, 1988-38, 

1988-39 and 1994-34. 12 Republican National Committee v. FEC, 76 F.3d 400 

(D.C. Cir, 1996), cert. denied, 117 S. Ct. 682 (1997). 
The Commission 31 Chapter Four 

The Commission 

Commissioners 

As part of the Treasury and General Government 

Appropriations Act of 1998, Congress enacted term 

limits for FEC Commissioners. Those nominated after 

December 31, 1997 (unless an intent to nominate was 

announced prior to that date), will be eligible to serve 

only one term on the Commission. President Clinton 

announced three nominations, and his intention to 

nominate a fourth Commissioner, prior to the December 31 deadline, including the renomination of Commissioners Scott E. Thomas and John Warren 

McGarry. If the Senate confirms these nominees, they 

will be eligible for one additional term in office. 

During 1997, Commissioner McGarry served as 

Chairman of the Commission, and Joan D. Aikens 

served as Vice Chairman. 

One seat on the Commission remained vacant 

throughout the year, and two other Commissioners 

whose terms expired in April 1995—Chairman 

McGarry and Vice Chairman Aikens—continued to 

serve.1

 Under the law, Commissioners may continue 

to hold office until new appointments are made by the 

President and confirmed by the Senate. Commissioners Aikens and McGarry continued to sit on the Commission, awaiting Senate confirmation of President 

Clinton’s appointees. 

On December 11, 1997, the Commission elected 

Mrs. Aikens to be its 1998 Chairman and Mr. Thomas 

to be its 1998 Vice Chairman. For biographies of the 

Commissioners and statutory officers, see Appendix 

1. 

The FEC’s Budget 

Faced with an unprecedented number of complaints, filed in the aftermath of the 1996 election, the 

FEC asked the Congress and the Office of Management and Budget (OMB) to provide $1.7 million in 

supplemental funding for fiscal year (FY) 1997 and an 

additional $4.9 million for FY 1998. Both requests 

were denied. 

Arguing in support of the supplemental funding, 

Commission Vice Chairman Joan D. Aikens, who 

chaired the agency’s finance committee in 1997, told 

the Senate Committee on Rules and Administration 

that the additional money was needed to investigate 

allegations that the Act had been violated on an unprecedented scale during the 1996 election cycle. 

Financial activity in that cycle surged to more than 

$2.7 billion, and the Commission received a third 

more complaints than during the 1994 election cycle. 

Mrs. Aikens cited a laundry list of alleged campaign 

finance abuses from the 1996 elections that had been 

chronicled almost daily in the nation’s newspapers. 

“The alleged abuses involve fundraising from nonresident foreign nationals, the use of soft money possibly 

spent to circumvent the party spending limits on behalf of publicly funded presidential candidates, coordination in assertedly independent expenditures, and 

massive, but undisclosed, expenditures on issue advertisements with an electioneering message by labor 

and business interests,” she said. 

Fiscal Year 1997 

The Commission had intended to use the 1997 

supplemental to hire by the end of the year a task 

force of full-time employees—including investigators, 

attorneys, auditors, systems analysts and clerical 

support—to investigate the alleged violations of the 

Act that occurred during the 1996 election cycle. The 

supplement also would have helped cover the administrative costs associated with the investigations. 

The Commission’s existing FY 1997 appropriation 

of $28.165 million was $1.2 million less than the 

President’s proposed budget for the agency and $2.7 

million below the Commission’s original request. The 

agency had asked for $30.877 million and 331.5 FTE, 

which would have maintained the Commission’s 

“standard performance level,” avoided backlogs 

caused by surges in workload and funded the FEC’s 

ongoing computerization initiatives. The President’s 

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

1 The vacant seat had been occupied by Trevor Potter, 

who resigned in October 1995 to return to his law firm. 
32 Chapter Four 

appropriation forced the Commission to reduce its FY 

1997 operations even more than had been planned in 

either proposal. 

Despite the increased use of new technology, the 

reduced budget hampered the Commission’s performance. Informational and educational programs suffered staffing cuts and reductions in outreach efforts, 

and informational publications were cut back. The 

Office of Election Administration reduced its research 

projects designed to assist state and local election 

officials in the performance of their oversight and administrative functions in federal elections. Although 

the Commission maintained the timeliness of its data 

entry of itemized information, the review of reports 

was delayed and Title 2 audits were reduced below 

desired levels. Finally, the Commission had to dismiss 

more enforcement cases without findings in order to 

focus its limited resources on more significant compliance actions; and it put a larger percentage of complaints on hold because of insufficient staff. 

Fiscal Year 1998 

The Commission initially presented two funding 

levels in its budget request for FY 1998. One—$32.6 

million and 331.5 FTE—would have supported a standard level of performance; the other—$29.3 and 

313.5 FTE—provided a reduced or minimally acceptable level of performance. The OMB concurred with 

the latter. 

As noted above, the Commission then augmented 

its request with a supplemental request of $4.9 million. As with its supplemental request for FY 1997, the 

Commission intended to devote the additional funds 

for FY 1998 to enforcement, including the hiring of an 

additional 47 full-time employees (reduced to 37 when 

the FY 1997 supplemental request was denied). 

Congress appropriated $31.65 million to fund the 

FEC’s operations in FY 1998, of which $750,000 was 

earmarked for an external audit of the Commission’s 

operations. More than $4 million of the remaining 

$30.9 million was set aside for specific nonpersonnel 

uses, yielding an operational budget of roughly $26.8 

million. The bulk of the $4 million set-aside was devoted to computer enhancements, including $1.3 million for computerized litigation and enforcement document support. Although the appropriation fell short of 

the Commission’s “standard performance level” request, the 313.5 FTE staffing authorization was an 

improvement over the actual FY 1997 staffing level of 

297 FTE. 

Budget Allocation: FYs 1997 and 1998 

Budget allocation comparisons for FYs 1997 and 

1998 appear in the table and charts that follow. 

CHART 4-1 

Functional Allocation of Budget 

FY 1997 FY 1998 

Personnel $19,435,411 $21,361,722 

Travel/Transportation 271,386 277,545 

Space Rental 2,538,448 2,711,000 

Phones/Postage 457,790 490,501 

Printing 259,753 287,320 

Training/Tuition 61,871 84,444 

Contracts/Services 2,533,236 1,349,060 

Maintenance/Repairs 438,109 337,618 

Software/Hardware 351,948 1,111,356 

Federal Agency Service 523,216 1,500,994 

Supplies 307,364 287,762 

Publications 254,225 254,731 

Equipment Purchases 710,637 845,947 

Total $28,143,394 $30,900,000 
CHART 4-2 

Divisional Allocation 

FY 1997 Actual 

FY 1998 Projected 

The Commission 33 

Allocation of Budget 

0 5 10 15 20 25 30 

Percent 

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 

ADP/Electronic Filing 

Allocation of Staff Percent 

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 
34 Chapter Four 

Computer Upgrades 

During 1997, the Commission continued to enhance its computer capabilities in several areas. As 

noted in Chapter 1, the agency implemented a voluntary electronic filing program and developed filing 

software to help committees submit reports in electronic form. The Commission also upgraded its PC 

hardware and software; expanded access to its digital 

imaging system; unveiled a pool of modems, CDROMs and a shared computer faxing system; developed a groupware (e.g., intranet) strategy; and undertook case management and legal research initiatives 

to benefit the Office of General Counsel (OGC). 

EEO and Special Programs 

The FEC’s Office of Equal Employment Opportunity and Special Programs fulfilled its duties so successfully during 1997 that the internet web site 

“cyberFEDS” cited it as a model program. The office’s 

duties involve administering the agency’s EEO complaint and special emphasis programs, and offering 

additional programs designed to improve employees’ 

professional and personal lives. 

During 1997, the office’s Career Advancement 

Program helped an FEC employee obtain the necessary education and on-the-job training to advance 

from a clerical position to auditor. Other programs 

included cultural diversity training, luncheon meetings 

for managerial women and support staff, guest speakers and panel discussions on a variety of topics, 

“Knowledge at Noon” education sessions and a 

Thanksgiving food drive for needy employees. The 

EEO Director also briefed agency staff on the EEO 

complaint process and early intervention program, 

and conducted training on sexual harassment. 

As part of a reciprocal arrangement, the EEO Director spoke and conducted EEO training at other 

government agencies and provided counseling services to employees at the U.S. Soldiers and Airmen’s 

Home, the Smithsonian, the National Capitol Planning 

Commission and Federal Maritime Commission. 

The EEO office also handles the FEC’s annual 

Combined Federal Campaign and U.S. Savings Bond 

Drive. 

Ethics 

The ethics staff provided ethics orientation to all 

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

ethical conduct. Staff also administered the 

Commission’s public and confidential financial disclosure report system, which helps ensure that employees remain impartial in the performance of their official duties. The staff also trained all employees required to file public and confidential financial disclosure reports. Finally, the ethics staff submitted required reports with the Office of Government Ethics, 

including the annual agency ethics report, the financial disclosure reports filed by Presidential and Vice 

Presidential candidates and semiannual travel payment reports. 

Inspector General 

Under the Inspector General Act, the Commission’s 

Office of the Inspector General (OIG) is authorized to 

conduct audits and investigations of FEC programs to 

find waste, fraud and abuse. The OIG audited several 

facets of Commission operations in 1997, including 

the agency’s accounts payable. The OIG also completed two follow-up reports on audits released in 

prior years. A follow-up report is done to ensure that 

the recommendations made in the reports have been 

implemented by management. In both cases, all recommendations had been implemented and the OIG 

considered these audit reports closed. 
Presidential Public Funding 35 Chapter Five 

Presidential Public Funding 

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

$3 tax checkoff, the federal government provides 

matching funds to qualified candidates for their primary campaigns, funding to major parties for Presidential nominating conventions, and grants to Presidential nominees for their general election campaigns. 

Shortfall Predicted for 2000 

According to a 1997 FEC staff projection, the Presidential Election Campaign Fund may experience a 

shortfall during the primary campaign in the year 

2000. 

The Commission began predicting a funding shortfall in 1988. The Commission noted that a shortfall 

was inevitable because of a fatal flaw in the public 

funding program: payments from the Fund were indexed to inflation, but the $1 tax checkoff that financed the system was not. The Fund was also affected by a gradual decline in taxpayer participation in 

the checkoff program. 

In an effort to avert a shortfall, Congress increased 

the checkoff from $1 to $3, beginning in 1994. The 

change had the effect of adjusting the checkoff 

amount for inflation since 1973, when the checkoff 

was first implemented. It did not, however, index the 

checkoff to inflation. 

Despite the increase in the checkoff amount, the 

long-predicted shortfall materialized during the first 

five months of 1996, resulting in partial matching fund 

payments to Presidential primary candidates during 

the first half of the election year. 

Now, it appears that the Fund may face an even 

greater deficit during the Presidential primaries in the 

year 2000. FEC staff project that the shortfall could be 

so severe that participating candidates might not receive their full entitlements until after the nominating 

conventions. If that forecast holds, some candidates 

might opt out of the public funding program entirely. 

The staff projection was based on certain assumptions. First, it anticipated that three parties would participate in the election process—the two major parties 

and one minor party, Ross Perot’s Reform Party. 

Second, it assumed that Treasury rules would continue to require that Treasury set aside funds for the 

conventions and general election before calculating 

the amount available for primary matching payments. 

Third, the projection assumed that Fund receipts, 

based on taxpayer participation in the $3 checkoff, 

would remain constant at $67 million a year. Fourth, 

the estimate assumed a 2.5 percent inflation rate over 

the next three years. Finally, the projection assumed 

that, since no incumbent would be seeking nomination, the Presidential race would be wide open, encouraging the participation of a significant number of 

primary candidates. 

Update on Presidential Debate 

Lawsuits 

On May 12, 1997, the Supreme Court declined to 

review an appeals court’s dismissal of lawsuits filed 

against the FEC and the Commission on Presidential 

Debates (CPD). The suits had been filed by two 1996 

Presidential hopefuls—Reform Party candidate Ross 

Perot and Natural Law Party nominee John Hagelin— 

who felt they had been unfairly excluded from the 

Presidential debates and that the CPD had violated 

the Federal Election Campaign Act (the Act). 

The U.S. Court of Appeals for the District of Columbia Circuit had upheld a lower court ruling dismissing 

the lawsuits for lack of jurisdiction. The courts had 

ruled that the two candidates had no private right of 

action against the CPD. As to the alleged violations of 

the Act, the courts had noted that the FEC has exclusive civil enforcement jurisdiction and that the law 

grants the Commission 120 days to act on a complaint before a court can become involved. 2 U.S.C. 

§437g. 

Audits of 1996 Presidential 

Campaigns 

During 1997, the Audit Division presented, for 

Commission approval, final audit reports for six of the 

eleven publicly-funded primary candidates who ran in 

1996, one convention committee, a host committee 

and one general election candidate. By year’s end, 
36 Chapter Five 

the Commission had approved all these reports except those for one of the primary candidates, the host 

committee and the convention committee. The pace 

of the 1996 work was considerably faster than in 1992 

when, by the end of the year after the election, the 

Commission had completed reports on only one primary candidate and one convention host committee. 

The agency’s progress was far better than in 1988 

when the last of the presidential audits was not released until nearly four years after the election. 

The accelerated pace was due, in large part, to the 

experience that many of the FEC’s auditors gained in 

1992. Moreover, these experienced employees were 

aided by improved technology—such as the introduction of laptop computers. The laptops gave field auditors full access to the Commission’s in-house computer network, and permitted more sampling and 

computerized analyses to speed some processes 

along. In addition, audit procedures were streamlined 

in 1996 and 1997. For the first time, the audit staff 

issued the preliminary results of the audits without 

formal review by the Office of General Counsel (OGC) 

or the Commission. This change eliminated nearly 

one complete level of processing while preserving the 

opportunities for campaigns to answer and comment 

on the conclusions reached in the audit reports. Simplified regulations also paid dividends in the form of 

fewer campaign errors and more straight forward 

analysis by auditors. Audit staff also made greater 

use of its subpoena authority to obtain records and 

other information needed to complete its work. 

CHART 5-1 

Audit Reports Approved During 1997 

Committee Report Date 

Specter for President June 12 

Alexander for President June 19 

Gramm for President June 26 

LaRouche for President July 17 

Wilson for President August 27 

Perot ‘96 General December 4 

Repayments 

Bush-Quayle ‘92 Primary Committee v. FEC 

On January 14, 1997, the U.S. Court of Appeals for 

the District of Columbia Circuit remanded this case to 

the FEC and asked it to explain why the Commission 

departed from precedent—or reconsider its repayment determination—when it required the BushQuayle ‘92 Primary Committee to repay $323,832 of 

the federal matching funds it received. 

The dispute involved the Commission’s August 17, 

1995, determination that the Bush primary committee 

had to make a pro rata repayment of $106,979 for 

nonqualified campaign expenses related to the general election totaling $409,123 and a repayment of 

$216,853 for matching funds received in excess of its 

entitlement. 

The Bush-Quayle committee contended that the 

Commission should have used a “bright-line” rule and 

allocated expenses based solely on whether they 

were incurred before or after the Presidential nomination. The committee also charged that the FEC had 

acted “arbitrarily and capriciously” because it had 

treated expenditures of the Bush-Quayle campaign 

differently than similar expenditures of the 1984 

Reagan-Bush campaign. In the 1984 election, the 

committee said, the FEC had concluded that certain 

pre-nomination expenditures by the Reagan-Bush 

Primary Committee were primary expenses despite 

the fact that some benefited the general election campaign. 

The FEC rejected both of the committee’s challenges. The Commission countered the first by arguing that its determination concerning qualified primary 

expenditures depended upon both the timing and 

nature of the expenditure. As to the second challenge, 

the Commission explained that it treated the BushQuayle and Reagan-Bush cases differently because 

they were factually distinguishable from each other. 

The court agreed that the Commission has discretion to consider both the timing and the nature of the 

expenditure, as it did here. However, the court found 

the FEC’s explanation of its apparently conflicting 

precedent in Reagan-Bush inadequate and remanded 
Presidential Public Funding 37 

the matter to the Commission either to justify its ap-

proach or to reconsider the repayment determination. 

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

Circuit, 95-1430, consolidated with 95-1431 and 95-

1432. The Commission decided not to appeal the 

court’s decision and, on June 23, 1997, determined 

that the Bush-Quayle committee did not owe a repay-

ment. 

Fulani Presidential Committee 

On March 6, 1997, the Commission released a final 

repayment determination for the Lenora B. Fulani for 

President committee and Dr. Lenora B. Fulani, in-

structing them to repay to the U.S. Treasury $117,269 

of the public funds they received during the 1992 

election cycle. 

The repayment includes: $18,768 for nonqualified 

campaign expenses that the Committee disbursed to 

a vendor; $73,750 for nonqualified campaign ex-

penses to individuals that cannot be traced; $1,394 in 

lost money orders.

1

 The Commission also determined 

that the Committee had to repay $23,357 in public 

funds received in excess of the candidate’s entitle-

ment. 

In response, the Fulani committee petitioned the 

FEC for a rehearing of the final determination. On July 

8, the Commission denied the petition for all but one 

of the committee’s claims, and, upon rehearing that 

one claim, the Commission adhered to its repayment 

determination. Dr. Fulani and her campaign commit-

tee then petitioned the U.S. Court of Appeals for the 

District of Columbia Circuit to review the FEC’s repay-

ment determination. 97-1466, August 5, 1997. On 

December 5, the Commission granted Dr. Fulani’s 

request for a stay of the repayment, pending the ap-

peals court’s decision. The case was pending at 

year’s end. 1 This last part of the repayment was made in January 

1994. 
Legislative Recommendations 39 Chapter Six 

Legislative 

Recommendations 

Part I 

Disclosure 

Electronic Filing Threshold (revised 1998) 

Section: 2 U.S.C. §434(a) 

Recommendation: The Commission recommends that 

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

reports electronically. 

Explanation: Public Law 104-79, effective December 

28, 1995, authorized the electronic filing of disclosure 

reports with the FEC. Starting January 1997, political 

committees (except for Senate campaigns) may opt to 

file FEC reports electronically. 

The FEC has created the electronic filing program 

and is providing software to committees in order to 

assist committees that wish to file reports electronically. To maximize the benefits of electronic filing, 

Congress should consider requiring committees that 

meet a certain threshold of financial activity to file 

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

reports more easily and efficiently, resulting in better 

use of Commission resources. Moreover, information 

in the FEC's database would be standardized for 

committees at a certain threshold, thereby enhancing 

public disclosure of campaign finance information. In 

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

and file reports. 

Filing Reports Using Registered or Certified Mail 

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

and(a)(5) 

Recommendation: The Commission recommends 

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

report is postmarked by a specific date. Instead, Congress should consider simply requiring political committees to file their reports with the Commission (or 

the Secretary of the Senate) by the due date of the report. 

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

provided that the report is postmarked by a certain 

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

postmarked by the due date if sent by registered or 

certified mail. In the case of a pre-primary or pregeneral election report, the report must be postmarked 15 days before the election.) 

In the 1996 election cycle, because of the extra handling required, the Postal Service often delivered reports filed via registered or certified mail to the FEC 

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

delayed delivery presented an obstacle to full public 

disclosure of campaign finances immediately before 

the 1996 election. Moreover, there is little likelihood 

of improvement in future election cycles because of 

continuing staff reductions within the Postal Service. 

To minimize this delay in disclosure, Congress should 

eliminate the option in the law that allows committees 

to rely on the postmark of a registered or certified 

mailed report. Instead, Congress should simply require that reports be filed with the FEC (or the Secretary of the Senate) by the due date specified in the 

law. This approach would result in more effective 

public disclosure of campaign finance information, 

because reports would be available for review at an 

earlier point before the election. It would also simplify 

the law and eliminate confusion about the appropriate 

due date for a report. 

Waiver Authority (revised 1998) 

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 Com-
40 Chapter Six 

mission has encountered several problems relating to 

the reporting requirements of authorized committees 

whose respective candidates were not on the election 

ballot. The Commission had to consider whether the 

election-year reporting requirements were fully applicable to candidate committees operating under one of 

the following circumstances: 

• The candidate withdraws from nomination prior to 

having his or her name placed on the ballot. 

• The candidate loses the primary and therefore is not 

on the general election ballot. 

• The candidate is unchallenged and his or her name 

does not appear on the election ballot. 

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

monthly filers to file Monthly reports on the 20th day 

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

must be postmarked by the 20th day of the month. 

The Act also requires monthly filers to file a Pre-General election report 12 days before the general election. If sent by certified or registered mail, the PreGeneral report must be postmarked by the 15th day 

before the election. As a result of these specific due 

dates mandated by the law, the 1998 October 

Monthly report, covering September, was required to 

be postmarked October 20. Meanwhile the 1998 PreGeneral report, covering October 1 -14, was required 

to be postmarked October 19, one day before the 

October Monthly. A waiver authority would enable the 

Commission to eliminate the requirement to file the 

monthly report, as long as the committee includes the 

activity in the Pre-General Election Report and files 

the report on time. The same disclosure would be 

available before the election, but the committee would 

only have to file one of the two reports. 

In other situations, disclosure would be served if the 

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

report is the day after the primary—the same day that 

candidates find out if there is to be a runoff and who 

will participate. When this occurs, the 12-day preelection report discloses almost no runoff activity. In 

such a situation, the Commission should have the 

authority to adjust the filing requirements to allow for a 

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

report), which would provide more relevant disclosure 

to the public. 

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

Campaign-Cycle Reporting 

Section: 2 U.S.C. §434 

Recommendation: The Commission recommends that 

Congress revise the law to require authorized candidate committees to report on a campaign-to-date 

basis, rather than a calendar year cycle, as is now 

required. 

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

requirements, the committee must track donations on 

a calendar year basis. Second, to comply with the 

law’s contribution limits, the committee must track 

contributors’ donations on a per-election basis. Simplifying the law’s reporting requirement to allow reporting on a campaign-to-date basis would make the 

law’s recordkeeping requirements less burdensome to 

committees. (Likewise, the Commission recommends 

that contribution limits be placed on a campaign-cycle 

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

This change would also benefit public disclosure of 

campaign finance activity. Currently, contributions 

from an individual are itemized only if the individual 

donates more than $200 in the aggregate during a 

calendar year. Likewise, disbursements are itemized 

only if payments to a specific payee aggregate in 

excess of $200 during a calendar year. Requiring 

itemization once contributions from an individual or 

disbursements to a payee aggregate in excess of 

$200 during the campaign would capture information 

of interest to the public that is currently not available. 
Legislative Recommendations 41 

Moreover, to determine the actual campaign finance 

activity of a committee, reporters and researchers 

must compile the total figures from several year-end 

reports. In the case of Senate campaigns, which may 

extend over a six-year period, this change would be 

particularly helpful. 

Monthly Reporting for Congressional 

Candidates (revised 1998) 

Section: 2 U.S.C. §434(a)(2) 

Recommendation: The Commission recommends that 

the principal campaign committee of a Congressional 

candidate have the option of filing monthly reports in 

lieu of quarterly reports. 

Explanation: Political committees, other than principal 

campaign committees, may choose under the Act to 

file either monthly or quarterly reports during an election year. Committees choose the monthly option 

when they have a high volume of activity. Under those 

circumstances, accounting and reporting are easier 

on a monthly basis because fewer transactions have 

taken place during that time. Consequently, the committee’s reports will be more accurate. 

Principal campaign committees can also have a large 

volume of receipts and expenditures. This is particularly true with Senatorial campaigns. These committees should be able to choose a more frequent filing 

schedule so that their reporting covers less activity 

and is easier to do. 

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

primary election. In States where a primary is held in 

the beginning of the month, the financial activity 

occuring the month before the primary would not be 

disclosed until after the election. To remedy this, 

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

file quarterly or monthly. However, where the timing 

of a primary will cause an overlap of reporting due 

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

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

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

$1,000 or more during the period immediately before 

the primary, regardless of their reporting schedule. 

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. 

Commission as Sole Point of Entry 

for Disclosure Documents (revised 1998) 

Section: 2 U.S.C. §432(g) 

Recommendation: The Commission recommends that 

it be the sole point of entry for all disclosure documents filed by federal candidates and political committees. This would affect Senate candidate committees only. Under current law, those committees alone 

file their reports with the Secretary of the Senate, who 

then forwards microfilmed copies to the FEC. 

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

for reports filed by House candidates from the Clerk of 

the House to the FEC. However, Senate candidates 

still must file their reports with the Secretary of the 

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

A single point of entry is desirable because it would 

conserve government resources and promote public 

disclosure of campaign finance information. 

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

Secretary of the Senate. Consequently, the FEC must 

ship the reports back to the Senate. Disclosure to the 

public is delayed and government resources are 

wasted. 

Public Law 104-79 also authorized the electronic filing 

of disclosure reports with the FEC. As of January 

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

This filing option is unavailable to Senate campaigns, 

though, because the point of entry for their reports is 

the Secretary of the Senate. 

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

with his or her State, provided that the State has electronic access to reports and statements filed with the 

FEC. In order to eliminate the State filing requirement 

for Senate candidates, it would be necessary for a 

State to have electronic access to reports filed with 

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

with the Federal Election Commission. In other words, 

unless the FEC becomes the point of entry for reports 

filed by Senate candidates, either the States will need 

to have the technological and financial capability to 

link up electronically with two different federal offices, 

or Senate candidates must continue to file copies of 

their reports with the State. 

We also reiterate here the statement we have made 

in previous years because it remains valid. A single 

point of entry for all disclosure documents filed by 

political committees would eliminate any confusion 

about where candidates and committees are to file 

their reports. It would assist committee treasurers by 

having one office where they would file reports, address correspondence and ask questions. At present, 

conflicts may arise when more than one office sends 

out materials, makes requests for additional information and answers questions relating to the interpretation of the law. A single point of entry would also reduce the costs to the federal government of maintaining two different offices, especially in the areas of 

personnel, equipment and data processing. 

The Commission has authority to prepare and publish 

lists of nonfilers. It is extremely difficult to ascertain 

who has and who has not filed when reports may 

have been filed at or are in transit between two different offices. Separate points of entry also make it 

difficult for the Commission to track responses to 

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

timely manner, even though they were sent on time 

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

not in compliance. A single point of entry would eliminate this confusion. 

Finally, the Commission notes that the report of the 

Institute of Politics of the John F. Kennedy School of 

Government at Harvard University, An Analysis of the 

Impact of the Federal Election Campaign Act, 1972-

78, prepared for the House Administration Committee, 

recommended that all reports be filed directly with the 

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

at 122 (1979)). 

Facsimile Machines 

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

Recommendation: The Commission recommends that 

Congress modify the Act to provide for the acceptance and admissibility of 24-hour notices of independent expenditures via telephone facsimiles. 

Explanation: Independent expenditures that are made 

between 20 days and 24 hours before an election 

must be reported within 24 hours. The Act requires 

that a last-minute independent expenditure report 
Legislative Recommendations 43 

must include a certification, under penalty of perjury, 

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

or suggestion of, any candidate or any authorized 

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

committee files, however, which covers the reporting 

period when the expenditure was made, must also 

include the certification, stating the same information. 

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

should consider allowing such filings via telephonically transmitted facsimiles (“fax” machines). This 

could be accomplished by allowing the committee to 

fax a copy of the schedule disclosing the independent 

expenditure and the certification. The original schedule would be filed with the next report. Acceptance of 

such a filing method would facilitate timely disclosure 

and simplify the process for the filer. 

Candidates and Principal Campaign Committees 

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

Recommendation: The Commission recommends that 

Congress revise the law to require a candidate and 

his or her principal campaign committee to register 

simultaneously. 

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

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

designating the principal campaign committee, which 

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

the candidate’s designation to register. This schedule 

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

financial activity that occurred prior to the registration 

is not disclosed until the committee’s next upcoming 

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

For example, should a report be due 20 days after an 

individual becomes a candidate, the unregistered 

committee would not have to file a report on that date 

and disclosure would be delayed. The next report 

might not be filed for 3 more months. By requiring 

simultaneous registration, the public would be 

assured of more timely disclosure of the campaign’s 

activity. 

PACs Created by Candidates 

Section: 2 U.S.C. §441a(a) 

Recommendation: The Commission recommends that 

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

candidate’s principal campaign committee. 

Explanation: A number of candidates for federal office, including incumbent officeholders, have created 

PACs in addition to their principal campaign committees. Under current law, such PACs generally are not 

considered authorized committees. Therefore, they 

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

limit permitted for unauthorized committees in a calendar year and may make contributions of up to 

$5,000 per election to other federal candidates once 

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

per election from individuals and may not make contributions in excess of $1,000 to other candidates. 

The existence of PACs created by candidates can 

present difficult issues for the Commission, such as 

when contributions are jointly solicited with the 

candidate’s principal campaign committee or the resources of the PAC are used to permit the candidate 

to gain exposure by traveling to appearances on behalf of other candidates. At times the operations of the 

two committees can be difficult to distinguish. 

If Congress concludes that there is an appearance 

that the limits of the Act are being evaded through the 

use of PACs created by candidates, it may wish to 

consider whether such committees are affiliated with 

the candidate’s principal campaign committee. As 

such, contributions received by the committees would 

be aggregated under a single contribution limit and 

subjected to the limitations on contributions to autho-
44 Chapter Six 

rized committees. The same treatment would be accorded to contributions made by them to other candidates. 

Require Monthly Filing for Certain Multicandidate 

Committees 

Section: 2 U.S.C. §434(a)(4) 

Recommendation: The Commission recommends that 

multicandidate committees which have raised or 

spent, or which anticipate raising or spending, over 

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

an election year. 

Explanation: Under current law, multicandidate committees have the option of filing quarterly or monthly 

during an election year. Quarterly filers that make 

contributions or expenditures on behalf of primary or 

general election candidates must also file pre-election 

reports. 

Presidential candidates who anticipate receiving contributions or making expenditures aggregating 

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

requirement to multicandidate committees which have 

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

The requirement would simplify the filing schedule, 

eliminating the need to calculate the primary filing 

periods and dates. Filing would be standardized— 

once a month. This change would also benefit disclosure; the public would know when a committee’s report was due and would be able to monitor the larger, 

more influential committees’ reports. Although the 

total number of reports filed would increase, most 

reports would be smaller, making it easier for the 

Commission to enter the data into the computer and 

to make the disclosure more timely. 

Reporting of Last-Minute Independent 

Expenditures 

Section: 2 U.S.C. §434(c) 

Recommendation: The Commission recommends that 

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

Explanation: The statute requires that independent 

expenditures aggregating $1,000 or more and made 

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

election be reported within 24 hours after they are 

made. This provision is in contrast to other reporting 

provisions of the statute, which use the words "shall 

be filed." Must the report be received by the filing 

office within 24 hours after the independent expenditure is made, or may it be sent certified/registered 

mail and postmarked within 24 hours of when the 

expenditure is made? Should Congress decide that 

committees must report the expenditure within 24 

hours after it is made, committees should be able to 

file via facsimile (fax) machine. (See Legislative Recommendation titled "Facsimile Machines.") Clarification by Congress would be very helpful. 

Reporting and Recordkeeping of Payments to 

Persons Providing Goods and Services 

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

and (6)(B) 

Recommendation: The current statute requires reporting “the name and address of each...person to whom 

an expenditure in an aggregate amount or value in 

excess of $200 within the calendar year is made by 

the reporting committee to meet a candidate or committee operating expense, together with the date, 

amount, and purpose of such operating expenditure.” 

The Commission recommends that Congress clarify 

whether this is meant, in all instances, to require reporting committees to disclose only the payments 

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

made to an intermediary contractor or consultant who, 

in turn, acts as the committee’s agent by making expenditures to other payees. If Congress determines 

that disclosure of secondary payees is required, the 

Act should require that committees maintain the 

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

and disclose it to the public on their reports. Congress 

should limit such disclosure to secondary payments 

above a certain dollar threshold or to payments made 

to independent subcontractors. 
Legislative Recommendations 45 

Explanation: The Commission has encountered on 

several occasions the question of just how detailed a 

committee’s reporting of disbursements must be. See, 

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

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

(Presidential candidate’s committee not required to 

disclose the names, addresses, dates or amounts of 

payments made by a general media consultant retained by the committee); Advisory Opinion 1984-8, 1 

Fed. Election Camp. Fin. Guide (CCH), ¶ 5756 (Apr. 

20, 1984) (House candidate’s committee only required to itemize payments made to the candidate for 

travel and subsistence, not the payments made by the 

candidate to the actual providers of services); Financial Control and Compliance Manual for Presidential 

Primary Election Candidates Receiving Public Financing, Federal Election Commission, pp. 123-130 (1992) 

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

from other advances or reimbursements to such staff 

and requiring itemization of payments made by campaign staff only as to the latter). Congressional intent 

in the area is not expressly stated, and the Commission believes that statutory clarification would be beneficial. In the area of Presidential public financing, 

where the Commission is responsible for monitoring 

whether candidate disbursements are for qualified 

campaign expenses (see 26 U.S.C. §§9004(c) and 

9038(b)(2)), guidance would be particularly useful. 

Excluding Political Committees from Protection of 

the Bankruptcy Code 

Section: 2 U.S.C. §433(d) 

Recommendation: The Commission recommends that 

Congress clarify the distribution of authority over insolvent political committees between the Commission’s authority to regulate insolvency and termination 

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

one hand, and the authority of the bankruptcy courts, 

on the other hand. 

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

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

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

outstanding debts,” and the “termination of an insolvent political committee after such liquidation...” However, the Bankruptcy Code, 11 U.S.C. §101 et seq., 

generally grants jurisdiction over such matters to the 

bankruptcy courts, and at least one bankruptcy court 

has exercised its jurisdiction under Chapter 11 of the 

Bankruptcy Code to permit an ongoing political committee to compromise its debts with the intent thereafter to resume its fundraising and contribution and 

expenditure activities. In re Fund for a Conservative 

Majority, 100 B.R. 307 (Bankr. E.D.Va. 1989). Not 

only does the exercise of such jurisdiction by the 

bankruptcy court conflict with the evident intent in 2 

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

but permitting a political committee to compromise 

debts and then resume its political activities can result 

in corporate creditors effectively subsidizing the committee’s contributions and expenditures, contrary to 

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

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

matters could undermine the Commission’s ability to 

enforce it. Accordingly, Congress may want to clarify 

the distribution of authority between the Commission 

and the bankruptcy courts in this area. In addition, 

Congress should specify whether political committees 

are entitled to seek Chapter 11 reorganization under 

the Bankruptcy Code. 

Fundraising Projects Operated by Unauthorized 

Committees 

Section: 2 U.S.C §432(e) 

Recommendation: The Commission recommends that 

Congress specifically require that contributions solicited by an unauthorized committee (i.e., a committee 

that has not been authorized by a candidate as his/ 

her campaign committee) be made payable to the 

registered name of the committee and that unauthorized committees be prohibited from accepting checks 

payable to any other name. 
46 Chapter Six 

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

of in the name of a fundraising project they sponsor 

unless, in the case of a fundraising project, the name 

selected clearly indicates opposition to the named 

candidate(s). The Commission adopted this latter 

prohibition after a rulemaking where the record clearly 

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

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

when in fact they were giving to the nonauthorized 

committee that sponsored the event. This confusion 

sometimes led to requests for refunds, allegations of 

coordination, inadequate disclaimers, and inability to 

monitor contribution limits. While recent revisions to 

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

now reduced this possibility, the Commission believes 

that contributor awareness might be further enhanced 

if Congress were to modify the statute by requiring 

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

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

any other name. 

Disclaimer Notices 

Section: 2 U.S.C. §441d 

Recommendation: The Commission recommends that 

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

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

how it is distributed. Congress should also revise the 

Federal Communications Act to make it consistent 

with the FECA’s requirement that disclaimer notices 

state who paid for the communication. 

Explanation: Under 2 U.S.C. §441d, a disclaimer notice is only required when “expenditures” are made for 

two types of communications made through “public 

political advertising”: (1) communications that solicit 

contributions and (2) communications that “expressly 

advocate” the election or defeat of a clearly identified 

candidate. The Commission has encountered a number of problems with respect to this requirement. 

First, the statutory language requiring the disclaimer 

notice refers specifically to “expenditures,” possibly 

leading to an interpretation that the requirement does 

not apply to disbursements that are exempt from the 

definition of “expenditure” such as “exempt activities” 

conducted by local and state party committees under, 

for example, 2 U.S.C. §431(9)(B)(viii). Believing that 

Congress intended such activities to be exempt only 

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

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

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

to the public should carry a disclaimer. 

Second, the Commission has encountered difficulties 

in interpreting “public political advertising,” particularly 

when volunteers have been involved with the preparation or distribution of the communication. 

Third, the Commission has devoted considerable time 

to determining whether a given communication in fact 

contains “express advocacy” or “solicitation” language. The recommendation here would erase this 

need. 

The Commission considered expanding the general 

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

which rather clarify the scope of some of the subordinate requirements. Most of these problems would be 

eliminated if the language of 2 U.S.C. §441d were 

simplified to require a registered committee to display 

a disclaimer notice whenever it communicated to the 

public, regardless of the purpose of the communication and the means of preparing and distributing it. 

The general public would benefit by being aware of 

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

benefit because they would no longer have to examine the content of communications or the manner in 

which they were disseminated to determine whether a 

disclaimer was required. 
Legislative Recommendations 47 

This proposal is not intended to eliminate exemptions 

for communications appearing in places where it is 

inconvenient or impracticable to display a disclaimer. 

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

This term generally refers to phone bank activities or 

written surveys that seek to influence voters, such as 

by providing false or misleading information about a 

candidate. This practice appears to be growing. The 

Commission has considered requiring disclaimers on 

push poll communications, but has declined to do so 

for a number of reasons, including difficulty in defining 

push polls and the fact that many such polls do not 

appear to expressly advocate the election or defeat of 

a clearly identified candidate. If Congress enacted the 

general disclaimer requirement proposed above, this 

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

disclosure by other groups engaging in this practice. 

Finally, Congress should change the sponsorship 

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

disclaimer notice requirements found in the FECA. 

Under the Communications Act, federal political 

broadcasts must contain an announcement that they 

were furnished to the licensee, and by whom. See 

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

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

on who authorized and paid for the communication. 

The Communications Act should be revised to ensure 

that the additional information required by the FECA 

is provided without confusion to licensees and political 

advertisers. In addition, the FECA should be 

amended to require that the disclaimer appear at the 

end of all broadcast communications. 

Fraudulent Solicitation of Funds 

Section: 2 U.S.C. §441h 

Recommendation: The current §441h prohibits 

fraudulent misrepresentation such as speaking, writing or acting on behalf of a candidate or committee on 

a matter which is damaging to such candidate or committee. It does not, however, prohibit persons from 

fraudulently soliciting contributions. The Commission 

recommends that a provision be added to this section 

prohibiting persons from fraudulently misrepresenting 

themselves as representatives of candidates or political parties for the purpose of soliciting contributions 

which are not forwarded to or used by or on behalf of 

the candidate or party. 

Explanation: The Commission has received a number 

of complaints that substantial amounts of money were 

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

complained that contributions which people believed 

were going for the benefit of the candidate were diverted for other purposes. Both the candidates and 

the contributors were harmed by such diversion. The 

candidates received less money because people desirous of contributing believed they had already done 

so. The contributors’ funds were used in a manner 

they did not intend. The Commission has been unable 

to take any action on these matters because the statute gives it no authority in this area. 

Draft Committees 

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

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

Recommendation: The Commission recommends that 

Congress consider the following amendments to the Act 

in order to prevent a proliferation of “draft” committees 

and to reaffirm Congressional intent that draft committees are “political committees” subject to the Act’s provisions. 

1. Bring Funds Raised and Spent for Undeclared but 

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

clearly identified individual to seek nomination for 

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

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

within the definition of “expenditure” funds expended 

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

2. Restrict Corporate and Labor Organization Support 

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

corporations, labor organizations and national banks 

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

3. Limit Contributions to Draft Committees. The law 

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

nomination or election of a clearly identified individual 

for any federal office which, in the aggregate, exceed 

that person’s contribution limit, per candidate, per 

election. 

Explanation: These proposed amendments were 

prompted by the decisions of the U.S. Court of Appeals for the District of Columbia Circuit in FEC v. 

Machinists Non-Partisan Political League and FEC v. 

Citizens for Democratic Alternatives in 1980 and of 

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

FEC v. Florida for Kennedy Committee. The District of 

Columbia Circuit held that the Act, as amended in 

1979, regulated only the reporting requirements of 

draft committees. The Commission sought review of 

this decision by the Supreme Court, but the Court 

declined to hear the case. Similarly, the Eleventh 

Circuit found that “committees organized to ‘draft’ a 

person for federal office” are not “political committees” 

within the Commission’s investigative authority. The 

Commission believes that the appeals court rulings 

create a serious imbalance in the election law and the 

political process because a nonauthorized group 

organized to support someone who has not yet become a candidate may operate completely outside the 

strictures of the Federal Election Campaign Act. However, any group organized to support someone who 

has in fact become a candidate is subject to the Act’s 

registration and reporting requirements and contribution limitations. Therefore, the potential exists for funneling large aggregations of money, both corporate 

and private, into the federal electoral process through 

unlimited contributions made to nonauthorized draft 

committees that support a person who has not yet 

become a candidate. These recommendations seek 

to avert that possibility. 

Definition of Political Committee (revised 1998) 

Section: 2 U.S.C. §431(4)(A) 

Recommendation: The Commission recommends 

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

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

political committee as a group which raises or spends 

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

Buckley v. Valeo, the Supreme Court, citing First 

Amendment concerns, ruled that the definition of political committee “need only encompass organizations 

that are under the control of a candidate or the major 

purpose of which is the nomination or election of a 

candidate.” Subsequent court rulings have cited the 

Buckley case in interpreting the statute to include 

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

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

Recently, however, an appeals court has interpreted 

the wording of the statute narrowly, ruling that the 

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

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

66 F.3d 348 (D.C. Cir. 1995); rev'd, 101 F.3d 731 

(D.C. Cir. 1996); cert. granted, 117 S.Ct. 2451 (1997). 

Congress should amend the statute to rectify the conflicting court rulings and to clarify Congressional intent 

regarding the meaning of “major purpose.” 

Point of Entry for Pseudonym Lists 

Section: 2 U.S.C. §438(a)(4) 

Recommendation: The Commission recommends that 

Congress make a technical amendment to section 

438(a)(4) by deleting the reference to the Clerk of the 

House. 
Legislative Recommendations 49 

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. 

Part II 

Contributions and Expenditures 

Coordination of Election-Related Activities with 

Candidates and Political Parties (1998) 

Section: 2 U.S.C. §§431(17), 441a and 441b(b)(2) 

Recommendation: The Commission recommends 

that Congress revise the statute to include a definition 

of the term “coordination.” 

Explanation: The Supreme Court has ruled that “expenditures controlled by or coordinated with the candidate and his campaign....are treated as contributions rather than expenditures under the Act....[The 

Act’s] contribution ceilings...prevent attempts to circumvent the Act through prearranged or coordinated 

expenditures amounting to disguised contributions.” 

Further, the Court said, “In view of [the] legislative 

history and the purposes of the Act, we find that the 

“authorized or requested” standard of the Act operates to treat all expenditures placed in cooperation 

with or with the consent of a candidate, his agents, or 

an authorized committee of the candidate as contributions subject to the limitations [of the Act].” Buckley v. 

Valeo, 424 U.S. 1(1976), pp. 40-41. See also FEC v. 

Massachusetts Citizens for Life, 479 U.S. 238 (1986); 

and Colorado Republican Federal Campaign Committee v. FEC, 116 S.Ct. 2309(1996). 

Whether an activity is “coordinated” (with a candidate 

or political committee) has become increasingly significant under the law, in the wake of two cases: 

MCFL and Colorado Republicans. These cases have 

heightened the importance of the distinction between 

“independent” and “coordinated” activity as a result of 

having broadened the class of persons who may lawfully engage in “independent” (and therefore unlimited) expenditures. The MCFL case created a new 

class of corporations that could engage in candidate 

advocacy as long as they conducted the activity independently. In the Colorado Republicans case, the 

Supreme Court rejected the Commission’s presumption of coordination between candidates and their 

party, and created a new category of unlimited party 

committee expenditures that had to be made independently of the candidate. In both instances, the concept of independence meant that there was no coordination between the candidate and the committee or 

group making the expenditure. Thus, the definition of 

“coordination” is key to determining how an activity is 

regulated under the Act and whether it is subject to 

the Act’s prohibitions or limitations. 

The Commission has addressed this issue in several 

ways through its regulations, and is currently engaged 

in a rulemaking based on the Colorado case. The 

notice of proposed rulemaking seeks answers to a 

range of questions, such as what would constitute 

coordination between the party and the candidate for 

purposes of the contribution limits and the coordinated party expenditure limits (section 44la(d)). Congress may wish to offer additional guidance on these 

matters. 

Quasi-Corporate Business Organizations (1998) 

Section: 2 U.S.C. §441b 

Recommendation: The Commission recommends 

that Congress consider whether the Act’s prohibition 
50 Chapter Six 

on corporate contributions and expenditures, at 2 

U.S.C. §441b, should be modified to explicitly exempt 

Subchapter S corporations. 

Explanation: The Federal Election Campaign Act 

prohibits contributions and expenditures by corporations. The prohibition does not extend to unincorporated business entities, such as sole proprietorships, 

partnerships and, in those states that explicitly categorize limited liability companies as noncorporate 

entities, limited liability companies. Through regulations and advisory opinions, the Commission has 

clarified that these entities may make contributions 

and expenditures in connection with federal elections. 

In the case of limited liability companies, the Commission determined that LLCs in three states and the District of Columbia should not be considered either partnerships or corporations, but would be considered 

“any other organization or group of persons” for purposes of the Act. See 11 CFR 110.1(e) and Advisory 

Opinions 1997-17, 1996-13, 1995-11 and 1984-21. 

The question has arisen as to whether Subchapter S 

corporations should be made exempt from the prohibition at Section 441b. Subchapter S corporations are 

small business corporations that are separate legal 

entities from their investors and possess all of the 

characteristics of a corporate entity. However, they 

are taxed in a fashion similar to partnerships under 

the Internal Revenue Code and are controlled by individuals who are personally taxed on their income from 

the ownership of the corporation. Since partnerships 

and sole proprietorships may legally make contributions 

in connection with federal elections, Congress may 

want to exempt Subchapter S corporations from the 

prohibitions of Section 441b. 

Election Period Limitations for Contributions to 

Candidates 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

limits on contributions to candidates be placed on an 

election cycle basis, rather than the current per election basis. 

Explanation: The contribution limitations affecting 

contributions to candidates are structured on a “per 

election” basis, thus necessitating dual bookkeeping 

or the adoption of some other method to distinguish 

between primary and general election contributions. 

The Commission has had to adopt several rules to 

clarify which contributions are attributable to which 

election and to assure that contributions are reported 

and used for the proper election. Many enforcement 

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

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

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

failure to fully document which election was intended. 

Sometimes the apparent “excessives” for a particular 

election turn out to be simple reporting errors where 

the wrong box was checked on the reporting form. 

Yet, substantial resources must be devoted to examination of each transaction to determine which election 

is applicable. Further, several enforcement cases 

have been generated based on the use of general 

election contributions for primary election expenses or 

vice versa. 

Most of these complications would be eliminated with 

adoption of a simple “per cycle” contribution limit. 

Thus, multicandidate committees could give up to 

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

to an authorized committee at any point during the 

election cycle. The Commission and committees 

could get out of the business of determining whether 

contributions are properly attributable to a particular 

election, and the difficulty of assuring that particular 

contributions are used for a particular election could 

be eliminated. 

It would be advisable to clarify that if a candidate has 

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

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

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

because at the Presidential level candidates might opt 

to take public funding in the general election and 

thereby be precluded from accepting contributions, 

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

should be retained for Presidential candidates. 

A campaign cycle contribution limit may allow donors 

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

or general election, but this would be tempered by the 
Legislative Recommendations 51 

tendency of campaigns to plan their fundraising and 

manage their resources so as not to be left without 

fundraising capability at a crucial time. 

Application of $25,000 Annual Limit 

Section: 2 U.S.C. §441a(a)(3) 

Recommendation: The Commission recommends that 

Congress consider modifying the provision that limits 

individual contributions to $25,000 per calendar year 

so that an individual’s contributions count against his 

or her annual limit for the year in which they are 

made. 

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

contribution to a candidate made in a nonelection 

year counts against the individual donor’s limit for the 

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

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

Candidate Smith in an election year contributes to her 

in November of the year before the election. The contributor assumes that the contribution counts against 

his limit for the year in which he contributed. Unaware 

that the contribution actually counts against the year 

in which Candidate Smith’s election is held, the contributor makes other contributions during the election 

year and inadvertently exceeds his $25,000 limit. By 

requiring contributions to count against the limit of the 

calendar year in which the donor contributes, 

confusion would be eliminated and fewer contributors 

would inadvertently violate the law. The change would 

offer the added advantage of enabling the Commission to better monitor the annual limit. Through the 

use of our data base, we could more easily monitor 

contributions made by one individual regardless of 

whether they were given to retire the debt of a 

candidate’s previous campaign, to support an upcoming election (two, four or six years in the future) or to 

support a PAC or party committee. Such an amendment would not alter the per candidate, per election 

limits. Nor would it affect the total amount that any 

individual could contribute in connection with federal 

elections. 

Certification of Voting Age Population Figures and 

Cost-of-Living Adjustment 

Section: 2 U.S.C. §441a(c) and (e) 

Recommendation: The Commission recommends that 

Congress consider removing the requirement that the 

Secretary of Commerce certify to the Commission the 

voting age population of each Congressional district. 

At the same time, Congress should establish a deadline of February 15 for supplying the Commission with 

the remaining information concerning the voting age 

population for the nation as a whole and for each 

state. In addition, the same deadline should apply to 

the Secretary of Labor, who is required under the Act 

to provide the Commission with figures on the annual 

adjustment to the cost-of-living index. 

Explanation: In order for the Commission to compute 

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

the Secretary of Commerce certifies the voting age 

population of the United States and of each state. 2 

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

not needed. 

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

Labor is required to certify the annual adjustment in 

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

receipt of these figures would enable the Commission 

to inform political committees of their spending limits 

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

has sometimes been unable to release the spending 

limit figures before June. 

Issue Advocacy Advertising (revised 1998) 

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

Recommendation: The Commission recommends 

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

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

candidate’s campaign. 
52 Chapter Six 

Explanation: The 1996 election cycle saw an explosion in “issue advocacy” advertising. Such advertising explores an officeholder’s, a party’s or a 

candidate’s stand on a particular issue, but does not 

expressly advocate the election or defeat of a clearly 

identified candidate or party. Courts have ruled that 

the Act’s prohibition on expenditures by corporations 

and labor organizations does not extend to issue advocacy that does not contain express advocacy. See 

FEC v. Massachusetts Citizens for Life, 479 U.S. 238 

(1986); FEC v. Christian Action Network, 894 F.Supp. 

946 (W.D. Va. 1995), aff’d, 92 F.3d 1178 (4th Cir. 

1996); Clifton v. FEC, 927 F.Supp. 493 (D.Me. 1996); 

114 F.3d 1309 (1st Cir. 1997) and Maine Right to Life 

v. FEC, 914 F. Supp. 8 (D.Me. 1996), aff’d, 98 F.3d 1 

(1st Cir. 1996); cert. denied, 188 S.Ct. 52 (1997). 

The Act defines the term “contribution” to include 

funds that are spent “for the purpose of influencing an 

election.” Although advertisements devoted solely to 

issue advocacy do not contain express advocacy, 

such advertising may benefit or harm a candidacy and 

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

Supreme Court has viewed public communications 

coordinated with campaigns as in-kind contributions. 

As contributions, such communications were subject 

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

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

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

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

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

In accordance with these rulings, Congress should 

stipulate when coordination of an issue advocacy 

advertisement with a candidate or campaign would be 

considered an in-kind contribution. Additionally, Congress should state that coordination of such a public 

communication with a corporation or a labor organization would be prohibited activity. Such a prohibition 

would help the Commission address the public's concern about the use of soft money—funds that are 

raised or spent outside the prohibitions of the Act 

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

Candidate’s Use of Campaign Funds 

Section: 2 U.S.C. §439a 

Recommendation: Congress may wish to examine 

whether the use of campaign funds to pay a salary to 

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

those funds. 

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

personal use. The Commission has promulgated final 

rules on what would constitute “personal use” of excess funds. See 11 CFR 113.1(g). It was unable, 

however, to decide whether excess campaign funds 

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

past, some have argued before the Commission that 

candidate salary payments are legitimate campaign 

expenditures, while others have felt that such payments constitute a personal use of excess funds prohibited by §439a. Congressional guidance on this 

issue would be helpful. 

Disposition of Excess Campaign Funds 

Section: 2 U.S.C. §439a 

Recommendation: In those cases where a candidate 

has largely financed his campaign with personal 

funds, the Commission recommends that Congress 

consider limiting the amount of excess campaign 

funds that the campaign may transfer to a national, 

state or local committee of any political party to 

$100,000 per year. 

Explanation: Under current law, a candidate may 

transfer unlimited amounts of excess campaign funds 

to a political party. This makes it possible for a candidate to contribute unlimited personal funds to his 

campaign, declare these funds excess and transfer 

them to a political party, thus avoiding the limit on 

individual contributions to political parties. 
Legislative Recommendations 53 

Distinguishing Official Travel from 

Campaign Travel 

Section: 2 U.S.C. §431(9) 

Recommendation: The Commission recommends that 

Congress amend the FECA to clarify the distinctions 

between campaign travel and official travel. 

Explanation: Many candidates for federal office hold 

elected or appointed positions in federal, state or local 

government. Frequently, it is difficult to determine 

whether their public appearances are related to their 

official duties or whether they are campaign related. A 

similar question may arise when federal officials who 

are not running for office make appearances that 

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

behalf of specific candidates. 

Another difficult area concerns trips in which both 

official business and campaign activity take place. 

There have also been questions as to how extensive 

the campaign aspects of the trip must be before part 

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

criteria for determining when such activity is campaign 

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

of a trip. This will also help Congress determine when 

official funds must be used under House or Senate 

Rules. 

Coordinated Party Expenditures 

Section: 2 U.S.C. §441a(d) 

Recommendation: The Commission recommends that 

Congress clarify the number of coordinated party 

expenditure limits that are available to party committees during the election cycle. 

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

connection with general elections and generic party 

building activity. 

Explanation: Section 441a(d) provides that national 

and state party committees may make expenditures in 

connection with the general election campaigns of the 

party’s nominees for House and Senate. The national 

party committees may also make such expenditures 

on behalf of the party’s general election Presidential 

and Vice Presidential nominees. The Commission has 

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

deem helpful to their nominees short of donating the 

funds directly to the candidates. Expenditures made 

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

from contribution limits. 

The Commission has been faced several times with 

the question of whether party committees have one or 

two coordinated party expenditure limits in a particular 

election campaign. In particular, the issue has been 

raised in special election campaigns. Some state laws 

allow the first special election either to narrow the field 

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

popular vote. If a second special election becomes 

necessary to fill the vacancy, the question has arisen 

as to whether the party committees may spend 

against a second coordinated party expenditure limit 

since both special elections could have filled the vacancy. In a parallel manner, the Commission has 

been faced with the question of whether party committees have one or two coordinated party expenditure limits in a situation that includes an election on a 

general election date and a subsequent election, required by state law, after the general election. Although in the latter situation, a district court has concluded that only one coordinated party expenditure 

limit would apply (see Democratic Senatorial Campaign Committee v. FEC (No. 93-1321) (D.D.C., November 14, 1994)), broader Congressional guidance 

on this issue would be helpful. 

Party committees may also make expenditures for 

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

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

these activities are not subject to limitation. 
54 Chapter Six 

When deciding, in advisory opinions and enforcement 

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

or a generic activity, the Commission has considered 

the timing of the expenditure, the language of the 

communication, and whether it makes reference only 

to candidates seeking a particular office or to all the 

party’s candidates, in general. However, the Commission still has difficulty determining, in certain situations, when a communication or other activity is generic party building activity or a coordinated party 

expenditure. Congressional guidance on this issue 

would be helpful. 

Volunteer Participation in Exempt Activity 

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

431(9)(B)(viii) and (ix) 

Recommendation: The Commission recommends that 

Congress clarify the extent to which volunteers must 

conduct or be involved in an activity in order for the 

activity to qualify as an exempt party activity. 

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

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

Among these conditions is the requirement that the 

activity be conducted by volunteers. However, the 

actual level of volunteer involvement in these activities has varied substantially. 

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

activity to qualify as an exempt activity. For example, 

if volunteers are assisting with a mailing, must they be 

the ones to stuff the envelopes and sort the mail by 

zip code or can a commercial vendor perform that 

service? Is it sufficient involvement if the volunteers 

just stamp the envelopes or drop the bags at the post 

office? 

Contributions from Minors 

Section: 2 U.S.C. §441a(a)(1) 

Recommendation: The Commission recommends that 

Congress establish a presumption that contributors 

below age 16 are not making contributions on their 

own behalf. 

Explanation: The Commission has found that contributions are sometimes given by parents in their 

children’s names. Congress should address this potential abuse by establishing a minimum age for contributors, or otherwise provide guidelines ensuring 

that parents are not making contributions in the name 

of another. 

Application of Contribution Limitations 

to Family Members 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

Congress examine the application of the contribution 

limitations to immediate family members. 

Explanation: Under the current posture of the law, a 

family member is limited to contributing $1,000 per 

election to a candidate. This limitation applies to 

spouses and parents, as well as other immediate 

family members. (See S. Conf. Rep. No. 93–1237, 

93d Cong., 2d Sess., 58 (1974) and Buckley v. Valeo, 

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

has caused the Commission substantial problems in 

attempting to implement and enforce the contribution 

limitations.1 

Problems have arisen in enforcing the limitations 

where a candidate uses assets belonging to a parent. 

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

his or her candidate-child while cautioning the candi1 While the Commission has attempted through regulations to present an equitable solution to some of these problems (see Explanation and Justification, Final Rule, 48 Fed. 

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

area. 
Legislative Recommendations 55 

date that this may well decrease the amount which 

the candidate would otherwise inherit upon the death 

of the parent. 

Problems have also occurred in situations where the 

candidate uses assets held jointly with a spouse. 

When the candidate uses more than one-half of the 

value of the asset held commonly with the spouse (for 

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

amount over one-half represents a contribution from 

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

The Commission recommends that Congress consider the difficulties arising from application of the 

contribution limitations to immediate family members. 

Lines of Credit and Other Loans Obtained by 

Candidates 

Section: 2 U.S.C. §431(8)(B)(vii) 

Recommendation: The Commission recommends that 

Congress provide guidance on whether candidate 

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

so, Congress should also clarify how such extensions 

of credit should be reported. 

Explanation: The Act currently exempts from the definition of “contribution” loans that are obtained by political committees in the ordinary course of business 

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

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

contribution limitations, if received from permissible 

sources, or the prohibition on corporate contributions, 

as appropriate. 

Since this aspect of the law was last amended in 

1979, however, a variety of financial options have 

become more widely available to candidates and 

committees. These include a candidate’s ability to 

obtain advances against the value of a brokerage 

account, to draw cash advances from a candidate’s 

credit card, or to make draws against a home equity 

line of credit obtained by the candidate. In many 

cases, the credit approval, and therefore the check 

performed by the lending institution regarding the 

candidate’s creditworthiness, may predate the 

candidate’s decision to seek federal office. Consequently, the extension of credit may not have been 

made in accordance with the statutory criteria such as 

the requirement that a loan be “made on a basis 

which assures repayment.” In other cases, the 

extension of credit may be from an entity that is not a 

federally-insured lending institution. The Commission 

recommends that Congress clarify whether these 

alternative sources of financing are permissible and, if 

so, specify standards to ensure that these advances 

are commercially reasonable extensions of credit. 

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 recently revised 

its rules to clarify that it is not permissible for a corporation or a labor organization to use coercion, threats, 

force or reprisal to urge any individual to contribute to 

a candidate or engage in fundraising activities. See 

60 FR 64260 (December 14, 1995). However, Congress should include language to cover such situations. 
56 Chapter Six 

Nonprofit Corporations and Express Advocacy 

Section: 2 U.S.C. §441b 

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

Supreme Court in FEC v. Massachusetts Citizens for 

Life, Inc. (MCFL), the Commission recommends that 

Congress consider amending the provision prohibiting 

corporate and labor spending in connection with federal elections in order to incorporate into the statute 

the text of the court’s decision. Congress may also 

wish to include in the Act a definition for the term “express advocacy.” 

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

1986, the Court held that the Act’s prohibition on corporate political expenditures was unconstitutional as 

applied to independent expenditures made by a narrowly defined type of nonprofit corporation. The Court 

determined, however, that these nonprofit corporations had to disclose some aspect of their financial 

activity—in particular, independent expenditures exceeding $250 and identification of persons who contribute over $200 to help fund these expenditures. 

The Court further ruled that spending for political activity could, at some point, become the major purpose 

of the corporation, and the organization would then 

become a political committee. The Court also indicated that the prohibition on corporate expenditures 

for communications is limited to communications expenditures containing express advocacy. 

Since the Court decision and subsequent related decisions (e.g., Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990)), the Commission has 

concluded a rulemaking proceeding to implement 

changes necessitated by the current case law. See 60 

FR 35293 (July 6, 1995). However, the Commission 

believes that statutory clarification would also be beneficial. 

Congress should consider whether statutory changes 

are needed: (1) to exempt independent expenditures 

made by certain nonprofit corporations from the statutory prohibition against corporate expenditures; (2) to 

specify the reporting requirements for these nonprofit 

corporations; and (3) to provide a definition of express 

advocacy. 

Honorarium 

Section: 2 U.S.C. §431(8)(B)(xiv) 

Recommendation: The Commission recommends that 

Congress should make a technical amendment, deleting 2 U.S.C. §431(8)(B)(xiv), now contained in a list of 

definitions of what is not a contribution. 

Explanation: The 1976 amendments to the Federal 

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

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

the Legislative Branch Appropriations Act repealed 

§441i. As a result, the Commission has no jurisdiction 

over honorarium transactions taking place after August 14, 1991, the effective date of the law. 

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

change to §431(8)(B)(xiv) deleting the reference to 

honorarium as defined in former §441i. This would 

delete honorarium from the list of definitions of what is 

not a contribution. 

Acceptance of Cash Contributions 

Section: 2 U.S.C. §441g 

Recommendation: The Commission recommends that 

Congress modify the statute to make the treatment of 

2 U.S.C. §441g, concerning cash contributions, consistent with other provisions of the Act. As currently 

drafted, 2 U.S.C. §441g prohibits only the making of 

cash contributions which, in the aggregate, exceed 

$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 
Legislative Recommendations 57 

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. 

Part III 

Enforcement 

Fines for Reporting Violations 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

Congress consider granting the Commission authority 

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

and disbursements. 

Explanation: In maintaining a regulatory presence 

covering all aspects of the Act, even the most simple 

and straightforward strict liability disclosure violations, 

e.g., the late filing or non-filing of required reports, 

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

procedures provide a number of procedural protections, and the Commission has no authority to impose 

penalties. Instead, the Commission can only seek a 

conciliation agreement, and without a settlement can 

only pursue a de novo civil action in federal court. 

This process can be unnecessarily time and resource 

consuming for all parties involved when applied to 

ministerial-type civil violations that are routinely 

treated via published fines by many other states and 

federal regulatory agencies. Non-deliberate and 

straightforward reporting violations would not have to 

be treated as full blown enforcement matters if the 

Commission had authority to assess fines for such 

violations under a published fine schedule, subject to a 

reasonable appeal procedure. Congress could authorize the Commission to promulgate a fine schedule that 

would consider a number of factors (e.g., the election 

sensitivity of the report and the previous compliance 

record of the committee). Addition of such authority 

would introduce greater certainty to the regulated community about the consequences of noncompliance with 

the Act’s filing requirements, as well as lessen costs 

and lead to efficiencies for all parties, while maintaining 

the Commission’s emphasis on the Act’s disclosure 

requirements. The Commission would attempt to implement this on a trial basis. 
58 Chapter Six 

Expedited Enforcement Procedures and Injunctive 

Authority 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

Congress consider whether the Act should provide for 

expedited enforcement of complaints filed shortly before an 

election, permit injunctive relief in certain cases, and allow 

the Commission to adopt expedited procedures in such 

instances.2 

Explanation: The statute now requires that before the 

Commission proceeds in a compliance matter it must 

wait 15 days after notifying any potential respondent 

of alleged violations in order to allow that party time to 

file a response. Furthermore, the Act mandates extended time periods for conciliation and response to 

recommendations for probable cause. Under ordinary 

circumstances such provisions are advisable, but they 

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

effort to avert intentional violations that are committed 

with the knowledge that sanctions cannot be enforced 

prior to the election, and to quickly resolve matters for 

which Commission action is not warranted, Congress 

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

Even when the evidence of a violation has been clear 

and the potential impact on a campaign has been 

substantial, without the authority to initiate a civil suit 

for injunctive relief, the Commission has been unable 

to act swiftly and effectively in order to prevent a violation. The Commission has felt constrained from 

seeking immediate judicial action by the requirement 

of the statute that conciliation be attempted before 

court action is initiated, and the courts have indicated 

the Commission has little if any discretion to deviate 

from the administrative procedures of the statute. 

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

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

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

2494 (D.D.C. 1996); In re Carter-Mondale Reelection 

Committee, Inc., 642 F.2d 538 (D.C. Cir. 1980); Common Cause v. Schmitt, 512 F.Supp. 489 (D.D.C. 

1980), aff’d by an equally divided court, 455 U.S. 129 

(1982); Durkin for U.S. Senate v. FEC, 2 Fed. Election Camp. Fin. Guide (CCH) ¶9147 (D.N.H. 1980). 

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

implement changes in such circumstances to expedite 

its enforcement procedures. As part of this effort, 

Congress should consider whether the Commission 

should be empowered to promptly initiate a civil suit 

for injunctive relief in order to preserve the status quo 

when there is clear and convincing evidence that a 

2 Commissioner Elliott filed the following dissent:

 The Act presently enables the Commission to seek 

injunctive relief after the administrative process has been 

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

§437g(a)(6)(A).)

 I am unaware of any complaint filed with the Commission which, in my opinion, would meet the four standards 

set forth in the legislative recommendations. Assuming a 

case was submitted which met these standards, I believe it 

would be inappropriate for the Commission to seek injunctive relief prior to a probable cause finding.

 First, the very ability of the Commission to seek an 

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

opens the door to allegations of an arbitrary and politically 

motivated enforcement action by the Commission. The 

Commission's decision to seek injunction in one case while 

refusing to do so in another could easily be seen by candidates and respondents as politicizing the enforcement process.

 Second, the Commission might easily be flooded with 

requests for injunctive relief for issues such as failure to file 

an October quarterly or a 12-day pre-general report. Although the Commission would have the discretion to deny 

all these requests for injunctive relief, in making that decision the Commission would bear the administrative burden 

of an immediate review of the factual issues.

 Third, although the courts would be the final arbiter as 

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

by the Commission to seek an injunction during the final 

weeks of a campaign would cause a diversion of time and 

money and adverse publicity for a candidate during the 

most important period of the campaign.

 For these reasons, I disagree with the recommendation 

to expand the power of the Commission to seek injunctive 

relief except as presently provided for the Act. 
Legislative Recommendations 59 

substantial violation of the Act is about to occur. 

Congress should consider whether the Commission 

should be authorized to initiate such civil action in a 

United States District Court, under expressly stated 

criteria, without awaiting expiration of the 15-day period for responding to a complaint or the other administrative steps enumerated in the statute. The person 

against whom the Commission brings the action 

would enjoy the procedural protections afforded by 

the courts. 

The Commission suggests the following legislative 

standards to govern whether it may seek prompt injunctive relief: 

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

2. Failure of the Commission to act expeditiously will 

result in irreparable harm to a party affected by the 

potential violation. 

3. Expeditious action will not result in undue harm or 

prejudice to the interests of other persons; and 

4. The public interest would be served by expeditious 

handling of the matter. 

Subpoena and Reason-to-Believe Notification 

Signature Authority 

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

Recommendation: The Commission recommends 

that Congress clarify these provisions to permit any 

member of the Commission to sign duly-authorized 

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

Chairman and Vice Chairman. 

Explanation: Section 437d(a)(3) grants the Commission the power to issue subpoenas requiring the attendance and testimony of witnesses and the production of documentary evidence. This provision specifies that subpoenas be signed by the Chairman or 

Vice Chairman of the agency. In those instances 

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

Vice Chairman are available to sign, the subpoena is 

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

issued in a more timely manner. 

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

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

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

Ensuring Independent Authority of FEC in 

All Litigation 

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

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

is an important component of the statutory structure 

designed to ensure nonpartisan administration and 

enforcement of the campaign financing statutes. The 

Commission recommends that Congress make the 

following four clarifications that would help solidify the 

statutory structure: 

1. Congress should clarify that the Commission is 

explicitly authorized to petition the Supreme Court for 

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

Court litigation. 

2. Congress should amend the Act to specify that 

local counsel rules (requiring district court litigants to 

be represented by counsel located within the district) 

cannot be applied to the Commission. 

3. Congress should give the Commission explicit authorization to appear as an amicus curiae in cases 

that affect the administration of the Act, but do not 

arise under it. 

4. Congress should require the United States 

Marshal’s Service to serve process, including summonses and complaints, on behalf of and at no expense to the Federal Election Commission. 
60 Chapter Six 

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

Supreme Court for a writ of certiorari in cases relating 

to the Commission’s administration of Title 2 and to 

independently conduct its Supreme Court litigation 

under that Title. The Commission explicitly has this 

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

ruled that Title 2 does not grant the Commission such 

authority. See FEC v. NRA Political Victory Fund, 

cert. dismissed for want of jurisdiction, 115 S.Ct. 537 

(December 6, 1994). Under this ruling, the Commission must now obtain permission from the Solicitor 

General before seeking certiorari in a Title 2 case. 

The Solicitor General may decline to authorize this 

action in cases where the Commission believes Supreme Court review is advisable. Even where acting 

in accordance with the Commission’s recommendation to seek certiorari in a given case, the Solicitor 

General would still control the position taken in the 

case and the arguments made on behalf of the Commission. This transfer of the Commission’s Supreme 

Court litigation authority to the Solicitor General, who 

is an appointee of and subject to removal by the 

President, misconstrues Congressional intent in establishing the Commission as a bipartisan and independent civil enforcement agency. Pertinent provisions of Title 2 should be revised to clearly state the 

Commission’s exclusive and independent authority on 

all aspects of Supreme Court litigation in all cases it 

has litigated in the lower courts. 

With regard to the second of these recommendations, 

most district courts have rules requiring that all litigants be represented by counsel located within the 

district. The Commission, which conducts all of its 

litigation nationwide from its offices in Washington, 

D.C., is unable to comply with those rules without 

compromising its independence by engaging the local 

United States Attorney to assist in representing it in 

courts outside of Washington, D.C. Although most 

judges have been willing to waive applying these local 

counsel rules to the Commission, some have insisted 

that the Commission obtain local representation. An 

amendment to the statute specifying that such local 

counsel rules cannot be applied to the Commission 

would eliminate this problem. 

Concerning the third recommendation, the FECA 

explicitly authorizes the Commission to “appear in and 

defend against any action instituted under this Act,” 2 

U.S.C. §437c(f)(4), and to “initiate...defend...or appeal 

any civil action...to enforce the provisions of this Act 

and chapter 95 and chapter 96 of title 26,” 2 U.S.C. 

§437d(a)(6). These provisions do not explicitly cover 

instances in which the Commission appears as an 

amicus curiae in cases that affect the administration 

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

the Commission’s role as an amicus curiae would 

remove any questions concerning the Commission’s 

authority to represent itself in this capacity. 

Concerning the final recommendation, prior to its 

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

of the Federal Rules of Civil Procedure provided that 

a summons and complaint shall be served by the 

United States Marshal’s Service on behalf of the 

United States or an officer or agency of the United 

States. Rule 4, as now amended, requires all plaintiffs, including federal government plaintiffs such as 

the Commission, to seek and obtain a court order 

directing that service of process be effected by the 

United States Marshal’s Service. Given that the Commission must conduct litigation nationwide from its 

offices in Washington, D.C., it is burdensome and 

expensive for it to enlist the aid of a private process 

server or, in the alternative, seek relief from the court, 

in every case in which it is a plaintiff. Returning the 

task of serving process for the Commission to the 

United States Marshal’s Service would alleviate this 

problem and assist the Commission in carrying out its 

mission. 

Enhancement of Criminal Provisions 

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

Recommendation: The Commission recommends that 

it have the ability to refer appropriate matters to the 

Justice Department for criminal prosecution at any 

stage of a Commission proceeding. 
Legislative Recommendations 61 

Explanation: The Commission has noted an upsurge 

of §441f contribution reimbursement schemes, that 

may merit heavy criminal sanction. Although there is 

no prohibition preventing the Department of Justice 

from initiating criminal FECA prosecutions on its own, 

the vehicle for the Commission to bring such matters 

to the Department’s attention is found at 

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

the Commission has found probable cause to believe 

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

Random Audits 

Section: 2 U.S.C. §438(b) 

Recommendation: The Commission recommends that 

Congress consider legislation that would require the 

Commission to randomly audit political committees in 

an effort to promote voluntary compliance with the 

election law and ensure public confidence in the election process. 

Explanation: In 1979, Congress amended the FECA 

to eliminate the Commission’s explicit authority to 

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

deter abuse of the election law. Random audits can 

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

the public that committees are complying with the law. 

Random audits performed by the IRS offer a good 

model. As a result of random tax audits, most taxpayers try to file accurate returns on time. Tax audits 

have also helped create the public perception that tax 

laws are enforced. 

There are many ways to select committees for a random audit. One way would be to randomly select 

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

the amount of campaign receipts and, in the case of 

candidate committees, the percentage of votes won. 

With this approach, audits might be conducted in 

many states throughout the country. 

Another approach would be to randomly select several Congressional districts and audit all political committees in those districts (with the exception of certain 

candidates whose popular vote fell below a certain 

threshold) for a given election cycle. This system 

might result in concentrating audits in fewer geographical areas. 

Such audits should be subject to strict confidentiality 

rules. Only when the audits are completed should 

they be published and publicized. Committees with no 

problems should be commended. 

Regardless of how random selections were made, it 

would be essential to include all types of political committees—PACs, party committees and candidate 

committees—and to ensure an impartial, evenhanded 

selection process. 

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. 

3The 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. 
62 Chapter Six 

Explanation: Under current law, the Commission must 

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

place until almost 2 months after the election, and 

because additional time is needed to computerize 

campaign finance information and review reports, 

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

Modifying Standard of “Reason to Believe” 

Finding 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

Congress modify the language pertaining to “reason 

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

allow the Commission to open an investigation with a 

sworn complaint, or after obtaining evidence in the 

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

standard to “reason to open an investigation.” 

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

to believe a violation has occurred” before it may investigate. Only then may the Commission request 

specific information from a respondent to determine 

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

does a disservice to both the Commission and the 

respondent. It implies that the Commission has evaluated the evidence and concluded that the respondent 

has violated the Act. In fact, however, a “reason to 

believe” finding simply means that the Commission 

believes a violation may have occurred if the facts as 

described in the complaint are true. An investigation 

permits the Commission to evaluate the validity of the 

facts as alleged. 

It would therefore be helpful to substitute words that 

sound less accusatory and that more accurately reflect what, in fact, the Commission is doing at this 

early phase of enforcement. 

In order to avoid perpetuating the erroneous conclusion that the Commission believes a respondent has 

violated the law every time it finds “reason to believe,” 

the statute should be amended. 

Protection for Those Who File Complaints 

or Give Testimony 

Section: 2 U.S.C. §437g 

Recommendation: The Commission recommends that 

the Act be amended to make it unlawful to improperly 

discriminate against employees or union members 

solely for filing charges or giving testimony under the 

statute. 

Explanation: The Act requires that the identity of anyone filing a complaint with the Commission be provided to the respondent. In many cases, this may put 

complainants at risk of reprisals from the respondent, 

particularly if an employee or union member files a 

complaint against his or her employer or union. This 

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

Robbins Tire & Rubber Company, 437 U.S. 214, 240 

(1978); Brennan v. Engineered Products, Inc., 506 

F.2d 299, 302 (8th Cir. 1974); Texas Industries, Inc. v. 

NLRB, 336 F.2d 128, 134 (5th Cir. 1964). In other 

statutes relating to retaliation for filing complaints, 

Congress has made it unlawful to discriminate against 

employees or other individuals for filing charges or 

giving testimony under the statute. See, e.g., 29 

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

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

§2000e-3(a) (Equal Employment Opportunity Act); 42 

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

recommends that Congress consider including a similar provision in the FECA. 
Legislative Recommendations 63 

Part IV 

Public Financing 

Automatic Adjustment of the Presidential 

Election Checkoff (1998) 

Section: 26 U.S.C. §6096 

Recommendation: The Commission recommends that 

Congress help maintain the solvency of the Presidential Election Campaign Fund by indexing the value of 

the checkoff to inflation. This would provide an automatic adjustment similar to that provided for payouts 

from the Fund. 

Explanation: With regard to funding for the Presidential 

election of 2000, FEC staff project a shortfall in the 

Presidential Election Campaign Fund. To help avert 

future shortfalls, the Commission recommends that 

Congress correct a fundamental flaw in the public funding law, namely, that the demand for funds is tied to 

inflation, but the supply (the value of the checkoff) is 

not. From 1973 to 1993, the checkoff value remained 

fixed at $1, but during that same time frame, inflation 

and amendments to the Act increased the payouts 

more than threefold. 

The 1993 Omnibus Budget Reconciliation Act included 

a provision increasing the taxpayer checkoff value from 

$1 to $3, as a one-time adjustment for the 300% inflation since enactment. Changing the checkoff value to 

$3, while obviously beneficial, was, by itself, an incomplete remedy for two reasons. First, it failed to make up 

for the depletion of the Fund caused by the uncompensated inflationary pressure in the prior presidential elections. Secondly, it created another static figure, which 

future inflation, however minor, would ultimately erode. 

Thus, as a way of restoring solvency to the Fund, the 

Commission suggests that Congress structure the 

checkoff mechanism in a manner similar to the automatic adjustment to the spending limits and to the 

corresponding public subsidies. In order to present 

the taxpayer with an understandable figure, the law 

could require that, after adjusting the value for inflation, the figure be rounded up to the nearest quarter 

dollar. Alternatively, the law could be amended to 

describe the $3 as a 1993 value that would be automatically and precisely adjusted for inflation since 

that date. 

Priorities for Public Funding Payments (1998) 

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

Recommendation: The Commission recommends that 

Congress reconsider the priorities for payments made 

by the Presidential Election Campaign Fund in order 

to help alleviate the projected shortfall in the Presidential Election Campaign Fund for the year 2000. 

Additionally, Congress may want to clarify the mechanism for allocating funds between the primary election 

candidates and the general election nominees to help 

ensure a steady cash flow to Presidential primary 

candidates during the early months of the campaign. 

Explanation: An FEC staff projection of funding available for the Presidential election of 2000 projects a 

shortfall in the Presidential Election Campaign Fund. 

Treasury regulations require that public funds be set 

aside for the national nominating conventions and the 

general election candidates prior to distributing 

matching funds to primary election candidates. 

Because of a structural problem in financing the Fund 

and a declining rate of taxpayers who check off their 

dollars for the Fund, the Fund is facing a shortage of 

cash. As a result, the Commission anticipates that, 

once funds have been set aside for the conventions 

and general election in 2000, there will be insufficient 

funds to make the matching payments to the primary 

candidates during crucial early primary contests. 

If, however, the priorities were rearranged, there 

would be sufficient funds for the primary candidates. 

Currently, the convention grant is the first priority 

among the three elements of the program. Congress 

may want to reset these priorities so that the convention funding becomes the last priority. 

Since 1960, the means by which major parties select 

their presidential nominee has shifted from the conventions to the state primaries and caucuses. The 
64 Chapter Six 

conventions still serve a valuable role in party building 

and promoting the nominee, but no longer do the 

conventions serve as an electoral body. Furthermore, 

the original intent of the program to have the conventions financed exclusively with public moneys has 

been eroded by various avenues for private financing. 

At present, when one includes all elements of convention financing, the majority of the expenses are being 

covered by private sources. If the role of conventions 

has changed since enactment of the public funding 

statute and if private financing is readily available, 

then it is worth considering whether the convention 

grant program should continue to outrank the general 

election grant and the primary matching program. 

If convention financing became the third priority, public financing for the conventions could be accomplished on an ex-post, reimbursement basis for audited expenditures. This adjustment will help ensure 

sufficient funds to pay candidates participating in the 

primary and general election process. 

In addition to shifting the priorities among the three 

funding recipients, Congress may want to clarify the 

mechanism of allocating the funds between the primary campaigns and the general election campaigns. 

More specifically, Congress may wish to clarify that 

the statute does, in fact, give the Treasury Department latitude to help ensure a steady cash flow to 

Presidential primary candidates during the early 

months of the campaign. 

Under the statute, the Secretary [of the Treasury] 

"shall deposit into the matching payment account...the 

amount available after the Secretary determines that 

amounts for payments under section 9006(c) [for general election nominees] and for payments under section 9008(b)(3) [for the nominating conventions] are 

available for such payments." 26 U.S.C. §9037(a). In 

effect, the Treasury is not allowed to make payments 

to primary candidates until after it has determined that 

there are sufficient funds (based on the amount of 

checkoff dollars) for payments to the general election 

nominees. Treasury has interpreted this provision to 

mean that the necessary funds for the general election must actually be in hand and set aside before it 

can make any payments to the primary candidates. 

There is, however, another way of interpreting the 

statute. Under an alternative interpretation, Treasury 

would calculate, based on 20 years of experience, the 

amount of new funds that would be received, under 

the checkoff,4 during the early months of the election 

year (February through April). Based on that calculation, Treasury could determine on January 1 of the 

election year that sufficient funds are "available" for 

the general election nominees. By doing so, Treasury 

would be able to free up funds already on hand and 

make them available for payment to the primary candidates on January 1 of the election year. By the time 

Treasury had to make payments for the general election (in July or August), the fund would be sufficiently 

replenished with new receipts (from the checkoff) that 

Treasury could make a full payment to the general 

election nominees. 

Congress might want to make explicit that Treasury 

could interpret the statute in this way. 

Qualifying Threshold for Eligibility for Primary 

Matching Funds (1998) 

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. A candidate need only raise $100,000 in 

4 On their annual income tax forms, individual tax payers 

may "check off" $3 of their taxes for the Presidential Election Campaign Fund. When individuals check "yes," they do 

not increase or decrease their tax liability. Equivalent 

amounts are placed in the Presidential Campaign Fund, 

which is used to fund Presidential elections through a convention grant, primary matching funds and a general election grant. 
Legislative Recommendations 65 

matchable contributions ($5,000 in each of at least 20 

states from individual donations of $250 or less). 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 raise the set dollar threshold, which 

would eventually require additional inflationary adjustments, Congress may wish to express the threshold 

as a percentage of the primary 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, which is the current statutory requirement. 

State Expenditure Limits for Publicly Financed 

Presidential Primary Campaigns 

Section: 2 U.S.C. §441a 

Recommendation: The Commission recommends that 

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

eliminated. 

Explanation: The Commission has now administered 

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

limitations could be removed with no material impact 

on the process. 

Our experience has shown that, in past years, the 

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

New Hampshire. In most other states, campaigns 

have been unable or have not wished to expend an 

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

administration of the entire program has resulted in 

limiting disbursements in these two primaries alone. 

With an increasing number of primaries vying for a 

campaign’s limited resources, however, it would not 

be possible to spend very large amounts in these 

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

limit would serve as a constraint on state spending, 

even in the early primaries. At the same time, 

candidates would have broader discretion in the running of their campaigns. 

Our experience has also shown that the limitations 

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

fundraising limitation, the compliance cost exemption, 

the volunteer service provisions, the unreimbursed 

personal travel expense provisions, the use of a personal residence in volunteer activity exemption, and a 

complex series of allocation schemes have developed 

into an art which, when skillfully practiced, can partially circumvent the state limitations. 

Finally, the allocation of expenditures to the states 

has proven a significant accounting burden for campaigns and an equally difficult audit and enforcement 

task for the Commission. For all these reasons, the 

Commission decided to revise its state allocation 

regulations for the 1992 Presidential election. Many of 

the requirements, such as those requiring distinctions 

between fundraising and other types of expenditures, 

were eliminated. However, the rules could not undo 

the basic requirement to demonstrate the amount of 

expenditures relating to a particular state. Given our 

experience to date, we believe that this change to the 

Act would still be of substantial benefit to all parties 

concerned. 

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 
66 Chapter Six 

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. 

Eligibility Requirements for Public Financing 

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

Recommendation: The Commission recommends that 

Congress amend the eligibility requirements for publicly funded Presidential candidates to make clear that 

candidates who have been convicted of a willful violation of the laws related to the public funding process 

or who are not eligible to serve as President will not 

be eligible for public funding. 

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

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

matter how severe. And yet public confidence in the 

integrity of the public financing system would risk 

serious erosion if the U.S. Government were to provide public funds to candidates who had been convicted of felonies related to the public funding process. Congress should therefore amend the eligibility 

requirements to ensure that such candidates do not 

receive public financing for their Presidential campaigns. The amendments should make clear that a 

candidate would be ineligible for public funds if he or 

she had been convicted of fraud with respect to raising funds for a campaign that was publicly financed, 

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

willfully disregarded the statute or regulations. See 

LaRouche v. FEC, 992 F.2d 1263 (D.C. Cir. 1993) 

cert. denied, 114 S. Ct. 550 (1993). In addition, Congress should make it clear that eligibility to serve in 

the office sought is a prerequisite for eligibility for 

public funding. 

Deposit of Repayments 

Section: 26 U.S.C. §9007(d) 

Recommendation: The Commission recommends that 

Congress revise the law to state that: All payments 

received by the Secretary of the Treasury under subsection (b) shall be deposited by him or her in the 

Presidential Election Campaign Fund established by 

§9006(a). 

Explanation: This change would allow the Fund to 

recapture monies repaid by convention-related committees of national major and minor parties, as well as 

by general election grant recipients. Currently the 

Fund recaptures only repayments made by primary 

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

annually. 
Legislative Recommendations 67 

Supplemental Funding for Publicly Funded 

Candidates 

Section: 26 U.S.C. §§9003 and 9004 

Recommendation: The Commission recommends that 

Congress consider whether to modify the general 

election Presidential public funding system in instances where a nonpublicly funded candidate exceeds the spending limit for publicly funded candidates. 

Explanation: Major party Presidential candidates who 

participate in the general election public funding process receive a grant for campaigning. In order to receive the grant, the candidate must agree to limit expenditures to that amount. Candidates who do not 

request public funds may spend an unlimited amount 

on their campaign. Congress may want to consider 

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

Applicability of Title VI to Recipients of Payments 

from the Presidential Election Campaign Fund 

(revised 1998) 

Section: 26 U.S.C. §§9006(b), 9008(b)(3) and 9037. 

Recommendation: The Commission recommends that 

Congress clarify that committees receiving public 

financing payments from the Presidential Election 

Campaign Fund are exempt from the requirements of 

Title VI of the Civil Rights Act of 1964, as amended. 

Explanation: This proposed amendment was 

prompted by the decision of the U.S. District Court for 

the District of Columbia in Freedom Republicans, Inc., 

and Lugenia Gordon v. FEC, 788 F. Supp. 600 

(1992), vacated, 13 F.3d 412 (D.C. Cir 1994). The 

Freedom Republicans’ complaint asked the district 

court to declare that the Commission has jurisdiction 

to regulate the national parties’ delegate selection 

process under Title VI. It also requested the court to 

order the Commission to adopt such regulations, direct the Republican Party to spend no more of the 

funds already received for its 1992 national nominating convention, and seek refunds of moneys already 

disbursed if the Republican Party did not amend its 

delegate selection and apportionment process to 

comply with Title VI. The district court found that the 

Commission “does have an obligation to promulgate 

rules and regulations to insure the enforcement of 

Title VI. The language of Title VI is necessarily broad, 

and applies on its face to the FEC as well as to both 

major political parties and other recipients of federal 

funds.” 788 F. Supp. at 601. 

The Commission appealed this ruling on a number of 

procedural and substantive grounds, including that Title 

VI does not apply to the political parties’ apportionment 

and selection of delegates to their conventions. However, the court of appeals overruled the district court 

decision on one of the non-substantive grounds, leaving 

the door open for other lawsuits involving the national 

nominating conventions or other recipients of federal 

funds certified by the Commission. No. 92-5214, slip op. 

at 15. 

In the Commission’s opinion, First Amendment concerns and the legislative history of the public funding 

campaign statutes strongly indicate that Congress did 

not intend Title VI to permit the Commission to dictate 

to the political parties how to select candidates or to 

regulate the campaigns of candidates for federal office. Nevertheless, the potential exists for persons 

immediately prior to an election to invoke Title VI in 

the federal courts in a manner that might interfere with 

the parties’ nominating process and the candidates’ 

campaigns. The recommended clarification would 

help forestall such a possibility. 

For these reasons, Congress should consider adding 

the following language to the end of each public financing provision cited above: “The acceptance of 

such payments will not cause the recipient to be conducting a ‘program or activity receiving federal financial assistance’ as that term is used in Title VI of the 

Civil Rights Act of 1964, as amended.” 
68 Chapter Six 

Enforcement of Nonwillful Violations 

Section: 26 U.S.C. §§9012 and 9042 

Recommendation: The Commission recommends that 

Congress consider amending the Presidential Election Campaign Fund Act and the Presidential Primary 

Matching Payment Account Act to clarify that the 

Commission has authority for civil enforcement of 

nonwillful violations (as well as willful violations) of the 

public funding provisions. 

Explanation: Section 9012 of the Presidential Election 

Campaign Fund Act and §9042 of the Presidential 

Primary Matching Payment Account Act provide only 

for “criminal penalties” for knowing and willful violations of the spending and contribution provisions and 

the failure of publicly funded candidates to furnish all 

records requested by the Commission. The lack of a 

specific reference to nonwillful violations of these 

provisions has raised questions regarding the 

Commission’s ability to enforce these provisions 

through the civil enforcement process. 

In some limited areas, the Commission has invoked 

other statutes and other provisions in Title 26 to carry 

out its civil enforcement of the public funding provisions. It has relied, for example, on 2 U.S.C. §441a(b) 

to enforce the Presidential spending limits. Similarly, 

the Commission has used the candidate agreement 

and certification processes provided in 26 U.S.C. 

§§9003 and 9033 to enforce the spending limits, the 

ban on private contributions, and the requirement to 

furnish records. Congress may wish to consider revising the public financing statutes to provide explicit 

authority for civil enforcement of these provisions. 

Contributions to Presidential Nominees Who 

Receive Public Funds in the General Election 

Section: 26 U.S.C. §9003 

Recommendation: The Commission recommends that 

Congress clarify that the public financing statutes prohibit the making and acceptance of contributions (either 

direct or in-kind) to Presidential candidates who receive 

full public funding in the general election. 

Explanation: The Presidential Election Campaign 

Fund Act prohibits a publicly financed general election 

candidate from accepting private contributions to defray qualified campaign expenses. 26 U.S.C. 

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

parallel prohibition against the making of these contributions. Congress should consider adding a section 

to 2 U.S.C. §441a to clarify that individuals and committees are prohibited from making these contributions. 

Part V 

Miscellaneous 

Funds and Services from Private Sources 

Section: 2 U.S.C. §437c 

Recommendation: The Commission recommends that 

Congress give the Commission authority to accept 

funds and services from private sources to enable the 

Commission to provide guidance and conduct 

research on election administration and campaign 

finance issues. 

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

to finance topical research, studies, and joint projects 

with other entities because it does not have statutory 

gift acceptance authority. In view of the Commission’s 

expanding role in this area, Congress should consider 

amending the Act to provide the Commission with 

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

range of private organizations would allow the Commission to have more control in structuring and conducting these activities and avoid the expenditure of 

government funds for these activities. If this proposal 

were adopted, however, the Commission would not 

accept funds from organizations that are regulated by 

or have financial relations with the Commission. 
Legislative Recommendations 69 

Ex Officio Members of Federal Election 

Commission 

Section: 2 U.S.C.§437c(a)(1) 

Recommendation: The Commission recommends that 

Congress amend section 437c by removing the Sec-

retary of the Senate, the Clerk of the House, and their 

designees from the list of the members of the Federal 

Election Commission. 

Explanation: In 1993, the U.S. Court of Appeals for 

the District of Columbia ruled that the ex officio mem-

bership of the Secretary of the Senate and the Clerk 

of the House on the Federal Election Commission 

was unconstitutional. (FEC v. NRA Political Victory 

Fund, 6 F.3d 821 (D.C. Cir. 1993), cert. dismissed for 

want of jurisdiction, 115 S. Ct. 537 (12/6/94).) This 

decision was left in place when the Supreme Court 

dismissed the FEC's appeal on the grounds that the 

FEC lacks standing to independently bring a case 

under Title 2. 

As a result of the appeals court decision, the FEC 

reconstituted itself as a six-member body whose 

members are appointed by the President and con-

firmed 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. 
2000 

1500 

1000 

74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 

Year 

500 

0 

Campaign Finance Statistics 71 Chapter 7 

Campaign Finance 

Statistics 

CHART 7-1 

Number of PACs, 1974-1997 

Corporate 

Nonconnected 

Trade/Membership/Health 

Labor 

Other 
72 Chapter Seven 

CHART 7-2 

Receipts of House Candidates for 

Each Year of Election Cycle, 1990-1998 

Election Year 

Nonelection Year 

150 

120 

90 

60 

30 

0 

Democrats Republicans Democrats Republicans Democrats Republicans 

Incumbents Challengers Open Seat Candidates 

90 92 94 96 98 90 92 94 96 98 90 92 94 96 98 90 92 94 96 98 90 92 94 96 98 90 92 94 96 98 
CHART 7-3 

House Campaign Fundraising 

in Nonelection Years 

Receipts from Candidate, Other Sources* 

Receipts from PACs 

Receipts from Individuals 

Millions of Dollars 

30 

60 

90 

120 

150 

0 1989 1991 1993 1995 1997 

CHART 7-4 

Senate Campaign Fundraising 

in Nonelection Years 

Receipts from Candidate, Other Sources *

Receipts from PACs 

Receipts from Individuals 

Millions of Dollars 

20 

40 

60 

80 

100 

0 1989 1991 1993 1995 1997 

Campaign Finance Statistics 73 

* Includes contributions from party committees, loans, interest earnings and offsets to expenditures. 
CHART 7-5 

Nonelection Year Fundraising by National 

Committees: Federal and Nonfederal Accounts 

Federal Dollars 

Nonfederal Dollars 

74 Chapter Seven 

Republican National Committee 

1991 1993 1995 1997 

Democratic National Committee 

1991 1993 1995 1997 
CHART 7-6 

Sources of National Committee: 

Federal Account Receipts 

in Nonelection Years 

1991 

1993

1995 

1997 

Republican National Committee 

Millions of Dollars 

35 

30 

25 

20 

15 

10 

5 

0 

Individuals Individual PACs Other * 

Less Than $200 

Democratic National Committee 

Millions of Dollars 

35 

30 

25 

20 

15 

10 

5 

0 

Individuals Individual PACs Other * 

Less Than $200 

$200 or More 

Campaign Finance Statistics 75 

$200 or More 

* Includes loans, receipts from local and state party committees and offsets to expenditures. 
76 Chapter Seven 

CHART 7-7 

Sources of National Committee: 

Nonfederal Account Receipts 

in Nonelection Years 

1991 

1993 

1995 

1997 

Republican National Committee 

Millions of Dollars 

20 

Democratic National Committee 

Millions of Dollars 

20 

15 15 

10 10 

5 5

0 0 

Corporate Individuals Other * Corporate Labor Individuals PACs Other * 

* Includes any unitemized receipts, bank loans, transfers from other party organizations, interest earnings and offsets to 

expenditures. 
77 

CHART 7-8 

Major Party Federal 

Account Receipts: 1997 

National Committee 

National Senatorial Committee 

National Congressional Committee 

State/Local Committees 

0 

Millions of Dollars 

5 

10 

15 

20 

25 

30 

35 

40 

Democrats Republicans 

Campaign Finance Statistics 
Individuals 

Other *

78 Chapter Seven 

CHART 7-9 

Major Party Federal Receipts Broken Down 

by Committee and by Source: 1997 

Millions of Dollars 

0 

5 

10 

15 

20 

25 

30 

35 

40 

DNC RNC DSCC NRSC DCCC NRCC State/Local State/Local 

Democratic Republican 

* Includes contributions from PACs and other party committees, loans, refunds and rebates 
1997-2000 Receipts 

1996 Ending Balance 

Primary Matching High Estimate 

Primary Matching Low Estimate 

General Election Grants 

Conventions 

Millions of Dollars 

$300 

$250 

$200 

$150 

$100 

$50 

$0 

Funds Paid Funds Available 

Campaign Finance Statistics 79 

CHART 7-10 

Presidential Election Campaign Fund: 

Projected Payments and Funds Available 

for 2000 Election 
Appendices 81 

Appendix 1 

Biographies of 

Commissioners 

and Officers 

Commissioners 

John Warren McGarry, Chairman 

April 30, 19951 

First appointed to the Commission in 1978, Chairman McGarry was reappointed in 1983 and 1989 and 

was nominated for reappointment by President 

Clinton in 1997. He previously served as FEC Chairman in 1981, 1985 and 1991. Before his 1978 Commission appointment, Commissioner McGarry served 

as special counsel on elections to the House Administration Committee. He previously combined private 

law practice with service as chief counsel to the 

House Special Committee to Investigate Campaign 

Expenditures, a special committee established by 

Congress every election year through 1972. Before 

his work with Congress, Commissioner McGarry was 

the Massachusetts assistant attorney general. 

After graduating cum laude from Holy Cross College, Commissioner McGarry did graduate work at 

Boston University and earned a J.D. degree from 

Georgetown University Law School. 

Joan D. Aikens, Vice Chairman 

April 30, 1995 

One of the original members of the Commission, 

Commissioner Aikens was first appointed in 1975. 

Following the reconstitution of the FEC that resulted 

from the Supreme Court’s Buckley v. Valeo decision, 

President Ford reappointed her to a five-year term. In 

1981, President Reagan named Commissioner 

Aikens to complete a term left open because of a 

resignation and, in 1983, once again reappointed her 

to a full six-year term. Most recently, Commissioner 

Aikens was reappointed by President Bush in 1989. 

She served as FEC Chairman in 1978, 1986 and 

1992. 

Before her 1975 appointment, Commissioner 

Aikens was an executive with Lew Hodges Communications, a public relations firm in Valley Forge, Pennsylvania. She was also a member of the Pennsylvania 

Republican State Committee, president of the Pennsylvania Council of Republican Women and on the 

board of directors of the National Federation of Republican Women. A native of Delaware County, Pennsylvania, Commissioner Aikens has been active in a 

variety of volunteer organizations and was a member 

of the Commonwealth Board of the Medical College of 

Pennsylvania and a past president of Executive 

Women in Government. She is currently a member of 

the board of directors of Ursinus College, where she 

received her B.A. degree and an honorary Doctor of 

Law degree. 

Lee Ann Elliott, Commissioner 

April 30, 1999 

Commissioner Elliott was first appointed in 1981 

and reappointed in 1987 and 1994. She served as 

Chairman in 1984, 1990 and 1996. Before her first 

appointment, Commissioner Elliott was vice president 

of a political consulting firm, Bishop, Bryant & Associates, Inc. From 1961 to 1979, she was an executive 

of the American Medical Political Action Committee. 

Commissioner Elliott was on the board of directors of 

the American Association of Political Consultants and 

on the board of the Chicago Area Public Affairs 

Group, of which she is a past president. She was also 

a member of the Public Affairs Committee of the U.S. 

Chamber of Commerce. In 1979, she received the 

Award for Excellence in Serving Corporate Public 

Affairs from the National Association of Manufacturers. 

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

Management Executive Program and is a Certified 

Association Executive. 

Danny L. McDonald 

April 30, 1999 

Now serving his third term as Commissioner, Mr. 

McDonald was first appointed to the Commission in 

1981 and was reappointed in 1987 and 1994. Before 

his original appointment, he managed 10 regulatory 

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

served as secretary of the Tulsa County Election 

1 Term expiration date. 
82 Appendices 

Board and as chief clerk of the board. He was also a 

member of the Advisory Panel to the FEC’s National 

Clearinghouse on Election Administration. 

A native of Sand Springs, Oklahoma, Mr. 

McDonald graduated from Oklahoma State University 

and attended the John F. Kennedy School of Government at Harvard University. He served as FEC Chairman in 1983 and 1989. 

Scott E. Thomas 

April 30, 1997 

Scott Thomas was appointed to the Commission in 

1986, reappointed in 1991 and nominated for reappointment by President Clinton on September 2, 

1997. He was 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 

John C. Surina, Staff Director 

Before joining the Commission in 1983, John 

Surina was assistant managing director of the Interstate Commerce Commission, where he was detailed 

to the “Reform 88” program at the Office of Management and Budget. In that role, he worked on projects 

to reform administrative management within the federal government. He was also an expert-consultant to 

the Office of Control and Operations, EOP-Cost of 

Living Council-Pay Board and on the technical staff of 

the Computer Sciences Corporation. During his Army 

service, Mr. Surina was executive officer of the Special Security Office, where he supported senior U.S. 

delegates to NATO’s civil headquarters in Brussels. 

Mr. Surina served as 1991 chairman of the Council on 

Government and Ethics Laws (COGEL). 

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

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

American University. 

Lawrence M. Noble, General Counsel 

Lawrence Noble became General Counsel in 1987, 

after serving as Acting General Counsel. He joined 

the Commission in 1977, becoming the Deputy General Counsel in 1983. He previously served as Assistant General Counsel for Litigation and as a litigation 

attorney. Before his FEC service, he was an attorney 

with the Aviation Consumers Action Project. 

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

Political Science from Syracuse University and a J.D. 

degree from the National Law Center at George 

Washington University. He is a member of the bars 

for the U.S. Supreme Court, the U.S. Court of Appeals for the D.C. Circuit and the District of Columbia. 

He is also a member of the American and District of 

Columbia Bar Associations. 

Mr. Noble served as chairman of COGEL during 

1998. 

Lynne McFarland, Inspector General 

Lynne McFarland became the FEC’s first permanent Inspector General in February 1990. She came 

to the Commission in 1976, first as a reports analyst 

and then as a program analyst in the Office of Planning and Management. 

A Maryland native, Ms. McFarland holds a sociology degree from Frostburg State College and is a 

member of the Institute of Internal Auditors. 
Appendices 83 

Appendix 2 

Chronology of Events 

January 

1 — Chairman John Warren McGarry and Vice 

Chairman Joan D. Aikens begin their oneyear terms of office. 

— FEC launches interim electronic filing program. 

24 — FEC releases 1996 year-end PAC count. 

— FEC releases audit report on Mississippi 

Democratic Party PAC. 

30 — Vice Chairman Joan D. Aikens testifies before Senate Committee on Rules and Administration on FY 1997 supplemental and 

FY 1998 amended budget request. 

31 — 1996 year-end report due. 

February 

15 — FEC publishes Combined Federal/State 

Disclosure Directory 1997. 

19 — FEC submits 57 legislative recommendations to the President and Congress. 

March 

5 — Commission releases final repayment determination for Fulani for President committee. 

13 — Vice Chairman Joan D. Aikens testifies before House Appropriations Subcommittee on 

FY 1997 supplemental and FY 1998 

amended budget request. 

15 — Texas holds special general election in 28th 

Congressional District. 

21 — Appeals court concludes Common Cause 

lacked standing to challenge FEC’s dismissal of complaint (Common Cause v. FEC 

(96-5160)). 

27 — FEC releases audit report on New Hampshire Democratic State Committee. 

April 

2-4 — FEC conducts state outreach workshops in 

Cleveland, OH. 

7 — Appeals court orders FEC to pay Christian 

Action Network’s legal fees in case involving 

express advocacy and corporate communications (FEC v. Christian Action Network). 

12 — Texas holds special runoff election in 28th 

Congressional District. 

16-18 — FEC conducts state outreach workshops in 

Trenton, NJ. 

25 — Revised “best efforts” regulations sent to 

Congress. 

28 — Electronic filing regulations take effect. 

29 — Increase in amount of civil penalties takes 

effect. 

30-2 — FEC conducts state outreach workshops in 

Des Moines, IA. 

May 

7 — Appeals court affirms district court decision 

declaring qualified nonprofit corporation 

regulations unconstitutional (Minnesota Citizens Concerned for Life v. FEC). 

13 — District court denies Christian Coalition’s 

motion for partial dismissal based on statute 

of limitations (FEC v. Christian Coalition). 

— FEC submits to President and Congress 

22nd annual report. 

— New Mexico holds special general election 

in 3rd Congressional District. 

30 — District court imposes $20,000 civil penalty 

on Legi-Tech for violating sale and use ban 

(FEC v. Legi-Tech). 

— District court orders FEC to act on DSCC 

complaint within 30 days; authorizes DSCC 

to file suit directly against NRSC if FEC fails 

to act (DSCC v. FEC (96-2184)). 

June 

6 — Appeals court declares voter guide/voting 

records regulations invalid (Clifton v. FEC). 

11-12 — FEC conducts state outreach workshops in 

Phoenix, AZ. 

12 — FEC approves audit report on Arlen Specter 

‘96 committee. 

18 — Commission holds public hearing on proposed rules governing independent expenditures by party committees. 

19 — FEC approves audit report on Alexander for 

President committee. 
84 Appendices 

25-26 — FEC conducts state outreach workshops in 

Madison, WI. 

26 — FEC approves audit report on Phil Gramm 

for President committee. 

30 — Commission submits to President and Congress report on impact of National Voter 

Registration Act. 

July 

2 — Revised “best efforts” regulations take effect. 

8 — FEC releases audit report on New Jersey 

Democratic State Committee. 

11 — Office of Election Administration publishes 

Federal Elections 96. 

17 — FEC approves audit report on LaRouche 

Presidential committee. 

25 — FEC releases semiannual federal PAC 

count. 

31 — Mid-year report due. 

August 

27 — FEC approves audit report on Pete Wilson 

for President committee. 

September 

15 — Disclosure Division publishes updated 

Pacronyms. 

24-26 — FEC holds regional conference in Seattle, 

WA. 

25 — FEC releases audit report on Democratic, 

Republican, Independent Voter Education 

(DRIVE). 

October 

1 — FEC releases FECFile electronic filing software. 

6 — Supreme Court declines to hear Maine Right 

to Life v. FEC. 

10 — Act amended to include term limits for Commissioners and to establish Secretary of 

Senate as point-of-entry for DSCC and 

NRSC reports. 

15-17 — FEC holds regional conference in Atlanta, 

GA. 

21 — FEC releases audit report on Kevin Quigley 

for Congress committee. 

30 — FEC publishes fourteenth edition of Selected 

Court Case Abstracts. 

November 

4 — New York holds special general election in 

13th Congressional District. 

6-7 — FEC holds corporate/labor conference in 

Washington, DC. 

December 

1 — Commission publishes new “Partnerships” 

and “Special Notices on Political Ads and 

Solicitations” brochures. 

4 — FEC approves audit report on Perot ‘96 

General committee. 

11 — FEC elects Joan D. Aikens and Scott E. 

Thomas as 1998 Chairman and Vice Chairman. 

11-12 — FEC holds membership/trade conference in 

Washington, DC. 

15 — Commission publishes new edition of Campaign Guide for Corporations and Labor 

Organizations. 
General Counsel 

Public Funding 

Ethics and 

Special Projects 

Deputy Staff Director 

for Management 

Data Systems 

Development 

Planning and 

Management 

Administration 

Equal Employment 

Opportunity 

Commission 

Secretary 

Public 

Disclosure 

Office of Election 

Administration 

Audit 

Staff Director Inspector General

Information 

Congressional 

Affairs 

Personnel 

Labor/Management 

Press Office 

Policy 4 

Reports 

Analysis 

Litigation 

Enforcement 

The Commissioners1 

John Warren McGarry, Chairman 2 

Joan D. Aikens, Vice Chairman 3 

Lee Ann Elliott, Commissioner 

Danny L. McDonald, Commissioner 

Scott E. Thomas,Commissioner 

Appendices 85 Appendix 3 

FEC Organization Chart 

1 One seat on the Commission remained vacant throughout 1997. 

2 Joan D. Aikens was elected 1998 Chairman. 

3 Scott E. Thomas was elected 1998 Vice Chairman. 

4 Policy covers regulations, advisory opinions, legal review and administrative law. 
Appendices 87 

Appendix 4 

FEC Offices 

This appendix briefly describes the offices within 

the Commission, located at 999 E Street, NW, Washington, D.C. 20463. The offices are listed alphabetically, with local telephone numbers given for offices 

that provide services to the public. Commission offices can also be reached toll-free on 800-424-9530 

and locally on 202-694-1100. 

Administration 

The Administration Division is the Commission’s 

“housekeeping” unit and is responsible for accounting, 

procurement and contracting, space management, 

payroll, travel and supplies. In addition, several support functions are centralized in the office such as 

printing, document reproduction and mail services. 

The division also handles records management, telecommunications, inventory control and building security and maintenance. 

Audit 

Many of the Audit Division’s responsibilities concern the Presidential public funding program. The 

division evaluates the matching fund submissions of 

Presidential primary candidates and determines the 

amount of contributions that may be matched with 

federal funds. As required by law, the division audits 

all public funding recipients. 

In addition, the division audits those committees 

which, according to FEC determinations, have not 

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

used in the Commission’s investigations of complaints. 

Commission Secretary 

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

including agenda documents, Sunshine Act notices, 

minutes and certification of Commission votes. The 

office also circulates and tracks numerous materials 

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

Commissioners 

The six Commissioners—no more than three of 

whom may represent the same political party—are 

appointed by the President and confirmed by the Senate.1 

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. 

1 As noted earlier, one seat on the Commission has been 

vacant since October 1995. 
88 Appendices 

The division also publishes the Reports on Financial 

Activityseries 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 on a touch-tone 

phone). 

Inspector General 

The FEC’s Inspector General (IG) has two major 

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

agency and to improve the economy and effectiveness of agency operations. The IG files reports notifying Congress of any serious problems or deficiencies 

in agency operations and of any corrective steps 

taken by the agency. 

Law Library 

The Commission law library, part of the Office of 

General Counsel, is located on the eighth floor and is 

open to the public. The collection includes materials 

on campaign finance reform, election law and current 

political activity. Visitors to the law library can use its 

computers to access the Internet. The librarian and 

legal staff also maintain computer indices of enforcement proceedings (MURs) and advisory opinions, 

which may be searched in the Law Library or the Public Disclosure Division. Local phone: 202-694-1600; 

toll-free: 800-424-9530. 
Appendices 89 

Office of Election Administration 

The Office of Election Administration (OEA), located on the second floor, assists state and local 

election officials by responding to inquiries, publishing 

research and conducting workshops on all matters 

related to election administration. Additionally, the 

OEA answers questions from the public and briefs 

foreign delegations on the U.S. election process, including voter registration and voting statistics. 

Local phone: 202-694-1095; toll-free phone: 800-

424-9530 (press 4 on a touch-tone phone). 

Personnel and Labor/Management 

Relations 

This office provides policy guidance and operational support to managers and staff in a variety of 

human resource management areas. These include 

position classification, training, job advertising, recruitment and employment. The office also processes 

personnel actions such as step increases, promotions, leave administration, awards and discipline, 

performs personnel records maintenance and offers 

employee assistance program counseling. Additionally, Personnel administers the Commission’s labormanagement relations program and a comprehensive 

package of employee benefits, wellness and familyfriendly programs. 

Planning and Management 

This office develops the Commission’s budget and, 

each fiscal year, prepares a management plan determining the allocation and use of resources throughout 

the agency. Planning and Management monitors adherence to the plan, providing monthly reports measuring the progress of each division in achieving the 

plan’s objectives. 

Press Office 

Staff of the Press Office are the Commission’s 

official media spokespersons. In addition to publicizing Commission actions and releasing statistics on 

campaign finance, they respond to all questions from 

representatives of the print and broadcast media. 

Located on the first floor, the office also handles requests under the Freedom of Information Act. Local 

phone: 202-694-1220; toll-free 800-424-9530. 

Public Disclosure 

The Public Disclosure Division processes incoming 

campaign finance reports from political committees 

and candidates involved in federal elections and 

makes the reports available to the public. Located on 

the first floor, the division’s Public Records Office has 

a library with ample work space and knowledgeable 

staff to help researchers locate documents and computer data. The FEC encourages the public to review 

the many resources available, which also include 

computer indexes, advisory opinions and closed 

MURs. 

The division’s Processing Office receives incoming 

reports and processes them into formats which can 

be easily retrieved. These formats include paper, 

microfilm and digital computer images that can be 

easily accessed from terminals in the Public Records 

Office and those of agency staff. 

The Public Disclosure Division also manages 

Faxline, an automated faxing service for ordering FEC 

documents, forms and publications, available 24 

hours a day, 7 days a week. 

Local phone: 202-694-1120; toll-free phone: 800-

424-9530 (press 3 on a touch-tone phone); Faxline: 

202-501-3413. 

Reports Analysis 

Reports analysts assist committee officials in complying with reporting requirements and conduct detailed examinations of the campaign finance reports 

filed by political committees. If an error, omission or 

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

discovered in the course of reviewing a report, the 

analyst sends the committee a letter which requests 

that the committee either amend its reports or provide 

further information concerning a particular problem. 

By sending these letters (RFAIs), the Commission 
90 Appendices 

seeks to ensure full disclosure and to encourage the 

committee’s voluntary compliance with the law. Analysts also provide frequent telephone assistance to 

committee officials and encourage them to call the 

division with reporting questions or compliance problems. Local phone: 202-694-1130; toll-free phone 

800-424-9530 (press 2 on a touch-tone phone). 

Staff Director and Deputy Staff 

Director 

The Staff Director carries the responsibilities of 

appointing staff, with the approval of the Commission, 

and implementing Commission policy. The Staff Director oversees the Commission’s public disclosure 

activities, outreach efforts, review of reports and the 

audit program, as well as the administration of the 

agency. 

The Deputy Staff Director has broad responsibility 

for assisting in this supervision, particularly in the 

areas of budget, administration and computer systems. 
Appendices 91 

Appendix 5 

Statistics on Commission 

Operations 

Summary of Disclosure Files 

Total Filers 

Existing in 

1997 

Filers 

Terminated 

as of 

12/31/97 

Continuing 

Filers as of 

12/31/97 

Number of 

Reports and 

Statements 

in 1997 

Gross Receipts 

in 1997 

Gross 

Expenditures 

in 1997 

Presidential Candidate 

Committees 387 40 347 422 11,885,310 20,891,234 

Senate Candidate Committees 588 94 494 1,156 132,843,790 68,242,606 

House Candidate Committees 2,683 372 2,311 4,571 146,360,518 91,519,017 

Party Committees 628 60 568 2,113 301,358,738 284,799,482 

Federal Party Committees 

Reported Nonfederal

532 60 472 1,751 213,664,797 202,269,492 

Party Activity 96 0 96 362 87,693,941 82,529,990 

Delegate Committees 10 2 8 2 0 3,089 

Nonparty Committees 4,128 284 3,844 18,265 223,052,817 164,033,084 

Labor Committees 347 15 332 1,727 51,451,687 33,744,126 

Corporate Committees 1,705 108 1,597 8,766 69,392,457 54,480,518 

Membership, Trade and

 Other Committees 2,076 161 1,915 7,772 102,208,673 75,808,440 

Communication Cost Filers 224 0 224 35 N/A 173,887 

Independent Expenditures by 

Persons Other Than 

Political Committees 

358 17 341 27 N/A 44,071 
92 Appendices 

Divisional Statistics for Calendar Year 1997 

Total 

Reports Analysis Division 

Documents processed 39,198 

Reports reviewed 51,170 

Telephone assistance and meetings 9,949 

Requests for additional information (RFAIs) 9,714 

Second RFAIs 4,474 

Data coding and entry of RFAIs and 

miscellaneous documents 20,098 

Compliance matters referred to Office 

of General Counsel or Audit Division 61 

Data Systems Development Division * 

Documents receiving Pass I coding 37,034 

Documents receiving Pass III coding 37,946 

Documents receiving Pass I entry 39,696 

Documents receiving Pass III entry 38,008 

Transactions receiving Pass III entry 

• In-house 152,799 

• Contract 445,955 

Public Records Office 

Campaign finance material processed 

(total pages) 847,773 

Requests for campaign finance reports 7,417 

Visitors 12,605 

Total people served 20,022 

Information telephone calls 17,440 

Computer printouts provided 57,513 

Total income (transmitted to U.S. Treasury) $48,614 

Cumulative total pages of documents 

available for review 14,707,783 

Contacts with state election offices 3,915 

Notices of failure to file with state 

election offices 330 

Faxline requests 4,637 

Total 

Administrative Division 

Contracting and procurement transactions 2,094 

Publications prepared for print 35 

Pages of photocopying 9,842,600 

Information Division 

Telephone inquiries 53,857 

Information letters 99 

Distribution of FEC materials 5,240 

Prior notices (sent to inform filers 

of reporting deadlines) 14,355 

Other mailings 46,318 

Visitors 136 

Public appearances by Commissioners 

and staff 165 

State workshops 5 

Publications 31 

Press Office 

News releases 103 

Telephone inquiries from press 17,144 

Visitors 1,300 

Freedom of Information Act 

(FOIA) requests 460 

Fees for materials requested under FOIA 

(transmitted to U.S. Treasury) $51,177 

Office of Election Administration 

Telephone inquiries 4,712 

National surveys conducted 6 

Individual research requests 201 

Materials distributed * 12,144 

Election presentations/conferences 15 

Foreign briefings 76 

Publications 5 

* Computer coding and entry of campaign finance information 

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

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

III, itemized information is coded and entered. 

* Figure includes National Voter Registration Act materials. 
Appendices 93 

Total 

Office of General Counsel 

Advisory opinions 

Requests pending at beginning of 1997 6 

Requests received 29 

Issued 26 

Not Issued * 3 

Pending at end of 1997 6 

Compliance cases † 

Pending at beginning of 1997 361 

Opened 147 

Closed 301 

Pending at end of 1997 207 

Litigation 

Cases pending at beginning of 1997 44 

Cases opened 22 

Cases closed 31 

Cases pending at end of 1997 35 

Cases won 21 

Cases lost 4 

Cases settled 6 

Law Library

 Telephone inquiries 829 

 Visitors 1,341 

* Two advisory opinion requests were withdrawn and one was 

dismissed due to incomplete facts. † In annual reports previous to 1994, the category “compliance 

cases” included only Matters Under Review (MURs). As a result of 

the enforcement prioritization system, the category has been expanded to include internally-generated matters in which the Commission has not yet made reason to believe findings. 

Audit Reports Publicly Released 

Year Title 2 * Title 26 † Total 

1976 3 1 4 

1977 6 6 12 

1978 98 ‡ 10 108 

1979 75 ‡ 9 84 

1980 48 ‡ 11 59 

1981 27 ‡ 13 40 

1982 19 1 20 

1983 22 0 22 

1984 15 2 17 

1985 4 9 13 

1986 10 4 14 

1987 12 4 16 

1988 8 0 8 

1989 2 7 9 

1990 1 6 7 

1991 5 8 13 

1992 9 3 12 

1993 10 2 12 

1994 5 17 22 

1995 12 0 12 

1996 23 0 23 

1997 6 6 12 

Total 420 119 539 

Audits Completed by Audit Division, 1975 – 1997 

Total 

Presidential 99 

Presidential Joint Fundraising 11 

Senate 22 

House 149 

Party (National) 46 

Party (Other) 134 

Nonparty (PACs) 78 

Total 539 

* 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. 
94 Appendices 

Status of Audits, 1997 

Pending Opened Closed Pending 

at Beginning at End 

of Year of Year 

Presidential 10 7 6 11 

Presidential Joint Fundraising 0 0 0 0 

Senate 0 1 0 1 

House 0 6 3 3 

Party (National) 0 1 0 1 

Party (Other) 4 0 2 2 

Nonparty (PACs) 1 0 1 0 

Total 15 15 12 18 
Appendices 95 Appendix 6 

1997 Federal Register 

Notices 

1997-1 

Filing Dates for Texas Special Elections (62 FR 8449, 

February 25, 1997) 

1997-2 

Filing Dates for New Mexico Special Elections (62 FR 

10562, March 7, 1997) 

1997-3 

Adjustment to Civil Monetary Penalty Amounts; Final 

Rule (62 FR 11316, March 12, 1997) 

1997-3 Correction 

Adjustments to Civil Monetary Penalty Amounts; Final 

Rule (62 FR 18167, April 14, 1997) 

1997-4 

Definition of Member of Membership Association: 

Rulemaking Petition; Notice of Availability (62 FR 

13355, March 20, 1997) 

1997-5 

Filing Dates for Texas Special Elections (62 FR 

15482, April 1, 1997) 

1997-6 

Electronic Filing of Reports by Political Committees: 

Final Rules; Announcement of Effective Date (62 FR 

22880, April 28, 1997) 

1997-7 

Recordkeeping and Reporting by Political Committees; Best Efforts: Final Rule; Transmittal of Regulations to Congress (62 FR 23335, April 30, 1997) 

1997-8 

Independent Expenditures and Party Committee Expenditure Limitations: Notice of Proposed Rulemaking 

(62 FR 24367, May 5, 1997) 

1997-9 

Adjustments to Civil Monetary Penalty Amounts: Final 

Rule; Correction of Effective Date (62 FR 32021, June 

12, 1997) 

1997-10 

Prohibited and Excessive Contributions; Soft Money: 

Rulemaking Petition; Notice of Availability (62 FR 

33040, June 18, 1997) 

1997-11 

Recordkeeping and Reporting by Political Committees: Best Efforts; Final Rule and Announcement of 

Effective Date (62 FR 35670, July 2, 1997) 

1997-12 

Definition of Member of a Membership Association: 

Advance Notice of Proposed Rulemaking (62 FR 

40982, July 31, 1997) 

1997-13 

Filing Dates for New York Special Election (62 FR 

43733, August 15, 1997) 

1997-14 

Recordkeeping and Reporting: Notice of Proposed 

Rulemaking (62 FR 50708, September 26, 1997) 

1997-15 

Definition of Express Advocacy: Rulemaking Petition; 

Notice of Availability (62 FR 60047, November 6, 

1997) 

1997-16 

Filing Dates for California Special Election (62 FR 

63715, December 2, 1997) 

1997-17 

Qualified Nonprofit Corporations: Rulemaking Petition; Notice of Availability (62 FR 65040, December 

10, 1997) 

1997-18 

Filing Dates for Pennsylvania Special Election (62 FR 

65704, December 15, 1997) 

1997-19 

Privacy Act: Republication and Notice of New Routine 

Uses for Disclosure (62 FR 65694, December 15, 

1997) 
96 Appendices 

1997-20 

Definition of Member of a Membership Association: 

Notice of Proposed Rulemaking (62 FR 66832, December 22, 1997) 

1997-21 

Recordkeeping and Reporting: Notice of Public Hearing (62 FR 67300, December 24, 1997)